House of Commons
Wednesday, May 15, 1974
The House met at half-past Two o'clock
Prayers
[Mr. SPEAKER in the Chair ]
Private Business
BRITISH TRANSPORT DOCKS BILL(By Order)
Order for consideration, as amended, read .
To be considered tomorrow .
GREATER LONDON COUNCIL (MONEY) BILL (By Order)
Order for Second Reading read .
To be read a Second time tomorrow .
Oral Answers to Questions
Scotland
Hunterston
asked the Secretary of State for Scotland if he is now in a position to give a decision on the planning applications of Chevron and ORSI to construct an oil terminal and oil refinery at Hunterston following receipt of the latest reply from Ayr County Council.
I cannot add to my reply to my hon. Friend on 10th April.—[Vol. 872, c. 411–12.]
I know that my right hon. Friend still considers himself to be a caretaker Secretary of State for Scotland. In spite of that may I ask him to give some decision some time? Will he confirm or deny the rumour sweeping Ayrshire at present that he has already decided to turn down both applications? Will he come clean?
I shall make my decision and announce it. I pay no attention to rumours. I would like to know who starts them. I can understand my hon. Friend's impatience, but I hope he will appreciate my responsibilities. There is more to Hunterston than just oil refineries and even applications for these have been amended—the Chevron application I think twice in the past year and the ORSI application four times. The latest changes came within the last fortnight.
Will the right hon. Gentleman take the advice of his hon. Friend the Member for Central Ayrshire (Mr. Lambie) and not only come clean but see that the whole area is kept clean and not despoiled by foreign companies?
I see that we have a full range of opinion, from that expressed by my hon. Friend to that held by the hon. Member.
May I ask my hon. Friend whether, bearing in mind his previous reply, he will now make a statement saying that he will accept no further amendments to the applications before him?
I cannot say that.
Bearing in mind the uncertainty of the industrial situation in the West of Scotland, may I ask the right hon. Gentleman for an assurance that he will not allow the site to be sterilised by the British Steel Corporation, which allegedly would like to reserve the site but which has no immediate plans to develop it?
The hon. Gentleman is trying to draw out my conclusions and decisions prematurely. No one wants to see this site sterilised in the way he has mentioned. He has referred to certain allegations. We have to appreciate that it is a unique facility. There were certain things laid down in the original planning decision by the hon. Member's right hon. Friend that are pertinent to any decision that has to be made.
Secondary Schools
asked the Secretary of State for Scotland what is the latest figure of part-time education in secondary schools; and if he will make a statement.
Returns at the beginning of May showed that 9,859 pupils in secondary schools, almost all in Glasgow and Lanarkshire, were receiving part-time education. I hope that the staffing position in these schools will be substantially improved as a result of the extra £1 million which my right hon. Friend has made available for the payment of teachers in schools with special problems.
Does the Minister agree that since this figure compares with one of about 200 at the beginning of 1973 we have a serious and urgent problem? In view of the virtual crisis situation in certain schools in Glasgow and Lanarkshire may I ask the Minister to give us an assurance that he will look seriously at the possibility of letting children leave school on their 16th birthday?
It is true that there has been an increase in the number of pupils receiving part-time education. It ought to be pointed out that 94 per cent. of those receiving part-time education are losing less than five hours of schooling. The figure has changed even since the hon. Gentleman's last Question on this subject. A month ago the figure was over 12,000. This is partly due to difficulties arising through sickness and where there are marginal staffing standards. The position can change from time to time. I frankly doubt whether allowing children to leave on their 16th birthday would make that much difference to the general position in the West of Scotland.
Surely at this stage in the school session the argument about leaving at 16 is irrelevant. Dealing with the immediate situation, may I ask my hon. Friend whether he is aware that in socially deprived areas, such as Easterhouse, three out of four secondary schools are designated, and one should probably be designated, and out of 19 primary schools not one has a full complement of teachers? Will he use his influence to take into account social disadvantages in such areas, as well as the pupil-teacher ratio?
Yes. All these things will be taken into account. I am aware of the particular problems in my hon. Friend's constituency, which I visited during the recess. The designation of schools is a matter for the local authority concerned. The payments are discussed with the Scottish Teachers Salaries Com- mittee and any influence we can have on the way the scheme finally turns out will be used on behalf of socially disadvantaged areas as well as the pupil-teacher ratio.
Improvement Grants
asked the Secretary of State for Scotland if he will now state his decision regarding the extension of the period during which the housing improvement grant will be 75 per cent. of the cost.
asked the Secretary of State for Scotland if he will now extend the time limit for completing house improvements qualifying for grant in the private sector.
I would refer the hon. Gentlemen to the reply given by my right hon. Friend on 30th April to my hon. Friend the Member for Glasgow, Garscadden (Mr. Small).—[Vol. 872, c. 426. ]
While expressing awareness of that reply, in view of some confusion that was apparent in the Scottish Grand Committee on Tuesday, may I ask whether the Minister will confirm that any work that is not finished by the June date will not qualify for the higher grant? Is that the position.
That is the general position. But in particular instances there is no completion date; in other words, any application which was approved on or before 30th September 1973 will receive the grant at the higher rate, regardless of completion date.
I welcome the decision of the Secretary of State to extend the improvement grant scheme for grants approved before the end of September last year. Does the Minister not agree, however, that it would also be fair to extend the grants for people who received approval for their scheme after September and who have commenced improving their houses, because, as I am sure the hon. Gentleman is aware, these are not people with a lot of money but people who in good faith made these applications and are using their life's savings to try to complete the work?
There are a number of question marks in what the hon. Gentleman has said. Any cut-off date is bound to give rise to difficulties for someone who, perhaps, falls just on the wrong side of it. The point about the date of 30th September was that anyone who had approval before that date could, in normal circumstances, have confidently expected to complete the work by 22nd June and, therefore, get the higher level of grant. Many people getting approval after that date, even under normal circumstances and without the three-day working week and so on, would not necessarily have been in a position to complete the work by the cut-off date, in any case.
Will the hon. Gentleman now extend the easement for private occupiers to local authorities?
The problems with local authorities are entirely different. The matter that concerned local authorities most was the suspension of all approvals imposed by the previous Government. I am glad to say that we have lifted that.
Lorry Parks
asked the Secretary of State for Scotland what funds have been allocated by the Government for the building of lorry parks in Scotland in 1974.
None, Sir. My right hon. Friend has no statutory powers to incur expenditure for this purpose. Local authorities have relevant powers, but no applications for borrowing consent have been submitted.
Will the hon. Gentleman acknowledge the Government's duty to help meet the desperate need in Aberdeen for improved facilities for lorries? Does he know that since the oil developments began in Aberdeen the number of lorries parked overnight midweek in Aberdeen has risen from 20 to 100, and that the average number of abnormal loads has risen from less than one a week to 12 a day? In the light of those figures, will the Minister make funds available to relieve this situation?
As I said in my original answer, there are no statutory powers available to the Government. I recognise the problem in certain areas, including Aberdeen, but it is possible for local authorities to make provision. I can only repeat that no local authority—neither that of Aberdeen nor anywhere else—has submitted an application for borrowing consent.
Beef Production
asked the Secretary of State for Scotland if he will give an estimate of the level of beef production in the spring of 1975 compared with production in the spring of 1974 in relation to the number of fat cattle for slaughter.
There are too many factors at work to make it possible to give any precise estimate of supplies of fat cattle for slaughter one year ahead. Present indications, however, suggest some increase in supplies next spring.
Does the right hon. Gentleman agree that the Scottish National Farmers Union has made it abundantly clear to him that there is a loss of between £20 and £40 per head on fat cattle at present? Does he also agree that the calf subsidy increase will be of no help to those in trouble at present? What steps does he intend to take in the immediate future?
On the precise Question that the hon. Gentleman asked I have given him an answer. The supplementary questions that he has asked are due to be answered in later Questions.
asked the Secretary of State for Scotland if he will make a statement about the future of beef production in Scotland.
asked the Secretary of State for Scotland what steps he is taking to give long-term confidence to the Scottish beef producing industry.
I have every confidence in the long-term prospects for beef production in Scotland.
To meet the immediate difficulties facing producers, we have more than doubled the rate of calf subsidy, bringing the total expenditure on direct subsidies for beef production to £100 million a year; of that about £25 million will be spent in Scotland.
We shall be ready to consider whether any further short-term remedial measures are needed to achieve for beef the Government's declared policy of encouraging the maximum economic home production of food.
Is the right hon. Gentleman aware that the calf subsidy increase is nothing more than a drop in the ocean of need, and that beef producers in Scotland are now operating at a heavy loss? For how long can they be expected to continue? Is the right hon. Gentleman aware, further, that the effect of this is that the British housewife next year will have to buy home-produced beef at scarcity prices?
I do not think that high prices should be a reason for people getting out of the beef trade—
Next year.
All these matters were answered in the debate last week. The Government managed to hold the day and persuaded the House to defeat the Opposition motion.
Does the right hon. Gentleman wish to see the production of the Scottish beef industry drop next year? That is what will happen unless something is done now.
I do not accept that. We have to appreciate that if we pursued policies of the sort that the previous Minister of Agriculture claimed he would have followed, prices would not have been any higher than they are today and there would have been no injection of £38 million into the feeding section of the industry.
I congratulate the Government on their remarkable conversion of the Conservative Party to their agricultural policy. If the right hon. Gentleman is considering short-term help to the beef industry will he bear in mind the great anxiety about the forthcoming calf sales in the autumn and that if help could be given before that it would be of great assistance?
We have already given help and said that we shall watch the position. There is far too much pessimism about this. In beef production, one year does not stand on its own, and for the past two years producers have done very well.
Is my right hon. Friend aware of a report that I received today from the Lower Clyde Water Board showing that two farms run by that board continue to show a tremendous profit?
When will the Secretary of State acknowledge that the real blow to the farming industry was the removal of any floor to beef prices, and that that is the one single act to have caused the pessimism? Is the right hon. Gentleman aware, however, that I am encouraged by what he says about short-term remedial measures. When does he expect to be able to announce details of them?
I have said that we shall watch the situation. If measures of this kind are required we shall see what action can be taken. The Opposition must appreciate that they have limited the actions that any Government can take. We have not full control over the situation, because of the Conservative Party's decision in relation to the EEC.
General Practitioners
asked the Secretary of State for Scotland if he will seek to discuss with representatives of general practitioners and area health boards the shortage of general practitioners in the industrial areas of Scotland.
Not all industrial areas of Scotland are short of general practitioners, though there are some, mainly in the central belt, which are designated by the Scottish Medical Practices Committee as requiring additional general practitioners. Ways of improving the situation are regularly considered with representatives of general practitioners and as appropriate, with individual health authorities.
Is my hon. Friend aware that I am bound to dispute the phrase "not all industrial areas"? Is he further aware that if we take the Scottish average as a criterion, all industrial areas have at least one and a half times—in some cases, twice—the number of patients that the rural and urban areas have in various parts of Scotland? Surely my hon. Friend accepts that the situation is very serious indeed. In my constituency, particularly in Grangemouth, medical practitioners are desperately anxious that something should be done in order to get a more equal distribution of doctors throughout Scotland. I hope that my hon. Friend will reconsider his answer and have the discussions that I suggested in my Question.
There are 26 practices—mainly in the central belt of Scotland—which are designated practices, where there are additional payments to doctors. I am aware of my hon. Friend's particular difficulty in Grangemouth. That has been a designated district since April 1966, and there still seems to be a difficulty of a large turnover of doctors in that area. Certainly we shall look at this matter. A committee is considering the effectiveness or otherwise of designated payments, and once it has reported we shall look at the question.
Without wishing to detract in any way from the importance of the problem raised by the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), may I ask whether the Minister will also keep in mind and under review the problem of shortages of doctors in the hospital service and, in particular, in mental hospitals?
That is another question. But we are naturally concerned about what is happening in the hospital service. If the hon. Gentleman has a particular question on this matter perhaps he will table it.
Will my hon. Friend use his good offices to endeavour to get at least one lady doctor in group practices? There is great discontent among the female population, arising from the fact that there is no method of getting attention from a lady doctor. This should be one of the main objectives on his Department. Group practices should have at least one lady on the staff.
I understand my hon. Friend's point. One would have to ascertain the availability of lady doctors. I could not give an assurance of the kind sought by my hon. Friend today.
Does the hon. Gentleman accept that this seems to be an increasing problem? Is he aware, for instance, that in Kirkconnel, in my constituency, there has been great difficulty in arranging for a general practitioner over recent months? Will the hon. Gentleman give an assurance that he will look urgently at this matter because naturally, in areas of large population, the lack of a doctor is of great concern.
Yes, I appreciate that point. But I think that I am correct in saying that the position in Kirkconnel now is that a doctor has agreed to go to the area. We are doing what we can to provide cover until the doctor takes up practice.
Secondary Schools (Cost Per Child)
asked the Secretary of State for Scotland what is the annual cost of keeping a child in a local authority secondary school in Scotland.
On average, about £333 in 1972–73, the latest year for which information is available.
Without commenting on whether the cost per child is large or small, may I ask whether my hon. Friend agrees that it is time that we had further financial provisions to ease the school transport burden for parents? Is he aware that in the Rosyth area many parents cannot find the money to meet bus fares to the new Inverkeithing school? This matter is causing a great deal of discontent, particularly because Rosyth had secondary education available before the Inverkeithing school came into the area.
I should not like to comment on that point today in relation to the schools that my hon. Friend mentioned. Certainly we are aware of the high cost of transport in some areas. One would have to try to arrange for bus operators to provide concessionary fares. However, if my hon. Friend will write to me on this point of difficulty I shall certainly see whether I can help.
Does the hon. Gentleman realise that the cases of local authority schools and grant-aided schools are closely connected? Will he say when there is likely to be an announcement about the level of grant for grant-aided schools in the coming year?
No.
Motorways (Noise)
asked the Secretary of State for Scotland if he will ensure that every effort is made to diminish the noise and general disturbance being experienced by people living in close proximity to the building of new motorways, particularly in the Govan area.
My right hon. Friend intends to lay draft regulations covering this matter before the House shortly. Meanwhile, I understand that Glasgow Corporation is prepared to consider sound insulation for certain houses likely to be affected by the construction of the Renfrew motorway.
I appreciate my hon. Friend's answer, but is he aware that even up to last Saturday, following representations made by me to the Glasgow Corporation, I was still receiving complaints about dust covering various areas? Is he aware that little effort has been made by contractors to keep down the amount of dust, and that the rules laid down by Glasgow Corporation are being ignored? Will he stress to the corporation the necessity for contractors to carry out their duties properly?
That is a matter for Glasgow Corporation rather than for me. However, as a Member for a Glasgow constituency, I am affected by the work which is being carried out in that area. I have just written to the corporation on a constituency matter and I shall look into the point.
In the regulations which the Secretary of State is thinking of promulgating, will the right hon. Gentleman consider limiting the hours of working and ensure that no work is carried out on Sundays?
I am not sure whether that matter will be covered, but I shall look into it. It springs from the Land Compensation Act 1973, with which I think the hon. Gentleman is familiar.
Young Offenders (Accommodation)
asked the Secretary of State for Scotland if he is aware of the danger of the breakdown of the Social Work Act in view of the shortage of accommodation for the treatment of young offenders; and if he will take action designed to prevent this happening.
I am aware of the difficulties, and I am having urgent discussions with representatives of the interests most closely concerned in order to see how the problem of the shortage of accommodation can best be tackled.
Is my hon. Friend aware that since January of this year authorities facing the problem of young offenders who have been convicted of inflicting damage to schools, have been unable to find a place in a list D school until September of this year, that there is no room for offenders in Lanarkshire Assessment Centre, and that local authorities are unable to provide supervision by social work officers because they have insufficient numbers of them and have to ask the police to warn offenders? This has resulted in their being released to commit other offences, with the result that schools have been set on fire on two occasions, at considerable cost to the local authority. This is making a farce of the law. Action must be taken immediately to relieve the situation.
I accept that the situation is difficult and that the shortage of places has caused problems. I do not disguise from the House the extent of the problem. It is a fact that between April 1971 and 31st March this year there has been a net drop of 109 places in list D schools and a much larger increase in referrals from children's panels than anybody anticipated. It is a mistake to think that there is only one solution to this problem. Some authorities are using their imagination and are bringing in different methods to deal with the young offenders mentioned by my hon. Friend.
I appreciate the Minister's answer. He will be aware of the situation as from 14th April, when information was given that there were 566 applications for places in list D schools. Although I welcome the fact that local authority panels use their imagination in deciding on the best possible way to deal with juvenile offenders, it would seem to me—
Order. I would remind the hon. Gentleman that this is Question Time. The hon. Gentleman should ask a question.
As I said in my original answer, difficulties are involved. There has been a net drop in the number of list D school places which have been available in the last three and a half years. This is a matter over which I have no control. It is a problem that we shall try to deal with, but I cannot conjure up additional places overnight.
Is it not a dreadful reflection on our society that the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) should have had to table this Question? Is it not true that education in Scotland and the rest of Britain is at an all-time low, and that the fact that mothers have to go out to work when their chidren are young militates against the children's interests? Will the Government now make a start in seeking to cope with this awful situation?
I am sure that there is a Shakespearian phrase which would enable me to answer the hon. Gentleman's question—but it is a pity that he sought to run down the education system. Anybody who visits schools well knows that teachers have an extremely difficult job, and the manner in which they are tackling their task should be praised.
Will the Minister say whether the Mitchell Committee, which has been examining the structure of list D schools, has reported, since its recommendations may well have a bearing on the number of places? Will the Minister make a statement as soon as he receives that report?
The committee set up by the Advisory Committee on Social Work, under the chairmanship of Professor Mitchell, has not yet reported, but we expect its report to emerge in the near future. Once we receive it, we shall certainly not delay publication.
In view of the unsatisfactory nature of the Minister's reply. I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.
Unemployment
asked the Secretary of State for Scotland what discussions he has had with Scottish industrial organisations about unemployment problems in Scotland.
I met the Scottish Trades Union Congress on 5th April and the Scottish Council (Development and Industry) on 10th May, for general discussions on the state of the Scottish economy. At both meetings, the need to reduce unemployment was basic to our wide-ranging view.
In view of the discussions which have taken place and the studies which no doubt will follow, will my right hon. Friend give an assurance that Scottish unemployment will not rise by a significant amount between now and the end of the year? Will he be more forthcoming on this matter than was his predecessor in office?
The situation is particularly difficult at the present moment because matters have been distorted by the three-day working week and other problems, as a result of the former Conservative Government's policies. However, at the moment it looks as though we are pretty well holding our own. Until we have a better idea how seasonal trends will move, it would be unwise to give any forecasts.
Will the right hon. Gentleman consider how unemployment levels will be affected by poor mobility of labour, particularly in the West of Scotland, where people seem to prefer to remain unemployed rather than move a mile or two to take advantage of job opportunities? Will he investigate the reasons for this attitude?
I do not know how well the hon. Gentleman knows the West of Scotland, but if he travels, as I do on the roads there he will soon appreciate that there is no difficulty in getting people to move. People move over fairly long distances—
I was referring to people moving homes.
If the hon. Gentleman wishes to revise what he said in his supplementary question, he should do so. "Mobility" in a general sense means moving to get work, and I am suggesting that at present people are moving long distances.
Does the Minister realise that one of the immediate threats to employment in Scotland is the ambivalent attitude by the Government to arms orders? Will he read today's leading article in the Daily Record and impress on some of the organisations in Scotland that common sense rather than political prejudice will help employment prospects there?
It is not always common sense and political prejudice. Sometimes an element of principle must come into these matters as well.
Public Servants (Weighting Allowance)
asked the Secretary of State for Scotland if he will ensure that all public servants in Scotland are paid a weighting allowance to reflect the higher cost of living in Scotland.
The evidence available does not suggest that such an allowance is necessary.
To clarify matters once and for all, will the Secretary of State now publish a Scottish retail prices index to ensure that the wages of public servants in Scotland are related to it?
If the hon. Gentleman wants a publication of that kind he should apply to another Minister. It is not my responsibility.
Does it occur to my right hon. Friend that it comes ill from a representative of the Scottish National Party to be concerned about the rate for the job when, in order to avoid paying the rate for the job in my constituency, the party had its election material for the recent district and regional elections printed by the prisoners in Saughton Prison in Edinburgh at a disgracefully low rate?
As the Minister responsible for Saughton Prison in Edinburgh, I know a little about this. I understand that the rates quoted by it are certainly commercial ones.
Adult Illiterates
asked the Secretary of State for Scotland how many courses are currently run by local authorities for adult illiterates in Scotland; and what is his estimate of the number of persons attending such courses.
In the current session, seven education authorities are providing a total of 21 courses for about 220 adults with difficulties in reading and writing. A further four authorities are providing individual tuition for about 20 adults.
I am grateful for that reply, but does my hon. Friend accept that the adult illiterate is just as much a social outcast as those who take drugs and drink, and that being a social outcast because of illiteracy means that there are fewer job opportunities? Is my hon. Friend aware that one of the aggravating factors, especially in Scotland, is the overcrowded classroom? Will he carry out a comprehensive survey to discover the extent of the problem and to force local authorities in Scotland to complete a register of adult illiterates, with a view to providing proper courses for them?
I accept the difficulties in terms of job opportunities facing people who are illiterate and I also appreciate the social problems flowing from illiteracy. However, I do not know that I can commit the Government to a full survey to determine who the illiterates are. But the Alexander Committee on Adult Education in Scotland will be reporting soon. It has had a large number of representations about the difficulties of illiterates and semi-illiterates. As soon as the report is published, I shall see what action can be taken.
I agree with the sentiments expressed by the hon. Member for Hamilton (Mr. Wilson) and wish to make a specific contribution. May I congratulate the authorities at Saughton Prison, where there is a very good system for teaching illiterates? The reformative element in punishment there has produced a situation in which many prisoners who entered the prison unable to read are now able to do so. In view of the captive audience that we have there, could we not make sure that anyone who is illiterate on entering prison comes out able to read?
The prison authorities take steps to try to improve the level of basic literacy. But it is not good enough. We shall look at this.
Cleansing Services
asked the Secretary of State for Scotland if he will set up an inquiry into the cleansing services provided by local authorities in Scotland.
I know of no reason for setting up such an inquiry. If the hon. Gentleman has a particular issue in mind, perhaps he will write to me.
I thank the hon. Gentleman for that reply. I suggest that the streams and woods of Scotland are becoming polluted by refuse which local authorities are willing to lift only by special request and at a heavy charge, with the result that people dump their rubbish at night. Cannot the Government look into this to see whether the charge can be removed, or to ensure that better arrangements are made for lifting this type of junk?
There will be provisions in the Control of Pollution Bill. But if there are specific problems in Ayrshire or anywhere else, I shall be happy to look into them.
Does the Minister agree that nothing demoralises an area more than having a lot of rubbish lying around, especially on the sites of big housing schemes? Is he aware that in some areas there are highly efficient cleansing services and that in other areas there are not? Would it not be advisable to have some co-ordination by the Scottish Office, or even an inspectorate of cleansing, to make sure that we have the same standards throughout the country?
I agree with a great deal of what the hon. Gentleman says. There are many areas where cleansing services do not provide the standard of cleansing in streets and elsewhere which most people consider acceptable. The Bill to which I have referred will, for the first time, impose upon authorities a duty rather than a power with regard to the provision of cleansing services. I shall be willing to look at any suggestions from hon. Members in the context of that Bill or in other ways to improve the services.
Vandalism
asked the Secretary of State for Scotland what estimate he has made of the cost of vandalism in Scotland; whether there has been an increase in such acts; what measures he proposes to take to prevent vandalism; and if he will make a statement.
The cost would be difficult to calculate, and I have not tried to make an estimate. The number of acts of malicious mischief is increasing. Counter-measures include effective enforcement of the law, and the strength of Scottish police forces is greater now than it has ever been.
Does the hon. Gentleman agree that there has been a great spread of vandalism throughout Scotland, particularly in terms of graffiti written on walls, and that there is a real need to take effective steps so that those apprehended spend their time and money cleaning up the mess that they have made?
That is a separate matter, for which there are certain powers available at the moment. The problem of vandalism is a very serious one. Apart from education by parents and in schools a great deal depends on having policemen available in sufficient numbers to catch offenders.
Is my hon. Friend pleased to see this new-found interest in socially deprived areas by hon. Gentlemen opposite, including even English Members like the hon. Member for Yarmouth (Mr. Fell)? Since the previous Government apparently did nothing about getting information on this subject, will my hon. Friend consult local authorities about providing him with information on the cost of vandalism as it would be a useful statistic to have?
A certain amount of information is available. I shall arrange to make the information that we have regarding education authorities, and so on, available to the House. I cannot give an indication of the figure, because many different aspects are involved in this matter.
Is the hon. Gentleman aware that this kind of vandalism is extending to small villages in rural areas? Will he consider the possibility of bringing back the village bobby? Such a move would be appreciated in many areas in Scotland.
There is a later Question about policemen on the beat. I think that I can deal with that point on that Question.
Does the hon. Gentleman agree that there is often a welcome trend downwards in vandalism when parents take a real interest in community and youth work, which is also often helped by the police in an informal way? Will he do everything possible to encourage and keep resources available for this type of enterprise?
Yes. I think that the community involvement work of the police is very important from this point of view.
Does my hon. Friend agree that the answer to vandalism is not purely punitive but lies deep within the bowels of society, and that that means the reorganisation of society on a more equitable basis, so that there are not so many drop-outs and the people concerned feel that they have a fairer share in society?
As a statement of general principle I find that unexceptionable. Unfortunately, like all statements of general principle in this area, it is difficult to put it into practical effect. I wish that I knew the answer.
Is it not a new departure for Scottish Members, such as the hon. Member for Glasgow, Provan (Mr. Brown) to suggest that English Members of Parliament should have no interest in the affairs of Scotland, particularly those affairs which also affect English constituencies? I should like to ask one question on this matter. Is the hon. Gentleman able to give us any idea of the connection between vandalism and illiteracy?
I cannot answer that question. The number of illiterates is quite small, whereas the number of acts of vandalism is unfortunately very large. Incidentally, I welcome contributions by English Members as well as by anyone else on these difficult problems.
Planning Appeals
asked the Secretary of State for Scotland whether he will review the present procedures for public inquiries on planning appeals, with particular reference to the costs of the objectors; and if he will make a statement.
asked the Secretary of State for Scotland what plans he has for simplifying the procedure at public inquiries in order to reduce the expenses which objectors may have to bear.
I have convened a group of people experienced in inquiry work to examine the possibilities of simplification.
I thank my right hon. Friend for that reply, which I find very encouraging. Has he taken note of the expense of objecting to some of the recent major public inquiries in Scotland? Has he noted that the total cost of the inquiry at Drumbuie was £175,000 and does he appreciate that very few organisations can take part in an exercise of such magnitude except occasionally? Does he agree that there is a contradiction in using public inquiries as a democratic safeguard if we fail to provide a system which enables organisations to take ad-advantage of them?
We must watch the whole situation. The question of money arises not directly but indirectly, because we want to consider how the evidence relevant to planning issues subject to inquiry can be assembled in full with the minimum expenditure of time, effort and money. We want speedy but fair opportunities for everyone—objectors and those who hope to get planning permission.
Does the right hon. Gentleman agree that the situation is becoming increasingly difficult for objectors, who in most cases cannot marshal the resources that the would-be developer has available to him, often when it is a public authority, and that if objectors are to marshal legal forces against developers there is a great need to simplify the matter and to reduce costs?
This is what we are trying to do. We should get matters in balance. Most inquiries are relatively inexpensive. This matter has been highlighted by two or three particular inquiries. It is difficult to change the principle for exceptions.
Will my right hon. Friend look at the report of the Select Committee on Scottish Affairs on Land Use, where an extremely powerful argument was advanced that high expenses should be taken into account by the State in matters of this kind?
That is equally relevant. It may be of interest to the House to know that those who are conducting the inquiry are drawn from the Scottish Committee of the Council on Tribunals, the Faculty of Advocates and the Law Society of Scotland. In the Chair is a senior officer of the Scottish Development Department. They have already had their first meeting.
Apart from cost, which rightly concerns the Secretary of State, he mentioned time delays on undramatic planning appeals. Since coming into office has he formed any view on how to speed up the process of planning appeals? Is he in a position to give us the figure for the average length of delay?
I could not give an average figure without notice. That is what it is all about. Indeed, it would be of help if, administratively, we could give guidance to local authorities about the information that they could give in the first instance, so that there could be more speed. Often a planning request comes forward with inadequate information, and that leads to considerable delay before the matter can begin to be considered.
Will the whole question of cost be thoroughly gone into in the inquiry? Although the matter has been focused by a number of expensive inquiries which have taken place, may I ask whether the right hon. Gentleman realises that in a number of small inquiries some genuine objectors have been deterred because of what they have heard about inquiries that have received Press publicity? It is important to ensure that justice is done, and reassurance on costs will contribute greatly in that respect.
The hon. Gentleman must realise that this matter did not start after the General Election. He should read the letter that his right hon. Friend sent to his hon. Friend about this matter. We are seeking to do everything possible to speed up the process and thereby to re- duce costs. The principle relating to who pays the costs is not a matter specifically for consideration by this inquiry.
Rates
asked the Secretary of State for Scotland if he will now give an estimate of the extent of rate rises expected in the current year.
It is not practicable to make a useful estimate for 1974–75 rates at present.
Is the hon. Gentleman telling us that he has no idea what the rise in rates in Scotland will be as a result of Government policies, or is it that it will be so frightening that he dare not say?
I am telling the hon. Gentleman that it is not and never has been practicable to make an estimate.
Is my hon. Friend aware that this Question has probably been asked on behalf of owner-occupiers? Does not a greater danger to owner-occupiers lie in the next valuation of their properties, because they will be compared with municipal properties on which much higher rents are being charged as a result of action by the previous Government?
That may be a valid point, but I am not sure that I can comment on what the next valuation may look like.
Does the hon. Gentleman agree that it is nonsense to say that the Question is being asked on behalf of owner-occupiers? All householders pay rates. Will the hon. Gentleman give an assurance that if, as we fear, the rise in rates this year, partly because of Government policy, is frightening, he will, as he did with his rent freeze for council tenants, take action to curb rate rises?
I do not agree that the rise is likely to be frightening. Like everybody else, local authorities and ratepayers are very much affected by the inflation that was bequeathed to us by the previous Government of which the hon. Gentleman was from time to time a supporter.
Road Improvements (Ross and Cromarty)
asked the Secretary of State for Scotland which of the road improvement schemes submitted by Ross and Cromarty County Council during the last six months he has refused, and what was the cost of these schemes.
In this period road schemes in Ross and Cromarty amounting to £2·31 million have been deferred, while schemes amounting to £821,000 have been cleared to proceed.
With permission, I will circulate details in the OFFICIAL REPORT.
The Minister will appreciate that this cut is considerably higher than the 20 per cent. originally envisaged.
DEFERMENT OF PRINCIPAL AND TRUNK ROAD SCHEMES IN ROSS AND CROMARTY SINCE 17TH DECEMBER 1973 Scheme and route number Estimated cost (£) A. SCHEMES DEFERRED (1) Principal Roads Balallan (Isle of Lewis), A859 97,615 Laxy Bridge (Isle of Lewis), A819 66,470 One small scheme in Lewis, A866 20,550 Three on the mainland, A832 Gorstan Junction—Torriegorrie, A832 54,602 Auchmore—Auchtertyre * , A890, A890 1,861,000 Total (Principal) 2,100,237 (2) Trunk Roads Three bridge schemes (Kincardine, East Fern and Craigroy), A9 162,000 White Bridge, Strathpeffer, A834 46,600 Total (Trunk) 208,600 Total (Deferred) 2,308,837 B. SCHEMES APPROVED (1) Principal Roads Improvement North of Newmarket, A857 Improvement North of Newmarket, A857 61,100 (2) Trunk Roads Dingwall Relief Road, A9 570,000 Rogie Falls, A832 190,000 Total (Trunk) 760,000 Total (Approved) 821,100 * Crofter Counties Programme scheme. Crofter Counties Programme scheme.
Note: This list does not include Ross and Cromarty components of the A9 modernisation programme. These have not been deferred.
Law Reform
asked the Lord Advocate what measures of law reform he intends to introduce this Session.
I have nothing to add to the Will he assure us that these cuts are not being used to finance the escalating costs of the A9, which should be totally separate in an oil-related area?
I have already said that we are separating oil-related road schemes from the others, so that expenditure on the one is not at the expense of others. But there is some misunderstanding about the 20 per cent. cut. The intention is that there should be a 20 per cent. cut in capital expenditure for 1974–75. Since ongoing schemes that have already started have to continue, the actual cut in new schemes is much greater than 20 per cent. In any case, I think that the county council wants to see us about this, and I shall consider the question of a meeting.
Following is the information:
reply given to the hon. Member for Dundee, East (Mr. Wilson) on 9th May 1974. As the hon. Gentleman may not have the OFFICIAL REPORT, perhaps I can tell him that it was to the effect that I hope to be able to introduce certain law reform measures during this Session, but I am not yet in a position to announce these. I can also tell the hon. Gentleman that the Land Tenure Reform Bill had its Second Reading in the other place last Thursday.—[Vol. 873, c. 250.]
May I take this opportunity to congratulate the right hon. and learned Gentleman on his first appearance at the Dispatch Box and thank him for his answer? When he is considering measures of law reform, will he consider whether any reform is necessary to enable police authorities more effectively to guarantee the right of free speech at Scottish universities?
Is the right hon. and learned Gentleman aware that a number of Scottish universities and colleges of further education have either supported or failed to condemn the new National Union of Students' policy of restricting freedom of speech? There have been incidents in which freedom of speech has been denied, including the occasion last year when a Liberal colleague, a spokesman for the National Front and I were prevented from debating at Edinburgh University the subject of immigration?
Will the right hon. and learned Gentleman—
Order. That is enough for the time being.
Those matters are not within my direct ministerial responsibility, but I take note of what the hon. Gentleman said.
Is my right hon. and learned Friend aware that many people in the Socialist movement believe that the first priority in any reform of the law should be the extension of legal aid to those who appear in burgh courts?
I think that the question of extending legal aid to burgh courts so long as they exist is essential. The whole question of providing legal aid in the lower courts is under active consideration.
The Lord Advocate will have noted that yesterday his hon. Friend the Member for Fife, Central (Mr. Hamilton) introduced a Bill to reform the divorce law in Scotland. What assistance is the right hon. and learned Gentleman prepared to give to enable the House to come to a conclusion on the matter one way or the other?
Again, I regret that that is not a matter within my direct ministerial responsibility, but when the Bill has been examined there is no doubt that the question of giving drafting assistance will be considered sympathetically, if parliamentary draftsmen are available for the purpose.
Indictments
asked the Lord Advocate if he is satisfied with the present procedures regulating indictments and the time limits thereon.
The provisions of the Criminal Procedure (Scotland) Act 1887 relating to the service of indictments is under review by the Thomson Committee on Criminal Procedure and I await the committee's views as to what improvements can be made.
I thank the right hon. and learned Gentleman for that reply. Is the Lord Advocate aware that Nurse McTavish was arrested last June and appeared on petition, but has since been awaiting the service of indictment for a crime which the Crown has admitted may be a serious one, involving the deaths of certain persons? Does the right hon. and learned Gentleman not agree that that is the most refined form of mental torture known to the law in Scotland, and will he take active steps to put an end to this sort of delay?
I do not accept the description which the hon. Gentleman has chosen to apply to this case, but I share the anxiety which he has expressed that prosecutions should be brought as speedily as possible, as that must be in the interests of the accused and the general public. Perhaps, on reflection, the hon. Gentleman will agree that one has to strike a correct balance between speedy prosecution and thorough investigation.
If the Thomson Committee recommends a longer notice of indictment duly served to the accused prior to the trial, will the right hon. and learned Gentleman, in this Session, introduce legislation to give effect to that recommendation?
I could not commit myself to that principle, but it is one which should be considered in general terms. As regards the particular case mentioned by the hon. Member for Berwick and East Lothian (Mr. Ancram), this sort of problem would not arise in that connection, because at present there is no question of any particular days running between the possibility of proceedings and the actual indictment being served, the person in question not being in custody.
Amalgamated Union of Engineering Workers
asked the Lord Advocate whether the investigation ordered by his predecessor in February into allegations of vote rigging and forgery during an election to choose an officer for the Amalgamated Union of Engineering Workers—AUEW—has been completed; what further action he proposes to take concerning this matter; and whether he will make a statement.
I refer to my answer to the Question put by the hon. Member for Bristol, North-East (Mr. Palmer) on 1st May. Inquiries have been made into this matter and criminal proceedings have been commenced against two men in the sheriff court at Hamilton. As the case is sub judice I cannot comment further at this stage.—[Vol. 872, c. 487.]
I thank the right hon. and learned Gentleman for his remarks, and I understand the problem of the case being sub judice . However, will the Lord Advocate assure the House that the matter will be pursued with full vigour and not swept under the carpet as the NUEW and Mr. Scanlon and his executive wish it to be? It is deplorable that the union has taken no disciplinary action whatsoever against the ballot rigging that occurred in this case. Does the right hon. and learned Gentleman agree that the time is ripe for a full-scale Royal Commission to inquire into corruption in the trade unions?
I assure the hon. Gentleman that the matter will be pursued with thoroughness and all due speed and despatch. I cannot agree with the hon. Gentleman's other comments, and it is right that I should tell the House that there has been no trouble in obtaining the necessary documents and information from the union in order to pursue this matter fully. It would clearly be inappropriate for the union to take disciplinary action in a case that is sub judice .
Parliamentary Draftsmen
asked the Lord Advocate how many parliamentary draftsmen he has on his staff.
The number of parliamentary draftsmen on my staff who are engaged on work in connection with the Government's legislative programme is eight. These draftsmen have, of course, additional duties as my legal secretaries.
I am also responsible for the draftsman who is permanently attached to the Scottish Law Commission, but he is engaged in drafting work for that commission.
It is clear that the parliamentary draftsmen on the Lord Advocate's staff are fully engaged. If the promise of a Scottish Assembly is kept in this Parliament, it is clear that much complicated legislation will be necessary to set up such an assembly. Is the Lord Advocate giving consideration at this stage to the question of the number of additional draftsmen that he will need for this purpose, and has he cast his eye around the available market with suitable applicants in mind?
I think that the hon. Lady underestimates the difficulties facing my Department. It is constantly under pressure. Considerable efforts are made to increase recruitment from both branches of the legal profession in Scotland but these attempts have, unfortunately, met with very little success.
Will my right hon. and learned Gentleman make it clear to the hon. Member for Moray and Nairn (Mrs. Ewing) and her hon. Friends that legislation directly affecting Scotland is drafted by draftsmen under the jurisdiction of the Scottish Office, that virtually all that affects Scotland is the product of, if not Scots themselves, those responsible to Scots, and that if Scotland is suffering grievously in any way the complaint must lie particularly heavily against the Scots themselves?
It is the case that purely Scottish legislation is drafted by Scottish parliamentary draftsmen. However, my hon. Friend is incorrect in thinking that they are at the Scottish Office—they are in my Department.
In the light of earlier questions today, will the right hon. and learned Gentleman suggest to one of his draftsmen that he might consider the penalties which can be imposed by children's panels in Scotland? Have we not reached the point at which we should consider introducing something between the two extremes which now exist, which are sending a child to care and sending him home scot-free?
That is a policy matter for my right hon. Friend the Secretary of State, and no doubt he will have heard the hon. Gentleman's remarks.
South Ockendon Hospital (Report)
With permission, Mr. Speaker, I should like to make a statement.
We have today published a deeply disturbing document, which is the report of the committee set up by my predecessor as Secretary of State for Social Services to inquire into the care of patients at South Ockendon Hospital. In keeping with the conclusions of the Second Report from the Joint Committee on the Publication of Proceedings in Parliament, it has been published as a House of Commons paper and copies are available in the Vote Office. I am indeed grateful to Mr. Hampden Inskip and the other members of the committee who under his able chairmanship have so assiduously and effectively pursued their inquiries. Their report is a very thorough one and where they have found fault they have not hesitated to say so in unequivocal terms.
There has been considerable delay in publishing this report, which was submitted to my predecessor as long ago as March 1973. I believe that the conclusions of an inquiry such as this should not be held up a moment longer than can be avoided, and we have therefore lost no time in publishing it. As some hon. Members will know, I pressed my predecessor vigorously both in this House and outside to institute this particular inquiry. Here I should acknowledge the work of Mrs. Barbara Robb of Aegis who made such strenuous and successful efforts to ensure that the events which had occurred were not swept under the carpet.
This inquiry was set up in April 1972 particularly as a consequence of allegations of ill-treatment in Willows Ward—where an elderly patient died in mysterious circumstances in February 1972—and continuing concern about the investigations into the death in February 1969 of a younger patient, Robert Robertson, who was accommodated in Beeches Ward. However the committee's remit was not specifically to look into these incidents but, much more broadly, to inquire into the care of patients at South Ockendon Hospital.
The committee have drawn attention to individual shortcomings and to weaknesses of judgment among those in authority at the hospital and in the former Hospital Management Committee and Regional Hospital Board. They particularly point to the adoption of a narrow view of clinical autonomy which had the effect that consultants were assumed to have authority over virtually the whole lives of their patients. This is a view which the committee regarded as quite unacceptable in the setting of a hospital which provides a semi-permanent home for many of its residents. I agree with their judgment but it is only fair to say that thinking on such matters by doctors and nurses in the field of mental handicap has developed considerably since some of the events examined by the committee took place.
There is also no doubt, and the committee draws attention to this, that those who worked at South Ockendon did so under very difficult conditions. These conditions clearly contributed in no small measure to the tragic events and practices at the hospital and criticism must therefore fall on successive Governments who have failed to ensure that National Health Service authorities devoted adequate resources for the mental handicap services.
It is true that, following the initiatives of Dick Crossman, which were sustained by the previous Government, significant improvements in staffing, physical standards and standards of care have been achieved in hospitals for the mentally handicapped generally. Nevertheless, there is certainly no room for complacency and I shall be asking all of the new health authorities to review practices and standards of care, as well as to consider improved resource allocation and staff training in all long-stay hospitals.
South Ockendon Hospital itself has not lagged behind and I visited the hospital myself recently to see improvements which had been made since the events which led to the inquiry. Since 1968 the number of patients at the hospital has fallen by over 150, while a large increase in the nursing staff has occurred. Wards have been upgraded, including two which feature in the report. Money has also been spent on the extension of the all-important facilities for occupational therapy and industrial therapy. I cannot pretend that everything is perfect, but I believe the staff are doing a sound job with the resources at their command. Things are moving and I hope that this report will have the positive benefit of stimulating further improvements.
But the value of this report is not simply to have brought into the daylight things which went wrong at South Ockendon, serious as they were. It also underlines the absolute need for renewed efforts to deal with the great problems which face us in bringing about radical improvements in our services for the mentally handicapped. I know that all who read this report will see it as a clear indicator of the imperative need for action.
One of the central problems in improving conditions in our hospitals for the mentally handicapped is to reduce the intolerable overcrowding that too often exists. Health authorities can do much to help with this problem by developing new small units serving local areas. But local authorities must also be helped and encouraged to expand their services for keeping a greater proportion of the mentally handicapped within the community on the lines visualised in the White Paper of 1971, "Better Services for the Mentally Handicapped". Many local authorities have been willing to respond to this lead but have found it difficult to obtain the loan consent needed to expand their resi- dential accommodation and training centres at the pace required.
As a result, although patient numbers in these hospitals are estimated to have been reduced by 7,000 since 1969, the number of places in local authority residences has increased by only about 4,000. The pressure on mental handicap hospitals to increase their numbers again will therefore be irresistible unless greater priority is given by the Government to this side of our services. Within the overall central and local government expenditure limits for the health and personal social services, it is accordingly my intention to press for priority to be given to loan consents for this vital aspect of local government work so that the pace of development can be restored to the level envisaged in "Better Services for the Mentally Handicapped".
Will the right hon. Lady accept that this is in no sense a matter for divisions on party lines either inside or outside the House and that for me personally—I was chairman of the Ely Hospital inquiry and thereafter a member of the post-Ely policy group set up by Richard Crossman—there is much that is deeply distressing in the familiarity of many of the findings in this report? I can only assume that she would agree that the whole nation should be shocked and shamed by some of the matters there set out.
Will the Secretary of State accept that I have a particular understanding of the difficulties that face those who have to evaluate conflicting testimony in an investigation of this kind? Would she also acknowledge that there are difficulties, which we should think about hereafter, surrounding the publication of a document of this kind, which, as she says reaches findings in such unequivocal terms? May I join her in extending my admiration and gratitude to Mr. Hampden Inskip and his colleagues not merely for the thoroughness but also for the wide-ranging humanity of the examination which they have conducted?
I am sure that the whole House will deplore the specific findings of neglect and maltreatment, but I hope that the House will agree that the findings should not diminish our total sense of gratitude and respect for the work done by the overwhelming majority of staff in these State hospitals under conditions in which the nation expects them, frankly, to cope almost with the impossible.
I fully share the sense of importance which the right hon. Lady attaches to the continued expansion of resources for this part of the National Health Service set in hand by Richard Crossman and sustained with great energy by her immediate predecessor, particularly in community care.
Does the right hon. Lady accept that the recommendations about clinical autonomy, which are wide ranging and of fundamental importance, need and deserve careful study? Will she, perhaps, give an indication whether cash is likely to be forthcoming for the important recommendations of the Davies Committee Report on Hospital Complaints Procedure?
Does the right hon. Lady agree that the central problem in all this is the extent to which people serving on health authorities—whether of the old kind or the new—have to accept their own real and personal responsibility for acting as the link between the aspirations of the circulars and the legislation that passes through this House and the reality which comes into existence on the ground?
I entirely endorse the opening remarks of the right hon. and learned Gentleman. He is right in saying that there is no party division whatsoever on what our aims and objectives should be. Anyone who looks back over the history of these unhappy inquiry reports, of which the right hon. and learned Gentleman has such first-hand knowledge, will be struck by the continuity of policy, the taking up by the right hon. Member for Leeds, North-East (Sir K. Joseph) of the initiatives instituted by Dick Crossman and, indeed, the additional allocation of resources to this sector since 1969.
It is also true that that increased expenditure is still inadequate. This is one of the difficult choices that falls to anyone in my job to have to make, when there are so many pressing claims in the National Health Service. It is easy to allow ourselves to slip back, after the initial shock of a report like this, into carelessness or lack of continuity of expenditure to improve conditions. I agree with the right hon. and learned Gentleman that anyone who has visited any of these hospitals must primarily be struck by the devotion of the staff and the severe nature of the job we give them to do. I should like that tribute to go out from the House. The last thing we want to do is to lower the morale of an already over-pressed nursing staff. We have to find a way of striking a balance between facing the scandals that are revealed from time to time and, at the same time, not undermining the confidence of the wonderful people who do this work.
The right hon. and learned Gentleman will be aware that the Davies Report was published only recently. My predecessor told the House that he wanted to enter into extensive consultations. Those consultations are still continuing, and it would be wrong for me to express a view until all concerned have had a full opportunity of making their views known. I cannot hold out any early possibility of my being able to announce the Government's policy on the report because it would be wrong for me to circumscribe in any way the consultations taking place on what is, after all, in some respects, quite a controversial report.
Will my right hon. Friend bear firmly in mind two considerations which are included in her foreword to the report? The first is:
The second consideration is as follows: doing something about the scandalously low wages paid to nurses?
I agree with my hon. Friend that the two sentences he quoted from my foreword are crucial to a proper assessment of the situation. I have repeated them in the remarks I have made, and I shall go on repeating them.
During my visit to South Ockendon I was immensely struck by the appalling nature of the job that some people have to do. Nurses have to deal with a concentration of high dependency cases. The recommendation contained in the report about one patient, John Meter, is that he should be in the kind of situation in which the equivalent of three whole-time nurses are dealing with him and him alone. We are clearly a long way from a proper manning-up of some of these hospitals. Therefore, I fully accept what my hon. Friend says.
My hon. Friend asks whether I shall go on pressing the Treasury. Every Minister is always willing to do that in the interests of his or her budget. I am telling the House something rather different, and I referred to it in my statement. I am saying that within the confines of whatever becomes the budget of my Department I intend to see that higher priority is given to the granting of loan sanctions to local authorities. Many local authorities have been keen to go ahead with the sort of community services visualised in the White Paper, "Better Services for the Mentally Handicapped", but, despite the expansion of expenditure, have found that they could not get loan sanction.
I specifically say in the concluding remarks of my statement that I intend to see that loan sanctions get higher priority. For example, loan sanctions for mental handicapped projects last year were 20 per cent. below the target figure needed if we are to fulfil the White Paper's recommendations. Whatever the size of one's budget, it is a question of giving a new priority to these schemes. Unless we do, the national scandals—the South Ockendons and other cases—will inevitably go on recurring.
Without wishing to suggest that horrifying stories of this kind about our mental hospitals are the rule rather than the exception—
Why say it?
If the hon. Gentleman will look at the record he will see that I said precisely what he is asking me to say.
Does the right hon. Lady agree that there are three lessons to be learned from this and other cases? Does she agree, first, that resources must be adequate to do away with overcrowding; secondly, that staffing must be substantially increased in all these establishments; and thirdly, that we must develop a much more rapid and sensitive method of processing complaints within the National Health Service?
Yes, I agree with the hon. Gentleman on all those three matters. The staffing position at South Ockendon has improved. I have seen the wards that have been upgraded and I was conscious of a difference in atmosphere where the improvements have taken place. I went round the occupational therapy unit and the industrial therapy unit. I could see what a difference they made, elementary though that provision might seem to be.
The fact that emerges clearly is that South Ockendon is already under pressure again to relax its ban on new admissions and the new ratios it has tried to work out. The tougher patient-to-staff ratio is under intense pressure because there is nowhere else for patients to go. I repeat, improvements have been made in the region, but we must see that they continue and that resources are made available to enable them to continue.
The hon. Gentleman asked about the complaints procedure. Since these events occurred a Health Commissioner has been appointed who can at his discretion receive complaints direct from staff on behalf of their patients. I hope therefore that, quite apart from representations by relatives or anyone else, there can be a channel of complaints and inquiries which formerly was not available.
Is my right hon. Friend aware that there will be a wide welcome for her promise of greater priority within the health budget for mental and mental handicap services?
Why is it that, within the last year or two, the inspections of mental and mental handicap hospitals by the Hospital Advisory Service, which were admirable, have either been discontinued or nearly so? Why is this? Will it be changed? Secondly, is my right hon. Friend aware of the feeling that the efforts of the Parliamentary Commissioner for Health to make his rôle known are to be strongly criticised as not being simple and effective enough?
I add my thanks to those who have pointed out that conscientious mental nursing is one of the most exacting and perhaps the noblest of all jobs in this country. Why is it that we have allowed the education, training, status and pay of mental nurses to fall behind those of so many other people?
My hon. Friend is right. The inquiries by the Hospital Advisory Service in the mental handicap sector are currently in abeyance, and I have been making inquiries to find out why. I gather that each of the mental handicap hospitals has been visited once by the service, but such visits are no longer being made and I am examining the situation. No doubt we shall be able to reach a decision on it in due course.
I had some criticism myself, when in Opposition, of the scope of the Health Commissioner's powers and the duplication of this post and that of Parliamentary Commissioner for Administration in the person of one individual, but the commissioner has been carrying out his duties only since last October. If, in the light of experience, any hon. Member feels that some improvements should be made, I would welcome suggestions.
While deploring, with the right hon. Lady, the reasons for this inquiry and report, I ask her to recognise the immense strain under which these staffs work, in conditions of gross overcrowding and very often of great understaffing. Can we have her assurance that she will do all she can to ensure that this situation is rectified? I assure her that the vast majority of all Members of the House will wish to support all measures she wants to take in order to achieve that end.
The answer to the hon. Gentleman's question is, "Yes", and I hope that he is right and that I shall have the support of the whole House in allocating additional resources, even at the expense of other equally urgent matters.
Is my right hon. Friend aware that we are all immensely grateful to her for the prompt, straight-forward and understanding way in which she has attacked this problem and dealt with the report? Will she use her best endeavours to ensure that any report of an inquiry into a death at any hospital, whether a mental handicap hospital or not, is not kept secret? I refer, as she probably knows, to the case of Stuart Shaw in Watford, where the report of the inquiry has been declared secret. I have a copy of it and I am finding it very very difficult to keep my mouth shut about it.
I will look into the point raised by my hon. Friend.
I add my tribute to those who work in this extremely difficult sector of nursing. Is the right hon. Lady aware that the last thing we would want to contemplate is the possibility of having to set up another, similar inquiry in future? I want to press one point which my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) raised. Given that cases may occur in which frank allegations have to be frankly dealt with, and that Parliament wishes it to be so, will the right hon. Lady look further into the question of how best we can handle reports of a forthright and courageous nature like this, which we want to be the result of such inquiries if we have to have them?
As I have explained, in publishing the report as a House of Commons paper I am following the procedure which was advocated by the Joint Committee and which is also touched on by the Davies Report. I will bear in mind what the right hon. and learned Member for Surrey, East (Sir G. Howe) and the hon. Member for Woking (Mr. Onslow) have said.
I appreciate that publication as a parliamentary paper deals with most of the problems which can arise, but the right hon. Lady will appreciate that it does not completely cover the position of those who conduct an inquiry in certain circumstances, not only in this area but in others, and that there is a difficulty here that we should perhaps look at more generally.
Yes, Sir. I shall be happy to do that and to consider any suggestions which the right hon. and learned Gentleman wishes to make.
Business of the House
That, notwithstanding the practice of the House relating to the interval between the various stages of bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[ Mr. Pavitt .]
Labelling of Toilet Preparations Bill
3.47 p.m.
I beg to move,
These include such things as rashes produced by talcum powder, after-shave lotions, deodorants and other products, swollen eyelids from some brands of mascara and eye shadow, and a good deal of scalp trouble from various hair preparations, some of which have caused hair to fall out. In every case, lack of product information prevented the sufferer from identifying the source of the trouble.
Even doctors treating cosmetic allergies often find that cosmetic firms refuse to reveal the name of the ingredient which is guilty, although this information is absolutely essential if the patient is to avoid trouble in the future. When commercial secrecy takes this kind of priority over human health, the disclosure compulsorily of cosmetic contents is clearly overdue, and that is the reason for this Bill.
Whilst cosmetics are often regarded as being entirely frivolous and unnecessary, it is important to realise that a whole range of toilet preparations are essential and are used on the body throughout life by practically every man, woman and child. Yet their contents remain a mystery to the user. Manufacturers are required to list the ingredients of the food we take into our bodies, but there is no such requirement in the case of toiletries which we use on our bodies. There is an increasing demand, both from individual consumers and from consumer bodies like the Consumer Association and the National Federation of Consumer Groups, for this essential consumer information.
If the right to know is important the problem of cosmetic danger is even more important. We confine colours used in food to a permitted list because of the cancer-inducing danger of many colours, but there is no similar legal restriction on cosmetic colours.
At my request the Home Office sought to trace whether a newly-banned food colour Ponceau MX, a bright red colour, was being used for lipstick. It took many months to find out, but the Department finally located one manufacturer who was using it but was considering giving it up. The public have no means of knowing which brand it was and whether that dangerous colour has, in fact, been discontinued. Again, some preparations contain lead and other metals to permitted levels, but even small amounts can be harmful to particular people, and many do not want these ingredients in their cosmetics or toilet preparations at all.
There is now a new worry because there is concern about the carcinogenic properties of the gas, vinyl chloride monomer—or VCM, as it is known. This has been used as an aerosol propellant among its many other uses. Aerosol toiletries are used in their millions by men and women as deodorants, hair sprays, foot sprays, and so on. After reading the article in last Sunday's Observer , which stated that the United States Government has been compelled to withdraw from sale thousands of canisters of hairspray because they contained VCM as a propellant, there must be many users here who are worrying about the possibility that VCM is in the toilet products they use every day. They have no ingredient information which would provide the means of knowing.
A year or so ago the deaths of babies in France as a result of the use of excessive amounts of hexachlorophene in baby powder was another case in point. As a result there is now voluntary limitation to what is believed to be a safe level of hexachlorophene in toilet preparations for general use, but there is still no indication on the label which products contain hexachlorophene. There is now an EEC draft document recommending that all appropriate toilet preparations should carry the words
I believe that this kind of ingredient labelling is necessary on all the toilet preparations we now use, however. It is essential for the public. Where the package is too small for a complete list of contents, the Bill provides that these can be printed on the promotional material provided that it is readily available.
Objection is sometimes made to the listing of ingredients on the ground that the public do not understand chemical terms, but we are quick to learn the name of a chemical which upsets us. Where an ingredient causes trouble that we wish to avoid, it soon becomes, like hexachlorophene, almost a household word.
We rely very much on the reputation of our leading manufacturers of toilet preparations in this country and on the voluntary code of practice which they observe. It is commonly accepted that they produce to a high standard. That being so, they have nothing to lose and a great deal of consumer good will to gain by the declaration of ingredients.
However, it is important that this should be a legal requirement so that it applies to the not-so-good firms as well as to the best, especially since almost anyone can start up in the highly lucrative toiletries business without any kind of licence or permit. I believe that the Bill will fill a gap in consumer protection, and I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Joyce Butler, Mr. Arthur Davidson, Miss Janet Fookes, Dr. J. Dickson Mabon, Mr. Arnold Shaw, Miss Betty Boothroyd, Mr. Ted Graham, and Mr. Emlyn Hooson.
Labelling of Toilet Preparations
Mrs. Joyce Butler accordingly presented a Bill to confer powers in relation to the provision of information or instructions on the sale of toilet preparations; and for purposes connected therewith and the same was read the First time; and ordered to be read a Second time upon Friday 21st June and to be printed. [Bill 46.]
Orders of the Day
Independent Broadcasting Authority Bill
As amended ( in the Standing Committee ), considered .
Schedule 1
Rental Payments
4.5 p.m.
I beg to move Amendment No. 1, in page 8, line 25 at end insert:
'or ( c ) income derived from publications including TV Times'.
With it we shall discuss Amendment No. 3, in page 8, line 25, at end insert:
'( c ) income derived from publications provided such publications include an independent broadcasting magazine of criticism, research and analysis, as well as the TV Times'.
I begin by expressing my regret at the absence of the hon. Member for Derby, North (Mr. Whitehead) this afternoon. His absence is due to illness. I am doubly sorry, because he is able to make a particularly valuable contribution to our debates. Had he been here I would have volunteered to give up my amendment in favour of his, because his is an improvement on mine. Mine seeks to preserve the present situation, and his seeks to create something new, imaginative and, I think, desirable. He advocates a magazine of criticism and research. In such a magazine there would be scope for reproduction of scripts edited from important programmes, and I think that the possibilities for such a magazine are considerable. Ultimately it might be to ITV what the Listener is in the BBC world.
It is as well to recall that in Committee the Minister of State dismissed my amendment in just over half a column of HANSARD. In that space he answered arguments that I had not made and none of those that I had made. He said,
One cannot deny that the copyright fees and profits fall within the definition of relevant income which accrues in connection, directly or indirectly, with the provision of television programmes. My amendment, however, was designed to extract the TV Times from a position which I think was wrong for it. A number of good reasons were put forward by the hon. Member for Derby, North, my hon. Friend the Member for Louth (Mr. Archer) and myself. To give him his due, the Minister, in the light of these reasons, said that he would reconsider the matter on Report.
The Minister must accept that the Bill does not aim to change the purposes of the levy. It changes the system and the machinery for the collection of the money. The old system was based on advertising revenue from television, and it did not affect the TV Times . If it had been meant to affect the TV Times it would have applied the levy to advertising in that publication. It never did, and the idea of bringing in that publication was hit upon by the Treasury as a means of getting more money from an entirely new source. It is a new departure for which no reason has been given. I do not say that, just because it is a new idea, it is necessarily wrong. I believe that it is wrong because the TV Times is now to be singled cut as the only publication to suffer this unique tax.
The Minister tried to say that the TV Times was in a unique position but he gave that up fairly soon, because it is not in a unique position. He cannot get away from the fact that the Radio Times is in precisely the same position. It is an exact parallel. It owes its existence to the BBC copyright exactly as the TV Times owes its existence to the ITV programme copyright.
The hon. Member for Derby, North, in supporting the argument at the Committee stage, said, as unanswerable. The hon. Gentleman went on to say that there were a number of other magazines which, if not in exactly the same position, were certainly dependent on the existence of television for their own existence. The TV Times is in competition for advertising with all magazines.
This case is simple and straightforward and can be put shortly, but it is I believe a very strong case and I hope that the Minister will acknowledge this and accept the amendment.
I wish briefly to support what has been said by my hon. Friend the Member for Howden (Sir P. Bryan). This proposal can be justified on a number of grounds, notably the inequality of treatment between the Radio Times and the TV Times .
I wish to take up what I regard as a very imaginative suggestion made by the hon. Member for Derby, North (Mr. Whitehead), a suggestion which deserves all-party support, although perhaps I should qualify that by saying that it deserves the support of the Conservative and Labour Benches, because no Liberal Member is present at the moment, and so we shall never know the Liberal Party's view on this matter. Probably the loss is not ours.
The suggestion made by the hon. Member for Derby, North in his amendment and both in Committee and on Second Reading is that the independent television companies should not be required to pay a levy on the proceeds or profits of the TV Times provided that an independent broadcasting magazine dealing with criticism, research and analysis was started.
Yesterday in the House we debated the state of the Press. As a journalist I took part in the debate. The Minister of State was present for part of that debate and no doubt heard what was said. There was general agreement in the debate that the Press in this country—newspapers and magazines—was facing a critical period, with some publications facing the threat of closure. Concern was expressed from both sides of the House and it was agreed that we wanted a Press which expressed the widest range of opinions available. It was also agreed that the financial position of the Press was such—this was and is the crux of the argument—that it was very difficult to start a new publication in the present economic climate. We have here a practical and imaginative suggestion how such a new publication can be started.
I understand from my hon. Friend the Member for Howden that this proposal would be acceptable to the independent television companies. The Minister of State should take note of that.
4.15 p.m.
We have here an opportunity which we should grasp with both hands. The House has the opportunity to see that a new magazine could be started which could make a real contribution in discussing and analysing programmes and broadcasting policy. Surely this is exactly what is wanted. In fact, the Listener , published by the BBC, has made a distinguished contribution in this area. It represents a wide range of views and cannot be said simply to reflect the views of the BBC hierarchy.
Surely there is everything to he said for developing discussion of broadcasting policy by means of a new magazine. After all, television is now the major medium in this country and its effects are widely debated by politicians and the public. We debate the effect of television on children and on consumers and, as the Minister of State knows, we also debate its effect upon the levels of violence.
I understand that my hon. Friend is prepared—and everything he said showed that he is prepared—to accept the suggestion of the hon. Member for Derby, North. We have an opportunity to add to the discussion of broadcasting policy, and, above all, to the place that discussion on a more informed footing. Too often discussion on the effect of broadcasting is based on preconceived views and sometimes on downright prejudice. I suggest that the growth in the impact of broadcasting, particularly television, means that our discussion and debate of broadcasting policy should now be very serious and should, as far as possible, be based upon fact, research and informed opinion. A further publication covering this sector would undoubtedly help.
The Minister of State has been presented with what I regard as an imaginative suggestion. It is notable that the suggestion has come from his side of the House. We in the House have an opportunity to take a step which could lead to a new magazine being formed. Such a magazine would undoubtedly fill a need, and I urge the Minister of State to take note of this point and to accept my hon. Friend's amendment.
I support what has been said by my hon. Friends the Members for Sutton Coldfield (Mr. Fowler) and Howden (Sir P. Bryan). I am delighted to see in the Chamber other hon. Members who were not able to attend the Committee. I know that they will listen to the arguments carefully and will vote in the way their conscience lies. I am glad to see the hon. Member for Bolsover (Mr. Skinner) present. He is a man of integrity. I know that he is present for no other reason than to listen to me and that he will guide the entire Tribune Group into the Lobby should it be necessary.
I also welcome the Minister of State. I take the opportunity of apologising to his Parliamentary Private Secretary whom I accused in Committee of not joining in the debate, without my realising the position which he held. I have taken considerable trouble to travel around the House and to find out how the Minister of State voted on other things. I found that among civil servants and senior politicians on both sides he is regarded as a man of conscience, honour and integrity. I have been delighted to find this, because there were one or two on our side of the House who were disappointed by the way in which he treated the Committee on this issue.
I am sorry that the hon. Member for Derby, North (Mr. Whitehead) is not here, because, without any disrespect to my hon. Friends, I believe that he is probably the best informed person in the House on the television industry, and it is a pity to have a debate without his being present. I am equally sorry that the hon. Member for Crewe (Mrs. Dunwoody) is not present, and I hope that the reason is not also illness. But we do have present the hon. Member for Bolsover, who I can see is briefing his stalwarts on what they should do this afternoon.
I asked my hon. Friend the Member for Howden to divide the Committee. We did not divide, because of what the Minister said. If we had divided, we should undoubtedly have defeated him. There is no doubt how the hon. Member for Derby, North would have voted, and there is little doubt how the hon. Member for Crewe would have voted. The Minister is a shrewd politician. He has been in the House far longer than I have. He chatted to the junior Whip on duty, whom it is also very nice to see present this afternoon. They decided that the cleverest thing to do was for the hon. Gentleman to say a few words to keep everyone happy. They were addressed not to a Conservative Member, but to his hon. Friend. It is an understood tradition of the House that when an hon. Member wishes to give way at all, he cleverly does it to a Member on his own side, although I thought at the time that it was a little mean of him, because the most definite speech on the subject had come from my hon. Friend the Member for Howden.
After listening to the arguments of the hon. Member for Derby, North, the Minister said:
If the hon. Member for Bolsover and his Friends had been present in Committee they would have understood the argument, being intelligent men. They would have supported the amendment, and the vote in favour would have been overwhelming if the Committee had divided.
The arguments of my hon. Friend the Member for Howden about the TV Times being unique are beyond discussion. The arguments about this being just another Treasury tax are beyond discussion. It will be fascinating to see whether the Minister delivers a Treasury brief and gets himself off the hook, or whether he listened to the speech of his hon. Friend the Member for Derby, North and took on board the arguments.
One understands that in politics occasionally one wins the argument but not the vote, but, as the hon. Member for Bolsover and his supporters are here, we may even win the vote as well, should it come to that. The Minister will have to give very good reasons why he does not accept the amendment, because we can see in black and white what he said. He lost his virginity in the Committee. We on this side of the House look forward to his accepting the amendment of the hon. Member for Derby, North.
The hon. Member for Louth (Mr. Archer) has paid a great tribute to me for my integrity and conscience. I must say that since the Committee stage my conscience has been racked over the issue. The hon. Gentleman wondered whether I had withdrawn from the fight on the last occasion as a tactical manoeuvre, because I feared for the troops behind me. I assure him that I genuinely sought to find a solution to the problem which has been raised not so much by Conservative Members as by my hon. Friend the Member for Derby, North (Mr. Whitehead) whose absence today I also regret. I regret particularly the reason for it.
I want to put to the House the considerations that have moved me and suggest to me that I should advise the House to reject the amendment. The members of the Committee will know, but others who were not on the Committee may not know, that the Bill results from discussions held by the previous Government to determine whether there should be a new system of devising the levy paid by commercial television companies for their right to broadcast television programmes on the independent television network. Both sides of the House accept that that is not a tax but a levy paid for a right which has considerable commercial value.
In the past that levy has been assessed according to the advertising receipts over the years, irrespective of the companies' costs in putting on their programmes. The companies felt that that was an unfortunate way of constructing the levy because it meant that in an increasingly inflationary period when costs were rising fast—possibly faster than advertising revenue—they might be worse off and in financial difficulties in some cases as a result of the old levy. They therefore accepted this new proposal for basing the levy upon the profits gained. In order to help the smaller companies, which are more likely than the bigger companies to be in financial difficulties, it was agreed that there should be a free slice of about £250,000; or 2 per cent. of advertising receipts, and that on top of that free slice there would be a levy on all profits at the figure of 66·7 per cent.
The effect of accepting the amendment moved in Committee by the hon. Member for Howden (Sir P. Bryan), and now moved again by him, would be to add £1½ million, which is the profit from TV Times , to the free slice available to the companies. The effect on last year's earnings, up to July 1973, would have been to increase the profits made by the companies by between 2 per cent. and 3 per cent. That is a substantial variation of the agreement, which is implicit in this approach to the Bill, that there should be this kind of breakdown of the profits—a free slice initially, and then two-thirds to the Government and one-third to the companies.
What the Treasury feels—I feel it, too, and argued it in Committee—is that if we accepted that view it would mean that an additional 2 per cent. or 3 per cent. went to the companies, and that, therefore, the whole structure of the agreement should be reviewed. In those circumstances I resisted the amendment in Committee. I resisted it because it was undeniably profit that accrued to the companies directly or indirectly from the showing of television programmes. Nobody disputes that—indeed, the hon. Member for Howden accepted that today. The hon. Gentleman wants us to separate that profit from the other kinds of profit which come directly from the making of the programme and from advertising revenue.
4.30 p.m.
The Minister keeps on quoting the year ending July 1972. In yesterday's debate on the Press his right hon. Friend the Prime Minister was able to quote much more up-to-date and relevant figures concerning the newspaper industry. Surely the television industry is facing many of the same pressures as the newspaper industry faces. It is not particularly relevant to quote figures that are almost 12 months out of date.
If the hon. Gentleman had contained himself he would have realised that I was coming to the present financial state of the companies. We discussed that at some length in Committee but I was going to refer to it again.
What impressed me in the course of the argument in Committee was the suggestion by my hon. Friend the Member for Derby. North that, though there was a difference between the financing of the BBC and the financing of the commercial companies, the financial position of the Radio Times —
On a point of order, Mr. Deputy Speaker. Is it possible to ask the Tribune Group to hold its meetings somewhere else?
That is not a serious point of order.
I was about to say that, although there is a clear difference between the financial position of the BBC and the financial position of the companies and, therefore, between the magazines that are produced on their behalf, there might appear to be an injustice if one magazine were treated differently from the other. In addition, there was the point which was made by my hon. Friend the Member for Derby, North, with which I have the greatest sympathy, that it would help the consumer a great deal if, instead of there being two magazines for television programmes, there was only one magazine. One of the virtues of trying to put some pressure upon both broadcasting organisations might be to construct one television booklet which would give the programmes for both organisations. In those circumstances I had further consultations—
I am sure that the Minister will not consider it rude if my hon. Friends and I regularly intervene as we are now on Report.
indicated dissent .
I do not want the opinion of the hon. Member for Gloucestershire, West (Mr. Loughlin). He was not on the Committee. The Minister has stated the reasons for his going back to Lord Harris. But that was not the reason that he gave in Committee. We hoped that that would be the reason that he would give today. He said in Committee:
"But I take the point that my hon. Friend the Member for Derby, North (Mr. Whitehead) has made about the direct comparison between the publishing concerns of the BBC and those of the ITA. I think that no injustice is done to the commercial companies by this proposal. But if it may seem that, by comparison, there appears to be an injustice, clearly that is a factor that we must bear in mind."—[OFFICIAL REPORT, Standing Committee B, 30th April 1974; c. 92.]
It is the difference between the BBC publication and the ITA publication which we thought was unfair.
As always, the hon. Member for Louth is open with his mouth and closed with his ears. If he had listened carefully he would have heard that I indicated that one of the factors that moved me in the discussions that we had in Committee was the one which he has just read out. It has been made plain to me that neither the companies nor the BBC would welcome a suggestion that they should promote a joint magazine. They take the view that it is impossible for two different broadcasting organisations in competition with each other, which is the situation that has been constructed by Parliament, to run a magazine that would further the audience of each of the different organisations and would be run jointly by the two bodies. There would inevitably be a tension because of their respective interests, which would make it impossible to run a joint magazine.
Is the Minister saying that had the organisations agreed that it would be possible and desirable to have a joint magazine he would have found it possible to concede the amendment?
It is possible that I could have done something if they had agreed to the proposition nut forward by my hon. Friend the Member for Derby, North. Certainly I would have felt more disposed to do something were they able to do that, but they were not. Therefore, we come back to the original proposition—namely if we are not going to have one magazine, is it right that we should have two magazines produced by television broadcasting systems, those bodies getting their revenue from the copyright that is possessed by the broadcasting systems? Further, is it right that there should be a levy on one magazine and not on the other?
That brings us back to the argument which took place in Committee. I do not see the injustice of that position. I have approached the matter on the basis that there might be an apparent injustice, even if there is not a real one, but even then I do not see that there is an apparent injustice. What would happen if we said to the companies "No, we will not exact a levy on the £1½ million that you make from the TV Times "? Would the money go back into the broadcastng system to make better programmes or to make a better TV Times ? The answer is that it would not. It would be a commercial profit going to commercial companies in the interests of their shareholders. Therefore, if we reduced the levy to increase the profit the result would not be better broadcasting.
However, what happens to the money which the Radio Times earns, which is roughly the same amount? The money goes back to the BBC, and it is available to the BBC for the making of programmes. That money means that a smaller burden falls upon the licence holder. That is because the money is available for broadcasting and it does not have to come from the licence holder. Therefore, it postpones the date of raising licence fees.
I cannot accept the Minister's suggestion that the profit from the subsidiary of a parent company does not find its way to improving the service that the parent company gives. If the Minister has any knowledge of the operating of the business—and I have no doubt that he has such knowledge—he will appreciate that that is precisely what happens. The BBC can be certain that it cannot be forced into liquidation, whereas the companies always run the risk that that can happen. The case can be supported without being unfair to the Radio Times .
The hon. Gentleman makes the point that has been made by the hon. Member for Sutton Coldfield (Mr. Fowler). The point is the same. If we take the money that is available from the TV Times and pay it hack to the companies, would that help them in the difficult financial circumstances that they are now having to meet? We discussed that matter at great length in Committee. The evidence available to me—and I accept that it is based on the past—is that under the proposed system no company save one would ever have made a loss in recent years. On the economic prospects for the future, it seems unlikely that any company save one will make losses.
Of course, for reasons of political policy the broadcasting organisations were put on to a three-day working week and told that they could not broadcast after 10.30 p.m. That was the position for about three months. We argued—and I think that it was accepted by the Committee—that we could not settle a policy for determining what the levy should be for the years ahead upon the chance of a bad three months such as was brought about by the three-day working week. We said that we should try to frame the levy on the basis of our past experience and see how it worked out in practice. We said that if there were difficulties we would then be able to reconsider them. I gave that assurance in Committee and I give it again today. Therefore, I do not think that it is part of our consideration of the £1½ million which comes from TV Times .
There is attraction in the idea that out of the profits from TV Times there should be a new magazine for commercial broadcasting which does a similar job to the Listener in the BBC. I do not think it is divulging any secrets to say that the Listener does not make a profit and that it is subsidised, in a sense, by the profits from Radio Times . The commercial companies could do that, if they were interested. There is nothing to stop them, if they wish, from launching a magazine of the Listener type as an addition to TV Times and subsidising it by the profits which come from TV Times . If that is what they want, they can do that already, irrespective of the levy. It will mean that there will be less profit to go to the levy in any event.
As I understood my discussions with my hon. Friend the Member for Derby, North he thought that the companies would refuse to do it if it were left to them because they would be interested more in the profits than in the service to the consumer. The companies can prove my hon. Friend wrong and prove me wrong if they want to. What my hon. Friend wanted, as I understood it—which is not clear from the amendment—was that that money should be taken by the Government and allocated to the IBA so that the IBA could produce a Listener -type magazine. In those circumstances, it would be for the IBA to determine whether it had the resources, the skill and the wish to produce a magazine of that nature. As I understand it, it has not.
We are thus left in the position in which we were left at the end of our debate in Committee. I do not think that there is an injustice, or even an apparent one. The effect of giving way on the amendment would be materially to increase the amount of profit which would go to the companies. I do not think that in normal years they need to have that increase, and it calls into question the whole settlement. If the companies wish to be benevolent and create a new magazine for broadcasting of the Listener type, they can do so out of the profits of TV Times as it stands.
There is no doubt that the spirit of the hon. Member for Derby, North (Mr. Whitehead) is very much with us this afternoon for every hon. Member so far has lamented his enforced absence. I share the regret at the hon. Gentleman's absence.
There is little doubt that all hon. Members find a great deal of interest in the imaginative proposition that there should be some form of "Independent Listener" as an alternative publication of that calibre from the independent television companies.
The Minister of State is right in saying that there is nothing to prevent the companies from starting such a publication now or even, as I understand it, from developing the TV Times into such a publication. It obviously follows that if such a publication were to be less profitable than the TV Times , there would be less income available to be levied.
4.45 p.m.
The major point which has exercised my hon. Friends has been the disparity of treatment between the TV Times and the Radio Times . It will be as well to bring to the attention of those hon. Members who were not privileged to serve on the Standing Committee the words of my hon. Friend the Member for Howden (Sir P. Bryan). My hon. Friend, as is characteristic of him, made a moderate and restrained speech this afternoon, but all hon. Members recognise that when he says something he means what he says. He does not embellish it in any way. When he says, "I feel strongly" he means just that.
I quote my hon. Friend's words from our debate in Standing Committee: That is the starting point for this debate. It is from that point that we want to examine carefully what the Minister of State has just said. I accept that he has given careful consideration to the discussion we had in Committee. He has again looked at the question how the TV Times is to be treated under the new levy proposals and has considered whether there is a case for accepting that it should be placed on a par for treatment with the Radio Times .
The Minister of State told the House today that had there been one magazine he would have given, or might have given, a different answer from that which he gave this afternoon. Since I heard those words a short while ago, I have been asking myself exactly what is the principle which the hon. Gentleman has in mind which would have enabled him to adopt a different attitude in those circumstances from that which he has presented to the House this afternoon.
That is a very fair question. The answer is that if one were starting with a publishing company which was producing a joint magazine for the benefit of the consumer for one organisation which was nonprofit making and another organisation which was profit making, there would have to be some discussion about whether the independent publishing company was itself to be profit making. My assumption about the rôle that it would play was that it would be non-profit making. In those circumstances, there would be a very different situation in relation to the levy. If it were profit making, it would depend to some extent upon where the profit went. These were factors which might have arisen had there been a joint publication, but there is not to be a joint publication.
I accept that there is not to be a joint publication. The hon. Gentleman is making what seems to be a qualitative argument. He is saying in the first instance that if there are no profits deriving from the publication of this or any other magazine in the ownership or joint or part ownership of the companies, then there will be no income to be assessed for the purposes of this levy. Every hon. Member would accept that.
The hon. Gentleman goes on to say that if the profits were to be applied in a particular way—and he used what I thought he intended to be a slightly emotive phrase, "for the benefit of the consumer", implying that in his mind the publication of TV Times is not for the benefit of the consumer—then he might have had a different view of the degree to which the profits from that publication should be assessable for the levy, if at all.
I question the principle which the hon. Gentleman is advancing. If he is serious about this, he must have a basis for the defence of this proposition. He runs away from the point each time on the ground that there is not to be a joint publication anyway. I do not think that is a sufficient answer if he is serious about what he has said. I suspect that what he has in mind, but has not openly admitted to the House, is that it is the amount of profit which is causing him to take up this position and not the fact that a profit is being made, nor is he genuinely questioning the purpose to which the publication is being directed. He is assessing the amount of the profit currently being earned by this publication.
He gave the position away when he talked about the loss of £1½ million which he said, if I remember his words aright, "the Treasury would find unacceptable." If the Government are concerned about the possibility of the loss of£1½ million then they are worried about any alteration to the structure of the arrangement formulated in the Bill. The hon. Gentleman referred to the basis of the agreement or the understanding between all the parties, which as I recollect it included the then separate Ministry of Posts and Telecommunications, the Treasury and the Independent Television Companies Association.
It was out of the discussions in which those three were engaged that the figures which appear in the Bill, 66 per cent. to 67 per cent. arose. If I am right the hon. Member's reasons for saying that he cannot accept the amendment is because the Treasury, having been a party to that agreement or arrangement, is not prepared to change the basis of it for the sake of equity of treatment between the publication of the independent companies and the publication of the BBC. The Treasury does not want to lose the £1½ million.
Perhaps my right hon. Friend will add, for the benefit of the Minister, that in any case his anti-profit motive argument is now out of date. Is the Minister not aware that the Chancellor said yesterday that profits were all right? He said on behalf of the Government that it is quite honourable and clean to make a profit.
As ever, my hon. Friend is ingenious in reminding us of the overtures the Chancellor has been making to try to retrieve a lot of the sympathy he has lost from British industry.
The right hon. Gentleman was a party to the negotiations between the three different organisations. He knows that there was an agreement. Now one of those parties wants to disturb that agreement to the tune of adding another 3 per cent. or so to the return it gets. In those circumstances it would not be unfair if another of the parties thought that if the agreement were to be abrogated in one respect, the whole agreement should be called into question.
This is what I wanted to be made absolutely clear. The point I was trying to draw from the hon. Gentleman is that that is the reason why he rejected the amendment. It is because of the cost of £1½ million that he is not prepared to consider the amendment. If he had said that straight out, we would have understood his position exactly. What I object to is the fact that he tried to import all sorts of other considerations of a qualitative nature which were totally different from the quantitative evaluation which the Treasury has placed upon the agreement.
If the right hon. Gentleman wishes to make the point he ought to make it fairly. He can make it only because I conceded in my opening argument that there was this factor. I did not say that that was the only argument that had decided that we should resist the amendment. I said that there were other arguments which we considered. Having rejected all these arguments, we were then left with the one issue: should we allow the companies to take that £1½ million clear of levy? In those circumstances we were right back to the original discussions and the original basis on which the agreement was made.
It would be helpful if the hon. Gentleman gave a little further consideration, while the Bill goes through its later stages in another place, to the premises for his arguments and decides which one he wishes to adopt in the future. If the point he made in his penultimate intervention is the major issue, namely that he is worried on behalf of the Treasury about the £1½ million, then I accept that position. Let it be the case and let him say so. It is a perfectly defensible position to come to the House and say that there has been a basis of understanding, figures have been written into legislation and no one party is prepared to give way. I understand that and am prepared to accept it. All I am asking is that he should openly admit it.
5.0 p.m.
If the elements to the agreement are so sacrosanct, as they appear to be, and if the hon. Gentleman is, as he has said, telling the House that the Treasury is not prepared to give £1½ million away back to the companies in terms of leviable revenue, I put it to him that there should be no alteration in the basis of this agreement until the circumstances affecting the companies and the operation of the business of making television programmes have materially affected the estimates and the sums which form the basis of the agreement.
I shall spell out what I have in mind. My hon. Friend the Member for Louth drew attention—with regret—to the fact that the hon. Member for Crewe (Mrs. Dunwoody) is not present with us today. It will be within the recollection of the Minister of State that during our proceedings in Committee the hon. Lady the Member for Crewe referred—obliquely—on occasions to the film industry. It will certainly be within the knowledge of the hon. Gentleman that for some time there has been circulating among Government Departments a proposition that television companies should pay a levy on the films shown on television in order to provide extra capital to support the British film industry.
I hope that the hon. Gentleman will rise in his place and intervene in my speech in order to give the House the assurance that there will be no alteration to the basis of this agreement in order to provide extra revenue to finance films shown in this country in the cinemas. We are not talking about a figure here of £1½ million. It could be a figure of about £2½ million to £3 million.
If it is seriously being considered that this is to be an additional impost to be placed against the revenues of the independent television companies because they are showing films on television, that would be a dramatic alteration to the basis of the agreement that had been reached in the preparation of the Bill.
I hope that I can have the Minister's assurance that he and his colleagues in his Department, together with the Treasury, who have been so adamant in
rejecting a proposition that £1½ million should be retained by the companies as non-assessable income for the purposes of the Bill, will not be party to distorting the basis of the agreement and the Bill by agreeing to any form of levy on the showing of films on television by the independent companies. If that were to be done, there certainly would be a substantial injustice.
I hope that the hon. Gentleman will bear in mind what I have said. If he is not prepared to intervene now, as he appears not to be, I hope that he will seek an early opportunity of giving the assurance for which I have asked.
Question put , That the amendment be made:—
The House divided: Ayes 104, Noes 217.
Division No. 23.] AYES [5.4 p.m. Aitken, Jonathan Grist, Ian Peyton, Rt. Hn. John Alison, Michael (Barkston Ash) Grylls, Michael Quennell, Miss J. M. Allason, James (Hemel Hempstead) Hamilton, Michael (Salisbury) Ridley, Hn. Nicholas Ancram, M. Hampson, Dr. Keith Rifkind, Malcolm Berry, Hon. Anthony Hayhoe, Barney Roberts, Michael (Cardiff, N.-W.) Biggs-Davison, John Heseltine, Michael Roberts, Wyn (Conway) Body, Richard Hooson, Emlyn Rodgers, Sir John (Sevenoaks) Boscawen, Hon. Robert Howells, Geraint (Cardigan) Ross, Stephen (Isle of Wight) Boyson, Dr. Rhodes (Brent, N.) Irvine, Bryant Godman (Rye) Rossi, Hugh (Hornsey) Braine, Sir Bernard James, David Boyle, Sir Anthony Brittan, Leon Jessel, Toby Shelton, William (L'mb'th, Streath'm) Brocklebank-Fowler, Christopher Johnston, Russell (Inverness) Sims, Roger Bruce-Gardyne, J. Jones, Arthur (Daventry) Skeet, T. H. H. Carlisle, Mark Kaberry, Sir Donald Smith, Cyril (Rochdale) Clark, William (Croydon, S.) Knight, Mrs. Jill Spence, John Cockcroft, John Latham, Michael (Melton) Sproat, Iain Cooke, Robert (Bristol, W.) Lawrence, Ivan Stanbrook, Ivor Cormack, Patrick Lawson, Nigel (Blaby) Stanley, John Crouch, David Lester, Jim (Beeston) Steel, David d'Avigdor-Goldsmid, Maj.-Gen.James McCrindle, R. A. Steen, Anthony (L'pool, Wavertree) Durant, Tony McNair-Wilson, Michael (Newbury) Tebbit, Norman Edwards, Nicholas (Pembroke) Marshall, Michael (Arundel) Tyler, Paul Elliott, Sir William Mather, Carol Viggers, Peter Eyre, Reginald Mayhew, Patrick (Royal T'bridge Wells) Waddington, David Fairgrieve, Russell Mitchell, David (Basingstoke) Wainwright, Richard (Colne Valley) Fidler, Michael Moate, Roger Walder, David (Clitheroe) Finsberg, Geoffrey Morris, Michael (Northampton, S.) Wall, Patrick Fisher, Sir Nigel Morrison, Charles (Devizes) Walters, Dennis Fookes, Miss Janet Neubert, Michael Wiggin, Jerry Fowler, Norman (Sutton Coldfield) Nicholls, Sir Harmar Winstanley, Dr. Michael Fraser, Rt. Hn. Hugh (St'fford & Stone) Onslow, Cranley Wood, Rt. Hn. Richard Godber, Rt. Hn. Joseph Osborn, John Woodhouse, Hn. Christopher Goodhart, Philip Page, Rt. Hn. Graham (Crosby) Goodhew, Victor Page, John (Harrow, W.) TELLERS FOR THE AYES Goodlad, A. Pardoe, John Sir Paul Bryan and Grimond, Rt. Hn. J. Percival, Ian Mr. Jefferey Archer. Cunningham, G. (Islington, S & F'sb'ry) Hunter, Adam Prescott, John Cunningham, Dr. John A. (Whiteh'v'n) Irvine, Rt. Hn. Sir A. (L'p'l, EdgeHill) Price, William (Rugby) Dalyell, Tam Jackson, Colin Radice, Giles Davidson, Arthur Janner, Greville Richardson, Miss Jo Davies, Bryan (Enfield, N.) Jay, Rt. Hn. Douglas Roberts, Albert (Normanton) Davies, Denzil (Llanelli) Jeger, Mrs. Lena Roberts, Gwilym (Cannock) Davis, Clinton, (Hackney, C.) John. Brynmor Robertson, John (Paisley) Deakins, Eric Johnson, James (K'ston upon Hull, W.) Roderick, Caerwyn E. Dean, Joseph (Leeds, W.) Jones, Barry (Flint, E.) Rodgers, George (Chorley) Delargy, Hugh Jones, Gwynoro (Carmarthen) Rooker, J. W. Dempsey, James Jones, Alec (Rhondda) Roper, John Doig, Peter Kaufman, Gerald Rose, Paul B. Dormand, J. D. Kelley, Richard Ross, Rt. Hn. William (Kilmarnock) Douglas-Mann, Bruce Kerr, Russell Rowlands, Edward Duffy, A. E. P. Kilroy-Silk, Robert Sandelson, Neville Dunn, James A. Kinnock, Neil Sedgemore, Bryan Dunnett, Jack Lambie, David Selby, Harry Eadie, Alex Lamborn, Harry Shaw, Arnold (Redbridge, Ilford, S.) Edge, Geoff Lamond, James Sheldon, Robert (Ashton-under-Lyne) Edwards, Robert (W'hampton, S.E.) Lawson, George (Motherwell &Wishaw) Short, Rt. Hn. E. (N'ctle-u-Tyne) Ellis, John (Brigg & Scunthorpe) Lewis, Ron (Carlisle) Short, Mrs. Renée (W'hamp'n, N. E.) Ellis, Tom (Wrexham) Lipton, Marcus Silkin, Rt. Hn. John (L'sham, D'ford) English, Michael Lomas, Kenneth Sitters, James Evans, Fred (Caerphilly) Loughlin, Charles Silverman, Julius Evans, Ioan (Aberdare) Loyden, Eddie Skinner, Dennis Evans, John (Newton) Lyon, Alexander W. (York) Small, William Ewing, Harry (St'ling, F'kirk & G'm'th) Lyons, Edward (Bradford, W.) Smith, John (Lanarkshire, N.) Faulds, Andrew Mabon, Dr. J. Dickson Snape, Peter Flannery, Martin McCartney, Hugh Spriggs, Leslie Fletcher, Raymond (Ilkeston) McElhone, Frank Stallard, A. W. Fletcher, Ted (Darlington) Maclennan, Robert Stoddart, David (Swindon) Foot, Michael, Rt. Hn. McMillan, Tom (Glasgow, C.) Stott, Roger Ford, Ben McNamara, Kevin Strang, Gavin Forrester, John Madden, M. O. F. Summerskill, Hn. Dr. Shirley Fowler, Gerry (The Wrekin) Marks, Kenneth Thomas, D. E. (Merioneth) Fraser, John (Lambeth, Norwood) Marshall, Dr. Edmund (Goole) Thomas, Jeffrey (Abertillery) Freeson, Reginald Mellish, Rt. Hn. Robert Thorne, Stan (Preston, S.) Garrett, John (Norwich, S.) Mendelson, John Tierney, Sydney Garrett, W. E. (Wallsend) Mikardo, Ian Tinn, James George, Bruce Millan, Bruce Tomney, Frank Gilbert, Dr. John Miller, Dr. M. S. (E. Kilbride) Tuck, Raphael Ginsburg, David Milne, Edward Urwin, T. W. Golding, John Mitchell, R. C. (S'hampton, Itchen) Varley, Rt. Hn. Eric G. Gourley, Harry Moonman, Eric Wainwright, Edwin (Dearne Valley) Graham, Ted Morris, Alfred (Wythenshawe) Walden, Brian (B'm'ham, Ladywood) Grant, John (Islington, C.) Mulley, Rt. hon. Frederick Watkins, David Griffiths, Eddie (Sheffield, Brightside) Murray, Ronald King Weitzman, David Hamilton, James (Bothwell) Newens, Stanley (Harlow) Wellbeloved, James Hamilton, William (Fife, C.) Oakes, Gordon White, James Hamling, William Ogden, Eric Whitlock, William Hardy, Peter O'Halloran, Michael Wigley, Dafydd (Caernarvon) Harper, Joseph O'Malley, Brian Willey, Rt. Hn. Frederick Harrison, Walter (Wakefield) Orbach, Maurice Williams, Alan Lee (Hvrrg, Hchurch) Hart, Rt. Hn. Judith Ovenden, John Williams, W. T. (Warrington) Hatton, Frank Owen, Dr. David Wilson, Alexander (Hamilton) Heffer, Eric S. Padley, Walter Wise, Mrs. Audrey Hooley, Frank Palmer, Arthur Woodall, Alec Huckfield, Leslie Park, George (Coventry, N.E.) Woof, Robert Hughes, Rt. Hn. Cledwyn (Anglesey) Parry, Robert Wrigglesworth, Ian Pavitt, Laurie Hughes, Mark (Durham) Pendry, Tom TELLERS FOR THE NOES: Hughes, Robert (Aberdeen, North) Phipps, Dr. Colin Mr. Donald Coleman and Mr. Hughes, Roy (Newport) Prentice, Rt. Hn. Reg Mr. Ernest G. Perry.
NOES Abse, Leo Blenkinsop, Arthur Carmichael, Neil Allaun, Frank Boardman, H. (Leigh) Carter, Ray Armstrong, Ernest Boyden, James (Bishop Auckland) Carter-Jones, Lewis Ashton, Joe Brown, Bob (Newcastle upon Tyne, W.) Clemitson, Ivor Atkins, Ronald (Preston, N.) Brown, Hugh D. (Glasgow, Proven) Colquhoun, Mrs. M. N. Atkinson, Norman Brown, Ronald (H'kney, S. & Sh'ditch) Concannon, J. D. Bagier, Gordon A. T. Buchan, Norman Conlon, Bernard Bates, Alf Buchanan, Richard (G'gow, Springbrn) Cook, Robert F. (Edinburgh, C.) Bennett, Andrew F. (Stockport, N.) Butler, Mrs. Joyce (H'gey, WoodGreen) Cox, Thomas Bidwell, Sydney Campbell, Ian Craigen, J. M. (G'gow, Maryhill) Bishop, E. S. Cant, R. B. Crosland, Rt. Hn. Anthony
Question accordingly negatived .
Motion made, and Question , That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 ( Third Reading ) and agreed to .
Bill accordingly read the Third time and passed .
Dumping at Sea Bill
As amended ( in the Standing Committee ) considered .
Clause 1
Restrictions on Dumping in the Sea
5.15 p.m.
I beg to move Amendment No. 1, in page 2, line 2, after 'ship', insert:
'(including a dredger used by or on behalf of a harbour authority)'.
It might be convenient to take also Government Amendment No. 2; Amendment No. 3, in line 3, after 'which', insert (apart from such a dredger)'; and Amendment No. 4, in line 5, after 'ship', insert '(excluding such a dredger)'.
The fact that the point dealt with in these amendments is valid is shown by a letter which I received from the Minister of State. I should like to quote one sentence from that letter:
The hon. Gentleman attempted to deal with this matter in his letter. I shall wait to hear what the hon. Gentleman says, but, as I read the Government amendment, it appears to meet the situation. As I interpret Amendment No. 2, dumping by a dredger does not take place unless the discharge is part of the operation of disposing of waste or spoil for which the vessel was built. This appears to cover the point which worries the British Ports Authority and about which it has written to Opposition Members. I await the Minister's explanation with interest.
In view of the concluding remarks of the right hon. Member for Edinburgh, West (Mr. Stodart), perhaps it will be useful if I follow the suggestion which you made, Mr. Deputy Speaker, since we are discussing Amendments Nos. 1, 2, 3 and 4 together, to move my own amendment, Amendment No. 2, and then to explain—
Order. The hon. Gentleman cannot move his amendment. He may do that formally later. We are already discussing an amendment.
I take your point, Mr. Deputy Speaker.
The right hon. Gentleman is quite correct. I wrote a letter to him along these lines because in view of most of our discussion in Committee, those lines were appropriate.
Our discussion in Committee circulated round two questions. The first was whether the dredger of a harbour authority was covered, and this was the main issue which the British Ports Authority raised with us. The second was the question of the complexities of amending the subsection. It was itself an exclusion subsection, and an amendment would have made a double exclusion in it. The problems did not seem to merit an amendment for the purpose of exempting from the exclusion only the dredger of a harbour authority. It would have created a gigantic drafting situation which did not seem likely to be necessary, because, despite the technicalities of the Bill, we felt that the operations with which we were concerned could happen.
Therefore, first of all I consulted the right hon. Member for Edinburgh, West in my letter. But we looked at the matter again and we felt that if we moved away from the matters raised by the Opposition dealing with a dredger operated by a harbour authority and, instead, broadened out into a more general class of vehicle and the functions of such a class of vehicle, it would be possible to come up with a more simple amendment which did not obscure the meaning of the Bill. We believe that our draftsmen have succeeded in doing that.
The effect of Amendment No. 1 would merely be to ensure that a dredger operated by a harbour authority was not subject to dumping controls in respect of its normal operations. The effect of the Government amendment would be to remove from the dumping controls any normal operations of vessels, whether constructed for dumping or dredging or not, if discharges were made for other than dumping purposes.
The clause really says that dumping is only dumping when it is dumping. When vessels dump, whether they are constructed as dumpers or dredgers or anything else, they are dumping. If anything goes over the side when they are not performing their normal function, it is dealt with in other legislation.
With that clarification, I hope that the right hon. Gentleman will accept that his proper course is to withdraw his own more restrictive amendment and to accept Ours.
This is as I suspected, having read the amendment. I accept the hon. Gentleman's point that one does not, if possible, wish to be too narrow in one's restriction and to have this amendment applying only to the dredgers of harbour authorities.
Perhaps the Opposition can take credit for having raised the matter in Committee.
Having said that, I thank the Minister of State for having gone to the trouble of seeing that those wise men, of whose assistance I no longer have the benefit, have done what is always difficult for an Opposition and found the right words to meet our point.
I think that my right course now is to beg to ask leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn .
"or of its equipment, does not constitute dumping for the purposes of this Act unless the ship, aircraft, vehicle, hovercraft or marine structure in question is constructed or adapted wholly or mainly for the purpose of the disposal of waste or spoil and the discharge takes place as part of its operation for that purpose."—[ Mr. Buchan .]
I beg to move Amendment No. 5, in page 3, line 2, to leave out
"section 1(1)( b ) above in relation to substances or articles dumped"
and to insert
"subsection (6) above in relation to substances or articles dumped outside United Kingdom waters".
This is a drafting amendment. There is an inconsistency. Subsections (7) and (8), for example, relate to subsection (6), which is the general offence, and we wish to do the same with subsection (9). It does not alter the specific offence. It is merely a drafting amendment to bring subsection (9) into harmony with subsections (7) and (8) by referring to subsection (6) instead of Clause 1(1)( b ).
Amendment agreed to .
Clause 5
Enforcement of Act
The following amendment stood upon the Notice Paper:
Amendment No. 7, in page 7, line 16, after "a", insert "vehicle".
This amendment was tabled in view of the undertaking by the Minister of State in Committee to look again at the matter which had been raised. It was tabled before I received the hon. Gentleman's letter. Having received his letter, I am satisfied with his explanation. The matter which I wished to cover is dealt with already by subsection (8)( c ). We do not wish to be over-restrictive. Therefore, if it is in order, Mr. Deputy Speaker, I ask your leave not to move the amendment.
Very well.
I beg to move Amendment No. 6, in page 7, line 6, transfer subsection (8) to end of subsection (10).
The effect of the amendment would be to change the order of the subsections in the Clause.
In the Bill which had gone through some of its stages during the life of the previous administration and which came from another place the subsections were in the order that I suggest now. For some reason, which I have no doubt the Minister will explain—although he did not do so in Committee—the order of the subsections is less good than it was. It is important to get matters in the right sequence, as they were in the original Bill.
In subsection (7), we have the establishment of the right to board a vehicle, ship, aircraft, hovercraft, etc. In subsection (9), we have the facilities for doing the boarding—stopping the vehicle or ship in order to get on board. In subsection (10), having got on board, we have the attendance of whoever is in charge. Then we have the exercise of the rights which are at the moment in subsection (8) and which therefore precede what I have been describing. Then, in front of the commanding officer or whoever is in charge, the containers are opened, the records are inspected, and so forth.
5.30 p.m.
That was the order of the subsections in the Bill taken over by this Government from the previous administration. Of course, it is not the only change in the Bill, but any other changes are very minor. Otherwise, the Bill is almost word for word as it was originally. That shows that it must be a reasonably good Bill and should command the support of the Committee. I hope that this legislation will be useful in preventing something that causes great anxiety to many people.
It is important that legislation should be straightforward and in the right sequence, so that it can be followed and quickly understood. I suggest that the right sequence of subsections in the Clause is as I have described.
I regret that the right hon. Gentleman should have pursued this point. It is not one on which either of us should go to the wall. Indeed, the right hon. Gentleman has been most cooperative today, just as the Opposition were in Committee last week.
The crispness of subsection (8) is extremely useful for those who have to understand and use this legislation. The main powers of an enforcement officer are described in subsection (4). Those are then dealt with in subsections (7) to (10). Subsection (8) crisply sets out his duties and subsections (9) and (10) set out the process for carrying them out.
It seems to me that this matter is neither less nor more logical in any form. It is readable and understandable. I hope, therefore, that the right hon. Gentleman will seek permission to withdraw the amendment. I am in a weak position. If the right hon. Gentleman does not seek leave to withdraw the amendment, I shall be inclined to recommend that we should change it later, in another place. I do not see why we should go to the wall on this matter. If the right hon. Gentleman does not feel that he should withdraw the amendment, I suggest that we look at it together to see whether we can change it in the direction that he requires. If we bring about a change I may want to consider the different aspects of the clause in another place. Perhaps we may have a joint stab at it, which is a nice exercise in a democratic proceeding, in the other place. Perhaps the right hon. Gentleman will be willing to withdraw the amendment.
It all depends what type of execution the hon. Gentleman has in mind. He said that we should not go to the wall, which seems to mean that he does not want to face a firing squad. I do not want to go to the stake on it.
It would be idle for me to try to make out that this was a matter of enormous importance, because the words are there, whether they stay where they are or appear later in the Bill. Therefore, there is no matter of great fundamental importance here.
I will accept the hon. Gentleman's offer. He said that he was prepared to look at the matter. Perhaps we can get together and argue it out. I certainly have an open mind about it.
As my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) wishes to intervene I shall not at this stage ask leave to withdraw the amendment and thereby terminate the debate.
I intervene to make only one point, in view of the Minister's generous offer. If he accedes to my right hon. Friend's suggestion I should like him to bear in mind one point that I made in Committee. It is important to make clear that a British enforcement officer's powers under subsection (8) are governed by the words
"for the purpose of enforcing this Act".
If the hon. Gentleman in his generosity decides to renumber the subsections, may I ask him to ensure that those governing words in subsection (4) continue to govern subsection (8) however it may be renumbered?
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn .
Clause 12
Interpretation
I beg to move Amendment No. 8, in page 11, line 35, at end insert
'or in Northern Ireland, section 38 of the Harbours Act (Northern Ireland) 1970'.
This is a necessary extension. We need to add a reference to Section 38 of the Harbours Act (Northern Ireland) 1970 because it is here that a harbour authority in Northern Ireland is defined as opposed to Great Britain. Therefore, it is necessary to include it.
Amendment agreed to .
Motion made , That the Bill be now read the Third time.
[ Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, signified. ]
Question put forthwith, pursuant to Standing Order No. 56 ( Third Reading ), and agreed to .
Bill accordingly read the Third time and passed .
Price and Pay Code
5.36 p.m.
I beg to move,
The first amendment order, Statutory Instrument No. 661, was made to allow traders to pass on the increases in excise duty and the extension of the value added tax announced by my right hon. Friend the Chancellor of the Exchequer in his Budget Statement. Although it has been in operation since 5th April, the Act provides that it will lapse unless it is approved by each House of Parliament.
The second amendment order, Statutory Instrument No. 785, puts into effect the proposals that we made on taking office to tighten the existing price controls. This order also needs the approval of each House of Parliament.
It may be helpful if I set out briefly the background to these two orders, which are in line with the Government's counter-inflation policy. They stem from our fundamental belief that industry, the trade unions, and the whole community have a common purpose in attempting to prevent the onward rush of inflation. We have never argued that it is possible to reduce prices in a large-scale way, but we believe that it is possible, at least to some extent, to curb the onward pressure of inflation by policies which were not pursued by the previous Government.
We believe that there are great opportunities for exports. It is therefore in the interests of this country that manufacturers should be encouraged to look to export markets for their major profits where it is possible to do so.
It is fair to point out that among those whom I have met in both manufacturing and distributive industries there has been a positive response to the concept that inflation is of such overriding national importance that it is appropriate that the distributive, retail and manufacturing industries should make a contribution to the attempt to restrain it.
At all times the Government have been aware that in pursuing policies which attempt to limit prices and margins they must consider the needs of investment and the long-term requirements for growth in this country. But another requirement that is perhaps as important to investment as anything else, including the return on capital, a situation of industrial peace in this country, and a genuine acceptance of the fairness of policies for dealing with inflation as well as financial and economic policies. It is because we believe that only this degree of fairness and restraint will be widely accepted among all sections of the community that we feel that action on prices is of overriding importance as part of the process of getting social agreement to counter-inflation policies and to policies for industrial health.
Our prices policy will bite upon the control of rents, the subsidisation of certain essential foodstuffs, the Prices Bill, with the associated negotiations on a voluntary shopping agreement and the creation of a general framework for the better information of consumers. It is with one aspect only of this policy—that is to say, the tightening of the Price Code—that we are concerned in debating these statutory instruments.
I should like first to deal with Statutory Instrument No. 661, which is in many ways a technical order. The purpose of the order is to regulate the way in which indirect tax increases may be reflected in prices, since this is not explicitly covered in the stage 3 Price Code. We believe it is right that traders should be able to pass on indirect tax increases without fuss or bureaucracy and without being accused because they do so. But, equally, no one should make a profit on an indirect tax. There should be no percentage margin on indirect tax, and therefore no markup. There are consequential provisions to ensure that those two things are applied in all calculations relevant to the Price Code.
There is a balancing provision for any future tax reductions which must be fully reflected in prices. The position is that tax increases may be passed on— it is for the retailer to decide whether they are—but tax reductions must be passed on.
The right hon. Lady is taking action against a background of tax increases which we usually get when the Labour Party is in power. I am a little confused about the inter-relationship between these two orders. If there is an instance of indirect taxes coming down, the second order bans over-labelling. Suppose a retailer has on his shelves goods on which the tax has been reduced and therefore he has, according to the first order, to reduce his price. What does he do about that? How does he get over the ban on over-labelling under the second order?
If there is a tax reduction it must be passed on, but the second order makes it clear that re-labelling is banned in respect of increases. It does not bite upon reductions. When the hon. Gentleman studies the second order he may want to ask further questions, but I think he will find that his criticism is not directly relevant.
I now come to the technical questions raised by the Joint Committee on Statutory Instruments in its Fourth Report. Because the criticisms are of considerable seriousness, as they deal with the possibility of retrospection, I hope that the House will bear with me if I deal with them in a little detail.
The point arises because although the order did not come into force until 5th April it refers back to tax increases imposed on Budget Day, after 25th March. But all the order does is to say that as from 5th April prices may contain an addition to reflect a tax increase made after 25th March. There is nothing retrospective about that. Indeed, it could be argued that the order would positively have enabled traders to put up their prices from the moment when the tax increases applied.
I should like to tackle the two criticisms of the scrutiny committee in more detail. The first was that the Price Commission might have begun proceedings in cases where traders had increased prices before 5th April, and that those proceedings would have been overtaken by this order. That is true: any proceedings would have been stopped in their tracks. The essential point is that the commission could not have ordered any restriction of a price increase before 5th April because it is required to give 14 days' notice to the trader before doing so, as any hon. Member can check by looking at the Price Code.
The second point made by the scrutiny committee was that the order
I do not think, therefore, that the fears of retrospection under Statutory Instrument No. 661 are justified on either of the points made by the scrutiny committee. They are, however, important issues and that is why I have dealt with them in some detail, but there can be no question of retrospective proceedings. I hope that my explanation will settle any doubts that there may have been, but if hon. Members have further questions to ask my right hon. Friend the Paymaster-General will deal with them.
The order concerns itself with the passing on, without the making of profit, of tax increases of an indirect kind, and it requires that reductions shall similarly be passed on and fully reflected in prices.
The second order—Statutory Instrument No. 785—is not technical, but embodies certain fresh policies. We have had extensive consultations about the proposals embodied in this order with, among others, the CBI, the TUC, Retail Consortium, the Association of British Chambers of Commerce, the Price Commission, the Pay Board, the Food and Drinks Industries Council, the Federation of Wholesalers Organisation, and many others, including major consumer organisations. These proposals, which have been somewhat amended from those in the original consultative document, reflect our concern to strike a balance between the interests of the consumer and the wage earner and the legitimate interests of those engaged in manufacturing and distribution and those concerned with future investment.
The order contains, basically, three major points. First, subject to certain safeguards, it sets a general three-months' interval between price increases. Secondly, it reduces by 10 per cent. the limits on distributors' gross percentage margins. Thirdly, it restricts upward repricing by retailers of goods bought frequently by the public. As hon. Members know, that matter has been the subject of a great deal of consumer complaint.
The basic objective of the three-months' rule is to restrict the frequency of price increases made by manufacturers and service enterprises under the code. We believe that restricting the frequncy of incrases will result in less complication and less confusion for consumers faced with constant price increases.
Secondly, if we are to give full information to consumers, including the proper labelling of goods, it is essential to have a rule such as this. It would not be possible to engage in the proper labelling of goods, including unit pricing where appropriate, if there were frequent changes in prices with little interval between them. Thirdly, it will help the distribution industry itself in restricting inflation, especially where there are short-term upswings and downswings in a particular situation.
The Price Code permits price increases in a situation of loss, in a situation of low profit, and when firms are undertaking substantial investment financed from their own funds. None of these safeguards in the existing code is affected, and all of them will apply to this provision. Therefore, a firm will not be covered by this provision if it comes under the existing loss-making low profit and investment safeguards of the present Price Code.
It is also the case that the existing profit margin safeguard is left intact—that is to say, 8 per cent. in respect of manufacturing industries—and it is further the case that the provisions of the Price Code under which, as hon. Members know, price increases may be re-coupled retrospectively, will still apply. So a firm will be enabled to recoup its cost increases—where allowed—retrospectively, as it can do at present.
But over and above this, we have introduced two other safeguards. The first covers a situation in which a permitted price increase—by which I mean permitted by the Price Commission—is 10 per cent. or more. This is to deal with the sort of situation in which a firm may face a sudden increase in one of its essential materials—oil, for example, would have been a good instance of this a few months ago—which is outside its own control, which is allowable and where we feel that it is only right and proper that it should be allowed to reflect that increase in final prices.
Second, where raw materials are of great importance to the firm—I shall come in a moment to the definition of raw materials, or I will get a further question from the hon. Member for South Angus (Mr. Bruce-Gardyne)—I want to make it clear that the raw materials position is as laid out in the statutory instrument, that where raw materials constitute more than 75 per cent. of a firm's costs—we are talking largely about primary processing industries—or where they constitute 50 to 75 per cent. and the increase is 5 per cent., then in both cases a firm will be exempted from the three months rule.
Although this is perhaps a complicated way of doing it, the object is to exclude those industries which are essentially first processing industries, largely using raw materials, such as the production of wool tops, the production of copper wire bars and so on. There has been uncertainty on this last point because there is no clear definition, strange as it may seem, in virtually any legislation approved by Parliament of what is meant by a raw material.
I should like to give the House some detailed information about this and about where it does appear. There is no comprehensive or authoritative definition of a raw material as such. Generally speaking, the sensible interpretation would be something which has not undergone a substantial manufacturing process or one which substanitally alters its nature Therefore, raw wool, cotton, metals, timber and natural rubber would all clearly be raw materials. At the other end of the scale, components and the more sophisticated semi-manufacturers would not. There will be many materials between those extremes about which the picture is less clear.
We have therefore tried to find the most objective basis possible for a definition of raw materials. The closest that one can find any definition of this kind is from the Index for Basic Materials and Fuel, compiled by the Department of Industry, and the corresponding index compiled by the Ministry of Agriculture for the food manufacturing industries. Incidentally, the phrases "basic materials" and, in one place, even "raw materials" are used in the Price Code, but there is no clear definition of their use there either.
We cannot take these lists as they stand, because, for reasons connected with an entirely different purpose—that is, import trading requirements—they include one or two items which are clearly not in the raw materials category. For example imported steel semi-manufactures appear on the list because they were originally required for a different purpose. Nevertheless, broadly, this list, leaving out those obvious anomalies, will be the basis upon which raw materials for these purposes will be defined, and all the materials which are listed in Tables 2 and 3 of Appendix 5E of the last report of the Price Commission, whether imported or home-produced, will be treated for these purposes as raw materials. In other words, industry can look at that existing published list and get immediate guidance, which I hope will put some fears at rest, as to what is constituted by raw materials.
Incidentally, a report has appeared in the Press about tea. That report, I am informed, was wrongly based, and there is no question of tea being regarded as anything but a raw material.
I appreciate the difficulty of finding definitions that cover all the categories that the right hon. Lady seeks to cover, but perhaps she could give a couple of examples, which would certainly help me. For example, is iron ore a raw material, but not pig iron? When it comes to livestock, if I am feeding my pigs barley, that is presumably a clear raw material, but if I am feeding them concentrate, let us say, of fish meal, which is in a sense a semi-manufacture, is that not a raw material?
I respect the hon. Member's belief in my omnipotence and my omnipotent memory—
It is not omnipotence.
"My omnipotent memory"—I qualified it.
Omniscience, surely.
I am sorry—I meant my omniscience. My omniscience and my memory are not of the quality that the hon. Member wants. I have referred precisely to House of Commons Paper 56, and he can consult it. That will give the information that he wants. On the basis of memory, I would say that iron ore is certainly a raw material, but I cannot answer for pig iron. I assume that barley is also a raw material, but that is as far as I will be lured on this point, because it is all down in writing.
Where?
It is the Price Commission's Report, Appendix 5E, published only a few days ago.
I would add that there may be instances where particular firms want guidance on the basis of something which they regard as a raw material but which is not in that list. Generally, the firm should approach the Price Commission, because it will be possible for the firm to make its case that this is a raw material, but, broadly speaking, the guidance that I have given the House is, short of very anomalous cases, the best that we can give at present, and it is pretty comprehensive.
Of course, where there are price reductions stemming from reductions in raw material costs, the code itself would deal with any price reductions, and the Price Commission has the power to pursue reductions on the basis of raw material price falls.
I saw the report in the Press, apparently with complete authority, that the Price Commission had indicated that tea, being blended, was not a raw material. Are we to understand that the Price Commission gave no such indication, or are we rather to understand that the right hon. Lady has, for once, told it that it is talking nonsense and stopped it behaving in as idiotic a manner as it usually does?
My second question relates to paragraph 1 of the schedule, which I think the right hon. Lady was about to leave. She pointed out some time ago that a firm in a loss-making situation would not be governed by the quarterly limitation on price increases. But what about the firm that is not in an overall loss-making situation but has some loss-making operations?
The right hon. Lady will be aware, for example, that it seems likely that cement supplies will dry up altogether in Scotland because the Price Commission is obliging the manufacturers to operate oil-fired cement plants at a loss. Supposing this happens, there is so far as I can see, no provision in paragraph 1 for a firm in that situation to get the Price Commission to think again, when a whole section of a market is being deprived of supplies totally as a result of its original adjudication.
On the first part of that question, my understanding is that two different interpretations were put on a telephone conversation. There is no question of the Price Commission ever having given any official indication that tea was not to be regarded as a raw material.
The hon. Gentleman's second question is a matter for the Price Commission, as it always has been. The statutory instrument includes what have always been the exceptions—that is to say, paragraphs 34, 53, 56, 68, 69, 70 and 71. What he is asking is what interpretation the commission will put on these paragraphs in the case of any individual firm. He will appreciate that, without knowing the facts put before it, I could not tell him what that interpretation would be. The position is the same as it has always been since the Price Code was instituted and had these safeguards written into it.
Am I right in saying that the selected basic materials are those shown in Appendix 5E to the Price Commission's recent report? Table 2 deals with materials that are not food, drink and tobacco, and Table 3 deals with food that will be classed as raw materials. If there are only one or two anomalies, perhaps the right hon. Lady will tell us what they are. Am I right in saying that, apart from the one or two anomalies, all the materials in Table 2 and Table 3 will count as raw materials?
I am sorry if my references have been a little confusing. My reference to anomalies related to the basic materials index of the Department of Industry, which deals with some things with which Appendix 5E does not deal. That index has also been used as guidance in fields beyond Appendix 5E, and anomalies may arise on that because it includes a number of semi-manufactures. I do not think that I can take the guidance on anomalies further, but my right hon. Friend the Paymaster-General will endeavour to deal later with any questions on this matter that arise in the debate. The anomalies refer to the Department of Industry index and not to Appendix 5E.
I turn now to the cuts in distributors' margins. These are central to the current phase of prices policy. Under paragraph 80 as drafted by the previous administration, the Price Commission decided on 1st April to cut the reference levels of food distributors by 10 per cent. That was on the basis of the powers it had available to it under the previous administration. The present Government took the view that that 10 per cent. cut in reference levels should be extended to the non-food trades in which market price and margins have traditionally been very much higher than they have been in the food trade. There seemed to be no reason for singling out the food trade alone to make a particular contribution to counter-inflation policy when other trades were excluded. The 10 per cent. cut imposed by the statutory instrument will be extended across the whole range.
The exception to this extension—and it was included in the original Price Commission's proposal for the food distribution trade—concerns small traders. The Price Commission decided that it would not take the 10 per cent. margin cut below a turnover figure of £250,000 a year. It has been agreed by the Government, after consultations, that the same exemption will apply also to the non-food trades. That is a substantial exemption which amounts to well over one-third of the trade in both cases. It means that small dealers will not be involved in the margin cut. However, we are not unaware that there will be some effect on the small trader as a result of competition. This presumably was in the mind of the Price Commission when it announced its 10 per cent. margin cut during the period of office of the previous administration.
We have provided, in addition, a new profit margin safeguard of 25 per cent. for distributors which was not provided by our predecessors in respect of the food distribution trade. If there is a reduction in net profit margins of more than 25 per cent., the firm concerned will be absolved from taking any further cut towards the 10 per cent. gross reference margin. That is a safety net that is broadly acceptable. The trade would have liked a higher safety net and we should have liked a more severe one. The one we have adopted represents a reasonable compromise. It is fair to say that, broadly speaking, the trade has shown a willingness to contribute towards the counter-inflationary policy.
Over and above the 10 per cent. margin—although the effect will not be any greater in terms of profit cuts—we are seeking a voluntary agreement with the distributive trade to keep down the margin on certain essential foodstuffs. That is not intended to be, nor is it, a further reduction in percentage margins. It is hoped that the distributive trade will concentrate its 10 per cent. cut largely on the more essential of the goods which are available to the consumer.
Paragraph 77A restricts the repricing of goods. The provision has the support of all the consumer organisations and has been broadly accepted by the retail trade, which has said that it regards irresponsible repricing as a very bad practice. The trade has further pointed out that there are certain problems in meeting what it regards as a practice that should be stopped in a wide range of cases— the up-labelling or up-pricing of fast-moving articles, and the sticking of one label on top of another. That practice is an irritant to the housewife who finds that goods change in price perhaps two or three times within two or three weeks, and she becomes peculiarly outraged by what she regards as an unfair practice.
We recognise that there are many trades in which the stock moves slowly and the cost of replacing stock is considerably higher than the cost of the initial stock. This applies to furniture, dry goods, electrical durables and so on. In those cases it is unreasonable to suppose that the retailer would not have to recover some part of the cost of replacement on the basis of existing sales. We have therefore, restricted the limitation on the repricing of goods to those that move relatively rapidly, where the stock change is at the rate of 10 times a year or more. That means that the restriction is limited to the food trade and to a certain number of fast-moving, non-food goods such as detergents, washing powder, washing-up liquid and toilet soap.
Manufacturers who provide printed wrappers may have to reprice. That will be permitted because it would be uneconomic not to use the wrappers. They would otherwise have to be destroyed, and the ultimate cost to the consumer would be greater.
We have also made an exception for mail order catalogues. Because of the difficulties caused to the printing industry by the three-day working week, there are long delays in the printing of mail order catalogues, which may have to be drawn up literally months before the goods are made available. We recognise that it would be impracticable to insist that there should be no repricing of goods advertised in mail order catalogues.
In answer to the hon. Member for South Angus, I deal with tax increases. A sudden tax increase will be permitted. We do not intend to catch stock which moves relatively slowly. We believe the measure is a reasonable one which will be widely welcomed in the trade. Many representatives of trade have told me that this up-pricing practice can be stamped out if it is done in a reasonable manner.
Because there are widely differing practices and widely differing problems concerning staff, turnover and stock between small, remote shops and large supermarkets, the Price Commission, after con- sultation, will issue a data sheet giving full details of the interpretation. Full information will be given about the interpretation of the provision, and it will be open to any trade that is concened about the ban to go to the Price Commission and argue its difficulties. We believe that the restriction of the provision to rapidly-moving stock meets most of the criticisms that have been made.
This has been, in the nature of things, a rather detailed and technical outline of what we are attempting to do. Broadly speaking, the object of this statutory instrument in three parts is to ensure that the distributive trade makes its contribution to holding back the pressures on prices. Secondly, we are taking reasonable steps to spread the interval between price increases. It would have been possible to introduce a price freeze, but I think that that would have been unreasonable. This is a much more flexible and sensible alternative. We believe that we shall stamp out a practice that is of little benefit to trade when applied to fast-moving stock but is a substantial irritant to the shopkeeper and the housewife. I hope that the House will approve the statutory instrument.
6.10 p.m.
The right hon. Lady said in conclusion that these are rather technical matters. I, too, will have to go into some technical detail, and I shall put a number of questions to the Paymaster-General, which I am sure he is eagerly looking forward to answering. I hope that he will be able to give the information to us because they concern detailed and important matters to people outside the House.
I will not now go into the arguments about the functions of the Price Commission and the whole question of counter-inflation policy—whether it is right to have a Price Commission or whether the whole apparatus of prices policy is operating in the right way. Nor will I go into the effects, which are readily apparent to many hon. Members, of the Government's proposal to have a statutory prices policy with no control over wages. It will be interesting to see the effects of that policy in a few months' time.
We must look at any changes in the Price Code in two ways—in the short term and in the long term. If there were too harsh an application of the code, resulting in the temporary benefits which might exist for consumers being speedily eroded, the long-term damage to industry could be very serious. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) will deal with some of the effects on industry of the Price Code and of the Government's measures.
In passing, however, I may say that I was pleased to read the reports of the Chancellor of the Exchequer's speech last night.
Show them to the Secretary of State for Industry.
Unfortunately, the Chancellor's actions speak louder than his words at present. Since the right hon. Lady began with her usual party political piece, which we have grown accustomed to in the Standing Committee considering the Prices Bill, I will deliver my party political piece at the beginning of my speech. It is little wonder, when one considers what the Government have done during their short period of office, that there is such widespread pessimism in industry. The Chancellor spoke last night of the need for high investment, and he is right. But it is worrying that the prospects for high investment are not good. On other occasions I have given examples of how investment plans are being cut back and of how employment prospects will be damaged if there is not sufficient investment in industry now. We must, therefore, look at the Price Code in the context of its effect upon industry and of its short-term and long-term effects on the consumer. If the long-term effects on industry are bad, the livelihood of our people could be seriously threatened.
As I understand the right hon. Lady's aims, if tax changes put up prices the addition to prices thus caused can be passed on and she is making arrangements that such increases do not have to be notified to the Price Commission by manufacturers. But the need for the orders would not have arisen if the Government had not imposed so many tax increases. If taxation had not gone up, the right hon. Lady would not have needed the orders.
We here all know, and the country is increasingly aware, how taxation has gone up, necessitating these orders. Value added tax has gone up appallingly, and this, with so many other taxation changes, will have serious effects on industry. In addition to increased VAT, there have been increases in petrol tax and corporation tax—on which advance payments are required—while there have been other indirect taxation measures. All of this affects industry adversely.
The right hon. Lady is constantly telling us of the marvellous and effective action she is taking to try to keep down prices. As I have said before, while she pretends to be cutting prices, the Government are putting them up. The Paymaster-General, in his famous Written Answer of 1st April, told us what would be the effect on the retail price index of the Government's total package. The right hon. Lady tells us that the Price Code is one of the measures which the Government are taking to try to keep prices down, when we all know that the effects on the retail price index of the Government's measures will, in total, put the index up. The Government have deliberately decided, for reasons which seem good to them no doubt, to take measures which will put prices up while pretending that they are actually putting prices down. Perhaps the Paymaster-General would like to elaborate on that point.
I have no desire to elaborate the point, the hon. Gentleman being now engaged on his party political piece. But surely, even in a party political piece, he would not go so far as to deny that it was the intention of the Conservative Government to raise the prices of the nationalised industries, that this was inevitable and that it would have been inflationary if we had not done it.
I was dealing not only with the problem of the nationalised industries but with indirect taxation, which is entirely the responsibility of the Chancellor of the Exchequer. The Government have chosen to put up the retail price index by a combination of measures. They decided to put up indirect taxation. No one can seriously deny—although attempts will be made to do so—that the Government are talking about reducing prices but that the totality of their measures will put prices up. The effect of their measures has been to put prices up and not down, and that is not what many people outside the House expected, judging by what the Labour Party said during the election campaign.
However, if we are to have increases in taxation, which can be debated on other occasions, these orders are reasonable. But I am astonished that an order should be brought before the House on which the Statutory Instruments Committee has reported so unfavourably. It may be that there are precedents for an order of this kind to be brought forward when the Committee has drawn to the special attention of both Houses the fact that it purports to have retrospective effect whereas the statute confers no such authority. I cannot recall any precedent, although I would not dispute that precedents may exist. The Committee has made a serious criticism, and I hope that my right hon. Friend the Member for Crosby (Mr. Page) will be able to tell us why it came to its conclusion and that the Government will tell us why, despite the criticism, they are proceeding with the order today. Is this one of the matters they will be discussing in relation to changes in the Price Code so that no further retrospective measures will be brought forward when there is no statutory authority for retrospection?
The second order is much the more important. What about the timing of the consultations about the new Price Code? I understand that they have either just begun or are about to begin. What are the Government's intentions? How speedily do they propose to come back with a complete rejigging of the code, which I understand is what they are engaged upon? The Government say that this is an interim order and that they are going to recast the whole of the code. They are entitled to do so, but when is it to take place? Have the consultations yet begun? When are we to expect the new code?
Following up what the Chancellor said last night, can we have an assurance that in the discussions on the new code the Government will ensure that an adequate return on capital is available? The Chancellor said:
With some surprise I noted that the Chancellor said last night that it is important
The Secretary of State's original proposals would have been most unsatisfactory and would have had serious effects upon industry. I am glad that some changes have been made, and I welcome them, but worries still persist and I have received many representations from various people. Paragraph 26B deals with the frequency of price increases. No one likes prices rising if it can be avoided, but occasionally there is no alternative to raising prices within the three-month period, as the code accepts in setting out exceptions. I have a number of questions about the code and I hope that the Paymaster-General will answer them and will not shelter behind the fact that the Price Commission has the duty to interpret the code. Some of the questions are important, especially since the Secretary of State told us about raw materials.
On that point, where is the statutory force for the right hon. Lady's definition of "raw materials"? The Government have announced that "raw materials" is to be interpreted as they say and the Commission has agreed to interpret it in the way the Secretary of State outlined to the House. Will the Paymaster-General confirm that this is the position? I was surprised that the Secretary of State said that no definition of "raw materials" was available. What was wrong with the definition in Section 34 of the Iron and Steel Act 1953? Perhaps that is not the best Act to commend to the Labour Party. The definition in that Act
I am confused on this question of definitions. I believe that my hon. Friend referred to a statutory definition of "raw materials", but surely it is of the essence of the Price Commission as it was initially established that it is expected to interpret its own rules, or so-called rules, to suit its own convenience. Therefore, I do not understand how one can impose a statutory definition upon it.
I was asking the Secretary of State for the meaning of her statement this evening. She told us how the Price Commission will define "raw materials". How is she in the position to tell us that? As I understand the situation, the commission interprets its own code, and the right hon. Lady, presumably, has received some assurance from the commission that that is how it is proposing to interpret "raw materials" in this case. I should be grateful if the Paymaster-General will tell us the statutory position. The commission operates independently, so has it given an undertaking?
I, too, have heard the tea story. A leading tea company rang up the Price Commission and was told that tea would not be counted as a raw material because it had been shredded and dried. What a ridiculous idea. Like many people in industry, I am relieved to hear that this very restrictive definition has now been changed. None of us this evening can be sure whether or not what the right hon. Lady proposes is satisfactory because we have not had a chance to look at the definitions. I hope that the Secretary of State will seek an opportunity to display somewhere, or tell us about, the excep- tions, or at any rate make clear exactly what is to be counted as a raw material and what is to be exempted. I do not know whether she could do it through a parliamentary answer, or whether a whole book has to be examined. I am not sure of the extent of the definitions to which she has referred, but any more information about that list would be welcome because the matter has caused confusion among people outside. It is important that this should be cleared up soon. There was a great deal of feeling that the Government's wishes on this point had been totally eroded by the restrictive interpretation placed on the definition of "raw materials".
Another important point relates to those companies which operate on a related products basis. I understand that a great many companies make an application for a price increase on an individual item or unit on which they have a reasonable case for raising the price. They apply the case of what has happened to the cost of that product. Other companies have a system under which when the costs of the whole range of their products go up they apply very frequently for a price increase based on that rise, and subsequently, when the commission sanctions a price rise, apply it to just one or two of the products. For example, a big company might find that its costs have gone up 2 per cent. overall and will apply to the commission for an increase. It will then direct that increase towards one or two particular products.
As the code is drafted such companies which operate on the related products basis will no longer be able to apply their increases in this way and will have to apply once every three months over a much wider field. This will be difficult and confusing. Is nothing being done about that, or, if they operate on the related products basis, will they be allowed to switch to individual items like so many other companies?
The Secretary of State referred to the cut in gross margins. If she had not written a safeguard into the provisions the proposals might have affected net margins by a considerable and serious amount. In spite of the Secretary of State's safety net the proposals are still very rough and ready. What is the rationale between wholesalers being exempted beneath £500,000 and distributors in retailing beneath £250,000? Wholesalers have made the point to me very strongly that if retailers are exempted beneath £250,000 a much higher group of wholesalers should be exempted because, naturally, their total volume of sales must be very much greater. They feel that it is unfair that so many of them should have been caught in this net, and the exemption figure is not sufficiently high. Perhaps the right hon. Gentleman can say why this basis of two to one has been chosen and whether he is satisfied that it is fair to the wholesalers.
Another question which has been raised with me relates to the allowable gross increases. One interpretation of the order could mean that if a firm tendered for something at the beginning of a particular period it would then be caught by the relevant paragraph in the code and would be unable to change the tender for a period of three months. Clarification is needed on the position of those firms which tender. If retailers ask a manufacturer to tender, what is the position if a tender is made which cannot be altered during the three months' period. I am not dealing here with the construction industry, for which there are special arrangements.
With regard to the safeguard for net profit margins the order states
With respect to the right hon. Lady, I regard the drafting of paragraph 74B as ambiguous. What happens to a company already near the net profit margin safety net even before a cut in gross margins? Is such a company exempt or does it escape? Many companies would like to know the position on this.
I have had many complaints from electrical distributors who feel that the new code will seriously affect them. Electrical distributors have written to me about this. Some companies feel that they may have to reduce their stockholding in terms of credit to customers, and they fear that they may have to reduce staff, possibly causing unemployment as well as diminishing their service. These companies think that the return on capital in our inflationary climate will be inadequate. Even with the safety figure contained in the Price Code as it exists at present, their position will be difficult. Has the right hon. Lady had representations from electrical distributors? Any action which she can take now, or later, when the Price Code is being renegotiated will—
Is the hon. Gentleman trying to make the point that retail distributors of electrical goods are having a hard time? An article in The Times relating to the 1,000 biggest companies indicated that Curry's, one of the biggest electrical distributors, last year increased turnover by about 20 per cent. and increased profits from £4 million to £7 million. I suggest that the difficult times which may be ahead for electrical distributors will be against the sort of cushion which I have just described.
I am not arguing the case for any particular company. Examples have been given to me of different figures in the industry to which the hon. Gentleman has just referred. I ask the right hon. Lady to look at the position of some firms which are extremely worried about the effects of the measures proposed. I would not like to comment on any individual case details of which I have not seen. What the hon. Gentleman has described is different from the position which I believe exists in other parts of that industry.
What the right hon. Lady has said regarding repricing is broadly satisfactory. I am grateful for what she has done in this respect. Her action will be welcomed by many people both inside and outside the House.
I turn now to the variation of gross percentage margins. As the right hon. Lady pointed out earlier, there is relief for low profits. I hope that this will be looked at during the review of the Price Code because during a period of inflation such as we have at present it is doubtful whether the safety net on low profits is sufficient. What happens to a company, so far as variation of gross percentage margins is concerned, which has traded for less than two years? I understand that under the existing code there is no limitation of profit margins if a company has traded for less than two years but that it will be subject to a 10 per cent. cut in gross margins. How can the safety net then be provided for a company in such a situation? To proceed in such circumstances with the imposition of a 10 per cent. cut would have a serious effect. Such a company will not have a net reference level for it to be protected.
I hope that the Paymaster-General can say what will be done to protect such companies. I have a particular case in mind, although I prefer not to raise it on the Floor of the House. This company will be seriously affected if it does not get some protection. It has been trading for less than two years. I hope that this point will be looked at preferably now, but, if not, during the renegotiations on the Price Code.
There are plenty of other examples. Many defects and anomalies exist. What happens, for instance, to a business which has achieved a substantial increase in sales value and even with the gross margin at 90 per cent. of the reference level will still maintain its net profit margin, because, although there is a declining trend in distribution generally, the increase in sales value is due to an increase in the number of branches opened?
The point has been raised with me that if the relevant paragraph in the code is being interpreted in such a way that firms are not being protected, this is a new power which has not necessarily been intended by the right hon. Lady. I would be grateful if the Paymaster-General could tell me what effect paragraph 80 will have on businesses in this situation.
I recognise that I have asked the right hon. Gentleman a large number of questions, and he may prefer to consider some of them rather than give answers tonight. However, I would be grateful for as many answers as possible tonight, and I hope he will be kind enough to write to me on other points which he is not able to answer tonight.
Changes in the Price Code must be fair to the consumer, otherwise what is the point of having a Price Code? I see that the Price Commission has reported, in relation to its last quarter, that it has saved people £600 million—I think that is the figure—through the operation of the code in the past few months. I am sure most of the House will welcome that saving. [ Interruption. ] I say most of the House because I am sure that my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) will put his point of view trenchantly in a few minutes if he gets the opportunity.
If we are to have a Price Code it is essential that it should be operated in such a way that it does not discourage investment in industry. It is important to look at the rate of return and at what is to happen to labour-intensive industries in the autumn if there are large wage increases. How will such increases be absorbed with the 50 per cent. offset? I hope that the right hon. Gentleman will consider this point during the renegotiation of the Price Code. What will be the position of labour-intensive firms when wages rise?
We will no doubt look at the Government's new proposals on their merits when they are put forward, but we must ensure that the Price Code is fair in the long term and in the short term to the consumer and to industry in general.
Some of the things the right hon. Lady has done are welcome. But I fear that during what is a difficult period for industry she may be applying the Price Code too rigidly. Therefore, it is all the more important that during her negotiations in the summer she takes every opportunity to encourage incentives in industry, upon which in the long term our livelihood, employment and prosperity rest.
6.40 p.m.
I think that my hon. Friend the Member for Southend, West (Mr. Channon) was trying to assist the Secretary of State to improve some aspects of the orders. I must confess from the outset that I have no such benevolent intention. I regret only that more of my right hon. and hon. Friends who served with distinction in the last Government were not here to listen to the right hon. Lady as she waded through her departmental brief, describing the full horrors of the bureaucratic tangle which is the inevitable consequence of every attempt to control inflation by passing laws against it. The trail she tried to unwind for us was one that antedated her time.
The right hon. Lady indicated what she saw as three purposes which would be served by the orders, and primarily by Statutory Instrument No. 785, which is the main issue of substance before us. I should like to suggest three achievements that are likely to follow from that order. They are, first, to ensure that goods will disappear from the shops; secondly, to ensure that many small shops close for good; thirdly, to ensure that the balance of payments suffers further damage, which it is in no condition to sustain at present. I shall try to elaborate each of those propositions in turn.
I deal first with the proposition that goods will disappear from the shops. A few weeks ago the chairman of the Food Panel of the Retail Consortium, Mr. Colin Cullimore, was quoted in The Times as having said:
I interrupted the right hon. Lady to question the position we are already seeing develop in cement production. I think that she confirmed the impression I already had, that paragraph 1 of the schedule makes no provision for cement-making works which will have to close down because the Price Commission has made it clear to the manufacturers that they cannot operate such works, except at a substantial loss.
It is our misfortune in Scotland that we happen to be dependent on such plants. One thing is clear from the schedule, and that is that as the plants close down, because they cannot be operated except at a substantial loss, the Price Commission will now be unable to do anything about the matter, even if it wishes to do so, until the three months' period is up in every case. By then we should have a fair old mess in the construction industry in Scotland.
I heard this morning on the wireless—I trust that it is a reliable source of information—that stilton cheese is likely to disappear from the shops in the very near future, because the right hon. Lady, in her wisdom, has decided to apply her subsidies to foreign cheeses and not to home-produced stilton. I happen to prefer foreign cheese to home-produced stilton, so I make no complaint, but here again we shall see that goods gradually start to disappear from the shops. The right hon. Lady and her friends, working away so hard, will eventually discover that nobody can be obliged beyond a certain length of time to supply goods to customers at a loss.
The second consequence that I suggested would flow from the orders was that many small shops would close. I was very interested in a report of a speech by the Chief Secretary to the Treasury, who was called in aid the other day to address the annual conference of the wholesale branch of the grocery trade, an audience in which he must have felt very much at home. He made to them very much the sort of speech the right hon. Lady made in her introductory remarks tonight. He hoped that it was not unreasonable of the Government to ensure that distributors should also make a contribution to checking inflation. He said that the Government recognised the special problems of the small trader. All wholesalers whose total sales were less than £500,000 a year and all retailers whose total sales were below £250,000 a year were exempted from the 10 per cent. cut in gross percentage margins. That is the concession which the right hon. Lady has proudly flourished before us tonight.
At one point a tiny shaft of light seemed to come through. For a moment the right hon. Lady suggested that it was conceivable that the corner shop would find it difficult to compete against the multiple which came under the ham-fisted attentions of the Price Commission, as extended in the order. Of course it will.
I had an interesting discussion with people in a multiple in my part of Scotland not long ago. They explained how the 10 per cent. cut in gross percentage margins would affect them. They readily conceded that the reductions in their gross percentage margins—which would naturally have to be achieved by reductions in prices which would not otherwise have occurred, or the holding of prices which would otherwise have gone up—would put the small trader in an intolerable position. The multiple tends to have much lower overheads anyway, and to be a much more efficient distributor. That is indisputable. The small corner shop relies on individual service and similar factors.
The action of the right hon. Lady, aided and abetted by her minions in the Price Commission, is making it more and more impossible for the corner shop to survive in the face of competition which in any case would be severe and is now rendered artificially severe by actions such as the one we are discussing.
When the right hon. Lady has returned in course of time to the Opposition benches, and when finally the House has come to its senses and recognised that inflation cannot be controlled by passing laws against it, we shall discover that the competition for the housewife's custom in many parts of the country has been reduced, and that the housewife will be the long-term sufferer from these events.
I want also to refer to the impact of the 10 per cent. cuts in gross percentage margins, at the other end of the scale, on the sort of supermarket chain to which I referred before. It accepts the the 10 per cent. cut, and achieves it by reducing prices or not passing on price increases that it would otherwise have passed on. The consequence of that is that their turnover expands and their gross percentage margin increases. They are thereby caught in a hopeless snowballing circular situation in which the more they cut their margin the more their turnover increases and the more they have to cut their margin again.
In that situation there is no solution but emigration. I have no doubt that the managements of many such businesses must be contemplating emigration seriously. On top of everything else, they are totally incapable of getting any form of answer or guidance from the Price Commission about how they are supposed to conduct their operations.
I know of one firm which went public last year—I communicated with the right hon. Lady about it—and now faces the prospect of being unable to produce its annual accounts, which it is required to do by law, because it does not know what sort of clawback it must make on its previous quarterly results. The firm cannot get any answer from the Price Commission about the operation of gross percentage margin control on a seasonal basis.
That is the sort of chaos that the right hon. Lady is producing. I am sure that she is doing so with the best will in the world and with complete unawareness of what she is doing. The chaos that she is causing is spreading throughout the country, and the damage will be permanent.
It might seem that the most extravagant claim that I made was that the order would have the effect of adding to the already daunting balance of payments deficit which the United Kingdom is running. Perhaps I should explain what I have in mind. My thoughts are related essentially to the additional stringency applied to price controls by the quarterly limitation on price increases. There was an interesting report about a letter sent out by Shell Chemicals to its customers throughout the country relating mainly to polystyrene and polypropylene. I have a constituency interest because a number of firms in my constituency are important customers for polypropylene.
Shell Chemicals wrote to its customers as follows: their products to end customers abroad on condition that those customers overseas forward the semi-manufactured goods to the United Kingdom customer who would originally have received them for processing and subsequent export. In that way they escape the profit margin control. The best of British luck to them!
What happens—and presumably the Paymaster-General must understand the situation even if the right hon. Lady has not yet grasped the point—is that the goods go out across one side of the foreign exchange and come back at a substantially marked-up price on the import side. In many cases the goods attract a tariff increase that must be built in to the whole cycle of extra costs. It is certain that the effect on the balance of payments is bound to be substantially adverse.
Will the hon. Gentleman say whether the point that he is making has anything to do with the measure that is now before the House? My understanding is that his point arises entirely from the arrangement of the Price Commission, which has been in operation ever since the hon. Gentleman's party brought it into power.
The right hon. Lady must understand that every fresh tightening of the screw—
It is not.
In fact, it is. There is a further tightening of the screw contained in the first part of the order—namely, the limitation of price increases to once a quarter. The right hon. Lady must understand that the more the screw is tightened the greater will be the consequences.
I hazard a bet that we shall see this year the massive re-importation of goods of United Kingdom origin because firms have found how wise it is to sell them abroad in the first place, thus getting the benefit of exemption from profit-margin control. The customer does not necessarily suffer as such costs are judged as allowable in the eyes of the Price Commission. Of course, that does not help our balance of payments deficit. I would not have thought that the Treasury views that prospect with any great enthusiasm.
Is the hon. Gentleman putting forward the argument that sophisticated companies—and he has hinted broadly that they are patriotic—should employ the means he has described of avoiding the laws and conditions of this country? Is he saying that such conduct should be encouraged? Does he applaud it?
The hon. Gentleman must understand that what is happening is in no way a breach of the law. The duty of the manufacturers concerned, as the Chancellor of the Exchequer reminded us last night, is to ensure that they can sell in profitable markets so as to finance future investment, thus maintaining employment and the standard of living. That is what they are doing. I think that they are acting in a patriotic manner in so doing. I hope that many more companies will follow their example.
The right hon. Lady referred to the discussions that she was having on these matters with the CBI and the Retail Consortium. I happen to have seen a record of one or two of those discussions. They make one's hair stand on end. I am frightened that the people with whom she has had discussions so often collaborate in their own execution. They are constantly trying to avoid the right hon. Lady making a fool of herself. Thereby they are tightening the nooses around their own necks.
There was a report in The Times about the discussions which took place on the provisions within the order. The report said that the retail trade was: anxiety about the impact of profit margin control and the constantly tightening control of prices throughout the economy as a result of the right hon. Lady's activities is of no help. The CBI should consider the wisdom of its own attempts to collaborate in this grotesque proceeding.
At the end of the collaboration process there have been instances like the famous affair whether tea was a raw material, on which we were grateful to have the right hon. Lady's assurance this evening. Clearly, the Price Commission has had a rap over the knuckles, and I am very glad to hear it. I am delighted that the right hon. Lady has tried to knock some sense into the heads of the members of the Price Commission, although I think that is always bound to be an uphill task.
As my hon. Friend the Member for Southend, West pointed out, it is for the Price Commission to interpret what is a raw material for the purposes of the exemptions which the right hon. Lady has written into these orders. It is not for her to interpret it. Perhaps it should be. I believe that it should be. If we must have these nonsenses, at least the right hon. Lady should be answerable to Parliament for them, but that is not the way the law is written. It is the Price Commission which does the interpreting. So far the Price Commission has made a pretty bizarre job of it.
On the question of paragraph 5 of the schedule to Statutory Instrument No. 785—namely, the question of relabelling goods already on shelves—I know, as anyone who fought the last election must be well aware, that this matter caused a great deal of indignation among housewives throughout the country. There were graphic Labour Party propaganda shots at election time about the awful business of the label which one picked off with one's fingernail. My conversations with proprietors of supermarket chains lead me to think that, as my hon. Friend the Member for Southend, West said, the trade itself was in many cases anxious to get rid of this technique.
I wonder whether the Paymaster-General has given any thought to one little difficulty. I suspect that it is the sort of thing that somehow gets missed when these deep and earnest negotiations are proceeding. I refer to the question of what I believe is known as edge-of- shelf pricing. If the right hon. Gentleman ever goes inside a supermarket—I do not know whether he does—he will recollect that there is a tendency to put the price of items on the edge of the shelf, for the convenience of shoppers.
Let us suppose that there were tins of coffee on shelves on Friday and they were priced at lop and that on the Monday a new consignment comes on to the shelves and is priced at 11p. What happened up to now was that the shop assistants went round and stuck 11p labels on the lop tins. This is what caused a fait amount of controversy. The edge of shelf price was adjusted to 11p.
Now, however, that will be no longer possible. So on the same shelves there will be tins with 10p on them and there will be tins with 11p on them. The edge-of-shelf price will say 10p or it will say 11p. Whichever it says, as I understand it, it will be in breach of the Trade Descriptions Act. Every supermarket store which has goods on its shelves at different prices because of the impact of this provision and an edge-of-shelf price which, by definition, can correspond only to one or other price will be open to having its local weights and measures inspector come in and say "You are in breach of the law". Has the right hon. Gentleman thought of that? I do not believe that the right hon. Lady's Department has thought of it. It is about time it did. This is just one of the instances of the chaos and confusion which are caused by activities of the kind embodied in the order.
I readily concede that the right hon. Lady has, in response to representations which have been made to her, done something to alleviate what would otherwise have been the most disastrous effects of this provision. If anything, I tend to regret that, because I believe that the best way to destroy the whole panoply of prices and incomes control is by showing it up to public ridicule.
7.5 p.m.
Reference has been made already to the fact that the first order is mentioned in the Fourth Report of the Joint Committee on Statutory Instruments as being retrospective in effect. The Joint Committee drew attention in its report to no fewer than nine orders which it considered to be defective, three because they were an unusual or unexpected use of the powers conferred by statute, four because they were defective in drafting, one because consultation which was necessary by statute had not been mentioned in the order, and one—this one—because it was retrospective in its effect.
I am grateful to the right hon. Lady for dealing with the subject in some detail. I wish that other Ministers would take a little more notice of the reports from the Joint Committee on Statutory Instruments and see whether amending orders can be introduced to meet points made by the Committee.
I know that Ministers will always receive a defensive brief from those responsible for drafting an order. However, a Minister loses no face by acknowledging that a Select Committee has reported on an instrument and had sought to have a defect remedied.
This instrument sets out to amend the code which originated in the Counter-Inflation Act 1973, which set up the Price Commission and the Pay Board. Section 2 of the 1973 Act charges the agencies as follows:
The Price Commission observes the code by serving a notice upon any trader who is in breach of the terms of the code. Let us remember that the code is statutory. It is provided for in the 1973 Act and it came into operation by virtue of the schedule to the Counter-Inflation (Price and Pay Code) (No. 2) Order 1973. It is the code which is set out in the schedule to that order which the first order seeks to amend.
The order seeks to amend several paragraphs of the code, the first of which is paragraph 24. There is to be an addi- tional paragraph 26A, which appears as No. 1 in the schedule to Order No. 661. It begins with the words:
The schedule to Order No. 661 says:
My contention is that that must refer to goods being sold after the tax has been reduced on 25th March; that is, before the order came into operation. Therefore, the paragraph is retrospective. It is made even clearer in sub-paragraph (iii), where the wording is:
I put it no higher than that because to be an offence there must be certain notices imposed by the code. If the trader does not observe the code he puts himself in the position where the process can be started against him. A notice is imposed and he then has to comply with it or he may be committing an offence. The right hon. Lady said that as from 5th April prices may be increased. She did not go on to refer to price reductions. True, prices may be increased as from 5th April; on the wording of the order I would say they may be increased from 25th March. What the order says is that reductions must be made from 25th March.
The memorandum from the right hon. Lady's Department which was provided to the Statutory Instruments Committee upon our querying the points, in my view, admits the retrospection of this order. The memorandum is printed at the end of the Fourth Report from the Joint Committee on Statutory Instruments and says:
The memorandum goes on: non sequitur, bearing in mind what has been said in the previous paragraph.
Let me put it the other way round. Suppose that between 25th March and 5th April a trader had increased the price in accordance with the new situation regarding tax but not in accordance with the previous code. Would that be the subject of a notice? He would be in breach of the code, as amended by the order, coming into operation on 5th April, but he would not be in breach of the code as it existed before 25th March. We are then left with the period between 25th March and 5th April.
There is doubt how the vendor of the goods should act in increasing or reducing his prices. If a notice procedure can be based on evidence of an increase in prices in this period, the order is retrospective. I cannot see, however I try to interpret the words amending the code and turn them around, how it can possibly be said that the order is not retrospective.
I quote now from paragraph 3 of the order, which inserts a new paragraph 74A into the code. This says:
7.20 p.m.
Before we pass these orders, as I assume we shall, I should like to pursue a little further with the Minister the question of the meaning of "raw materials" in Order No. 785. If I understood the Secretary of State correctly, she said that there was no statutory definition of "raw materials". In response to that point, my hon. Friend the Member for Southend, West (Mr. Channon) pointed out that there is a statutory definition of "raw materials" in Section 34 of the Iron and Steel Act 1953. My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) argued that even if there were a statutory definition it would not make any difference because the Price Commission would not be bound by it anyway. Those are two important points to which the Minister should give attention in his reply.
If the definition in the 1953 Act were binding, it would include iron and steel scrap among the items which should be regarded as raw materials for the purpose of this order. The Secretary of State has introduced another way of interpreting the meaning of "raw materials" by reference to the document published by the Department of Industry called "Basic Materials and Fuel Purchased by Manufacturing Industry". I am not quite clear about the force of the right hon. Lady's reference to that document. Is the list of items in that document to be regarded as both comprehensive and exclusive in defining raw materials? Second, is her reference to it to be taken merely as guidance or as a binding directive on the Price Commission?
Iron and steel scrap does not appear in the list of basic materials. On the other hand, as the Secretary of State mentioned, imported steel semi-manufactures appear in the list; home-produced steel semi-manufactures do not appear in the list. There is a contrast here between steel products and one or two other items in the list. For example, raw wool appears in the list, both in its imported form and in its home-produced form. I should like the Minister to explain why, if this list is to be regarded as binding, imported steel manufactures should be included within the scope of the order but home-produced steel semi-manufactures should not be included.
I understood that the document to which I am referring was the document to which the Secretary of State was referring as containing the guidance or directives to the Price Commission. It is important that these points should be cleared up by the Minister, because the Price Commission is an autonomous body and is not accountable to Parliament. It has in the past been entirely independent in its interpretation of its functions. Its interpretation in areas in which discretion is allowed to it has almost invariably been narrowly drawn in ways disadvantageous to industry.
It may seem unjustifiable for hon. Members on the Opposition side of the House—with certain exceptions whom I see on the benches in front of me—to complain about the way that the Price Commission interprets its functions, because it was a Conservative Government who gave the Price Commission its functions. Perhaps I might take a neutral posture here as I was Chairman of the Standing Committee on the Counter-Inflation Bill and was, therefore, not committed to the detail of it either on one side or on the other. But it is important that we should know exactly how the present Government interpret the standing and functions of the Price Commission and whether what we have heard from the Secretary of State today can be taken as a binding commitment on the way that the Price Commission will interpret its functions in relation to the present orders.
7.26 p.m.
Having myself, in times past, commended a number of fairly complicated and even obscure orders to the House, I have a good deal of sympathy with the Secretary of State and with the Minister who is to reply to the debate in their task this evening because, by any measure, these two orders are not precisely clear. Having tried to relate them to the parent documents which they seek to amend, I am bound to say that I have a good deal of sympathy with those people in industry and, indeed, in the retail commerce of our country who will have to apply them in practice.
I could not help thinking that it has been the posture of the present Government, and indeed the practice of both the present Government and the previous Government, to consult people in industry about matters which are to be brought before the House. I am sure that the right hon. Lady has had very extensive consultations, but I cannot help wondering how she got on with the shopworkers' union when she sought to explain to its members how precisely, on the supermarket floor, they were to work out some of the consequences of what the order will lay before them.
I shall deal with the matter fairly briefly in terms of its impact on industry. I must do so in the context of the Chancellor's statement last night to the effect that the Government are turning over a new leaf. In spite of everything they have done to damage industrial confidence, to raise costs, to increase taxes, to squeeze profits and, therefore, investment, and to cut off overseas markets—for example, in Chile or South Africa—in spite of all this, the Chancellor asks us now to believe that the Government are really anxious to see private industry flourish and, in the process, make a fair profit.
My right hon. and hon. Friends and I very much welcome the Chancellor's words. We recognise that they cannot have been very palatable to many Labour Members, or, indeed, to the Secretary of State for Industry, the Secretary of State for Trade or the Secretary of State for the trade unions—the right hon. Member for Ebbw Vale (Mr. Foot). But I have never been one to look a gift horse in the mouth. In the case of the Chancellor of the Exchequer, I very much welcome what he said last night as the words of a sinner repenting.
It is right that we should examine the right hon. Gentleman's words in the context of these two orders. Their effect is likely to fly in the face of much of what the Chancellor of the Exchequer told the CBI in his speech last night. It would be otiose for the Opposition to oppose the idea of making such orders since it was the Conservative Party that created the machinery which is now being operated by the right hon. Lady the Secretary of State for Prices and Consumer Protection.
I am critical of the likely effects of the orders appear to take little if any, account like the policy of the Conservative Government, the orders are being applied virtually in isolation—without the benefit of the wide range of equally important measures which the Conservative Government developed and which were designed to operate side by side with price control.
Secondly, I am critical because these orders appear to take little, if any, account of the new and much more difficult situation into which much of British industry has been plunged. I refer not only to the constant price rises in oil and commodities, over which the Government have little control, but also to a new situation. On top of extra commodity costs, we have had to experience the damaging actions of the right hon. Lady's colleagues, which have made a difficult situation for industry ten times worse. We are in a new and much more serious economic situation than we were eight weeks ago. The orders do no reflect the fact that things are very much more difficult than they were when first conceived.
Thirdly, I am critical of the likely effect of the orders because of the detailed—I almost said "nonsense", but I shall content myself with saying the detailed obscurities and possible injustices of certain parts of the orders. There is the nonsense which arises from the fact that existing stocks—reference has been made to coffee—will be displayed on shelves at one price while an identical product displayed on the same counter and delivered a day or so later will be sold at a different price. This must be nonsense, and certainly will be confusing. We must ask whether, in the circumstances, legal action will lie against the storekeeper concerned.
I also wish to draw attention to the injustice of the fact that the order can apply retrospectively. There seems to have been complete unconcern on the part of the Government for the views of the Statutory Instruments Committee in this respect. Furthermore, we must consider the effect of the imposition of further measures on industry and commerce when personnel have to consider the algebraic computations involved in all this new documentation. This must result in a considerable amount of time-wasting research.
I should like to develop those three criticisms in detail. I turn first to the orders themselves. When I intervened in the right hon. Lady's speech, she said that she could not give a definition of "raw materials" or "basic food". She said that if I consulted the Library I should be given the index of basic materials and fuels purchased by manufacturing industry as provided by the Department of Industry and equivalent documents issued by the Ministry of Agriculture, Fisheries and Food. However, when I consulted the Library officials they said that they could not find these documents. I also understand that the Department's advisers sitting in the Ministry box do not have that documentation with them. It is a rather sad state of affairs if documents, which are the basis of the orders we are now discussing, are not available from the Library, from the civil servants concerned or from the right hon. Lady. It is an impossible situation when we are expected this evening to impose these measures on industry and commerce.
I hope that in his reply the right hon. Gentleman the Paymaster-General will give the House a little more help on the definitions of raw materials and basic food. If the answer is to the effect, "The definition will be whatever the Price Commission says it is", may we be told whether these matters can be tested in the courts? If there is a particularly difficult case and industry finds itself damaged as a result, is it possible for that industry to go to the court to challenge the Price Commission's interpretation? It is important that this matter should be clarified.
What will happen in respect of cost increases in items which do not appear to be covered by these measures—for example, rates? If industry is affected by a higher rate bill within a period of months, can those rate increases be passed on?
Is the hon. Gentleman asking his question in respect of manufacturing industry or distribution?
I am referring to both, since both sections of industry pay rates. There is a further matter which I should like to raise with the right hon. Gentleman, although it may be unfair to ask him to reply this evening. If, as I fear may happen, we reach a point where threshold agreements begin to operate and a number of workers become entitled to the additional 40p because the retail price index has passed the additional figure of 7 per cent., can industry pass on those additional costs?
I fear that we are close to the point at which threshold agreements will begin to operate, and this morning I canvassed the Price Commission's view. The spokesman said that the Commission would have to think about it. At a later stage he got in touch with my researcher and said that the Price Commission's view was that, as the orders now stand, it would not be able to allow threshold agreement increases to be passed on. Plainly, this is a matter of some importance to industry. The point I wish to put to the Paymaster-General—I do not ask him to deal with this matter tonight, for no doubt he will wish to take advice—is that if, within a reasonably short time, threshold agreements are to operate and workers become entitled to an additional payment of 40p, will industry be able to pass on those increases in the prices of their goods?
My hon. Friend generously said that he did not expect the Paymaster-General to answer this evening. Surely it is extremely import- ant that we should have a clear answer on this matter before we allow these orders to proceed. Once these measures have been approved and are law, they will apply to the operation of the Price Commission. Therefore, I repeat that it is important for the House to have an answer from the right hon. Gentleman at the end of this debate.
Bearing in mind the complexity of this matter, and also my desire to understand the Minister's difficulties, my generosity may have got the better of me. I think that my hon. Friend has raised an important point and I must ask the Paymaster-General to deal with this matter in his reply. My information—which I confess is second-hand and was given to me by my researcher—is that, in the judgment of the Price Commission, as the orders now stand, it would not be able to allow price increases arising from threshold agreements to be passed on.
I turn briefly to the wider issues. The approach of the Conservative Party to statutory price control was and still is that it is one, but only one, of a package of counter-inflation measures which need to be applied as a whole. The Opposition's criticism of the Government is that they are trying to apply the prices control more or less in isolation, without the essential counterparts of a policy for clear and steady economic growth which keeps down costs through longer production runs and, therefore, lower unit costs, without policies to reduce the level of taxation, which is one of the greatest possible aids to holding prices steady, and without incomes as well as prices restraint. It was this package which we believed was the right approach to counter-inflation.
The present Government have held on to prices restraint, and I give the right hon. Lady full credit for what she has been trying to do, even though I do not agree with all the ways in which she has proceeded. But what about the other no less important elements in the total package?
There is the question of growth. Last night, the Chancellor of the Exchequer was ebullient, but I doubt very much whether we are getting the healthy rate of growth which is essential if there are to be the longer production runs and the lower unit costs which will help to hold down prices.
Secondly, far from taxes being reduced—and without involving myself in a lot of party debate—the plain facts are that across the board nearly all the taxes which affect prices have been increased—on food and drink, the tax on petrol, on corporations, and the rest. So the second part of the package is not being delivered.
Thirdly and most important, there is very little effective incomes restraint. This is a matter about which there is disagreement between the two sides of the House. But it is fair to say that no price controls, however complex and however tight they may be, will save the country from drifting into hyper-inflation if uncontrolled income demands are allowed to surge through the economy.
We have been told that the Labour Party can take care of this through the so-called social compact, and this is not the time or the place to go into that. But I read with great interest an article in the Economist which was headed, "The Contract is Gazumped". It is fair to record these three examples of recent seaside conferences. In the case of the shop workers' conference at Margate—a very relevant group, when considering this order—there was a vote for a 20 per cent. rise in minimum wages, a 35-hour week, longer holidays and higher overtime pay. There is not much of a social compact in that. At Hastings, the power workers voted to reopen their wage talks and to achieve results not worse than those won by the miners. At Eastbourne, the teachers voted for a 37 per cent. wage claim and a series of one-day strikes. At Blackpool, the clerical union, despite the eloquence of the Secretary of State for the trade unions, voted to reject stage 3 restraints.
The right hon. Lady is seeking to stick to price restraints, but there is no evidence that the other elements in the general package of counter-inflation measures are being applied. Therefore, we are concerned, as my right hon. Friend the Leader of the Opposition frequently warned in the past, lest there should be piled on top of the rising oil prices and the prices of other commodities from abroad the inflationary impact of unrestrained incomes increases at home. It is against that background that I complain that orders of this kind, seen in isolation, are unlikely to do the job.
I now want to say a word about the direct effects on industry. Admiring the efforts of the right hon. Lady as I do, I am afraid that she has chosen an unfortunate moment at which to lay further burdens on British industry. In the CBI's April survey, 94 per cent. of all British companies reported a rise in the average costs of their unit output. The latest wholesale price index shows price rises running at an annual rate of 38 per cent., and every day there are new ones. The price of aluminium has just gone up by 13 per cent. That of cement is forecast to rise by as much as 40 per cent. by mid-May. These are staggering increases, and they are worrying to both sides of the House. There is no doubt that they impose upon British industry the greatest difficulties in finding the money for investment.
In its latest survey the CBI summed up the situation in a rather alarming phrase. It said:
Let us see what the Government have done, and I put it in terms of the other four economic Ministers—the right hon. Lady being the fifth—who are responsible for the management of our economic affairs.
The Chancellor of the Exchequer has taken £1,100 million out of industry's cash flow. He has raised taxes on companies by just over £400 million and accelerated the date of payment. He has charged each firm an additional 44p for every employee—in effect, a new selective employment tax without rebates—and he has gone a long way towards destroying incentives for the younger executive by raising income tax and putting an end to stock options.
The contribution of the Secretary of State for Industry has been to discourage and in some cases to halt completely industry's expansion plans by threats of nationalisation. He has created despair in many board rooms by dangling over their heads the National Enterprise Board. It is against this background that these orders do not tie in with the other actions of Her Majesty's Ministers.
Then we have the contribution of the Secretary of State for Trade. He has managed to leave all those firms which were counting on the benefits of free trade with the Common Market bewildered as to whether Britain stays in or comes out. Simultaneously, he has slammed the door in the face of export orders from countries like Chile and South Africa.
Finally, we have the Secretary of State for the trade unions who, by capitulating to the strong but not to the weak trade unions, has once again stoked up inflationary pressures on industry's wage policies.
Does not all this make much more difficult the task of the right hon. Lady in seeking to hold down prices? With friends like these four Ministers, the right hon. Lady hardly needs any adversaries in the task ahead of her. Far from playing the part of the guardian angels of industry, as the Chancellor of the Exchequer suggested last night, what is now known in parts of London as the "BFSH combination"—Benn, Foot, Shore and Healey—looks to a lot of industrialists like the Four Horsemen of the Apocalypse because they tend to stand for nationalisation, inflation, reduced exports and higher prices.
I mention these matters because there is a great deal to be gained by controls on price increases, and that is why the Opposition do not seek to oppose the order. As I said in my opening remarks, we created the machinery and it must be accepted that we have some measure of responsibility for its operations. But we sought price control against the background of a whole armoury of other relevant policies for long-term growth, for restraining incomes as well as prices, for expanding and not contracting our overseas markets, and for sustaining and encouraging private industry and private enterprise.
Given these policies as a whole, I believe that price controls could work, but without them they could do more harm than good. That is the gravamen of our criticism of the Government in bringing forward these orders tonight. We shall not oppose them, but we are in grave doubt whether they will work unless they are placed in the context of other and necessary measures to contain inflation in Britain.
7.50 p.m.
The hon. Member for Bury St. Edmunds (Mr. Griffiths) told the House that the Opposition are not opposing the orders. Were I not a person of great courtesy, this might be some disincentive to answer the innumerable questions that I have been asked. In any event, I know that that would particularly dissatisfy the hon. Member for South Angus (Mr. Bruce-Gardyne), because he has properly insisted on having answers tonight before consenting to the orders going through.
Throughout the debate, and among hon. Members present who have spoken, I gained the impression that the hon. Member for South Angus was the only happy man. He, at any rate, knows that the Government are wrong in introducing these orders and that the previous Government were wrong in introducing orders of this kind and the Price Code on which they were based.
Hon. Gentlemen opposite, clearly, are divided on this matter. They introduced price controls and the Price Code. Yet they are trying to niggle about these orders. They suggest that the orders are the straw that will break the camel's back and that, as a result of these relatively minor improvements in price controls in this country, investment, industry and exports will collapse. I have heard nothing like it since Mrs. Caudle's Curtain Lectures. The suggestion is that sudden disaster will overcome this country's manufacturing industry as a result of these orders. The fact is that the previous Government were right to introduce price control and that these exaggerated complaints tonight make little sense.
The hon. Member for Bury St. Edmunds said that his individual criticism of the orders was that, unlike the previous Government, we were bringing them forward in isolation from a general counter-inflationary policy whereas they had a broad counter-inflationary policy. I take it that their broad counter-inflationary policy included a borrowing requirement of £4,400 million and the money supply going skyhigh. I do not think that any Government could have planned to undermine their own counter-inflationary policies in a more skilled way than right hon. and hon. Gentlemen opposite did.
The hon. Gentleman asked whether rates were an allowable cost. They are. He asked me about one matter which his hon. Friend the Member for South Angus considers very important in this context—namely, the effect of increases in pay which activate the threshold. I am not sure why the hon. Gentleman thinks that that is a relevant question on these orders. He knows about the productivity deduction of 50 per cent. That will continue to operate, and subject to that, those increases will be an allowable cost.
I do not think that the right hon. Gentleman has quite got the point. The threshold, as my hon. Friend pointed out, is about to be activated. Of course there is the 50 per cent. deduction which he inherited along with a lot of other baggage. Nevertheless, the threshold will apply within a quarter where, according to the first paragraph, no increase will be allowable. So industry has to carry this extra cost until the quarter has elapsed presumably, and that will have a significant and serious effect. Will the right hon. Gentleman confirm that?
That is right, unless it comes within the safeguards mentioned in the paragraph.
This is an important point. If the thresholds are not activated and a number of firms have to pay 40p per week more for each employee, must they wait until the end of the three months before carrying the cost increases into the prices of their goods? That is the central question, and it deserves an answer.
That is the clear effect of the amendment of the code that is presented here, unless they fall within the safeguards indicated in paragraph 26B.
Will the right hon. Gentleman tell me whether he and his right hon. Friend had foreseen the possible effect on a company's liquidity if, against the background of all the other pressures, it were to carry for three months, which is a substantial time, a very large increase in its wages bill? What action does he think might be taken in the event of firms getting into difficulty on that account, bearing in mind that if they approach the banks they must pay between 12 per cent. and 14 per cent. on any money they may borrow to make the payment?
The hon. Gentleman must remember that it is possible to get it back under the provisions of the code which enable companies to recoup over a period. That point was not made during my right hon. Friend's consultations. However, the hon. Gentleman's interpretation is right. The matter will be governed by paragraph 26B as applied by the Price Commission.
Before dealing with more general questions posed by the hon. Member for Southend, West (Mr. Channon), I should like to deal with some of the specific points that were made. The hon. Gentleman said that if I could not answer any particular questions tonight he would permit me or my right hon. Friend to write to him. I will do my best to answer the specific points that he put to me, and if I omit any I will write to him.
First, I should like to refer to the question of retrospection which both he and his right hon. Friend the Member for Crosby (Mr. Page) mentioned. The right hon. Gentleman has the advantage of me because I am not a lawyer.
The right hon. Gentleman has the advantage of me.
That may be true. The argument that the order was retrospective, if that was on what the Select Committee based its criticism, did not, to me at any rate, carry conviction. I do not understand why the order should be considered retrospective when action cannot apply before 5th April, the date on which it takes effect. No action can be taken until after 5th April. Therefore, it is not retrospective.
If no action can be taken, may I ask why it should be necessary to put in 25th March as the date from which prices must be reduced?
If the right hon. Gentleman will look at the previous Government's statute dealing with counter-inflation he will find that in many cases there is reference back to earlier dates which influence the conduct of companies after the date on which the Price Code or a subsequent amendment comes into effect. The 25th March was the day before the Budget. The order states "after 25th March". It is, therefore, referring to Budget tax changes. But the impact of the order arrives when it becomes effective—5th April. I submit this as a commonsense and perhaps not excessively legalistic point of view. Despite the argument put forward by the right hon. Gentleman, to which I listened with astonishment and admiration, I do not understand why he should consider this order retrospective.
That gives me an oportunity to reply to the hon. Member for Southend, West, who said that this was retrospection. He asked whether retrospection would be the subject of consultation about the new Price Code. Perhaps he will understand that that is a question of the order of "Have you stopped beating your wife?", because as this is not retrospection it does not need to be the subject of consultation.
We expect consultation about the new Price Code to start towards the end of June. There is no definite timetable, but I do not expect there to be a new Price Code before the autumn. However, I emphasise that there is no firm timetable.
Many hon. Members came back to the important and difficult question of the meaning of the term "raw materials". The hon. Member for Oxford (Mr. Woodhouse), in particular, asked whether the documents to which my right hon. Friend had referred were comprehensive and exclusive, or whether they were guidance. The answer is that they were guidance. Under Schedule 1 to the Counter-Inflation Act, the Price Commission has power to provide guidance, and it will be providing guidance on the meaning of the term "raw materials". I hope that that gives hon. Gentlemen opposite the answer that they want.
There is the price list to which my right hon. Friend referred, there are Tables 2 and 3 in Appendix 5E, and there is the fact that the Price Commission will be giving further guidance. There is further the fact that people who want an answer about a specific raw material can ask for it, and that seems to clear the matter.
The House would like to know the position about raw materials, about which representations have been made. Can arrangements be made—I accept that it may not be possible tonight because it is too late, but that is a pity—for hon. Members to have available in the Library a clear definition of the term "raw materials"?
My right hon. Friend or I will see what can be done, and when the Price Commission produces its list I am sure that it will be possible to make that available in the Library.
We are getting ourselves into difficulties. It has to be made clear that under the legislation the Price Commission is master in its own house in these matters. To take tea as an example, for reasons best known to itself the Price Commission decides that tea is not a raw material. The right hon. Lady rings up the Price Commission and gives it a rocket, following which the commission has to say "We are sorry, but we have had second thoughts". That is how the system operates. There is no possibility of telling the House or anybody else what will come into the Price Commission's mind at any given moment, and it is absurd to pretend that there is.
The hon. Gentleman should reserve that comment until he sees the guidance which the Price Commission gives. My right hon. Friend tells me, as she has previously told the House, that the story about tea is not true, and that tea is a raw material. The hon. Gentleman must be a little hard put to it if he has to hang his case on a certain statement that has been made to him about 10 times during the course of this relatively short debate.
The right hon. Gentleman has several times referred to guidance. What we are interested in is not the guidance given by the Price Commission to industry. We take it that what the Price Commission gives is a ruling. What we are interested in is the guidance given by the Secretary of State to the Price Commission.
That is a matter for the Price Commission, which, under the Act, has power to give guidance. Either my right hon. Friend or I will see what can be done to supply the House with further information on this matter, possibly by means of a list being put in the Library.
I was asked why wholesalers were excluded at a level of £500,000, whereas retailers were excluded at a level of £250,000. There can be no exact science in this matter, any more than there was any exact science in the regulations introduced by hon. Gentlemen opposite. One draws lines in these things to make the position possible to administer. It was thought that that was a reasonable relationship, and quite a high percentage of wholesalers are excluded from the control by that level.
I was asked whether the safety net would operate if a firm was below the net profit margin level. There is no intention of a further cut being made if it is already below the 25 per cent. safeguard.
I was asked about the position of a firm which had been in existence for only two years. It is intended to consider that during the review.
The review is not to be until the autumn. I have in mind a firm to which my comments apply, and, if necessary, I could give the details of the firm to the right hon. Gentleman. What is to happen to this firm in the intervening six months? What advice has the right hon. Gentleman for it?
I appreciate that the hon. Gentleman does not want to mention the firm's name now, but if he lets me have the details I shall look into the matter.
It is not a matter of only one firm being involved. This is a situation in which many firms will find themselves. What are they supposed to do between now and the presentation of the review, whenever that may come?
This is not our legislation. We inherited it, but we are trying to apply it as reasonably as possible. I shall look into the matter if hon. Gentlemen think that there is a difficulty, and in due time write to the hon. Member for Southend, West.
The hon. Member for South Angus is worried about the effect on small shops. I was not clear about his argument here, though I appreciate that his main argument is that advanced by his hon. Friends. Apparently he thinks that the effect of the ham-fisted Price Commission's interfering with the efficiency of the multiples will be to make the multiples more competitive and thereby put the small shops out of business.
I do not know whether under the rules of the House I have to declare an interest, but I was until recently a director of a grocery company and I do not see the force of the hon. Gentleman's argument. The small shop provides a special service. It has survived against the competition of the multiples, and I cannot see that these amendments will have anything like the effect suggested by the hon. Gentleman. Indeed, if it is true that the Price Commission's interference will have a disastrous effect on the efficiency of the multiples, the small firms will flourish, and not the opposite.
I should be prepared to enter into a bet with the hon. Gentleman about the disappearance of stilton cheese from the shops. Perhaps I can discuss the matter with the hon. Gentleman outside the Chamber, or perhaps he will agree now that if stilton does not disappear as a result of these orders he will come back to the House and confess that for once he was wrong, as so many of us are from time to time. He had an interesting story about polystyrene and propylene being exported and reimported. I should be interested in the details. It seems that these products, which are manufactured in this country, are highly competitive with imports from other producers in Europe, and can still be sold at prices acceptable to consumers, which presumbly follows from the hon. Member's case.
I apologise for interrupting again, but the right hon. Gentleman appears to have got the story wrong. I quoted a letter from Shell Chemicals telling its customers that it could not continue supplying these items because it was more profitable to sell them abroad. I can give the right hon. Gentleman the reference for this public statement by the company.
I will look at the public statement of Shell Chemicals.
The attempt of these orders is to strengthen price control and, therefore, have an effect on reducing inflation. In that respect, they are a continuation of the price control policies of the previous Government. They sharpen those price control policies to make a more definite impact on inflation. Nevertheless, we realise that the Price Code needs review, and we intend to review it. We will, of course, bear in mind the fact that if price control were driven beyond a reasonable point it would affect investment. This consideration would obviously be taken into account. But if we are to have a determined attack on inflation, policies of this kind are necessary.
I detect that the right hon. Gentleman is coming to his peroration. I hope that he will deal with a specific point that I raised, where there appears to be a conflict of law-edge-of-shelf pricing. This is not a matter of enormous significance, but if the Government are to pass legislation which will mean that supermarkets find themselves operating against the law, this is serious. How can the order be reconciled with the Trade Descriptions Act as applied to edge-of-shelf pricing?
We have considered this point. We are of the opinion that Section 8 of the Counter-Inflation Act 1973 enables us to ensure that there should be no contradiction between these two pieces of legislation in this respect.
That is absolute rubbish.
The hon. Member correctly said that I was coming to my peroration. As I had already reached it before he intervened, I will simply commend the orders once again.
I realise that we must not detain the House much longer, but I must put one point to the right hon. Gentleman. The livestock industry in this country is now in considerable trouble, mainly because of the rising costs of its feed. If a farmer is feeding barley to his pigs and cattle, presumably that is a raw material and he would be able to pass on the costs. But if he is feeding pelletised or any other kind of semi-manufactured feed, a concentrate, can we be clear that the Price Commission will accept that that, too, is a raw material basic feed, and that no distinction will be made?
I understand that all fresh food production is outside the coverage of these orders; therefore, the hon. Gentleman's question does not arise.
Question put and agreed to.
That the Counter-Inflation (Price and Pay Code) (Amendment) Order 1974 (S.I., 1974, No. 661), a copy of which was laid before this House on 4th April, be approved.
That the Counter-Inflation (Price and Pay Code) (Amendment) (No. 2) Order 1974 (S.I., 1974, No. 785), a copy of which was laid before this House on 2nd May, be approved.—[ Mrs. Shirley Williams. ]
Consolidated Fund (No. 2) Bill
Order for Second Reading read.
Motion made, and Question proposed, That the Bill be now read a Second time.—[ Dr. Gilbert. ]
8.15 p.m.
I hope that we are not to have a repeat of the performance on Monday night when it was difficult to tell whether the Under-Secretary of State for the Environment intended to speak or not.
When we debated this matter on Monday, we examined a number of points in relation to the Estimate. The sums involved are very large, amounting almost to £500 million, and therefore it was right that we should probe the matter in some detail. Some of the Under-Secretary's answers clarified our points but others were less satisfactory, and I want to deal briefly with them.
I am glad to see the Financial Secretary here as well, no doubt because the Order Paper tells us that remaining stages may also be taken. I could hazard a guess about his brief, because the only matter which can be discussed is the definition of the word "may" in the phrase that says that the Treasury "may" issue money out of the Consolidated Fund—
And a definition of the Treasury.
The hon. Gentleman is right, of course. We can debate what is the Treasury, and that might be a fascinating subject for another occasion, when it might be interesting to hear that brief read out.
On Monday the Under-Secretary first referred to the unusual procedure that we were following. He then expressed some interesting views about interest rates. The Government intend, we understand, that these sums should be provided to keep down mortgage interest rates, in the expectation that rates generally will soon fall. I expressed surprise on Monday when the Under-Secretary appeared to say that the Government expected that interest rates would soon fall. He then came out with the startling statement that his original wording had been carefully chosen, and he said that what he had actually said was:
Why has the first £100 million of this sum been apparently financed in a curious way? That is to say, the Bank of England is apparently to advance the money and the Treasury will subsequently reimburse it. The Under-Secretary's answer was not abundantly clear. We are still not aware why the whole of the £500 million should not proceed—since we are to use it—straight from the Treasury in the usual way, and why there has to be this roundabout procedure in relation to the Bank of England. Although he tried to answer this point, the Under-Secretary did not answer it on Monday. Why is the first £100 million not paid direct from the Treasury? Why is the money to be advanced from the Bank of England and then reimbursed? What is the timing? Are we to understand that, for a period, the Bank of England is to cover it. If so, why?
The third question that was not satisfactorily answered was whether the whole £500 million scored as public expenditure. The Under-Secretary of State sought to defend his Secretary of State who, I suggested, had not understood that the whole amount was public expenditure. The Under-Secretary of State said: Under-Secretary of State, he gave an excuse and not a reason. I understand that the whole amount will score as public expenditure, and the Secretary of State was not correct in his remark.
The Under-Secretary of State, having had a chance to contemplate the replies he gave, can perhaps give me precise answers to the three questions I have asked.
8.21 p.m.
I have the pleasure, which I had not expected, of replying to the three questions put by the hon. Member for Worthing (Mr. Higgins) who, I am sure, will appreciate that we were in some doubt, until we knew the form the debate would take, whether it would be more appropriate for my hon. Friend the Under-Secretary of State for the Environment or myself to reply. As the hon. Gentleman asked questions which comes more under the Treasury than the Environment aegis I shall attempt to answer them to his satisfaction.
I hardly think that even the hon. Member for Worthing would wish to have a prolonged discussion on the future course of interest rates on an occasion like this. I do not seek to avoid his question, but there are other more significant economic debates in the parliamentary calendar, one of which will take place tomorrow. There will also be others in Committee on the Finance Bill when, through the tolerance of the Chair, a whole range of financial matters is usually debated. It would not be difficult for the hon. Gentleman to raise this matter then with the Chancellor of the Exchequer.
My hon. Friend was saying not that he expected but that he hoped that interest rates would fall. He said that we had already given them a certain modest nudge downwards. I hope that that is an acceptable situation which will commend itself to the hon. Gentleman.
I apologise for interrupting the Financial Secretary, but in a Second Reading debate it is only by intervention that I can pursue these matters. What the Under-Secretary of State said was this:
"It is hoped that the pressures on societies will ease if the general level of interest rates falls in accordance with expectations."—[OFFICIAL REPORT, 14th May 1973; Vol. 873, c. 1021.]
Although the Financial Secretary says that I can raise this matter on other occasions, I cannot raise specifically what the Under-Secretary of State said. It is of interest because Ministers do not normally express a view on the future course of interest rates. Whose expectation is the Under-Secretary of State referring to? Is it his, the building societies' or the Bank of England's? Whose is it?
I cannot speak for the Under-Secretary of State's expectations. Quite simply, it depends upon the time scale. We all hope that interest rates will fall over the medium or longer term. The present level of interest rates is widely accepted to be intolerable. It is the result of two things; first, the international level of interest rates and, secondly, the enormous public sector deficit which we inherited from the previous administration. I do not seek to hang that round the hon. Gentleman's neck but I am sure that he recognises that the size of public sector borrowing is one of the factors involved. He and I have no difficulty in agreeing that future levels of interest rates are outside the Government's control if international rates move adversely. The hon. Gentleman is right to note that recently the interest rates in the United States moved up yet a further notch. It is impossible to make a firm prediction of the level of interest rates at any time, and the hon. Gentleman is sufficiently economically sophisticated to know that.
We are saying that the Government hope to bring down interest rates by a modest amount. There is a limit to how much they can do in that respect, and they have made a modest start. The Bank of England minimum lending rate is already 1 per cent. below its peak level of 13 per cent., so a start has been made.
That was a most interesting discourse, which we have all enjoyed, but it is not an answer to the question "Who?" to speak in terms of when or where, which is what the hon. Gentleman has done. To whose expectations was the Under-Secretary of State referring? He cannot say that this is the expectation, basing that exercise on a hope that justifies the view that it is a temporary measure, and then not say to whose expectations he refers.
I was trying to make clear to the hon. Gentleman that we all have an expectation that interest rates will fall, but the question is by how much, and when. The hon. Gentleman must surely recognise that. We have already made progress, albeit modest, in that direction.
I hope that the question of the £100 million from the Bank of England will not give us quite so much difficulty as the level of interest rates present and future. The hon. Gentleman asked why we took £100 million from the Bank of England rather than from the Treasury. The answer is that it was hoped initially that it would be a short-term banking operation. The timing of the repayment to the Bank of England has not yet been settled. It is the subject of discussion between the Treasury and the Bank of England at this moment.
The hon. Gentleman asked whether or not the first £100 million would be public expenditure. The statement made by the Secretary of State of the Environment was perfectly accurate. It was that, in so far as it came from the Bank of England and was repaid by the building societies to the Bank of England, it would not be public expenditure. If, on the other hand, it was refinanced through the Treasury, it would count as public expenditure, and that is why the full £500 million appears in the Vote. I hope that makes the position clear to the hon. Gentleman.
Question put and agreed to.
Bill accordingly read a Second time and committed to a Committee of the whole House.
Bill immediately considered in Committee, pursuant to the Order of the House this day; reported without amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 ( Consolidated Fund Bills ), and agreed to.
Bill accordingly read the Third time and passed.
Channel Tunnel Bill
That Mr. Toby Jessel be discharged from the Select Committee on the Channel Tunnel Bill and that Mr. Victor Goodhew be added to the Committee.—[ Mr. Walter Harrison. ]
Adjournment
Motion made, and Question proposed, That this House do now adjourn.—[ Mr. Dormand. ]
Disabled Persons (Foreign Domestic Help)
8.31 p.m.
I am grateful to have the opportunity to raise this subject on the Adjournment, for it is one which merits sympathetic consideration. I put the case in somewhat broad terms, for two reasons. First, I believe that there may be a number of cases in the country in which people have had the same experience as my constituent. Secondly, my constituent wishes to remain anonymous, as the hon. Gentleman will understand, and not be mentioned in this House. I can assure the hon. Gentleman also that it is not in any way a party political debate, because the complaint I have applies to the Department of Employment under both the Conservative Government and the present Government.
The debate stems from a constituency case. The lady concerned suffers seriously, alas, from multiple sclerosis. She is the mother of a number of young and, no doubt, lively and obstreperous children, and with her disability she desperately needs to have living in the home someone to help her but specifically to look after the children. This need will, as time goes on, increase. It will be increasingly difficult for her to cope with her small family. The fact that she needs this help is confirmed by specialists, who have prepared a report which I have submitted to the hon. Gentleman and which he has seen.
As a result, my constituent sought to obtain living-in help. But all her efforts to obtain a girl from the United Kingdom to fulfil this task totally failed. She applied through agencies; she advertised and looked through advertisements in various journals and newspapers, but was quite unable to find anyone for the task. The sort of home help provided by the local authorities, admirable though it may be, is wholly inappropriate in this case, which demands someone living in the home all the time.
One may ask why this lady could not have got an au pair girl, perhaps from Europe. The answer is that, over recent years, girls from Europe are increasingly being attracted to work in commerce, industry and other activities, and are less and less inclined to undertake the sort of work required by my constituent.
Accordingly, and because she learned of similar difficulty among people suffering from similar disabilities, my constituent found out that the one nation which would supply girls admirably qualified for this task, and which desired to do so, was the Philippines. Through an agency, she made contact with a girl in the Philippines. The girl was of high repute, with excellent references, in first-class health and with a good record. Arrangements were made between the parties, and all that was required was a work permit.
Here, of course, my constituent ran up against a brick wall. Let us look at the background. In November 1972, the hon. Gentleman's predecessor, in answer to a Question in the House which concerned Filipino girls, said that applications for work permits would not be considered until efforts had been made to find jobs for Ugandan Asians. I find that extraordinary. At the present time I do not think it can conceivably apply, because Ugandan Asians will not undertake this task, as my experience of them in my constituency shows, and they are all very well placed in jobs already.
Last year there were a number of widely publicised complaints that Filipino girls were coming to this country, allegedly in their droves, to be employed as sweated labour in Lancashire factories. This naturally caused considerable concern and led the Government, last July, to put a total embargo upon work permits for these girls. After that total guillotine my constituent was left on the wrong side of the fence and bereft of any help.
In subsequent correspondence on the subject I was informed by the Department that the reason for the total embargo was the abuses, which were probably those referred to in the factories, and that discussions had to take place with the Philippines Government on the subject. What was described as a breathing space was required, I was told, so that the problem could be dealt with. The prob- lem was more difficult than had been anticipated. The decision on the embargo was made by the Department after consultation with the Home Secretary and the Secretary of State for Foreign Affairs. I was surprised that the discussions did not include the Department of Health and Social Security, which should have been apprised of the problem but which was bypassed and apparently not consulted.
There were abuses and a breathing space was required, but a year has elapsed since that decision and it is high time that the difficulties were overcome. I shall be interested to hear from the Minister about progress in the talks with the Philippines Government.
The problem should be seen in perspective. We are not dealing with fantastic figures. Last October the House was told of the number of work permits granted to people from abroad. Between 1968 and 1971 fewer were granted to the Philippines than to almost any other country. Even in 1972 the number of permits allowed for the Philippines was lower than for France, Germany, Italy, Switzerland and the United States, so it cannot be said that great floods of these people are coming in. In that year only 2,600 work permits were granted.
Although I believe that there are a number of people who, like my constituent, are suffering from a disability of some sort, who have families and who need help of this kind, I do not think that that number is such as would cause a vast influx into this country of Filipino girls for this purpose. I do not ask the Minister to open the flood gates to allow masses of people to come in from the Philippines or anywhere else. I do not ask him to permit sweated labour in Lancashire factories. I do not even ask him to enable help to come in so that British mothers can go out to work while a foreigner looks after their families. All I ask for is help for a small but worried group of disabled people like my constituent. I hope that the Minister can break through the present undue rigidity of the regulations governing work permits and sympathetically consider genuine cases of hardship.
Since a year has elapsed I hope that the Minister will feel able to allow work permits for these Filipino girls, subject to such safeguards as he thinks fit, in order that these disabled people can get the help they so desperately need.
8.40 p.m.
I appreciate the sincerity and the humanity with which the hon. Member for Harrow, Central (Mr. Grant) put forward the argument for his constituent. As he rightly said, this is not the only case which has come to the attention of my Department. There is a great problem about making more and more exceptions to what was a ban imposed by the Government of which the hon. Gentleman was then a member. There is no party issue in this. The solution to the problem he poses, and to other similar cases, is to try to get the thing right in relation to Filipino girls coming here on work permits, so as to meet the needs of the hon. Gentleman's constituent and the needs of many other cases which have come to my attention.
I will first say a few words about the work permit schemes. A work permit is issued by my Department for a specific job with a specific employer, and certain basic conditions have to be satisfied before issue. There are additional conditions required in the case of domestics, conditions which were imposed in the interests of both the employer and the overseas worker. There are no special arrangements whereby disabled persons or households including sick or disabled members may recruit people from overseas to work in their homes. All households are eligible, and many thousands of overseas workers have come to this country over the years to take resident domestic work in private homes, hospitals and similar institutions.
My Department has long recognised the difficulties experienced through shortage of domestic staff in this country and arranged many years ago for our local employment offices to issue permits freely on application by employers. No preference is given when considering applications. Provided there is a job and no one available locally to fill it, a permit is issued. I appreciate what the hon. Gentleman says regarding this particular case. If the conditions are fulfilled a permit is issued. The numbers of people coming here for domestic work in recent years has been falling, from about 10,000 permits a year for foreign resident domestic workers in the late 1960s and early 1970s to 6,000 in 1972 and 5,500 last year, when people from the EEC no longer needed permits at all. A comparatively recent phenomenon has been the appearance in this country of girls from the Far East and, in particular, from the Philippines. Of the 6,000 permits issued in 1972 for resident domestic workers a quarter were for Filipinos, while up to the middle of last year the proportion of Filipinos was over a half. Therefore, they form a very substantial proportion of those coming here for domestic work.
There was also a demand for workers from the Philippines by the hotel and catering industry and for girls to work as machinists in factories in the clothing industry. I will refer to this later because it has a bearing on the previous Government's decision to suspend the issue of permits for unskilled and semi-skilled workers from the Philippines.
The hon. Gentleman asked for special and humane treatment for families in the distressing situation of having to care for sick and disabled people without adequate domestic assistance. I must therefore stress that my Department wishes to do all that it can to assist such families and point out that permits for all resident domestic workers other than those from the Philippines are still being freely issued, and, as I shall explain later, I hope that these particular restrictions on Filipinos will soon be removed.
I do not say this unfairly, but the family of which the hon. Gentleman speaks and other families in a similar predicament have literally the rest of the world from which to choose a domestic worker. I do not underrate the difficulties of families in such predicaments, but they have the rest of the world to choose from and there is a large part of Western Europe where no permits are needed. I do not regard it as being particularly attractive to have a situation where only the Philippines has a ban against it. But I think that it will be better to try to get things right for the Filipinos and to remove that ban altogether.
Filipino domestics working in this country may, of course, change their employers if my Department gives approval. One way in which my Department tries to be helpful is in doing what it can to ensure that an overseas worker stays with the employer who went to the trouble and expense of recruiting him or her. It is important that workers from overseas should know in advance what will be expected of them.
Many people engaging domestic workers from overseas do so from employment agencies. I think that that is the case with the hon. Gentleman's constituents. It is up to the parties to ensure that full details of the job are given. That is particularly important in the case of a hardship household with elderly or disabled people, otherwise the foreigner, especially if a young person, may be unwilling to stay, and will seek permission to change to another employer.
There would be a sense of grievance if a family such as that of the hon. Gentleman's constituents went to the trouble of recruiting someone from the Philippines, or any other distant part of the world, advanced a substantial air fare and then found that the attractions of working in other domestic employment or—perhaps not legally—in employment outside the domestic area took that person away from them. But I am not prepared to see put upon a foreign worker a degree of pressure, legal or otherwise, which would place that worker in the position of an indentured labourer. That is the difficulty we have to try to overcome.
To prevent exploitation, overseas workers must be employed under the same conditions as British workers. They may therefore take another job if they first get my Department's permission. If they seek to do this soon after arriving with the permit employer, our local offices will, if advised, interview the employee and try to find out the reasons for leaving. Then, where appropriate, they will try to persuade the foreign worker to return to the original employer. But there is always the temptation to move from the original employment for which the work permit is given to certain others.
That was one of the problems we encountered with Filipino girls, although there were other complications. To begin with, the Philippines Government, whilst anxious to enable their nationals to take work abroad, require to see a suitable contract of employment before allowing the worker to leave. Then there is a requirement in the Philippines that in most cases the employer shall have advanced the air fare. The total cost to the employer is often about £200. In some cases the girls come under a fly now, pay later arrangement and then have to pay the advance out of their wages. Where the employer has advanced the air fare, it is usually recovered by means of deductions from the girls' wages.
We and our predecessors found that some girls attempted to avoid repayment of the fare in this way by leaving their employers and going to work elsewhere. Others, being pressed for repayments by local agents of the agency or finance house in the Philippines, would also attempt to change their jobs and disappear from the scene. Of course, these were comparatively rare, but of sufficient importance for my Department officials to be concerned that the work permit system was being abused in this way, and not always, of course, was the fault on the girl's side. Some employers have been known to work the girls very hard, and difficulties over language—although most understand English—and lack of knowledge of Western ways have added to the problems.
There was about 18 months ago Press and TV comment about the Rochdale conditions, about which the hon. Gentleman spoke. I think that there was some distortion and inflation of what happened, but there was sufficient there to cause concern to officials of my Department.
The publicity which that case generated resulted in a special study being commissioned by the Runnymede Trust into "Immigrants and employment in the clothing industry—the Rochdale case". The report has now been published, and includes a contribution from a journalist in Manila. I think it would be useful to quote from this report, because it highlights some of the difficulties with which one is faced when allowing easy recruitment of workers from overseas, particularly the Philippines.
I shall not give many quotations, but those that I shall give from the Runnymede Trust report will show the difficulties in which we find ourselves. The report says:
My officials have had talks with the Home Office, the Foreign and Commonwealth Office, the consular staff of the Philippines Embassy and the Federation of Personnel Services. Those talks have produced ideas, some of which are still being considered. One particular difficulty has been the contract between the worker and the prospective employer. Ideally, the girl should stay with the permit employer until the end of the two-year period when the contract expires. Such contracts are not part of the work permit arrangements and there are no ways in which my Department could enforce such a stay. Even if there were, it would not be desirable to do so. We are considering the possibility of restricting girls to working in private households for the first year, for example, rather than permitting them to transfer to work in hospitals, which are unable to take over commitments about repayment of fares.
The Philippines Government have taken steps to prevent a repetition of at least some of the problems. They will now accept only contracts drawn up by Government licensed agencies or, if the proposed arrangement is a private one, after inquiries made by the Embassy abroad have satisfied them about the employment.
In these discussions will the Minister also have talks with his hon. Friend the Under-Secretary of State for Health and Social Security who has responsibilities for the disabled? Does he think that his hon. Friend should be brought into these discusions?
I gladly give the hon. Gentleman the assurance that I shall draw these matters to the attention of my hon. Friend. He has a well-known and sincere interest in such matters. I hope that the hon. Gentleman will realise that my Department is not being restrictive for the sake of it. There is pressure from all sides. We have regretfully had to turn down applications from people like the hon. Gentleman's constituents who particularly wanted a Filopino. We have done this because, although in this case I am sure that the bona fides of the prospective employer are genuine, if we give one permit exceptionally, how many more cases do we have to deal with before we have broken a ban which I hope will be as short as possible?
We must remember the representation of those individuals and bodies concerned about the welfare of young foreign girls in our midst or about the fact that they appear to be here in large numbers. We are also only too well aware of the third side of this triangle—the employers who, as I have already mentioned, complain bitterly about their staff who, instead of being single as certified on the various forms, are found to be married and have children in Manila, who engage in various undesirable activities, and who disappear owing their employers money—I am not suggesting dishonesty; I mean owing money in respect of the advanced air fare.
Whatever one thinks about the general need to employ foreign domestic staff or the desirability of doing so, I accept that in many cases there is no alternative. This is one such case. Officials of my Department's overseas labour section want to provide the best possible service, but I hope that the hon. Gentleman will appreciate the pitfalls involved. I hope that his constituents and others like them, if they really have no alternative to employing Filipinos, will have patience while we try to produce an answer to the problem which will not merely prove to have restored the status quo under another name.
I accept the sincerity and the force with which the hon. Gentleman presented his argument. It is undesirable that we should exclude one country from our work permit scheme. I shall, in conjunction with my hon. Friends, look at the matter again, and I hope that in that way we can find a proper solution to the problem and also satisfy the needs of the hon. Gentleman's constituents and others placed in a similar predicament.
Rates
8.57 p.m.
I welcome this opportunity to speak about rates, in particular those in the South-West of England. I shall not be too critical of the Minister, who has come at such short notice to reply. Obviously, it is difficult for him to get the facts and figures. However, I am critical of the Government.
My hon. Friends the Members for Tiverton (Mr. Maxwell-Hyslop), for Totnes (Mr. Mawby) and others and myself have tabled Early-Day Motion No. 94, which states:
There is real concern in the South-West over the increase in rates, particularly its effect on those with fixed incomes. The extra costs hurt those people very much. Obviously, I cannot blame the Government for the rise in the cost of fuel, but this to many people is a very expensive burden on their household expenses and now this steep rise in the rates makes it even harder for them.
The Minister may not realise it, but wages in the South-West are lower than elsewhere. In manufacturing industry in the South-West they are £l·28 lower than in the rest of the United Kingdom. For the building industry the figure is more than £4 a week. Taking all incomes together, the figure is £117. The cost of food is slightly cheaper in the South-West than in other parts of the country. Fuel, power and transport costs are all a bit higher. I bring that in to show the lower wages and the higher rates in the South-West. This is a great problem for many constituents.
We must try to be fair. Of course rates would have gone up if my party had been in power. I understand that they would have gone up fairly evenly across the board. What has happened now, as we see it, is that there has been at least a 60 per cent. to 70 per cent. rise in rural rates. This is grossly unfair. There seems to be a bias towards the towns and the big cities. Many councils are gravely affected by the Rate Support Grant Order introduced by the Government. Something must be done. We cannot leave things as they are.
Immediate measures—I know that there are difficulties and I have read that nothing can be done—must be taken to introduce special relief. Again, to be fair, local authorities must try to curb expenditure. They must go through their expenditure programmes with a fine-tooth comb. They must get their priorities right, as must people. It is not much use people criticising the Government, Members of Parliament and local authorities about the rates if they are demanding more and more.
Members of Parliament have to be careful not to pursue expensive projects, because that means that the rates rise. All authorities must get their priorities right. It may well be that in these difficult inflationary times we may have to give up some of the things we hold dear, some of the things we want, and cut our costs where we can. It is also important for constituents and ratepayers to realise that inflation hits councils just as much as any individual or company. In this sort of inflationary period there are bound to be increases in rates. My plea is that such increases should be spread evenly and fairly throughout the country.
I turn to the problem of sewerage rates. I draw to the Minister's attention the serious anomaly and difficulties which arise for those who still use buckets. You may be surprised, Mr. Deputy Speaker, to hear that people are still using buckets. I can assure you that this is so. Perhaps some hon. Members have never used this method—I think that it is probably the best way of putting it. I did in my younger days. It used to be at the end of the garden. Nowadays a person walks solemnly to the end of the garden, and when he returns to his house he finds that the postman has left a rate demand which includes an element for sewerage. It is galling, to say the least, that he has no facilities and only a primitive method of dealing with these matters; and then, when he arrives back indoors, he finds that he has to pay for others. This is grossly unfair, and it must be put right.
Cesspits—which I have at my home at present—have to be emptied. One usually has to pay a private contractor to empty them twice a year. Again, after one has paid the bill for a local man to empty them, the postman brings a sewerage demand. It would be a different matter if the local authority paid for the emptying of cesspits, but it does not in many cases. Once again, therefore, my constituents are paying twice over. These things must be looked into.
I understand that the Minister of State, Department of the Environment, said the other day:
What can be done for the future? Changes have been discussed for a long time. When one considers all the problems that have been caused by the action of the present Government on rates, and the anomalies of the past, one is bound to realise that changes are needed in the whole system of rating. New methods of raising money must be examined. I am not an expert on these matters, but some of my colleagues have been working on a new system of dealing with this matter, which I should like to explain.
Their views are that a local tax must be introduced and that we must do away with the present methods of raising money, which are so unfair. Private individuals should be taxed on a PAYE basis and certain costs should be transferred to central funds, such as those for education, the police and, perhaps, the fire authority. This system would be fairer. It would mean that everyone, including single people, would pay for local amenities and council work.
There is a need to look very carefully into this matter. It has been brought to a head by what I call the unfair treatment by the present Government in rating, particularly in rural areas. I hope that we shall hear from the Minister that the Government are actively engaged in examining new ways of dealing with this problem. I hope, too, that the sewerage rate will be sorted out and that some special relief will be given, as it must be, before the end of the year. Hardship it certainly is in the South-West and other places. I have heard all sorts of rumours about revolts as regards paying these rates. I hone that this will not happen. But it is up to the Minister to let us know—I accept that it is rather short notice—what the Government's intentions are and to reply to the points that I have been putting to the House.
9.10 p.m.
I have great pleasure in endorsing the speech of my hon. Friend the Member for Devon, West (Mr. Mills) for I believe that it is fortunate that we have been afforded this opportunity to discuss ratepayers' problems. I should like to highlight one or two problems in relation to my constituency which no doubt are reflected in many other constituencies.
My hon. Friend drew particular attention to the problems faced by ratepayers on the question of surcharge. I wish to emphasise the problem of the burden placed upon the ratepayer by the new water rates. We must look at this situation on the basis of the creation of the new water authorities as part of an evolutionary process, but many of us did not anticipate some of the present difficulties because when the water authorities brought in their precepts for the year 1974–75 they were not in a position to be precise about the budgetary implications.
I think it can be said that the single largest percentage increase borne by ratepayers in my constituency has risen as a direct result of the substantial budget of the new water authority. The body concerned in my area is the Southern Water Authority. There is a feeling of unfairness among my constituents that when the new water authorities compile their budgets there is no proper check or scrutiny. Representations to the Southern Water Authority were made on behalf of ratepayers in Hampshire, Kent, Sussex and the Isle of Wight. They expressed dissatisfication at the level of the budget, with the suggestion that the matter should be referred back to a finance committee. This suggestion was turned down by the water authority and we were informed that the matter had already been authorised by the Department of the Enviroment.
Many of my hon. Friends and I have pursued this subject with Department of the Environment officials but we have been unable to get any satisfaction on the question of authorisation and vetting. When I sought to take up the matter in the House, I was told in reply to a Parliamentary Question that the Minister concerned had no power to act. I believe that the whole process should be taken a stage further because the present situation is far from satisfactory. On the one hand, the regional water authority says that the matter lies with the Department of the Environment and, on the other, the Minister tells the House that he has no power to act.
I hope that in his reply the Minister will consider the implications of the hiatus created by the present system. Since we are now primarily concerned with next year's budget, and since we are meeting the Southern Water Authority in this House next week, any advice which the Government can give us will be extremely helpful.
I turn to the other main element in the rate increases—education. Many of us feel that it is very difficult to answer the pensioners who write to complain about the weight of the burden in the rating system caused by education. It has to be said that the weight of the burden can no longer be dismissed or justified as a matter of local autonomy in which all must share. If this Government remain in office, which is an open question, it is clear that they are dedicated to the progressive elimination of local autonomy, committed as they are to the rapid introduction of a system of comprehensive education and with it the removal of even that element of local choice. Therefore, it is difficult to justify a system in which local ratepayers are increasingly reflecting upon the weight of the burden of education.
I join many of my right hon. and hon. Friends who have sought to draw attention to this problem, especially in Early Day Motion No. 119, which a number of us have signed and which seeks to bring the burden of education into the central Government Exchequer. This is a move in the right direction. There are other moves afoot in this House. There is a Private Member's Bill in process. These are arguments which should be thrashed out when we consider this wide-ranging, important and growing burden of rates.
If we ignore the problems of the rising tide of the ratepayers' rebellion, we do it at our peril. It is undoubtedly one of the most keenly felt unfairnesses over recent months. People have looked at the new system of local government. Perhaps we have all been at fault in expecting too much too soon. But if the immediate impact of the reform of local government is reflected in the very heavy rate burdens which exist throughout the country, we as parliamentarians are likely to see our work brought into disrepute. In the widest possible sense, this is a matter in which I hope that we can work together constructively in order to bring some amelioration.
9.18 p.m.
I speak against a background of a great many letters arriving daily from my constituency and from people living nearby in the North-West. My constituents have benefited from the rate support grant, but that does not affect the elderly, the sick and the widows—people particularly affected by increases in the rate demands ranging from 38 per cent. to 56 per cent., and I have even heard of cases of 69 per cent. and 72 per cent. increases.
This hardship on people, who cannot afford to pay, is ameliorated partially by the rate rebate. But we do not always reach the people who need it. At present, I am having a flood of people coming to me in tremendous distress because they do not know how to cope with the problem of paying their rates. It has also come to my notice that a great many elderly householders, who have been left properties let at controlled rents, are suffering an even greater burden. It is for this reason that I rise to support my hon. Friend the Member for Devon, West (Mr. Mills).
These people very often are trying to cope with an all-inclusive rental, by which I mean that it is inclusive of electricity charges, water rates and local rates. They cannot get help with electricity charges because the rents on these properties have been frozen. Ten elderly people in a matter of two or three weeks in one constituency multiplied by 635 show how deep is the problem resulting from the increase in the rate burden.
I am concerned that it should come at a time of other vast increases which elderly people have to suffer. For a long time it has seemed to me extremely unfair that where there are four or five wage earners in one house they pay the same rate as the little lady next door who has been left on her own to cope with all the maintenance and repairs to her house on a fixed income.
The rates on council houses or other properties are not frozen.
I appreciate that rates are not frozen, but other charges which come in an all-inclusive rental are. Someone of 75 who is faced with a rate burden on his own home cannot put up the rent to include increases in electricity charges and various other matters included in the rental of another house. It makes the problem highly complex, very worrying and extremely distressing.
The basis of the problem facing local authorities today is our inequitable rating system. For a long time I have believed in a form of local income tax. I see that as the only way to spread more fairly the demands of the community upon the local authority, for we all know that the demands of the community are growing.
There is a great growth of local interest groups and I welcome the participation of such groups. These groups suggest that we should buy land for leisure facilities and other projects. These are laudable objects, but the people running these groups must appreciate that what we buy we must pay for.
For example, in my constituency there is a building that used to be a rest home for retired railway men. It is called Leasowe Castle. It is a beautiful place. We did not buy it some years ago because we considered that it would be too great a burden to impose on local ratepayers. However, it was bought by the old Wallasey Council just before it was dissolved at the end of March. It will now cost millions of pounds to be put to any use. Admittedly, it forms what we hope will be the future coastal park, but the cost of buying it and putting it to use was never fully understood by those who were pressing for that great mansion to be bought for the area.
Another area that we must consider is education. Within the new Wirral authority area there are three different systems of education. We do not yet know the Minister's intentions regarding education in that area, but if we are forced to have another reorganisation scheme we shall waste a great deal of the good system that has gradually been built over the last few years. I know that it is difficult to sort out between old authority areas, but we should obviously waste a lot of money. I hope that we shall not hear from the Government that we are purposely to waste a lot of money for doctrinaire reasons. That would not be in the interests either of our children or of the ratepayers, who would have to bear the burden.
At this time the new local authorities are undergoing enormous teething troubles and are still living out of packing cases. Therefore, we not only face a slower response to problems of a local authority nature within our constituencies, but we burden beyond the realms of possibility the people who can least afford rate increases. Therefore, if we do not consider other systems of raising local finance we are failing in our duty to the people of this country. If this Government will not undertake that task, may I assure them that the next Conservative Government certainly will.
9.24 p.m.
Few taxes—probably none—are reviled as consistently in this House and yet subject to so little change over the years—indeed, over the centuries—as rates. No one ever has a good word to say about the maintenance of the rating system, yet successive Governments have been unable to find a more acceptable method of collecting the large amount of revenue produced by the rating system.
Until the House determines and gives instructions to a Select Committee that the rating system is to be stopped—and the question is not only whether it should be stopped but what is to replace it, whether it be a local income tax, a combination of a local income tax and a sales tax, or, in the long term, an agreement between central Government and the local authorities about the amount of grant that they will receive out of the central Exchequer revenue—we shall make very little progress.
Having heard the hon. Member for Wallasey (Mrs. Chalker) suggest that the rate burden has become too heavy I am forced to recall that there were some respects in which the burden was greatly increased by the previous Government. I am thinking particularly of such things as rent allowances. No clear, logical distinction is drawn between the expenditure which falls upon the rates and that which falls upon the central Exchequer, and I can see no justification for putting the cost of rent allowances in the private sector or rent rebates in the council house sector, largely, or even partly, upon the rates or, even less so, upon council rents. We should prune the list of expenditures which are put upon the rates.
The process has gone on over the years in a somewhat desultory way, and there has always been a tendency, however much the service in question is nationally controlled, to say that some part of the expenditure ought to fall upon local ratepayers. I am thinking, for example, of the cost of magistrates' courts. Local authorities have virtually no say in the administration of these courts. They have very little say even in the probation service, except to decide how many desks there will he in the offices, and so on, and yet, though it was possible recently to raise the national Exchequer contribution to these expenses from 50 per cent. to 80 per cent., there was, nevertheless, the insistence that the remaining 20 per cent. ought to fall upon the local ratepayers even though they have no say, through their elected local councils, in the administration of those services. We ought to draw a sharper, more logical conceptual line between national and local services and put the cost of the national services on the national Exchequer where decisions are normally taken.
For my part, I should be prepared to take the whole cost of education out of local rates and put it on to the national Exchequer, but to do that would be to raise the old bogy about establishing a Fascist State with national control over education. That is a consequence which I should be prepared to accept because, on the whole, the quality of decision-taking at national level is rather superior to the quality of decision-taking at local level, but it has its dangers.
My area of Islington is one of the most deprived in the country, whether measured in terms of housing, the income of a large part of the population, the physical attributes of the area, the lack of open spaces, or whatever criterion one chooses. The decision taken by my right hon. Friend the Secretary of State for the Environment about the reallocation of grant was of great assistance to my area. It meant that despite an increase in local revenue and capacity to spend it was possible to reduce the rate by 1p, as opposed to what happened under the previous Government.
I accept that many parts of the country—particularly the rural areas, but not only those—suffered as a result of my right hon. Friend's decision, but if one has to contrast one area with another, the inner cities are particularly deserving of financial support.
We on the Opposition benches appreciate the hon. Gentleman's concern, and most of us would share the feeling that more needs to be done to help the inner cities, but we also feel that the rating system, for reasons that he has described, is a wholly inappropriate instrument for carrying out this redistribution and that it should be dealt with through the tax system. Does he agree with that?
Yes; I think that 635 Members of this House would agree with that proposition. The trouble is that no one gets around to doing anything about it. We all understand why; if we take away from local authorities the revenue which is completely in their control, they will feel aggrieved. However much one says that they will get a slice of the nationally-collected revenue, they will not believe it. They want to hang on to their own private rating system, as they have for 400 years.
I agree with the substance of what the hon. Gentleman says. That is why I think that the House should at some time take a decision that the rates will go and then consider only what is to be put in their place. If the House conducted its affairs competently, which it certainly does not, this is the sort of matter which would be looked at by one of its Committees off its own bat, but since we totally neglect our Committees and they do not see their function as initiating policy—in contrast with the more vigorous attitudes of committees of the American Congress—that does not happen. Therefore, it is up to the House to put the burden upon a Committee.
There are two features of the burdens of an innner city area for which my right hon. Friend's decision will be of assistance. One is what, in an inner city area, might be called the "Barnesbury syndrome"—an area which used to be working class almost exclusively but which has become very fashionable, and where, therefore, relatively wealthy families are replacing poor families in rundown accommodation. Large numbers of people who brought homes when they were very cheap and who earn well under average earnings—they are certainly not well off—were able to afford the rates in an area like that when it was a recognised poor area. Many such people have been got out of those areas, or have chosen to move, because of the bad conditions of the houses, or they have been winkled out by property companies. But some remain. I should like to see everything done to help them to remain in inner London, where they wish to be and where they are required for the running of the services.
Because the area in which they have survived—nobbut just, but they have survived—has become fashionable, the valuation officer bumps the valuation enormously. Then they find that, although they have done nothing, because the area has changed, usually to their detriment or danger, they are being asked to pay much higher rates. Perhaps new criteria could be imposed on valuation officers in those circumstances. I draw attention to this characteristic, and it is in connection with that that my right hon. Friend's decision brought some relief.
There is another feature of life in an area like mine on which my right hon. Friend's decision was helpful. My local authority has not chosen to wait for compulsory municipalisation of rented property. Islington has wisely and vigorously gone out into the market in the last year or two and bought a large number of private houses and blocks of flats. That has been very much welcomed by the people living in those blocks of flats and by the 11,000 families on the waiting list. It brought relief from the insecurity from which they were suffering as a result of the activity of property companies, and it meant that a large number of dwellings which were lying empty or half-empty waiting to be sold with completley vacant possession were put to better use.
In buying that property the local authority has to pay market value, but it is an exaggerated market value. What happens is that one property company, ABC, in order to screw more out of the local authority, either under compulsory purchase or by voluntary sale under threat of compulsory purchase, sells to property company XYZ at a higher figure than it paid for the property and the XYZ company might sell it to the LMN company. This results in evidence being available that the property has exchanged hands in the recent past for quite high figures, of which the district valuer has to take account. The directors of the property companies, who are probably the same for the whole group of companies, therefore make a larger profit than they would have done if the properties had not passed from hand to hand round this octopus.
The ratepayers of Islington have to carry a great burden in purchasing that property, and any assistance that my right hon. Friend is able to give, not only by his decision on the distribution of the rate support grant but in his more recent measures, is of great help in providing housing accommodation in those circumstances.
Finally, I make the plea that in respect of education and such clearly national services as the courts, while we are waiting to get rid of the rating system entirely—and the country has been waiting for 400 years to do that—we should clean up by transferring to the national Exchequer as many services as possible over which the local authority has no policy control. The most obvious place to start would be the courts, the probation services—broadly what I call the law and order sector—and the judiciary, where local authorities have absolutely no say in the policy control of the services.
9.37 p.m.
The hon. Member for Islington, South and Finsbury (Mr. Cunningham) is, naturally, happy that his constituents benefit from the change in the distribution of the rate support grant made by the Secretary of State immediately on taking office. But his constituents gain from that change at the expense of my constituents in the rural areas.
Local authorities were notified of the figure of the domestic rate support grant by the outgoing Government and later told that there would be a reduction, with the result that not until the past two weeks have my constituents received their rate demands. Never have I seen such a demonstration by law-abiding citizens in reaction to the tremendous increase in rates which they have suffered. I do not say that that is simply because the Secretary of State changed the distribution of the domestic rate support grant. As my hon. Friend the Member for Devon, West (Mr. Mills) said, local authorities are not, and cannot be, immune from the rising costs of labour and of the materials and so on that they have to buy. Obviously, there had to be an increase, and one can see some justification for it.
But certain types of people are probably rather more up in arms than anyone else at the moment. For example, there is the group who belong to the "bucket brigade", to which my hon. Friend referred, or who have a cesspit, are not connected to the main sewerage system, and also have a well which, under existing legislation, they already have to register and license. On top of all that, these people are now being called upon to pay sewerage and water rates. One can understand their attitude.
I wrote to the Secretary of State on 23rd April, and the fact that I have not had a reply yet suggests that he probably feels that there is some substance in my letter. I hope that when I get the reply it will show that he has had some further thoughts and that he may have taken cognisance of the points I made.
Hon. Members have said that there must be a change in the rating system. I have sat on many Committees of the House discussing alterations to the rating system but, as has been said, we are still where we were. On the other hand, there is need to look at the services over which local authorities no longer have any control.
If a local authority has some control over a service which it can administer and adapt to local conditions, a local rate is justifiable to pay for it. But a service like education is not under the control of the local authority in its operation. If a local authority decides to build a new school, it cannot decide what form it shall take. The Department of Education and Science will decide that. The hon. Member for Islington, South and Finsbury suggests that there are people in London who will probably make better decisions than local people.
We are in a situation in which important decisions are being taken in London but nevertheless local ratepayers are expected to foot at least part of the bill. When one sees the size of the education charge in one's rate demand, one wonders whether the time has not arrived to transfer the cost of education to the Exchequer, whereby the determination would be upon ability to pay.
There are those who say that the rating system is fair because the man with the big income lives in a big house and, therefore, pays more rates. But many people whose children have now left home but who are still living in the family home are called upon to pay higher rates than they can really afford. Probably many of them would never have moved into the house in the first place had they known what was going to happen.
In keeping with the principle which the hon. Gentleman advocates—that local authorities should pay only for things they have a say in—would he not agree that the cost of rent allowances should not fall to any extent upon the local rates but upon the national Exchequer?
To follow my argument through would mean that where the local authority had no right of decision and no opportunity of deciding how the service would operate the charge should be a national one. Where the local authority had some jurisdiction and controlled part of the expenditure it would be reasonable for the charge to be local.
Either there must be a change in the basic rating system or we must consider transferring some of the very expensive services to the Exchequer.
9.46 p.m.
Most of us would hesitate to disagree with much of what the hon. Member for Totnes (Mr. Mawby) said. He did not seem to suggest that the problems had arisen suddenly in the last 10 weeks. It is annoying to hear some Conservatives suggest that long-standing problems, inequities and abuses which should have been corrected long ago are the fault of the Labour Government. Nevertheless, my own Government left them unsolved. The hon. Member was prepared to accept that his Government carried the most recent responsibility for failing to deal with the problem, however.
I have attended meetings of ratepayers recently at which was demonstrated one of the most spontaneous, violent and considerable reactions of public feeling that I have experienced. True, they were organised meetings, but they were quite genuine and should not be ignored. They demonstrate the magnitude of the problem, and we should resist the temptation to make party political capital out of it. Not all the Conservative Members have managed to do that.
My constituency benefited from the Secretary of State's decision to give flat-rate relief to all parts of the country equally. I should have found it very difficult to explain it to my constituents had he not done that. Even bearing in mind that the original decision was taken by the Conservatives it would have been difficult to explain and impossible to justify why a constituency like mine, with all the problems of the industrial North-East, was getting rate relief of about 7p in the pound when other areas, including one not far from the Totnes constituency, were getting 40p in the pound.
We should look not just at the percentage increases in the rate burden, heavy though they are and significant though they are in their impact upon the public. The actual rate which people pay is more important, because they have to find the money. I doubt whether in all cases where there has been disappointment at the Minister's decision the rate which people pay is higher than the rate in areas such as mine, which benefited to the extent of 5p in the pound as a result of the Minister's decision.
We hear a good deal about the drawbacks and disadvantages of living in rural areas such as Cornwall. We hear about lack of services in those areas. I wonder, therefore, why property costs so much in those areas which appear to be so deprived? Why do such areas which seem to be so deprived of public services justify special treatment in relief on rate burdens which other parts of the country have to meet?
Does not the hon. Gentleman agree that in many cases in rural areas people have themselves paid for some of the facilities which they have? They have, for instance, paid to have septic tanks installed, yet they are charged through the rates for services which they do not have from the local authority and which they have had to provide and pay for themselves. That is why there is such anxiety, frustration and bitterness.
I accept that point. What the hon. Gentleman has mentioned is one aspect of public services, but I suggest that equally there are deprivations in industrial areas, as well as the areas which he has in mind.
At a meeting in which I spoke, I at times felt inclined to look for the nearest exit and to ensure that my line of retreat was clear. The mood of the people at the meeting was lively. At the meeting many people were blaming part of the rate increases—not without some cause—on local government reorganisation, but if one ventured to suggest that the responsibility was not ours but that of the previous Government one was told not to start talking party politics, and the people said "We do not want to hear about that." I got the impression that they did not want to talk party politics but wanted to blame me, which was rather rough hearing in mind that the Government had been in office only a few weeks.
One thing which I found to a smaller extent than I expected was the division between the private occupier and ratepayer and the council tenant and ratepayer. Often one finds that owner-occupiers talk as if council tenants do not pay rates. Owner-occupiers talk about housing subsidies and rarely accept that the income tax rebates which they receive against mortgage interest payments constitute a subsidy—
A bigger one.
Indeed, a substantially larger subsidy, as my hon. Friend says, than some people receive.
Like other hon. Members, I have found a tremendous reaction on the matter. People in my area have not been as ready as the hon. Member for Totnes might expect to acknowledge the relief which my right hon. Friend gave them. A reduction of 5p in the rate burden as a consequence of his decision seems trivial to them against the increase which they face. But it is a genuine result of public concern, partly because of the one-off situation of reorganisation and consequent expenditure increases, not all of which were necessary, perhaps.
Less defensively, because of long-term considerations which must be tackled in the reasonably near future, I much regret the Conservative Government's total failure in their review of local government finance after the reorganisation of local government. The mountain laboured and brought forth such a pitiful mouse in the shape of their proposals for the reform of local government finance as almost to disqualify any Conservative Member from complaining about the present situation.
To the hon. Member for Wallasey (Mrs. Chalker), who pledged that the Conservatives would, if re-elected, do something about the problem, I think the obvious answer and challenge from our side must be "Why didn't they do it when they had the opportunity?"
9.56 p.m.
I will not follow the hon. Member for Redcar (Mr. Tinn) in his wide-ranging analysis of the present situation. Many of my hon. Friends still wish to speak, so I shall just briefly develop one point with which my hon. Friend the Member for Devon, West (Mr. Mills) began—the question of the sewerage charge.
Three things have happened which together justify and explain the outcry which now reaches us from our constituents on that point. The first is the sharp rise in the rate, often applied to people who gain no service as a result of paying that rate, because they are not connected to main sewerage services. Secondly, for the first time the sewerage rate is presented separately, so that it stands out.
I would make a criticism of the water authorities. In my case, the Thames Water Authority made no attempt to explain through the district councils what it was spending the money on, why it wanted it, and what the whole thing was about. If the water authorities are going into this business, as required by the House, they must make an effort to explain to their customers what they are about, and why they need these large sums of money. I hope very much that the Government can encourage them, and perhaps more than encourage them, to set about the business in a proper and responsible way.
Thirdly, the Secretary of State, as one of his first actions, completely altered the arrangements proposed by my right hon. and learned Friend the Member for Hex-ham (Mr. Rippon). The whole point of the variable formula was that it took account of the needs of those parts of the country where sewerage and water costs were particularly high. The new Secretary of State swept it away almost within hours of taking office.
It would have been a difficult situation anyway, but for my constituency the right hon. Gentleman has converted a difficult situation into a disastrous situation. When the hon. Member for Redcar says that we must not play party politics with the matter, I agree. All parties bear responsibility for the present unsatisfactory situation. My constituents are in a high state of indignation. The situation has been made much more difficult by the ruthless scrapping of the variable formula, designed precisely to meet the difficulty into which they have now fallen.
I should like to make one modest but practical suggestion, which I hope the Government will consider. It has already been stated in a Written Answer at the beginning of this month that the water authorities have now the responsibility of working out a new system under which people who do not have sewerage services will not in future be charged for such services. That is a sensible system which when explained to our constituents will bring them a good deal of satisfaction. I ask the Under-Secretary of State—
It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn. —[ Mr. Dunn. ]
—whether arrangements will apply backwards to this year? I understand that they will take time to work out. If the people who have no sewerage services who are required this year to pay greatly increased rates as a result of the actions of the Secretary of State could be told "Yes, you must pay this rate this year. It has been levied on you and you must pay it. However, when the arrangements are perfected and completed we shall take account of what you have paid this year. When your demand comes in for next year you will be reimbursed for the money which you paid last year for a service that you did not in any respect enjoy—"—
Is the hon. Gentleman suggesting that there should be a retrospective adjustment of the tax which is payable? How does he square that with the views of some of his hon. Friends about the £10 million tax refund for the unions?
The hon. Gentleman is being a little too clever. There is nothing retrospective about my suggestion. The Government have announced a new procedure. I am suggesting that that procedure should date from now. There is nothing retrospective in that. It is related not to past years but to the present year. I am not putting forward an expensive proposal. Nevertheless, it would bring a great deal of relief and satisfaction to many of our constituents who genuinely feel that an injustice is being thrust upon them.
If the Minister could make the new arrangements reflect the situation as from now—and not retrospectively to last year—so that people who now have to write large cheques and pay large sums for sewerage services that they do not enjoy would know that next year the matter would be taken into account, that would bring great relief to many people. That is a small but practical suggestion which I hope the Minister will consider.
10.3 p.m.
I wish to make it clear that authorities like mine that have benefited modestly from my right hon Friend's decision are nevertheless in a critical situation. There is no question of their having been put out of their misery. In my constituency, in spite of the improvement amounting to about 3p in the pound, there has been a percentage increase in the rate demand of between 60 per cent. and 70 per cent. In some cases the demand is even higher than that.
My postbag is as large as any other Member's. The revolt of the ratepayer is as real in my constituency as in any other constituency, if not more real. I do not blame my constituents. I am not surprised. I confirm what my hon. Frined the Member for Redcar (Mr. Tinn) has said. It is also my experience that those who are being expected to bear the rate demand consider it to be an unacceptable burden. There is no doubt about the reality of that burden. I am, naturally, pleased that my right hon. Friend has made a modest change. Without that change there would have been utter disaster for my constituents.
I am fascinated by the new strength of the demand to move education expenditure on to the Exchequer, for example, and the suggestion of the hon. Member for Wallasey (Mrs. Chalker) to introduce local income tax. Those are matters that have been argued and discussed in the House time out of number. Alas, for various reasons we have fought shy of them. Some of the reasons were good and some were not so good. It would have made much more sense to talk about a local income tax had we been thinking of a form of local government reorganisation which offered some form of regional structure. That would have been a fairer and more balanced proposal. The proposal might not be so fair in terms of a more narrow area.
It may be that the sense of outrage which has been expressed in our constituencies at the way in which the increases have taken place will speed up the serious consideration of the possibility of changing the rate basis. Dick Crossman, whose memorial service was held today, started in this sphere with a vigorous declaration of his bitter opposition to the rate burden, but he was confronted, as everybody else has been, with all the difficulties involved in making a change.
We must not underrate the problems. The payment will have to be made in one form or another. The form of local government reorganisation we have had has in some respects added to the charges. All hon. Members must be unhappy about some of the examples we have seen in our areas. We have been told that some of the scales of pay are under independent investigation. I hope this is so. Some of the early retirements of people in their early 50s has involved heavy extra cost on the rates. The duplication involved in planning is an enormous worry.
I hope that my right hon. Friend the Secretary of State will investigate these matters and try to speed them up. I hope that out of the evil of this heavy charge will come an improvement in our system of local taxation.
10.8 p.m.
We all owe a debt of gratitude to my hon. Friend the Member for Devon, West (Mr. Mills). I trust that his story of the buckets will galvanise the Government into action even if it has not flushed the Liberal Party into the Chamber.
This is a very important subject. I have had more letters on this subject than I have received on any other. All over South-West Staffordshire, where people have to face rate increases of between 68 per cent. and 70 per cent., there is great anger. People are particularly annoyed at the Government's unfair discrimination against rural areas, areas which often do not have the amenities of towns but provide so much rest, relaxation, recreation and—dare I say it?— re-creation for urban dwellers.
I hope that my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) and the Under-Secretary will say that they will pay serious attention to the need for restructuring the rating system. There is before the House the Rating Reform Bill which was introduced by my hon. Friends and myself last Thursday and is due for Second Reading on 14th June. I hope that it will stimulate comment. It cannot be perfect and its drafting is bound to be deficient, but I trust that it will lead the Government to set up a Select Committee. That is the least that the Government can do.
10.10 p.m.
One of the remarkable features of this debate, and of the debate last Friday, is that while no party has made more in this House and in the country about reforming the voting system—which we debated on Friday—and reforming the rating system, which we are debating now, than the Liberal Party, on neither occasion has it seen fit to attend the deliberations of the House. I am grateful to my hon. Friend the Member for Arundel (Mr. Marshall) for sitting on the Liberal Bench.
Will my hon. Friend accept my assurance that my presence in this seat does not denote that the mass battalions of Arundel have joined the Liberal Party, but simply that some of my hon. Friends and I feel that it is essential that we keep a watching brief on this bench, in view of the cursory and ineffective appearances of the members of the Liberal Party?
I am obliged to my hon. Friend. I am sure that all those who voted Liberal in Arundel will appreciate his actions in representing his own party and the Liberal Party tonight.
I have never known such anger in the rural areas as has been caused by this question of rates. My hon. Friends have already illustrated this. Many country-dwellers regard this as the last straw. They have seen charges for electricity, coal, petrol and telephones rising steeply while at the same time many local services have declined. There are fewer buses and fewer postal deliveries, and many village shops and sub-post offices are closing down.
There is a feeling of injustice that rates should be rising while services are declining. This feeling is most strongly held by those living on small, fixed incomes. There are many people in rural areas who simply cannot pay more. They do not have the money. There is talk of a revolt. What have we advised them? We have not done a Clay Cross, we have not done a Scanlon. We have told our constituents that they must not withhold their rates, they must not march on the council offices, they must not break the law or defy the courts. If we tell them that, we owe it to them to demonstrate that we are genuinely concerned about their distress and are together determined to make a start on rating reform.
It is impossible in two minutes to indicate the areas in which rating reform might be effective. Before my party left office we had devised a variable and flexible contribution for those householders who would be most disadvantaged by the effects of local government reorganisation and water reform, and the effects arising from the revaluation of the previous year. I believe that this flexible contribution would have materially helped people in rural areas. It came as something of a surprise and disappointment to me that one of the first actions of the Minister and his departmental colleagues was to change a system that was variable and flexible and designed to help those in the greatest need. The Minister has produced a change which in the first instance is confusing to many local authorities. It is also indiscriminate, and I believe that it is wasteful of resources.
I am sorry to say it, but I believe that it was largely politically motivated. In any event, it was not particularly effective. We had the situation when Kingston-upon-Thames got more than Kingston upon Hull. That was an instance of how, with all the political motivation in the world, the hon. Gentleman was not sufficiently competent to carry this out correctly.
At this point we can indicate only some broad ideas. I am sure that rates must be reformed by tackling the problem at both ends. At the local level we must first try to find more, better and fairer sources of local revenue. Perhaps this could be achieved by charging for planning permissions, possibly by running lotteries. I doubt whether there is anything to be gained by going for local petrol or sales taxes, because that would only mean that the better-off areas would prosper and the worse-off areas would become poorer.
Second, we must shift more from the rates to the Exchequer. The previous Government moved some of the costs of colleges and national parks. It is possible to do more in the direction of a shifting of the educational burden to the Exchequer, though that requires a great deal of careful examination. It is also possible that the more expensive elements of the police service could be moved to some degree.
Third, we must all look for greater economy in local government expenditure. Indeed, that can be one of the main engines of inflation. But the Minister knows as well as I that much local expenditure arises from obligations placed upon local authorities by this House. If we want local government to spend less, we ourselves must take a self-denying ordinance not to place more obligations upon local government.
Fourth, I very much hope that those who are suffering—I repeat "suffering"—from these latest rates increases will, if they are eligible, take advantage of the better rebate scheme. The rebate scheme which the Conservative Government introduced and which the hon. Gentleman's Government have brought forward is a better scheme. I know that the hon. Gentleman will have more honesty and magnanimity than one of his hon. Friends, who had the temerity to go to Exeter and announce that the new Labour Government were introducing a new rebate scheme to help people when in fact it was simply a retread of what we had already produced.
I congratulate my hon. Friend the Member for Devon, West (Mr. Mills) on initiating the debate, which has been useful if very short. But let the Minister not fail to recognise that there is deep resentment and anger in the rural areas, where many people simply cannot pay.
10.16 p.m.
It is fashionable in the media at present to criticise this place and hon. Members. I think that it is typical of the House that when it gets an opportunity such as this in an Adjournment debate, an hon. Member, as the hon. Member for Devon, West (Mr. Mills) has done tonight, will bring to the attention of the House a burning issue of vital national importance and of vital concern to hon. Members, so that grievances on both sides of the House—I was about to say "on three sides" but, as is usual, we do not expect our Liberal colleagues to be present—can be expressed. It gives an opportunity for the House to debate what is being discussed outside. Most important of all, it gives a chance for the Government to reply to some of the allegations that are being made by hon. Members.
The House must consider, first, the rate support grant. The only alteration that was made by my right hon. Friend to the rate support grant that was so hurriedly concocted by the previous Government was that the variable domestic support was changed to a fixed sum of 13p for all cases in England. Some hon. Members have said in this debate that what they want is fairness. That was an attempt at rough justice and fairness. I do not know how Conservative Members could justify a system whereby some of the inner cities were in receipt of 7p and some areas of Cornwall were in receipt of 40p. When we examined those hurriedly concocted figures we found that they were not only unfair but statistically wrong, such was the haste with which the previous Government had concocted them.
We were faced with a global sum which we inherited from the previous Government and which we did not and could not alter. We tried to inject an element of fairness in the country as a whole. In order to do that we had to give more to the inner cities.
What about Bradford?
One has to consider the total amount of money paid by a family in rates. In Manchester, for example—I regret that I do not have precise figures—the average houshold paid rates of £96. Hon. Members have spoken about some rural areas in which the figure is about £40.
One hon. Member mentioned relative incomes, but incomes in Manchester are not double those which obtain in Devon and Cornwall. I believe that in terms of variable domestic element my right hon. Friend was right to take the action he did.
In considering the matter of fairness, we must examine other matters which are implicit in rate support grants—a system which we inherited from our Conservative predecessors. Hon. Members from the South-West and from Cheshire may have cause to complain on this score. A figure of £40 million was given to the outer London suburban area—which includes, believe it or not, the Isle of Wight. A vast sum of money was also given to the outer Midlands area—but not a penny was included for inner Birmingham or Cheshire. Cheshire lost considerably under the needs element. That was the situation we inherited.
People outside the House say, "Why have our rates gone up—why has there been this rates explosion?" The hon. Member for Devon, West and the hon. Member for Totnes (Mr. Mawby) injected a great deal of honesty into the debate when they said that one of the principal causes of the situation was the inflation which local authorities—and everybody else—have had to face. It must be said that neither the Conservative nor the Labour Government were responsible for that element of the rate support grant. However, I suppose it must be pointed out that the Conservatives were in office when that, inflation was taking place. I should not pursue that line too far in this debate.
I hope that the hon. Member for Devon, West and also the hon. Member for Bury St. Edmunds (Mr. Griffiths), when facing angry constituents, will point out some of the other elements which have caused rate rises. I hope that they will point to the fact that local government reorganisation has caused rates to rise dramatically. It was not the Labour Government who introduced the local government reorganisation proposals, in which the shire counties were preserved as a double-tier system of government. That system was introduced by the Conservative Government.
I hope that when those hon. Gentlemen meet irate constituents who question them about water charges, they will tell them that the Conservative Government, having brought in local government reorganisation, then hived off the water and sewerage services and created the regional water authorities—costly creatures. Having done that, they did not even do it well. They had to decide how those regional authorities—undemocratic creatures which had no system of directly elected members—were to charge for their services. Indeed, those water authorities were set up and given no funds to start with. The dirty work of collection was left to the local authorities. It was a highly inefficient way of conducting things.
We must remember that the charges are not subject to rate rebate, and they ought to be. At the time this matter came up in the House, I well remember representing the Opposition, both in the House and in Committee, and pleading with the Government on the question of rate rebates—but my pleas were ignored. Another consideration related to a charge being made to consumers whose dwellings were not connected to a main sewer. This matter has arisen in my constituency, and it is an almost intolerable position that people are being charged for a service which they do not receive. It has arisen because those people previously were paying hidden charges for sewerage in their rates. In those days, an authority with a lot of septic tanks had a lower sewerage rate, but now its ratepayers are paying the sewerage rate for the whole region. But it was not the Labour Party which set up these regional authorities. In Committee, we criticised both the way they had been set up and the problems that they would create. The Conservative Government did nothing about this question of a sewerage charge.
The Written Answer has been referred to. As a Minister at the Department, I had the matter looked into. Although obviously I cannot announce details tonight—it will be realised that I have not sufficient information before me to be able to do so—we are trying to devise a way not only to stop it for next year but to do something about the effect of these charges this year. I am not promising that we can do it, but we are trying to devise a way.
If the hon. Gentleman brings in an amendment order on this point he will have the full support of the Opposition.
I am obliged to the hon. Gentleman, but it is not the physical way of doing it which is the problem. It is the practical difficulty of trying to return the money, and so on.
Some astonishing matters were raised by the hon. Member for Wallasey (Mrs. Chalker) and the hon. Member for Bury St. Edmunds. I noted carefully what the hon. Lady said, although she is one of the beneficiaries of this small amount.
We have heard a great deal about what this Government did with the variable domestic element. In most cases we are discussing a few pence in an explosive rate increase situation. However, both the hon. Lady and the hon. Member for Bury St. Edmunds said that if there were a Conservative Government they would find an alternative to the rating system. I remind them both that the then Conservative Government introduced a Bill in November of last year, after a Green Paper and a White Paper, which did precisely nothing to deal with the nature of the rates. It varied the rate support grant, but it found no alternative to the rating system.
What is more, the previous Minister for Local Government and Development, who had three and a half years in which to do it, recently introduced a Private Member's Bill about lotteries. Another hon. Member on the Opposition benches spoke of his support for these attempts to take some of the charges away from local authorities and to put them on the national Exchequer. He referred to education and other services over which local authorities have little control. But what were the previous administration doing for three and a half years? What were they doing in their Bill? When we suggested amendments to the Bill to give greater rating power to local authorities or to provide alternative financing for local authorities, time and time again we were voted down, often by many of those who are now so critical of this Government, who have been in office for only two months.
What I can promise is that next year's rate support grant, especially the needs element in that grant, is being studied now. We are beginning negotiations now, and not at the end of the year. We are taking careful note of the effect of the rate support grant in specific areas, and not merely with the local authority associations as a whole. We want to get a much fairer system of rate support grant than that which we inherited.
In replying to this short debate I hope that I have been able to clear up a few misunderstandings about rates. When we came to office it was not fairies that we found at the bottom of the garden; it was buckets and their contents. This Government found the same mess to clear up in that field, in terms of rates and the rate support grant, that we found in so many others.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock