asked the Secretary of State for Education and Science what estimate he has made of the number of teachers and ancillary workers in education who will lose their jobs in the next year as a consequence of the Government's policy towards education.

This will depend upon decisions taken by individual local education authorities. It is not possible to estimate the numbers for England as a whole.

Does the Minister accept that that is a totally unsatisfactory answer? Is he aware that it is a means by which the Government are evading responsibility for maintaining teaching standards in the State sector? Is he aware that large numbers of teachers and ancillary workers will be leaving the education service and that will inevitably lead to a decline in education standards? When will he wake up to the fact that local authorities are taking such decisions because of financial pressure from the Government?

I shall deal with the two or three points that develop from the hon. Gentleman's question. We accept fully that the savings through the reductions in the school meals service have been necessitated by the desire to preserve the core of education standards in our schools. But the hon. Gentleman, and other Labour Members, must understand that pupil numbers will fall by 25 percent, between 1977 and 1989. The current reduction in teacher numbers, like reductions elsewhere in the education service, is as much a response to that as to expenditure cuts.

Order. I remind hon. Members that long questions and long answers merely reduce the number of hon. Members who can be called.

Is my hon. Friend aware that if local authorities such as Leicestershire did not make economies in the education service, as elsewhere, the burdens on private ratepayers would be impossible and there would be a sharp reduction in the amount of employment by private business?

I accept the point that my hon. Friend has forcefully made. He understands the Leicestershire situation fully. I acknowledge that the reduction in the number of ancillary workers employed in the schools is inevitable as pupil numbers fall. I want to make that clear. Natural wastage will play a major part in the rundown of numbers and we believe that large-scale redundancy is unlikely.

What is the Minister doing to monitor the situation? What steps will he take if he finds that a particular local authority is dismissing far more teachers than he thinks is reasonable?

I do not think that the hon. Member has presented any statistics to my Department. So far we have not heard from him on that point. In the current financial year there have been 1,264 teacher redundancies and a further 4,483 teachers have accepted premature retirement. The figures for 1979–80 were, respectively, 1,334 and 2,271. The Department maintains a watch on the statistics and until hon. Gentlemen are prepared to provide evidence we shall have to wait and watch the position.

Does the Minister realise that the massive education cuts, far beyond what one might expect due to falling rolls, have resulted in the sacking of large numbers of peripatetic music teachers? Is he aware that the musical life of a school is vital and is not a frill? What will he do to ensure that the musical life in the State sector will be carried on properly, as no doubt it is in the private sector?

I do not accept the first point that the hon. Member made about massive reductions in expenditure on our education services. Therefore, the second part does not apply. It is a matter for local education authorities.

asked the Secretary of State for Education and Science what assessment he has made of the effects of the recent rate support grant settlement on educational standards.

I gave my assessment of the implications of the recent rate support grant settlement, following consultations with representatives of the local authorities, in my answer to my hon. Friend the Member for Macclesfield (Mr. Winterton) on 16 December last year.

Does the Secretary of State accept that the consequences of the rate support grant settlement were that the Inner London Education Authority would have had to cut its services below a level that even the Secretary of State would accept, and that therefore the ILEA's only course was to maintain its standards? Does the Secretary of State agree that it made the right decision?

I do not accept any of the premises underlying the hon. Gentleman's question. First, I do not accept that I am suggesting that the ILEA should cut its standards below what is acceptable. The rate support grant for the authority has been affected by the movement of rates away from inner London and by the fact that the ILEA has historically been a high spender. The amount of grant that it receives will depend on its budget. As I pointed out in a statement to the House last week, for every 1 per cent, by which the ILEA reduces its expenditure it will get another £4 million from the Government.

As the question concerns the whole country, will my right hon. and learned Friend point out to teachers and educationists generally that at a time of world recession it is impossible for the Government to continue with projected expenditure that was based on trying to win an election and that unless the Government get on top of inflation the money spent on education in the next two or three years will buy much less than it can purchase today?

I totally agree with what my hon. Friend says. As I have made clear on many occasions, the education services cannot be exempt from the need to reduce public expenditure and to bring it into line with what the country can afford. Unless we get our public expenditure more realistically in line with what we can afford, we shall have higher unemployment in future and more economic problems.

How can the Secretary of State still claim that there is money in the rate support grant for youth and community capital grants when education authorities, including many Conservative-controlled authorities, say that they cannot meet their statutory obligations satisfactorily in the face of the present level of cuts?

I confirm that for the purposes of arriving at the amount of relevant expenditure for education purposes I have assumed similar expenditure on the youth service in general terms as in previous years. I have visited some of the youth services in the area of the hon. Gentleman's local education authority. I realise that the services are under pressure in many parts of the country, but the Government have assumed that current expenditure should remain similar to the levels of previous years.

Is my right hon. and learned Friend aware that Dorset county council's decision on school meals, which was criticised by a number of Labour Members and by some trade unionists, has been widely accepted without demur by the parents in my constituency? Will he therefore commend the decision of the county council to other local authorities as an example of good housekeeping?

My hon. Friends remarks are a fair assessment of the reaction to the Dorset decision. I repeat what my hon. Friend the Under-Secretary said earlier. We are anxious that authorities should make savings in school meals rather than in other parts of educational provision.

Does the Secretary of State recall saying on 16 December, at the time of the rate support grant settlement that reductions would have some impact on educational provision and numbers employed? Does he accept that only his hon. Friend the Member for Macclesfield (Mr. Winterton) is likely to accept his figure of a cut of £87 million in local authority expenditure as accurate and that, in fact, that figure is a gross underestimate, because school expenditure will be cut in 1981-82 not by £70 million, but by £150 million? Does the Secretary of State realise that, because of his refusal to fund school transport services and his miscalculation of the savings on school meals, there will be another £157 million to be found? [HON. MEMBERS: "TOO long."] I know that Conservative Members do not like it, but they are going to get it. School cuts next year will mean a monsterous £307 million being taken away from the children of this country. Does the Secretary of State think, in the light of such figures, that local education authorities can discharge their legal responsibilities under sections 8 and 61 of the 1944 Act, or does he accept that as "Education Magazine" said last week, he is presiding over "a period of catastrophe"? Does he not think that he ought to resign?

Order. The same rules apply to Front-Bench spokesman as to Back Benchers.

In the speech that we have just heard from the hon. Gentleman he has not added a single new fact that I have not told the House myself. If he cares to read what I said on 16 December he will realise that I said that it was £87 million in addition to the assumed cut in the previous White Paper and I went on to add that there was also £37 million assumed as a result of the reduction in school transport. For the hon. Gentleman to suggest that he thought that I said that the reduction was £87 million, when it was greater, means that he did not read, or did not understand, my statement.

On the second part of the hon. Gentleman's question, I accepted in my statement that the additional cut was bound to have some effect on the level of provision in education. I said that we had to bring that level of provision into line with what the country could afford. I stand by that.

asked the Secretary of State for Education and Science how many teachers it is proposed will be employed by local authorities in England and Wales at 1 September 1981; and how this compares with the last three years.

My right hon. and learned Friend made clear to the House on 16 December that the reductions then announced in educational expenditure in England in 1981-82 would have some impact on the numbers employed in the service. Provision for school teacher numbers is under review as part of the Government's expenditure plans. The staffing of schools in Wales is a matter for my right hon. Friend the Secretary of State for Wales.

In making calculations for the rate support grant and the review, what estimate has the Undersecretary made of the cost of redundancy pay for teachers, unemployment benefit for them, at least for the first 12 months, and the loss of income tax from them? Is it not true that the sums that it costs the State in those ways are almost the same as the cost of employing a teacher?

The Department has no detailed estimates of those sums, because they are a matter for local authorities and local social services. I must make clear to the Opposition that there has been a fall in teacher numbers of about 2·2 per cent, since 1978 and during the same period pupil numbers have fallen by 4·9 per cent. I should have thought that that was an important statistic and something which the Opposition should understand fully at the outset.

Does my hon. Friend agree that while a sound pupil-teacher ratio is of the utmost importance, the deployment of teachers and the quality of the work that they do are crucial to a successful education for the children of our country?

I accept that fully. I remind the House that the overall pupil-teacher ratio stands at the best level ever—under 19:1. We certainly do not anticipate any major change in 1981.

Does the Under-Secretary recognise that reductions in the number of teachers inevitably result in schools being forced to cut essential subjects from the curriculums, irrespective of the fact that there may be fewer pupils? In those circumstances, surely the Minister must recognise that the quality and standard of education are being reduced.

The hon. Gentleman will understand what my right hon. and learned Friend has said in the House more than once. I certainly do not accept what the hon. Gentleman said at the outset of his question. We do not believe that education standards are necessarily determined by resource levels.

asked the Secretary of State for Education and Science if he is satisfied with current arrangements for negotiating teachers' pay.

No, Sir. I am consulting the teachers' and local authorities' organisations about possible changes in the present arrangements.

Does my right hon. and learned Friend agree, that, as well as salary levels, matters such as pupil-teacher ratios, working conditions and working hours should be discussed?

I have made clear to both sides of the Burnham committee that it would be helpful if pay and other conditions of service were brought into the same negotiating body. That is the basic purpose behind the document that I put to them.

Is the Secretary of State contemplating any major changes in arbitration procedure? If he is, can he tell us what earthly constructive point would be served by having a system that would guarantee blockages and deadlock by having a two party reference to the arbitrator?

I shall deal with that question in two parts. So far as the longer-term review is concerned, certainly the whole of the arbitration procedure is one of the matters that I put out in the document inviting discussion. In addition, as the hon. Gentleman knows, I have consulted the parties formally on whether the means of access to arbitration should be changed for the purpose of the current year, that is, from that whereby at the moment unilateral access should be made to that where it should be only by agreement of both sides. All that I can say at the moment is that I have received representations on this and I have received a deputation from the teachers' associations. I have not yet made a final decision, but I shall have to do so within the very next few days.

asked the Secretary of State for Education and Science whether he has yet come to a decision as to a loan scheme for students.

asked the Secretary of State for Education and Science if he is now in a position to announce his policy on student loans.

asked the Secretary of State for Education and Science when he expects to conclude his current investigation into the possibility of introducing a system of student loans; and if he will make a statement.

asked the Secretary of State for Education and Science if he will make a statement about his Department's continuing appraisal of the feasibility and desirability of replacing the present system of funding students in higher education with grants by a system of loans.

The question of loans for students is still under consideration.

During that consideration, will my hon. Friend bring to bear his formidable critical faculties on a proposition floated in some quarters, namely, that a loan should subsequently be repaid by way of an additional tax upon the graduate? Would not that inflict additional direct taxation on wealth creators? Can it really be supported by anyone who is a true supporter of the Prime Minister's policies?

I am grateful for that question from my hon. Friend. Like him, I can identify myself as a true supporter of the Prime Minister's policy.—[HON. MEMBERS: "Stop playing for time."] I am not playing for time. When we asked for a report from the Department on various ways in which a loan or loan-grant scheme could be introduced, if we decided to do so, one of the schemes suggested was exactly that to which my wise friend referred, namely, a graduate tax. I believe that I went on record the same day as saying that I disagreed—as I am sure that my hon. Friend does—with such a graduate tax, which would seem to be a tax on intellect as well as direct taxation. Whatever schemes we are considering, we are certainly not considering graduate taxation.

Perhaps I can offer the Minister some more fraternal help from his own side. Do the recent reported remarks of the hon. Member for Cambridge (Mr. Rhodes James), as the Prime Minister's liaison adviser on higher education, indicate that no Government proposal for a loans procedure to replace the present grants system for first degrees is under consideration? Does he realise, from the questions that have been asked today, that many Conservative Members as well as Labour Members believe that access to education should not depend upon the ability to pay or on the ability to pay back?

I am getting helpful questions from both sides of the House today. On the question of a loan system, what we as a Government decide, knowing how much money will be available at any time, is the way in which that money can be used to the best advantage. I recommend that the hon. Member for Derby, North (Mr. Whitehead) should look at the number of people, including Open Universty students, who at present get nothing. There are people training for chiropody, speech therapists, those going into the law after their degree and those going into social work. However much certain people who are getting full grants may like it, hundreds of thousands of others are getting nothing. We shall consider the whole question.

Has my hon. Friend seen recent opinion polls which suggest that student loans would actually be far more popular and acceptable than is often believed? Does he agree with me that the effective choice is not between a loans system and a grant system but that there may well be a great deal to be said for a combined system including both grants and loans?

What we are considering at present is the possibility of a grant-loan system, not a straight loan system. Recently information was put out regarding a vote at Edinburgh which, I accept, indicated that only 5 per cent, supported a direct loan system. But the same report showed that only 40 per cent, supported the present system of grants dependent upon parental income. So it is by no means as popular as some people pretend. A similar report from Bath and Exeter last year indicated that 56 per cent, of the students—[Interruption.] The hon. Member for Bedwellty (Mr. Kinnock) might learn something if he listened. I know that you, Mr. Speaker, are paying close attention to this. That report indicated that, 56 per cent, of students at Bath and Exeter preferred a loans system to the present grant system dependent upon parental income.

Will the Minister take note of one clear fact about a possible loan scheme? Is he aware that in the industrial North and other areas of high unemployment a remarkable regional disparity would be inevitable, as young people would be reluctant to enter a period of indebtedness, and that if he was concerned about unity in this country he would not wish to act in that extremely divisive manner?

I welcome the hon. Gentleman's question. I am sure that he will be as concerned as I am that under the present system the percentage of children from blue-collar worker families is now falling so that we are back to the level of the 1920s. Therefore, the present system is not solving the problem. If we introduce any system, it will certainly not penalise people earning low incomes when they enter college or low incomes when they come out.

When will my hon. Friend reach a decision?

That is a very simple and direct question. We have now left the realm of philosophy and turned to the calendar. I trust that within two or three weeks the Department can come to some form of conclusion as to whether there is a scheme that is likely to be viable, considering all the points that have been so wisely made in the House today. If we decide that there is, we shall put out a consultative document, so that everyone can spend even more time talking about it, and then make a decision in the summer.

Can we take it from some of the hon. Gentleman's remarks that in considering this matter he intends to go much wider than grants to university students and consider the question of educational maintenance support generally; the disparities between the different systems of support under the Manpower Services Commission, industrial training boards, LEAs and the like? Does he accept that there is a need to look at the totality of financial support for students in education and training as well as in higher education?

I accept the points made by the right hon. Member for Brent, East (Mr. Freeson). As a neighbour, I always pay close attention to all that he says. There is no doubt that the present system has grown up in such a way, with different funding bodies, and that it is often unfair to those within it. Even within the education system for which we are responsible, the fact that some people are on mandatory grants while others are dependent upon an increasing number of discretionary grants is similarly unfair. I trust that we shall be examining the whole pattern.

Is the Minister aware that there is a good deal of resentment among students from the dependent territories, particularly from Hong Kong, at the large increase in fees? Will he consider the possibility of loans for those students?

We have been in continued contact with Hong Kong regarding this matter. I believe that I actually said this in an Adjournment debate some months ago. If we could arrange some form of loans system with Hong Kong, we would see what we could do to co-operate in terms of students entering universities in this country.

Is the Minister aware that if a loans system is introduced it will be one of the most retrograde steps to be taken in education? Is he aware that my own family is a good example of what can actually happen? My wife, who left school at the beginning of the war with seven passes and three distinctions, did not get to a university, whereas my brother-in-law, at the end of the war, managed to get to a university because of the grants system. Does the hon. Gentleman understand that thousands of ordinary working people will never have these opportunities if a loans system is introduced?

I am glad to put the hon. Member's mind at rest. In this country at present, 23 per cent, of the intake to universities are children of blue-collar workers. In Sweden, where a loans system was introduced in 1964 by so-called social democrats—I know that those are dangerous words in this House—the percentage of children of blue-collar workers is 33 per cent, and rising, and the number in higher education has trebled since 1964.

asked the Secretary of State for Education and Science if he will make a statement on the education of 16 to 19-year-olds in the light of the publication of his Department's report on this subject.

asked the Secretary of State for Education and Science what discussions he proposes to have on the document "Education for 16 to 19-year-olds".

asked the Secretary of State for Education and Science what plans he has for reducing the role of the sixth form and transferring A-level courses to colleges of further education and other relevant establishments; and if he will make a statement.

asked the Secretary of State for Education and Science whether he expects the recommendations recently published of the committee chaired by the hon. Member for Sutton and Cheam (Mr. Macfarlane) to lead to the phasing out of school sixth forms.

I welcome this joint review, and am grateful to the elected members and officers of local education authorities who took part in it. I believe their work will greatly assist authorities as they consider the pattern of provision that is most suitable in the light of their particular circumstances. The group itself recognises that in some areas sixth forms will continue to be appropriate, although in others it may be right to develop sixth form and tertiary colleges. We will be discussing aspects of the review in the course of our normal consultations with the bodies concerned.

I thank my right hon. and learned Friend for that reply. Can he assure the House that it is not the policy of his Department to encourage the disruption of perfectly good secondary schools by the removal of their sixth forms in order that sixth form colleges may be set up, perhaps only for the reason that they are administratively convenient?

I can assure my hon. Friend that that is not the Department's policy. The report itself made clear that it believed that there was a continuing role for sixth forms in certain schools.

Will the Secretary of State make absolutely clear in all his discussions that the Government are prepared to contribute their share of resources to such fundamental changes? In particular, will he bear in mind the need to make adequate grants to 16-year-olds to stay on in full-time education? Is he aware that in the Northern region fewer pupils stay on because of the inadequacy of family finances and that, among other things, that is a terrible waste of talent?

The provision made by the Government is part of the general provision in this area. It must be looked at in contradistinction to the type of institution which it is right to have in a particular area. I cannot give any promise that we are considering educational maintenance allowances at the present time, because I do not believe that we are in a position to do so. I am, of course, aware that the participation rate in some areas of this country is still lower than we would wish.

Does not the right hon. and learned Gentleman agree that, as a general principle, the adult atmosphere of a further education or technical college is a much healthier place for 16-plus education and that it would have the advantage of bringing people on academic courses together with people on non-academic courses? At the same time, it could save some of these colleges from the devasting attacks which the Government are making on the non-mandatory sector of education.

I do not accept the hon. Gentleman's blanket assertion that the atmosphere is necessarily far better.—[HON. MEMBERS: "Visit some of them".] I have been in various ones. I was about to say that opinion differs in various parts of the country. For what it is worth, my own impression is that those in the sixth form and tertiary colleges like such places. My impression is also that those in sixth forms of schools like those sixth forms.

Will my right hon. and learned Friend acknowledge the concern which has been expressed by many parents and teachers about the possibility of sixth forms being abandoned in certain areas? Will he urge upon local education authorities the need for consultation within their areas before undertaking any such changes?

Certainly. I believe that there should be the widest consultation. Where there are effective viable sixth forms, I hope that local authorities will continue them. In other areas of the country, where the numbers have dropped greatly, it may be that a sixth form or tertiary college is the correct answer. I believe that the solution will be different in different parts of the country. What the House cannot ignore is the fact that over the next few years there will be substantial reductions in the number of pupils in that age group, which means that local authorities ought to review their provision.

Does the Secretary of State accept that there is widespread disappointment with those sections of the report which deal with vocational educational and training? Does he also accept that because of the large reductions in the youth service and further education, education authorities are unable to make the contribution to the youth opportunities programme which they should? Does he further accept that there is widespread frustration at his own Department's puny efforts in its discussions on the content of the youth opportunities programme?

The hon. Gentleman has gone off at a slight tangent. I accept that the document refers to vocational training, but it mainly looked at full-time education between the ages of 16 and 19. As to the youth service, I can only repeat what I said in answer to an earlier question. As far as relevant expenditure is concerned, we have assumed no reduction in the expenditure on the youth service next year as against the present year. I accept that in the end these matters are decided by local authorities and I realise that they are under pressure generally. I have never disputed that. However, at a time of high youth unemployment, the youth service is an important aspect of their work.

Is my right hon. and learned Friend aware that, on the few occasions when I wake up in the night with a terrible start, it is because I feel that he might be paying attention to trendy educationists? Before he makes any change in any traditional system, will he think retwice about changing from a very conservative attitude?

I am sorry to hear that my hon. Friend ever has need to think of me in the middle of the night. In general terms, I agree with him. I do not believe that one should merely go along with the most recent fad. I was surprised to hear the hon. Member for Bedwellty (Mr. Kinnock) apparently recommending that all education at 16-plus should now be undertaken in tertiary colleges. I do not believe that that is the right answer. I believe that we should retain some of the sixth forms.

Does the Secretary of State recognise that his answers are somewhat complacent in view of the great urgency involved in this issue? The education of 16 to 19-year-olds is perhaps the most important issue in education today. Crucial decisions are now being made by local authorities throughout the country. Will he recognise that the provision of resources is vital, because right across the board children are now leaving school as a result of the economic circumstances of their parents and are unable to continue their education? This is an urgent matter.

Of course I realise that this is a vitally important area of education. Indeed, it was for that reason that the committee, to whose report we have referred, specifically urged local authorities to review their provision in order to ensure that as full a range of opportunities as possible should be accessible to all in each locality. I hope that they will do that as a matter of urgency.

I am afraid that I can give no promise at present of further resource provision in that area, other than that which has been assumed in Government plans for the coming year. However, contrary to what the right hon. Gentleman said, I believe that there are signs that in many areas of the country the participation rate beyond 16 is actually going up.

While regretting the discourtesy of the Department in failing to notify a Member of this House that his question was being linked to a much earlier one, may I ask my right hon. and learned Friend what credibility he places upon assurances given by a local education authority that under reorganisation full sixth form facilities would be provided at a new secondary school, when in the event the local education authority in question is liable to back track on that assurance, which was given to parents who had little chance to complain about this change in policy?

I think that I know the case to which my hon. Friend has referred. In the first place it is a matter for the county council concerned and not for my Department. I am sorry if he feels in any way insulted or offended by my Department. I would have thought that it was reasonable to link questions up to No. 20 and to assume that hon. Members who had tabled those questions would be present.

If the right hon. and learned Gentleman thinks that I said that tertiary colleges were the only acceptable form of post-16 education, he is either myopic or he has been in hibernation with his hon. Friend the Member for Harrow, West (Mr. Page). Is he not concerned that Britain continues to have a much lower proportion of young people aged between 16 and 19 in systematic full-time or part-time education than any other comparable economy or modem society? If he is exercised by that fact, does he not think it possible to have a significant extension of opportunities for these young people when he is cutting non-advanced education by £12 million more next year and advanced further education by £25 million more, thereby further reducing the opportunities which currently exist?

Of course I am aware that the figures for full-time and part-time education in Britian for those beyond the age of 16 are lower than for any other European country. I am in contact with my right hon. Friend the Secretary of State for Employment about training opportunities for those beyond the age of 16. On the question of those in full-time education, it is important that we get rationality into the system which will provide the widest possible opportunities.

asked the Secretary of State for Education and Science, further to his reply to the hon. Member for Birkenhead (Mr. Field), Official Report, 23 January, column 246, if the October school dinners survey is now available; what the figures are; and how they compare with a year previously.

asked the Secretary of State for Education and Science, further to his reply to the hon. Member for Birkenhead (Mr. Field) on 23 January Official Report, column 246, if the October survey on school dinners is now available; and if he will make a statement.

I refer the hon. Gentlemen to the reply given to my hon. Friend the Member for Streatham (Mr. Shelton) on 29 January.

Does not the minister realise that the catastrophic drop in the uptake of school meals is bound to cause concern about the health of working-class children? Does the fact that the Minister did not intervene in the abandonment of school meals in State schools in Dorset and Lincolnshire imply that the Government want to get rid of school meals altogether? If that is not the case, will he make it clear this afternoon that he intends to take action to ensure that there is an increased uptake in school meals in State schools.

I do not believe that the hon. Gentleman has read the press release issued by my Department shortly after I answered the question posed by my hon. Friend the Member for Streatham. There has not been a catastrophic decline in the provision of school meals. The Government believe in the importance of the school meals service. We are confident that local authorities can adapt to the changing requirements of youngsters in this day and age. It is clear that those local authorities which have adopted the principle of the cash cafeteria system have achieved an increase in take-up of meals. The trend during the past 10 or 15 years has been for a transfer from packed meals to cafeteria meals. The 17 authorities that have not yet introduced cash cafeteria systems must review their provisions.

The Education Act 1980 made it clear in section 22 that children of those in receipt of family income supplement or supplementary benefit were entitled to free school meals.

Is the Minister saying that a fall of 1·3 million in those taking school meals is not catastrophic? What does he think about the Salvation Army soup kitchens, now operating in Lincolnshire, which feed children at midday because they cannot obtain school meals because the reactionary Tory authority has abolished them?

The hon. Gentleman's prejudice is taking hold of him and clouding his judgment. The survey undertaken by the Department of Education and Science in recent weeks acknowledged that in the summer term of 1980 there was an inevitable decline in the number of pupils staying on school premises to take either the traditional or the cash cafeteria meals. During the past 10 or 15 years—under successive Governments-—there has been a notable increase in the number of children bringing packed meals to schools. The present statistics are much the same as they were under the previous Labour Government.

As the Minister's answer tells us that there has been a decline of about 25 per cent, in the number of children taking school dinners, and as he asserted to the House last November that he was confident that there would be no dramatic decline—his words—in the numbers taking school dinners as a result of the Government's increase in school dinner charges, would he now say what, for him, constitutes a catastrophic decline? Also—[HON. MEMBERS: "TOO long."] Also, as the increased charges hit hardest at the poorer families, will he report to the House what monitoring progress has been made by the Government on the nutritional effects of the loss of meals as a result of the increased charges?

The hon. Gentleman asked a number of questions. I can tell him that two-thirds of local education authorities in England have adopted criteria for entitlement to free school meals that are more generous than the statutory minimum. I hope that that will encourage the hon. Gentleman. On the question of the nutritional element, my right hon. Friend the Secretary of State for Social Services proposes to monitor the effect of the new school meal arrangements. I understand that the design of that study has yet to be finalised.

The hon. Gentleman referred to the catastrophic decline in numbers taking school meals. That is not the case. I am confident that local authorities have the capacity to monitor the effects of the changes in the school premises, and also the social services aspects. The hon. Gentleman must understand that savings must be made on the school meals service in order to preserve the core of our educational service.

asked the Secretary of State for Education and Science whether the Professional Association of Teachers will now have a seat on each local authority teachers' negotiating committee.

It has always been open to local authorities to choose for themselves whom they should consult; but I am sure that local authorities generally will take note of the admission of this association, by my right hon. and learned Friend, to the Burnham Primary and Secondary Committee.

I congratulate my hon. Friend on including the Professional Association of Teachers in Burnham. Will he go further and send a circular recommending local authorities to include that body in all local negotiations?

It has not been the Department's practice to send circulars suggesting to local authorities—which treasure their liberty—whom they should see. I am sure that they are aware that the PAT is now represented on Burnham, and will draw their conclusions from that.

asked the Prime Minister if she will list her official engagements for Tuesday 10 February.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Will my right hon. Friend find time today to study the Employment Act 1980, with reference to the case of Joanna Harris? Is she aware that many on the Conservative side of the House believe that a person's right to work should not depend on union membership, and that in such circumstances a closed shop is a denial of free choice?

I agree with my hon. Friend about the operation of closed shops. I hope that those affected by it will take full advantage of the change in the law provided by the Employment Act 1980. As my hon. Friend will have seen from the Green Paper on trade union immunities, we are reviewing the law and will consider what action to take in the light of the Sandwell cases and other instances of its operation.

Has the Prime Minister had the chance today to study what we consider to be the extremely serious matters arising on the agenda of discussions between the National Coal Board and the National Union of Mineworkers? Does she not think that it is utterly deplorable, at a time of world crisis in energy, that Britain should contemplate closing pits that still have coal in them? How does she square that with the undertakings given by herself and the Government at the Venice meeting a few months ago?

That is a matter for the National Coal Board to consider in the light of its duties, its coal stocks, its requirements, its productivity, and the prices that it charges. We have already fixed the external finance limit for the NCB for next year at the considerable sum of £882 million.

Will the right hon. Lady reconsider her answer? This is a matter for the nation to consider. Will she give an undertaking that no steps will be taken along that road until the House has had an opportunity to discuss the matter? Will she not reinstitute the tripartite system of discussions for the coal industry, which produced "Plan For Coal"—which the Government said they would carry forward for a period? Does she not agree that it would be better for industry and for the country as a whole if an agreement were reached between the NCB, the miners and the Government about a plan for the industry, rather than the right hon. Lady condemning it to the disaster of quarrels between all three?

It would be quite wrong for the Government to attempt to manage every nationalised industry. It is for the Government, in conjunction with the NCB, to fix the amount of finance that is available. We have done so, and the figure I gave to the right hon. Gentleman is considerable. That money will have to be found either from taxation or from borrowing, and will go to the NCB for its operations next year. That is in addition to the price that we shall pay for coal and the increased price that we shall pay for electricity because the price of coal is high.

Since the future of the nation is involved in this matter and since we shall never recover from the recession if the right hon. Lady and her friends allow the coal industry to sink, may we have an absolute undertaking that all the proposals will be discussed in the House of Commons before the procedure under which she is directing that industry proceeds?

No, Mr. Speaker. I am not directing that industry. We have fixed the amount available for the industry. It is for the management of the National Coal Board to make the arrangements and we shall stand by those arrangements.

Although my right hon. Friend does not wish to direct any industry, does she agree that Great Britain is famous for its red telephone boxes? Does she accept that British Telecom's announcement that they are to be repainted because, in the words of its spokesman, "yellow is its colour", will be treated with the greatest possible dismay?

I see my hon. Friend's point. I think that we are famous for one or two things other than red telephone boxes.

Will the Prime Minister call to her office the Secretary of State for the Environment to tell him of the widespread concern about the statement that he made in the House yesterday about funding the inner city programmes? Will she tell him that the statement was not good enough and that hon. Members representing inner city areas are worried about the desperate need to improve our inner cities? Will she ask him to come back to the House with a new statement indicating new proposals?

I cannot offer the hon. Gentleman any hope that more money will be made available for the inner city programmes. We are operating under considerable constraints. Whatever one wishes to do, one cannot go on borrowing more and more for causes, however worthwhile they are.

asked the Prime Minister if she will list her official engagements for Tuesday 10 February.

I refer my hon. Friend to the reply which I have just given.

Is my right hon. Friend aware of the growing resentment at the prospective increases in the water rate? Will she confirm that the Secretary of State has the power to dismiss as well as to appoint the chairmen of water authorities and that chairmen will be chosen because of their determination to reduce bureaucracy and cut costs?

We are aware of the widespread concern about water charges. My right hon. Friend the Minister for Local Government and Environmental Services has therefore seen the chairmen of the English water authorities. With their co-operation he has appointed a team of financial consultants to inquire into the scope for reducing water charges from their present levels and to advise him accordingly.

Is it not strange that people who always profess loyalty to Britain should now threaten to take up arms against this country? Is the right hon. Lady aware that a large majority of people in Britain want to see a lasting solution to the troubles in Ireland and, moreover, a solution which is based on the reality of the situation that exists in the whole of Ireland?

The situation with regard to Northern Ireland has not changed and will not change unless the people of Northern Ireland themselves wish to change it and unless the Parliament here so decides. Until that time, it remains exactly as it is.

Will my right hon. Friend find time to study the statistics which show that one in four subscribers to BUPA are trade unionists? Does she agree that when it comes to making provision for the health of oneself and one's family it is better to be independent of the State than dependent on it?

I noted the figures. I am glad that an increasing number of people are choosing to spend their money freely on increasing provision for their health.

Is the right hon. Lady aware of the devastating consequences that the 1,500 redundancies at the Tate and Lyle sugar refinery in Liverpool will have on the economic and social infrastructure of that city? Has she received requests from the city council and from the spiritual and political leaders in Liverpool for a meeting with her to discuss the implications of that closure? Is she prepared to meet such delegates?

We have received some representations. I cannot receive such deputations. They should see management representatives. The hon. Gentleman knows how the problem arose. First, there has been a reduction in sugar consumption. Secondly, an increasing amount of sugar is refined from sugar beet.

asked the Prime Minister whether she has any plans to visit Tel Aviv.

I have at present no plans to do so.

When my right hon. Friend visits Washington at the end of the month will she discuss with President Reagan the great need for a settlement of the Palestinian question? To what extent does she feel that the Camp David concept of Palestinian autonomy within a framework to be determined by Egypt, Israel and, ultimately, Jordan is still valid?

When we go to the United States we shall undoubtedly discuss this matter with President Reagan. I believe that Camp David was a great step forward. I have no doubt that the President of the United States will be considering how to take it further. One of the problems is that the concept of autonomy has so far been rejected by Jordan and the other Arab leaders.

If the Prime Minister goes to Tel Aviv will she go to the West Bank and talk to the Palestinians there where she will discover that they are determined to secure the right of self-determination in their own independent State?

We issued a declaration from Venice on this matter. If there is to be a settlement of the great problems in that area it is vital that one side should honour the right of Israel to live behind secure borders and in peace and that the other side should honour the legitimate rights of the Palestinian people. The problem has been to move those two essentials forward together.

Will my right hon. Friend confirm that she recognises Israel's right to exist and that the Palestinian Liberation Organisation is still dedicated to the destruction of the Israeli State?

Of course we recognise Israel's right to exist and behind secure boundaries. We have never recognised the PLO as the sole representative of the Palestinian people because of its relationship with terrorist activities.

If the Prime Minister goes to Tel Aviv will she stress to the Israelis that they cannot expect to live behind any type of secure border when they continue to seize land as they did recently when they seized 4,000 acres around the Arab town of Nablus?

That illustrates the importance of trying to secure an agreement on this long-standing problem. I do not think that it helps to hurl accusations at one side or the other. We must try to move both sides forward, recognising the two concepts that I indicated earlier.

asked the Prime Minister what further proposals she will make at the next European Council to implement the Government's intentions regarding reform of the common agricultural policy of the European Economic Community; and whether she will make a statement.

It is too early to say what will be on the agenda for this meeting or what stage will by then have been reached in negotiations on farm prices and related matters.

Will my right hon. Friend ensure that the Government put as much determination behind refroming the CAP as they did behind the successful renegotiation of the budget contribution? Does she agree that it is plain that the present system cannot continue for much longer?

I assure my hon. Friend that we shall devote all our vigour to reforming the common agricultural policy. It seems to us to be absurd to have a policy which builds ever-increasing surpluses which take ever-increasing proportions of the budget and of resources to produce food that we do not want and cannot eat.

Is the Prime Minister aware that we are honoured with a visit of a delegation from the People's Republic of China? It is not a laughing matter. Although I am not allowed to draw the attention of the Prime Minister to the fact that they have not been in the Gallery, would she perhaps consider whether she could arrange a visit to China as soon as possible?

Order. This was not an open question, but one of the questions on the Common Market.

When my right hon. Friend goes to the European Council, will she take the opportunity to comment upon the interesting letter in The Times today by our distinguished colleague, Sir Fred Catherwood? In that letter he asserts, first, that the Euro-junkets such as we have read about recently are necessary and should continue. Secondly, he asserts that the EEC has a trade policy independent of the nation States within the EEC.

I cannot vouch for precisely what the letter in The Times says, but, if the sums which were reported as spent on overseas travel visits by Euro Members of Parliament were correct, it was gross extravagance.

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

The threatened closure of coal mines."

I have just come back from the National Coal Board; I was not chucked out. I have not had an opportunity to raise the matter with you, Mr. Speaker, because I dashed straight in from Hobart House.

The matter is serious, because 30,000 miners are being thrown on the scrap heap. It is important, because of what I said about the miners and because we could be witnessing another period of a pit closure programme from which we cannot escape, because pits, like so many factories—but not all—are unable to be reopened. It is important that we raise this matter at an early stage, because of what the Prime Minister said today in response to my right hon. Friend the Leader of the Opposition, when she implied that the closure programme had nothing to do with the Government. I have a statement from the board—not from the union—which says that it is as a result of the run-down of the economy that between 8 million and 10 million tons of coal must be—[HON. MEMBERS: "TOO long."]

Order. The hon. Member for Bolsover (Mr. Skinner) is entitled to raise this matter. I should have taken it before the notice of motion, but the hon. Gentleman had not given me notice. Therefore, I was not to know what matter he would raise. However, he must not make the speech that he would have made if I had granted the application. He must confine his arguments to saying why the matter is urgent, important and necessary.

I shall forgive you, Mr. Speaker.

The matter is urgent, because, as a result of the joint discussions this morning, arising from the executive meeting on Thursday of the NUM and other affiliated bodies, it is likely that a joint meeting with the Department of Energy and perhaps also the Prime Minister will be requested. It would fall into line with what my right hon. Friend said during questions, namely, that the House should discuss this matter before talks are considered.

The matter is also important, because, if we are to ensure the future of the coal industry, it is necessary to put a curb on the ever-growing total of imports under the auspices of the Government. They have risen by as much as three times since the last year of the Labour Government. They need to be reduced, and urgent measures must be taken.

The matter is urgent, because the coal industry, unlike many others that have fallen foul of the Government, has been increasing its productivity faster than any other. It is in line with Government policy. If we are to ensure that Government policy is to be kept intact, why should an industry that has managed to increase its productivity be thrown on to the scrap heap like the rest of them as a result of the general run-down in industry?

The issue is very important. The miners' unions and other unions—not merely in some of the so-called militant areas but throughout the coal fields—have said that they will not stand for this closure programme. Therefore, it is essential that we give the matter priority for a debate at the earliest opportunity.

The hon. Member seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"The threatened closure of coal mines."

As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reason for my decision. I listened carefully to the hon. Gentleman and to the representations that he made, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

But I can try again.

I beg to move, That leave be given to bring in a Bill to put a statutory obligation on health boards to set aside a proportion of their existing resources for research into the causes and effect of muscular dystrophy or to fund any research project approved by the Secretary of State into the causes and effect of muscular dystrophy.

The Bill is in no way a party political issue. I have drawn support for it from all political parties in the House, with the exception of the Liberal Party because I could not find any of its members.

As the title suggests, the Bill is exclusively about muscular dystrophy. It would perhaps be appropriate at the outset to ask ourselves two questions—what is muscular dystrophy, and what can we do about it?

I shall briefly explain in layman's terms what muscular dystrophy is. Unlike motor neuron disease, or multiple sclerosis, with which it is generally confused, it is essentially a disease of the muscle. It does not affect the nervous system. We must make that distinction. The muscle wastes away quickly. The disease is exclusively carried by females and is passed on exclusively to male children.

It is a cruel disease. It is not necessarily apparent at birth. I know of many children who seemed to be normal at birth and in whom the disease did not become manifest until they were 5, 6 or even 8 years old. However, although the disease is not apparent at birth, it can be detected at birth by a simple procedure, which is in use in Japan, Germany and to some extent France. It is not used in maternity units in this country. Perhaps our maternity units could consider that process. Detection at birth is vital.

The disease destroys half of a child's muscle by the age of 5. If the process is to be slowed down, detection at birth is vital. There is a medical wrangle over the suitability of one or two of the drugs, but certain drugs, if used from the age of 1 or 2 months until the child is 5, will undoubtedly slow down the process. However, by the time that the disease has manifested itself, generally at 5 or 6 years of age, it is too late even to slow its progress. I urge doctors to consider universal testing at birth.

I do not wish to exaggerate the size of the problem. The disease affects only one in 100,000 children. It does not occur more frequently in areas of deprivation, or in different parts of the world. It affects all strata of society and all parts of the globe equally.

If the disease is allowed to take its course, an affected child is in a wheelchair by the age of 8. As the muscles weaken and are destroyed, the child's body becomes progressively distorted. The child never leaves his wheelchair. Death normally follows between the ages of 15 and 20 years. A few struggle on into their late twenties or early thirties.

Any one of us can suffer from cancer or be struck down by heart, liver or kidney disease. We do not know whether such diseases will kill us next week, next year, or in three years' time. Muscular dystrophy kills, with certainty. No one survives. That is its unique feature. Not only does it kill; it destroys a child's ability to enjoy childhood. He cannot use his legs or arms.

Society has done little to combat the disease. Dr. Thomson, of Knightswood hospital, in Glasgow, has had to work in a cupboard for the past 20 years. His annual grant is £22,000. Out of that he has to find his salary and that of his assistant, and the money to maintain his equipment. He has come upon a drug called Allopurinol. It is not claimed to be a miracle cure, but it appears to slow down muscular wastage and to maintain mobility for an extra two or three years. Such a horrible and cruel disease is worthy of the expenditure of more than £22,000 a year. We have perhaps seen the first chink of light, but more research needs to be done.

I have a list of people who claim that they get money for research into muscular dystrophy. The Southern general hospital in Glasgow gets £43,000; Edinburgh gets £40,000; and St. Andrew's gets £5,000. However, their research is not specifically into muscular dystrophy. A great deal of the money goes towards other research, albeit necessary research.

The Bill aims to give the Minister powers to tell health authorities—perhaps the wording is slightly wrong—to set aside a specific part of their budgets for research solely into muscular dystrophy. I repeat that it is one of the cruellest diseases that we know.

We all know what Ten-Minute Bills are for. Their purpose is essentially to draw attention to a specific subject. I hope that when the Bill has a Second Reading, Government Whips and the Front Bench will go to the toilet or to the pub—I hope that they will disappear—so that we can examine the problem in detail, as in Committee.

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

The main purpose of the Bill is to enable the disposal of shares in the Radiochemical Centre Ltd. This is a small company, usually known as TRC, which makes radioactive isotopes for industry, medicine and research. The Bill clarifies the present powers of the Government to dispose of shares held in companies operating in the field of atomic energy in general and clarifies the present powers of the United Kingdom Atomic Energy Authority to dispose of shares in any company. In particular, it will enable the sale of up to 100 per cent of the shares in TRC. I emphasise that TRC is not a company operating in the field of nuclear power. For historical reasons, which I shall explain, it is a company owned by the Atomic Energy Authority.

Before turning to why the Government consider that shares in TRC should be sold, I should like to give the House the background and history of the company. It is a remarkable company, although it is not well known.

The origins of the company go back as far as 1940, when the Government invited a small company called Thorium Ltd to undertake the refining of radium and the manufacture of radium-based self-luminous paint for use in compasses and aircraft instruments. The company started in a small house in Amersham. Much of the early drive came from a young chemist, Dr Grove, an entrepreneur who had the ideas and vision to see the future uses for radio-isotopes and who was to lead the organisation as it grew for some 40 years. From those first modest steps in a house in Amersham grew a company that today is a world leader in its field and is internationally associated with the manufacture of radioactive substances.

Thorium Ltd. initially acted as managing agents for the Government but relinquished that agency in 1946 when the Radiochemical Centre was established within the public sector. Its immediate purpose was concerned with natural radio-elements, but it was also envisaged that, when artificial radio-isotopes became available, the centre would undertake the processing and distribution of them as well.

Although radium and its associated products dominated the work at Amersham until well into the 1950s, artificially produced radio-isotopes became more important as Pharmaceuticals and research chemicals incorporating these materials were developed and manufactured. During this period, the Radiochemical Centre continued to expand.

In 1954, the centre became part of the newly formed United Kingdom Atomic Energy Authority, whose primary purpose was to carry out research and development in atomic energy. TRC has undoubtedly benefited from the growth in general scientific knowledge as a result of research into atomic energy, although—this is a point that should be emphasised in case there is any doubt—the products that TRC produces are not directly relevant to the nuclear power programme.

The Radiochemical Centre took over the functions of the isotope division of the Atomic Energy Research Establishment at Harwell in 1959 and continued to develop its sales. By 1959, sales exceeded £1 million per annum, with over 60 per cent. going overseas to some 50 countries.

The 1960s were a period of further vigorous expansion. New laboratories were built to enable the manufacture of more radiation sources. The export business continued to prosper. The centre received the first of four Queen's Awards for Exports in 1967.

This part of the Atomic Energy Authority's business—the manufacture of radioactive substances used for diagnosis and treatment in medicine—was transferred to a wholly owned subsidiary company, known as the Radiochemical Centre Ltd., by the Atomic Energy Authority Act 1971. When this company was set up in 1971 it was originally envisaged that there should be a private shareholding in the future. When the incorporation was made, the purpose was to see the centre develop as an independently run company and to encourage proper commercial and financial disciplines.

The Minister used the words "it was envisaged". Envisaged by whom?

It was envisaged by the Conservative Government who introduced the Act in 1971. I am coming to the view taken by an earlier Labour Administration. I am at the moment dealing with the view of the Government in 1971.

Since then, when TRC was set up as a company, it has continued to trade profitably and to expand. It decided in 1973 to open a new green field manufacturing site at Cardiff. Work on this is almost complete and production has already started. The Cardiff plant is planned to be in operation in 1981. Recent capital investments have cost the company some £20 million and will enable it to double its manufacturing capabilities.

Without doubt, TRC has developed into a commercial and manufacturing organisation with a worldwide business and a world-wide reputation. It employs some 2,000 people. Its main markets are in medicine, research and industry. It manufactures radioactive drugs for diagnostic purposes, ranging from biological research to engineering and advanced electronics. In the field of industrial radiation, the company produces sources for industrial radiography, with applications in industry—for example, the examination of pipeline welds.

TRC is a world leader in its field. About 80 per cent. of its sales revenue comes from abroad, an astonishing achievement. In research radiochemicals, it has captured about 80 per cent. of the United Kingdom market, some 30 per cent. of the United States market and roughly 30 per cent. of the Japanese market. This has been achieved by a dynamic management and dedicated work force in the face of tough, international competition.

I hope that this has given the House some idea of the nature of the company. I should now like to explain why it is the Government's view that shares in the company should be sold.

The proposal that private capital should be introduced into the company is not a new idea. When TRC was constituted as a limited company in 1971, the then Government stated that they favoured eventual private participation. This would also appear to have been the view in 1970 of the Labour Administration, which introduced a Bill similar to that which became the 1971 Act, which lapsed with the general election that year. At the time of the 1971 Act it was the intention that the Government and the authority between them would retain a majority shareholding, and this was provided for in the Act.

Early in 1974 the then Conservative Government reaffirmed their intention to sell shares in TRC but deferred any such sale until after the introduction of an improved system of product costing and accounts based upon it. Nothing further has been done since then, and all the shares are still held by the Atomic Energy Authority.

The present proposal to sell shares in TRC is in accordance with the Government's policy of introducing private capital into public sector companies and, in view of the previous proposals, coupled with TRC's outstanding record as a successful commercial operation, TRC is plainly an excellent candidate for privatisation.

The Government have avoided intervention in the day-to-day running of the company and have never provided subsidies. Indeed, its only link with the public sector is the fact that its shares are held by the AEA, and this is now an anachronism.

The hon. Gentleman has explained the great merits and success of this company. What benefit does he think that the introduction of private shareholding will confer on it?

There are no reasons why this company should remain in the public sector. The company can only benefit from having total freedom from Government intervention. The hon. Gentleman will perhaps at least see this point. The time taken up by management and by civil servants reviewing the investment plans, the pay plans and the corporate plan of the company is valuable time given by people who have other things to do. There is every reason why this company should be available for investment by the private sector. We believe that this company can benefit through being fully integrated into the private sector. The company's board has been consulted and agrees with the principle of disposing of shares in TRC.

The proceeds of disposal of shares in the company, less the administrative costs of making the disposal, will be paid into the Consolidated Fund. This is in accordance with one of the Government's other objectives from privatisation—this, too, answers the hon. Gentleman's question—to reduce the size of the public sector borrowing requirement. The reasons for privatisation are, therefore, twofold: to reduce public involvement in a company which will benefit from full commercial freedom, and to lower the Government's need to borrow money.

Is the Minister saying that the board and the staff agree with the power to be taken under the Bill to dispose of more than 49 per cent. of the shares?

The board thinks that the Government should retain some holding in the company. I have not said anything that is contrary to that. The board also thinks that it is right that there should be sales by the Government of shares in the company. It welcomes that.

I should now like to explain in more detail the provisions of the Bill and why it is necessary. When the company was set up in 1971 it was envisaged that a minority shareholding would be sold off at some time. As a result, the Act provided for a majority of the voting shares in the company to be retained in the public sector. The Government now wish to have the option of selling more than half the shares, and so the Bill removes the provision in section 11(3) of the 1971 Act, which requires that the Secretary of State and the authority between them should hold at least 50 per cent. of the voting shares.

At the time of the 1971 Act it was thought that, subject to this provision, the Secretary of State or the authority could dispose of any shares owned by them. However, the Government have been recently advised that these general powers of disposal are constrained in respect of sales of shares by the Secretary of State in companies operating in atomic energy by reference to his general duties to promote and control the development of atomic energy, and constrained in respect of sales of shares made by the authority in any company by its ability to do only such things as are in accordance with its statutory functions.

Arguments could therefore be advanced that the disposal of part or all of any of the AEA's existing shareholdings would be inconsistent with existing powers, and any such disposal might therefore be challenged in the courts. For this reason, it is essential, if this disposal is to take place—even this sale of shares amounting to less than 50 per cent.—that the general powers of the Secretary of State and the authority be clarified in the case of TRC.

It seems sensible to take the opportunity similarly to clarify the present position of the other two companies in which the AEA holds shares—British Nuclear Fuels Ltd. and the National Nuclear Corporation Ltd.—and any company that the Government or the authority may require in future. The Bill ensures that the Secretary of State has the power to sell any shares that he owns in companies operating in atomic energy, and that the authority has the power to sell shares in any company that it owns.

The Government and the authority have already the power to buy shares. It is surely right that they should have the freedom and power to sell shares as well as to buy them.

One present restriction on the sale of shares is on the sale of more than half of the voting shares in British Nuclear Fuels Ltd., which is specifically imposed by section 11(3) of the Atomic Energy Act 1971. I draw to the attention of the House the fact that the restriction is retained by the Bill. The Government want to have the option, which was previously thought to exist prior to legal advice, of selling up to 49 per cent. of the shares in British Nuclear Fuels Ltd., but I emphasise that at present the Government have no plans to do so. The Government are merely clarifying the powers that it was previously thought the Government had.

Similarly the option to sell shares in the National Nuclear Corporation Ltd. is being kept open, although at present the Government have no plans to make such sales. Should the Secretary of State or the authority acquire shares in other companies in future, they would likewise, as a result of the Bill, have the option to sell them, too.

The Government now have only a minority holding in the National Nuclear Corporation Ltd. They do not have a majority holding as they have in British Nuclear Fuels Ltd. If it were the Government's intention at some future date to reduce their holding, would it be their intention to reduce it to virtually nil or to retain a small holding?

The Government have made no decision to dispose of their shares. My hon. Friend rightly says that the Government have only a minority holding. I believe that it is 35 per cent. at present. However, others have shares and there could be circumstances in which the shares held by others end up in the Government's hands. The potential provisions set out in the Bill are relevant to that. I emphasise that at this moment, at the beginning of the nuclear programme, the Government do not have plans to dispose either of the 35 per cent. holding or of other shares that might come their way. It is, of course, a matter that the Government could consider in future.

Is my hon. Friend saying that in this Parliament he will not be disposing of any of the shares of companies other than those of the Radiochemical Centre?

At present the Government have no plans to dispose of shares in BNFL. The Bill would allow the Government to do so up to 49 per cent. They have no plans at present to sell shares in the National Nuclear Corporation. As for the latter body, things might change. There is every reason to want to see a strong private sector construction industry building our stations. We must see how the programme develops. First, we must get it off the ground. We have no plans to sell shares at present. That is all that I am saying on that score. I am not going beyond that.

Is it the Government's intention to give to private enterprise any section of a nationalised industry that happens to be viable and to allow the parts of the nationalised industries that are almost impossible to make viable and profit-making to remain in the nationalised sector?

It is the Government's firm policy to reduce the size of the public sector and wherever possible and practical to introduce private capital.

rose—

I must get on.

Apart from the provisions that I have mentioned, the Bill covers a few other matters. The requirement for TRC's account to be laid before Parliament is removed once more than half the voting shares are disposed of. Clause 2 makes it clearer than it is at present that, should the authority receive moneys from the sale of shares, the Secretary of State may direct them to be transferred to the Consolidated Fund. Clause 3 provides for the expenses associated with the disposal to be paid for out of sums provided by Parliament.

The Bill also allows for the sale of shares to be made either by the authority or by the Secretary of State. As I mentioned earlier, the shares are at present held by the authority. If the Government wished to sell the shares in TRC directly the Secretary of State would first use his powers under the 1971 Act to transfer to himself those shares which it was intended to sell. It would then sell the shares and the proceeds would be paid into the Consolidated Fund.

Alternatively, the Bill gives the Secretary of State the power to direct the authority to make the sale and then to transfer the proceeds into the Consolidated Fund. It has not yet been decided who will actually make the sale, but legislating in this way provides greater flexibility.

The Bill would enable a sale of up to 100 per cent. of the shares in TRC. The Government have not yet decided on the exact timing, the method, or the extent of the disposal, but it seems unlikely that a sale could take place before the end of this year at the very earliest. For the time being we wish to keep these options open.

There is one final and important matter that I wish to make clear. The Government have decided that employees at present with TRC may remain in the Atomic Energy Authority pension scheme in which they are now members.

Such generosity.

That means that TRC and its employees will continue to make the appropriate contributions to the scheme in the normal way. Employees joining TRC after some agreed date in the future will join a new company scheme which is being set up.

I pay tribute to the employees of TRC, who, through their dedication and hard work, have enabled their company to be so successful and outstanding. I realise that there may be uncertainties about the disposal. However, I assure them that there are no grounds for such anxiety. The Government see TRC as a national asset and would not agree to plans that would endanger the company's future or the livelihood of those who work for it.

Does my hon. Friend agree that it would be possible under the joint stock company provisions to have stock options and share options which would enable individual employees in the company to benefit, which is not possible if the company remains parts of a nationalised industry?

My hon. Friend makes an extremely important intervention. I am sure that he has referred to one of the attractions of privatisation for many people. When I met the trade unions at the Radiochemical Centre last week, that was one of the very issues that they raised. No decision has yet been made on whether the company will be privatised either by sale to a corporate buyer or through a flotation. A flotation enabling a share incentive scheme and profit-sharing schemes to be devised for the benefit of the work force is clearly a matter of importance. Further, even though Labour Members pooh-pooh it, the workers in TRC favour it.

As I said at the beginning, the primary purpose of the Bill is to enable the disposal of shares in TRC. It therefore takes further the Government's manifesto commitment to roll back the public sector. The Government see no benefit, either to the nation or to TRC, in the Government continuing to own all the company's shares. Indeed, I believe that it is right that such a high technology company, which is both profitable and rapidly expanding, should be allowed to develop in an atmosphere of the fullest commercial freedom. I am confident that the injection of private capital into this company will not only be in the national interest but will benefit management and workers alike. TRC has been successful over the years. The House should give it the means to build on that success in the future.

On a day when a meeting of deep concern to the energy requirements of this nation is taking place, to bring forward such a petty and irrelevant Bill is a waste of legislative effort and time.

As the Minister said, the only really significant change that the Bill seeks to make concerns the power to sell off the whole of the Radiochemical Centre. I understand that the provisions governing BNFL do not change the position that we thought existed after the 1971 Act, and that the situation regarding BNFL and the role of the Government's majority shareholding will be fully maintained. So there is no fundamental change of policy in that respect. However, I should like to ask the Minister about some of the extraordinary wording of the Bill in relation to the general power that the Secretary of State is seeking.

The whole case for this two or three-clause Bill, this measly little Bill, rests entirely on the proposal to sell off completely the Radiochemical Centre. The power already exists for shares to be created in TRC. That is not in dispute. That power has existed since 1971. The only reasoned justification for the Bill is to give the Government power to sell off the whole of TRC. The power to create shares already exists, and, if it does not, we shall not dispute that part of the Bill that clarifies the matter. We are appalled with the rotten case presented by the Minister to justify taking the power to sell the whole or the majority of the shares in the centre.

Is not the hon. Gentleman aware that considerable doubt is cast on the provisions of the 1971 Act by the provisions of the 1946 and 1954 Atomic Energy Authority Acts? Should he not bear those Acts in mind?

I shall certainly bear them in mind, and I hope that we can reach a consensus before I finish my remarks. We support any part of the Bill that clarifies the position and role of the Atomic Energy Authority and the Government with regard to the sale of shares in this company. If that is the purpose of the Bill, we may be able to obtain a consensus.

The hon. Gentleman knows that the Bill gives the Secretary of State power to sell more than 50 per cent. of TRC if he so wishes.

May I ask my hon. Friend to deal with the point on which the Minister would not give way a few moments ago? My hon. Friend mentioned that the Minister's explanation left a great deal to be desired. Will he pursue the point that the Minister's explanation gave no assurance with regard to the amount that the Government expected to receive for those shares? The Minister said that £20 million would be reinvested. We have a right to know whether that sum of money will be returned.

That is a pertinent point and I shall deal with it later. However, I should like to deal first with the point that was made about the need to clarify the position.

The problem that the Minister has had in presenting his case today is that the Government are so used to the claptrap about inefficient and badly managed State enterprises compared with the bright-eyed, sharp-eyed private sector, and this company did not fit any of those categories. Grudgingly, the Minister had to admit that TRC had been a wonderful success story—a 100 per cent. Governmentowned success story. He could not say that TRC was losing money or that it had come cap-in-hand to the Government and had made demands on the taxpayer. He did not give the figures—

It is wrong to say that my description of the company's success was half-hearted. Over and over again I emphasised the great achievements of the company. In the light of that, will the hon. Gentleman say what he thinks would be gained by retaining this company in the public sector and, at a time of public expenditure restraint, why the money that is tied up in this company should be left there rather than be used for the other valuable purposes for which the hon. Gentleman is always campaigning from the Dispatch Box?

Because it is making money for the Government. The Minister did not give the figures, so I shall give them one by one.

First, since 1971 the turnover of this company has risen from £8 million to £50 million a year—not bad for a socalled nationalised concern. That turnover has been matched by excellent profits—£26 million in that period—and with an average return on group capital investment of 26 per cent. I should like to know how many other companies in the private sector have achieved such good figures.

I turn now to the question that the Minister asked. Why should the Government hold on to this valuable company and why should not the shares be sold? The dividend has been paid to the shareholders—the United Kingdom Atomic Energy Authority. In 1971–72, the dividend was 10 per cent.; in 1972–73, 10 per cent.; in 1973–74, 7 per cent.; in 1974–75, 11·49 per cent.; the same percentage the following year; in 1976–77, 8·2 per cent.; in 1977–78, 22 per cent.; in 1978–79, 12 per cent.; and in 1979–80, 12 per cent. The company is doing very well for the taxpayer and the State. It has been making profits and paying good dividends to the Government.

Has the company made any demands on the public sector borrowing requirement besides being artificially a part of the PSBR? I should be grateful if the Minister would give the figures with regard to the significance of TRC being a part of the public sector and its impact on the PSBR. Has the company made large demands on the Government for its capital investment programme? Besides the initial capital investment of £6 million, which is now extremely profitable to the Government, has it made a huge demand on the public sector borrowing requirement to finance the large-scale £20 million exciting investment at the Cardiff factory? It has not done that. It raised most of it from its profits on its own reinvestment, along with some support from the Government in the form of equity, for which now the Government are receiving a very healthy return.

So the company is not making any demand. In the large scale expansion programme that this company has undertaken it has made marginal, insignificant demands on the public sector borrowing requirement, for which the Government will get a very high and valuable return in the coming years, unless they go through this foolish act of selling the company off to the private sector at the moment of major growth and expansion by TRC.

I am sure that the hon. Member does not wish to mislead the House. Does he acknowledge that the £6 million profit figure to which he referred relates to 1979, that last year the profit figure was £4 million, and that this year it is likely to be distinctly lower than £4 million?

I am sorry that the hon. Member is leading with his chin on this matter. The reason why it will be distinctly lower than the £6 million is that, as the Minister pointed out, 84 per cent. of TRC's products are exported, 30 per cent. going to the United States. The high interest rates and particularly the high exchange rate have some effect on the growth of profits of the company. That is the reason. Volume has risen, but the margin has become slighter because of the Government's policy towards exchange rates. I am sorry to report to the hon. Gentleman that the Government's general economic policy has been the chief cause for the slight dip in profits.

I think that anyone who knows about this matter and anyone who has looked particularly at the Cardiff venture—I had the privilege of visiting it, as I shall mention again shortly—will say that the potential now for both expansion and profits is very considerable, as a result of the tremendous initial £20 million investment. If it was partly financed by the Government, they had a happy opportunity for handsome return on such investment.

For the last six years the Government have received a 12 per cent. dividend return on their investment, which we hope will pay the marginal costs of the so-called management review and the corporate plans. It has been such a successful company that it should take about five minutes to survey and to study. In return for that, the Government have had a very large return on their investment.

The next reason that the Minister gives as a case for selling off TRC is that we need private capital to be injected into the company for future expansion programmes, instead of the company having at some time in the future to come cap-in-hand to the Government. As the Minister admitted, already the £20 million investment programme has almost doubled the company's capacity to expand. That is already in place and has been financed. Therefore, we cannot expect a demand of any kind to be made on the Government until the late 1980s for any further expansion.

Anyway, the power exists without the Bill for the Government to allow the injection of private capital into TRC. No one is arguing against that. It will not be the Opposition's case that there is not a case for shares or capital from the private sector to go into TRC. What we are saying is that we do not need the Bill to do it, except in the clarifying sense, and, secondly, that we are opposed most bitterly to the idea of the majority, if not the whole, of the company being sold.

Why does the hon. Gentleman think that it is a good idea for private shares to be taken in TRC?

I do not particularly think that there is a good case for that. [Hon Members: "Oh."] What I am saying is that the opportunity has existed since 1971. The Labour Government of 1974–1979 did not remove that opportunity. It can be taken up at any time, if it is judicious and sensible commercially or technologically so to do.

I do not think that at present there is any need for such privatisation or the introduction of private capital. But if the Government want to say "What we need is some worker shareholding", they can do so without the Bill. The Minister knows that.

indicated dissent.

The Minister shakes his head. He admits that this could be done without the Bill.

indicated dissent.

We shall discover further, when the winding-up speech is made, what is preventing worker shareholdings as part and parcel of TRC without the power to take more than 50 per cent. of the shares and sell off the company.

The Minister was very disingenuous about the company's position and that of its staff and workers and their attitude towards the Bill. He said that he had visited them in Amersham. He said that the point that they raised with him was that they wanted some shares in the company. However, that was not the only topic which they raised with him, and it was not the main one. So why did he not tell the House about the main point raised by these dedicated staff, to whom he paid a great compliment, and the dedicated management, who have made such a commercial and technological success of this company, although it is 100 per cent. Government-owned? Why did the Minister not state is the position of TRC staff and workers?

The Minister will know—I do not think that last Friday he found anything different—that their statement made last month expresses the position by which they stood last Friday and stand today. That statement says:

"We believe that the Government should retain a controlling interest in the Radiochemical Centre."

That is a statement of the wishes and feelings of the overwhelming majority of the staff and workpeople at TRC. Why did not the Minister tell that to the House? Why did he just say "Of course, one point that was raised with me was that they would like some worker shareholding of some kind"? That is because it conflicts with all the grand compliments that he has been paying to the company, and he knows that the action that he is proposing to take as a result of the Bill, would conflict with the wishes and feelings of the overwhelming majority of the staff and workers at TRC.

Will the hon. Gentleman give way?

I shall not give way. I have done so a number of times. I want to deploy one or two other arguments. The hon. Gentleman can make his own speech. He will have plenty of time to make his comment. We shall be here for a couple of hours at least.

The Bill is about the power to sell off a company which has commercially and technologically kept more than one step ahead of its competitors in the game. It has made a great deal of money. It has invested very well. It is capable of making even more money as a 100 per cent. Government-owned company, or as a Governmentcontrolled company. Its industrial relations have been marred by only one half day's marginal dispute since 1944. In its industrial relations and its terms and conditions of service it has skilfully blended the best of the Civil Service arrangements with those of industry in the negotiations that have been taking place and evolving over the last year or two.

As the Minister admitted, I think, there is an intense and very special commitment to the company by its staff and workpeople. In the brief time that I have spent at the new Cardiff premises, I found that to be a very striking feeling and wish. There is a sense of commitment and of special relationship and identification with the company, which has grown out of its success.

Why impair that? Why even cast doubt on it? Why create any uncertainty about it, as the Bill and its powers could do? Why cast doubt on a very successful ongoing operation? Why create the degree of uncertainty that can flow and is strongly felt by many members of the staff about the possibility of being taken over by some unknown company or organisation, when it is already a remarkably successful outfit, with a marvellously dedicated staff, and is doing extremely well?

There is not a shred of evidence—the Minister brought none to the Dispatch Box today—to suggest that the structure of the company over the last eight or nine years since 1971, the organisation of the company, how it has been managed or how it is owned, have in any way inhibited the growth and development of the company. The Minister cannot produce such evidence, because the figures speak for themselves. There has been no demand from the management for this change. There has been no demand for the Bill from the staff or the workpeople.

If there is a case for this change, where does it lie? In the end, the Minister gave the two reasons: first, party dogma and doctrine; secondly, the public sector borrowing requirement. Let us look at these two so-called reasons for casting doubt on certainty and creating uncertainty and doubts that need not exist about the continuation and development of this very successful company.

Let us look at the public sector borrowing requirement consideration. As has been said, the Bill's main purpose is to enable the Government to realise the assets that they hold in the Radiochemical Centre and to reduce the public sector borrowing requirement. By how much will the public sector borrowing requirement be reduced? How is it to be reduced, and on what time scale? The Minister may say that the Government have taken the option and that they will think about the time later. What evaluation or assessment have the Government made?

If the Bill represents a major item in the Government's policy of reducing the public sector borrowing requirement, the Government should tell us how much money is involved. Is it £50 million? Is it £100 million? This year the public sector borrowing requirement amounts to £12·5 billion. Can it be true that the Government want to create uncertainty and want to cast doubt on the development and continuing success of a company just so that they can knock £50 million to £75 million off the public sector borrowing requirement? That is peanuts in public sector borrowing requirement terms.

The problems and uncertainties that the Bill will create will be far greater than any impact it might have on the public sector borrowing requirement. However, if that is the Government's case, the Minister should tell us what estimate the Government have made for the reduction in the public sector borrowing requirement during the next 12 months or so.

There is a more dangerous and worrying aspect about selling the centre. If the Government desire to raise the maximum amount of money in order to reduce the public sector borrowing requirement, they must sell to the highest bidder. They will, therefore, look for a premium price. Who will pay that price? Which companies are most likely to offer the largest sums of money to the Government? There is a lot of evidence to suggest that TRC will be quickly snapped up by a foreign-owned company, probably by a major American chemical or pharmaceutical company. Such companies will want to buy it because of its tremendous success.

The hon. Member for Enfield, North (Mr. Eggar) seems to be nodding his head approvingly at the idea of an international company purchasing it. He now seems to be shaking his head. I do not mind if the hon. Gentleman has a 180 degree change of opinion about it. I had thought that the hon. Gentleman agreed that it would be nice if a large American international company were to pay a premium price for TRC. That would be absolutely disgraceful.

Fear and worry have led the staff to ask the Government not to sell more than 49 per cent. of their shares in TRC. If the Government wish to reduce the public sector borrowing requirement, they will be sorely tempted to allow the highest bidder to buy the company. That would not be in the interests of those who work there or in the interests of the nation. It would certainly not be in the interests of the development of TRC as an independent company.

Therefore, if the Government intend to reduce the public sector borrowing requirement, I hope that they will give a clear assurance about the sale. Before the Bill is enacted—given the Conservative Party's majority, the Bill will presumably be enacted during this Session—will the Minister give an assurance that the company will not be sold to any international or foreign company? Will the hon. Gentleman also give an assurance that TRC will be maintained as an independent company and that it will be allowed to thrive as it has in the past?

The Bill is the result of Conservative Party dogma and doctrine. The Government are committed to privatise wherever possible. It is sad that a successful concern should suffer from the Government's narrow, blinkered and doctrinaire attitude.

The hon. Gentleman keeps saying the same thing over and over again.

Repetition of the truth does not do any harm. That is the sort of cant that we hear from the Government Front and Back Benches. The worries and concerns of those 1,100 people at Amersham and of those 400 workers at Cardiff who made a success of the company are at stake. We have a right to ask that the Government's doctrinal views should not overcome the views and attitudes of those who—as the Minister admitted—have made the company a success. It seems to be suggested that the Bill has been introduced to clarify the sale of BNFL shares and the sale of shares in the other companies owned by the Atomic Energy Authority.

In 1971 a Bill was introduced by, I believe, the right hon. Member for Bournemouth. West (Sir J. Eden). The debate was wound up by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). They are two purist monetarists and are as good free enterprise freebooters as one could come across. When the Bill was introduced, they both justified the idea that the Government should retain a majority share in BNFL and in TRC. They said that it was reasonable to constitute the two companies in an autonomous way so that they would have commercial freedom within the structures of independent autonomous companies whilst the Government maintained a 51 per cent. shareholding in them.

In 1971 there was a happy consensus in the House. My right hon. Friend the Member for Bristol, South-East (Mr. Benn) supported the Bill, along with the right hon. Member for Bournemouth, West and the hon. Member for Cirencester and Tewkesbury. A trinity such as that should never be destroyed. This Bill will break that consensus. It seeks to cast doubt on and destroy that consensus.

When the Minister replies, he may say that the Bill seeks to clarify the shareholding position in BNFL and TRC and the Government's right to sell a minority shareholding in either of those companies. If he says that, we shall not vote tonight but will give speedy support to the passage of the Bill. However, if the Minister seeks to retain a provision that will allow the Government to damage the company and to create uncertainty by selling more than half and probably the whole of TRC, we shall oppose the Bill in the Lobby tonight.

The hon. Member for Merthyr Tydfil (Mr. Rowlands) has made extremely heavy weather of a very light brief. He has completely failed to understand the Bill's provisions. He brushed aside the fact that the 1946 and 1954 Acts create problems for my hon. Friend the Minister and for the Government. This Bill provides the Secretary of State not only with the power to acquire shares but with the power to dispose of them. I should have thought that that was a sensible thing to do.

With great respect to the hon. Member for Merthyr Tydfil, he tried to give the impression that those working in TRC would face a very bleak future if the hand of Government were removed from the company. The performance of the hon. Gentleman's party as regards nationalised industries—I refer not least to the Coal Industry Act 1965—probably sent a bigger shiver down the backs of those who work in nationalised concerns than any such prospect. The recent history of British Steel and the associated problems of job security will make those who work at TRC look forward to the day when they can shake off the hands of Ministers. As has been suggested, they probably look forward to the company's expansion in a highly successful industry.

I welcome the Bill not only because it provides for tidying up, but because I hope that it will mark a turning point—albeit a small one—in the fortunes of the nuclear industry. In the 1950s, we led the world in the use of nuclear power for peaceful purposes. Indeed, we were the envy of the world. Since then, regrettably, there have been many stops and starts and many doubts which have created an extremely difficult period for this great industry with inevitably low morale as a result.

I hope that my hon. Friend and his colleagues will ensure that a new impetus is given to the nuclear power industry in this country. We need a clear strategy for the next 20 years. We need a positive publicity and public relations campaign, not merely to allay the fears of those who are, perhaps, naturally concerned, but to show the positive benefits of the industry to the future economy of the country. I hope that the example of the electricity industry in issuing stickers saying "Atoms for Energy" will be followed on a larger scale in future.

I understand from Mr. Speaker that because this measure deals with miscellaneous provisions we can range fairly widely across the whole industry. I am sure that the hon. Member for Truro (Mr. Penhaligon), who complained in a recent debate on energy prices that we had no opportunity of discussing the atomic energy industry, will take advantage of the ruling that has been given. I shall restrict my remarks to a fairly narrow but vital area in the nuclear energy industry. I hope that my hon. Friend will kindly address himself to the question that I posed to him at the end of that energy prices debate.

After an impressive start, we are now floundering. Regrettably, we have had major delays and cost escalations in the thermal programme. The AGR, through no fault of its own, has acquired a bad reputation. In fact, many of its problems relate to contractors' difficulties rather than to design problems. As a result, even now, in 1981, we are beginning to look at another reactor option. We have considered the options in the past. The Labour Administration considered the heavy water option. The Conservative Government stuck very strongly to the gascooled reactor option. I declare an interest in a company which makes graphite.

Order. I do not want the hon. Gentleman to go too far down that road. I was not here when he spoke to Mr. Speaker, but I think Mr. Speaker meant that the debate was wide in terms of its miscellaneous provisions. The hon. Gentleman must confine his remarks to what is in the Bill.

I shall, of course, relate all that I say to the fact that the Bill gives the Secretary of State powers to sell off holdings not just in the Radiochemical Centre, but in a number of other companies in the nuclear industry. To that extent, I include the company with which I am concerned, which makes graphite. The general nuclear programme is affected by the wording of the Bill. I shall be careful not to stray too far.

Rather than develop a new and costly reactor system in the shape of the pressurised water reactor, it would be wiser to opt for a major leap forward towards the commercial fast breeder reactor. It would make for a better utilisation of fuel and would ultimately have the advantage of providing cheap electricity for our industries.

That is where the nuclear industry, above all, can offer positive gains. Over the years we have seen the whole hydrocarbon market, whether oil or coal, rise inexorably to the point where industry has suffered. If the base load of electricity generation can be carried by nuclear power—ideally by the use of a fast reactor—we shall be able to make a positive contribution to our energy costs and to the success of our economy. Therefore, I ask my hon. Friend to indicate the possible timing for the introduction of such a reactor.

The hon. Member for New Forest (Mr. McNair-Wilson) raised one or two interesting topics, but they appear to be unconnected with the Bill. I, like him, am an advocate and a defender of nuclear power, but this Bill is a restricted measure.

I want to put one or two questions to the Undersecretary. First, why do we have the Bill at all? It is an extraordinary little measure. It deals with the affairs of the Radiochemical Centre, which is a highly successful enterprise. Indeed, the Minister did not deny that. In fact, he went out of his way to emphasise it. The centre is doing work of great technical complexity, work which needs high standards of care and safety in the manufacture and sale of radioactive materials for use in industry, medicine and scientific research.

In no way is this a British Steel situation. A Conservative Member drew a parallel with British Steel, but there is no such parallel. The centre is a prosperous industry by current standards. From my inspection of the ninth annual report, it seems that it pays a dividend of 12 per cent. on invested capital. That is not bad these days. If only all British industry were doing as well there would not be much wrong with our economy. The Radiochemical Centre is acting fully commercially. So I do not understand what the Under-Secretary of State meant when he talked about supervision in detail by civil servants. They should not be doing that. The shares are held by public agencies, but there is no reason for civil servants to butt into an enterprise of this kind that is working well. Such interference should be stopped, and I hope that the hon. Gentleman will do something about it.

The Radiochemical Centre is, as I say, acting commercially. It has a high standard of scientific research and development, and its products are distributed throughout the world. It is helping our exports. So what is its fault or crime? I cannot see what it has done wrong. The only fault which it appears to have, because of its very nature, is that all its shares are held by State agencies. Apparently, that is the only charge against it.

Its crime is the fact that it is a suitable and convenient sacrificial lamb to be sacrificed on the altar of demands that are made on the Department of Energy and every other Department by Downing Street.

I am obliged to my hon. Friend. I shall come to the matter of Downing Street in a moment. The explanatory memorandum says, sadly, that the public custodians of the shares, the Atomic Energy Authority and the Secretary of State,

"are not free to dispose of shares to mere investors with no expertise in the field".

In my opinion, they should not be free to do so. Those who have a say in the control of this work should surely have an expert knowledge of it. That, as a principle, was accepted by previous Governments, and I think that it should be accepted now. Indeed, my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) pointed out that the old Select Committee on Science and Technology which looked into these matters on an all-party basis in the late 1960s and early 1970s—I was Chairman of the Select Committee at that time—suggested this system of ownership with these safeguards. The Select Committee pointed to the importance of the industry to public welfare and to the community generally.

I am sorry to repeat this, but I am driven to the conclusion that the reason for the birth of this little wretch of a Bill is doctrine. There can be no other explanation. It represents that view of society and industry which believes that all public ownership, big or small, is undesirable and, hence, should be restricted and, wherever possible, the assets sold off whatever the merits in a particular case.

I should like to see a better understanding between the parties on the mixed economy and ownership in industry. But if the time of the House is given to a measure which makes not the slightest practical difference when there is so much else to be discussed—for instance, of unemployment and inflation—any hope of getting any working understanding between the parties on the future nature of the mixed economy seems remote indeed.

Will the hon. Gentleman explain why he believes it is any more doctrinaire to argue that because an industry is in the public sector it should be allowed to be released from the public sector than to say that because an industry is in the public sector it should always stay in the public sector, which is what he is arguing?

I suffer from the fault—a fault for which I can be blamed by hon. Members on both sides of the House—that I am a pragmatist. I believe that that which works best is best. I make no apology for that view. Here what is working best should be kept.

My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to Downing Street. The Prime Minister, in the television interview that she gave to Mr. Brian Walden—an interview which is notorious for many remarks that she made—referred to a number of countries in Europe which she thought had done better than we have done in recent times. Those countries were presumably, she thought, close to her political ideals. The right hon. Lady mentioned Austria approvingly. Austria has a Socialist Government who operate an incomes policy in co-operation with the trade unions; it has also more nationalisation than any European country this side of the Iron Curtain. Socialism, nationalisation, an incomes policy are all things the right hon. Lady hates. Yet the right hon. Lady said that Austria was an example for us, apparently not knowing the nature of the economy of that country. It is certainly not a free enterprise economy.

But here I am not making points one way or the other. I am arguing that State-owned enterprises, if well managed, can be as efficient as the best private enterprise, and in this instance even more efficient.

I shall simply leave—

Will the hon. Gentleman give way?

I was about to sit down, but I will give way to the hon. Gentleman.

Is the hon. Gentleman saying that if this company goes into the private sector it will immediately become less efficient?

No, I am not saying that. It will probably remain as efficient as it is now, so why do it? What is the gain from change?

Why not do it?

I thought that I had already given the House that answer. We have more important matters to deal with than to give our time to this unnecessary measure. Certainly I believe that the House deserves a better explanation of the reasons for the Bill than has so far been given.

I shall confine my remarks to the Bill and try to be brief.

The hon. Member for Bristol, North-East (Mr. Palmer) asked why we needed the Bill. The answer is fairly straightforward. I hope that hon. Members on both sides of the House recognise the necessity for the passage of the Atomic Energy (Miscellaneous Provisions) Bill both because of the legal and legislative precedents for such action and because of the advantages which would ensue from its passage.

At present, the sale of a minority stake in the Radiochemical Centre Limited is allowed under the Atomic Energy Authority Act 1971, although the sale of a majority stake is prohibited. The transfer of stock from the public to the private sector has many precedents, which are widely welcomed by Conservative Members.

In July 1979, the National Enterprise Board disposed of all of its 50 per cent. holding in Ferranti. We widely applauded that at that time. Plans have been announced to float shares in British Aerospace in the near future. Part of our policy is to encourage privatisation, and we do not in any way apologise for that. We intend in legislation to dispose of the minority interest in the British Transport Docks Board and provide disposal powers for Sealink, Seaspeed Hovercraft and British Transport Hotels—all subsidiaries of British Rail.

The British Telecommunications Bill will make possible a liberalisation of the Post Office monopoly on telecommunications and posts. Also, enabling powers will soon be taken to introduce private equity into the British National Oil Corporation and to dispose of both a majority interest in the National Freight Company and a minority interest in British Airways. All told, numerous attempts have been made to replace Government money with private capital and to increase the role of individual enterprise in the economy. The passage of the Bill would follow the precedent set by the actions that I have just mentioned.

Although the sale of a minority stake in the Radiochemical Centre by the United Kingdom Atomic Energy Authority is allowed under the 1971 Act, other existing legislation clouds the issue. Indeed, the framers of the 1971 Act, as well as the framers of similar legislation in the 1970 Labour Government, intended that a minority stake would eventually be sold to the public. However, the Atomic Energy Act 1946 imposed restrictions upon the disposal of shares by the Secretary of State in companies in the atomic power sphere. Furthermore, the Atomic Energy Authority Act 1954 may prohibit the sale of the shares by the United Kingdom Atomic Energy Authority if it is decided that such action is not consistent with the statutory functions of the authority.

The apparent conflict between the provisions of the 1971 Act and those of the 1946 and 1954 Acts seems to have been unintended and undermines the 1971 Act. It has not been decided whether the two earlier Acts affect the later one, but it is essential that all such unintentional restrictions be dealt with. These restrictions have the potential to cause further problems in the future as the Secretary of State would not be able to dispose of the shares in atomic power companies which the United Kingdom Atomic Energy Authority is allowed to acquire and the authority would similarly be unable to sell shares after it had bought them.

The Bill would remove any possible uncertainties about the 1971 Act and would ensure that the spirit of the legislation remains unaltered. That is very important.

In addition to clarifying the position of the United Kingdom Atomic Energy Authority in relation to the disposal of its shares in the Radiochemical Centre, I welcome the fact that the Bill clarifies the position with regard to the centre's holdings in British Nuclear Fuels Ltd and in the National Nuclear Corporation. Although there are no present plans to sell shares in either of these companies—indeed, clause 1(6) specifically retains the 1971 prohibition on the disposal of more than a minority share in British Nuclear Fuels—the Bill prevents any future complications from arising. The only specific change regarding the disposal of shares affects the Radiochemical Centre, whereby the United Kingdom Atomic Energy Authority is allowed to sell up to 100 per cent. of its shares in the company.

The removal of uncertainty is not the only advantage of the Bill. All those involved with the Radiochemical Centre will benefit from its full integration into the private sector. The radiochemical industry is growing and changing extremely rapidly. The company will be able to react to the changes more quickly and efficiently if it is more a part of the industry. The employees of the company will benefit from the freedom of the private sector. Those benefits will extend to consumers, as radioactive isotopes are used in medicine and industry, in addition to scientific research. The House will not be surprised to hear me say that eventually all taxpayers and the economy will gain.

The provisions of the Bill will radically alter the connection between the Radiochemical Centre and Government. The majority of the company's finance is raised without Government guarantee and the management of the company is independent of the Government. Two loans made to the Radiochemical Centre from the Consolidated Fund represent the company's sole involvement with the Government, apart from the shares held by the United Kingdom Atomic Energy Authority. The proceeds of the sale of the Radiochemical Centre's stock would go to the Consolidated Fund to eradicate that debt.

Will the hon. Gentleman give way?

I do not have very much time. Many of my hon. Friends wish to speak.

As the company is not part of the nuclear industry, the Government loses no control of that industry by selling part or all of The Radiochemical Centre. Control over the supply of such chemicals as are produced by the Radiochemical Centre is not necessary, as countless other equally vital chemicals are produced by companies in which the Government have no direct interest. Such control is also absent in other industrially advanced nations including Japan, Germany and the United States.

The passage of the Bill will not weaken the Government in any way and will benefit the country greatly. Existing legislation will be clarified and the spirit of the 1971 Act will be preserved. The company will benefit from a more central place in the industry. Most important of all, strong advances will be made in the Government's efforts to strengthen the private sector of the economy.

I must confess that when I see a Bill with the words "atomic energy" written across the top I am likely to be against it. That is true today as on previous occasions. I regard the Radiochemical Centre as very much the more acceptable face of the nuclear industry. It is a company which has a great deal to be proud of and a number of people owe their lives to the genius and expertise which has been demonstrably displayed by that company. I have no wish to lessen the company's impact.

The company has won four Queen's Awards to Industry. A number of references have been made to its financial viability and the fact that it is a successful enterprise. When we consider the argument about who should own an enterprise of this size, I take the Government's view, in that I see little virtue in such an enterprise being State-owned. The Government will know that my colleagues and I have supported a number of measures to dispense with Government ownership of various enterprises.

We know that, no matter what the Government propose to sell, the Labour Party will oppose them, whether the enterprise concerned makes a lot of money or no money. That is not my party's position. We take a rather more pragmatic view. However, I am worried about selling this company and the implications of the sale. I shall explain why.

I should be willing to argue for a Government monopoly or near-monopoly in atomic energy. I am worried about the safety of the industry, as I know are great swathes of the British public. The public are confident in the knowledge that the Government are in charge of safety standards, own the company and will have to answer the questions about any incident happening anywhere.

Anyone who read the Three Mile Island report will know that the further involvement of the Government in maintaining standards and instructions has a great deal to do with the better safety record of the nuclear industry in this country compared with that of the United States.

Will the hon. Member explain how the products that this company produces are in any way related to what happened at Three Mile Island?

I shall explain that. The British Government, who have a near-monopoly of the entire industry from A to Z, have set up and maintain a number of standards of reporting and safety and general investigation which for a long time they have been able to swap between one aspect of the nuclear industry and another. That has produced a high level of engineering expertise in safety. If bits of the industry are to be sold off to different owners—I shall come to that—there will be a division of the great attempt to maintain high standards and a tendency not to swap information that each has gained between one branch and another

Is it not the task of Government to regulate, control and deal with health and safety at work rather than to own and run operations of this type?

I do not argue with that in general, but in the exploitation of the potential of atomic energy I take a different view. I was disturbed about the implication of what the Minister said. I am unsure about what the Bill allows the industry to sell. I should like a clear guarantee that the understanding is that nothing but the Radiochemical Centre can be sold without the direct and specific approval of the House. I have no wish to see the control of atomic power stations or any other nuclear installation put in private hands.

I should be grateful if the hon. Member would answer my original question. What connection does the production of radioactive isotopes have with the generation of electricity by nuclear means?

Order. I have listened carefully to what the hon. Member for Truro (Mr. Penhaligon) has said. He has been relating his argument to what is in the Bill. But I must ask him to keep to what is in the Bill and not to go too wide, which is likely to happen if he seeks to answer the hon. Gentleman.

In my view, general safety standards are important throughout atomic energy. If that matter is maintained within a Government monopoly, the standards are likely to be higher than if it is diversified into a number of camps.

The Minister explained why further legislation is required. If there is a desire to put private capital into the enterprise, I cannot see why the sense of the 1971 Act could not be implemented even if slight modification is required because of the point made by the hon. Gentleman. I did not understand his explanation why the 1971 Act was defective, but if that was his argument the sense of the measure could have been implemented by a minor change to the law.

I argue strongly that if the company is to be sold a massive effort should be made to ensure that the shares are diversified among a large number of people so that no individual group or multinational organisaton succeeds in gaining control. The arguments for the employees virtually to be given a large stake in the capital appreciation of the company are strong. It is their genius, energy and enthusiasm which has made the company a great success. One hopes that that genius and effort will be maintained and will continue to add to the success of the company. As one who believes in an asset-sharing society, I see this as a good chance for the Government to demonstrate that they want to see a wide property and asset-owning society. They have a real chance to do something about it with the Bill. We have had this discussion before and I should have liked the Government to go even further with one or two of the Bills that are before us.

A number of people in the industry are concerned that an American company, New England Nuclear, which employees of the British company say is of a size similar to the Radiochemical Centre Ltd., has been taken over on the American stock market by Du Pont, which paid £150 million for it. That is considerably more than figures that have been mentioned for the valuation of the British company, though those in the industry do not believe that the American company has more assets than the British company and they would therefore expect a similar price to be paid for the Radiochemical Centre Ltd.

They are disturbed that they may become a mere branch of a giant chemical company. Despite what the Minister said about civil servants being endlessly involved in various decisions, I understand that the freedom of those in the industry to practise and develop their expertise has been much appreciated and should be maintained.

My objection to the Bill and to the sale of the company is that they are to do with atomic energy. It is the strong view of the Liberal Party that the Government monopoly of the exploitation of the possibilities of atomic energy should be maintained.

We want to know what else in the nuclear arena the Government intend to sell. Do they look forward to the whole industry being privately owned? If so, there will certainly be opposition from the Liberal Party and from those who fear the industry, and the Government will have every conservationist in the nation on their back. I do not accept that the British people believe that the principle of a private enterprise economy, which Liberals support, is so important that it must be extended to small enterprises such as the Radiochemical Centre Ltd.

The hon. Member for Truro (Mr. Penhaligon) put forward a threadbare case. There are not many Liberals left, and they do not make up for their lack of numbers by any strength of argument.

Opposition Front Bench Members repeat many things in an attempt to get the truth across. Unfortunately, it is not the truth that they are spreading, but never mind: they are entitled to make their utterances in the House from time to time. I wonder whether the new political party will have the same nuclear policy as the Labour Party. I always thought that Labour's policy was simply to advance the cause of coal, but we learn new things every day.

I fully support this interesting Bill. Under clause 1, the United Kingdom Atomic Energy Authority may dispose of any company

"whose activities include the development of atomic energy or research into matters connected therewith or the production, treatment, storage or disposal of radioactive substances."

That is a broad provision and it will include all the subsidiaries not merely of the Radiochemical Centre, but of British Nuclear Fuels Ltd. and the National Nuclear Corporation.

In a debate on the Atomic Energy Authority Bill in 1970 the right hon. Member for Bristol, South-East (Mr. Benn) said:

"It was a Bill to establish two new mixed-enterprise companies, one for nuclear fuel and one for radio chemicals, both with 100 per cent. Government holdings at the start and both with a statutory Government majority for all time".

It is the "for all time" that has created difficulties, and that is why we need the present Bill.

The right hon. Gentleman continued:

"Thus we had the beginnings of the mixed-enterprise ownership pattern which is embodied in the Bill. Nobody has said it was wrong then, and nobody has said, not even the Minister, that it is wrong now. Of course it is not wrong in an area in which publicly-financed research figures very highly and is applied in industry. The mixed-enterprise arrangement was right."—[Official Report, 17 December 1970; Vol. 808, c. 1602–6.]

The Minister has indicated that he has no present plans for BNFL or the NNC, in which the Atomic Energy Authority holds a minority interest. I should have thought that it would be in our interests to dispose of those companies at the earliest opportunity, though I am prepared to agree that a time limit should be put into the Bill. We have another Bill coming forward shortly dealing with the British National Oil Corporation in which powers will be taken. But will they ever be exercised? That is why I asked the Minister whether he intended to exercise the powers during the lifetime of this Parliament.

The Opposition argue that there is no case for the Bill. They ask why a public asset should be disposed of. But the assets are owned by you and me, Mr. Deputy Speaker, and if we wish to dispose of them to private enterprise, for any reason, it is a good move.

If the hon. Member for Merthyr Tydfil (Mr. Rowlands) were in Government and were prepared to run the Radiochemical Centre Ltd., he would be prepared to run every company in the country. If he were to put the profits into the Consolidated Fund they would be used for a number of miscellaneous Government purposes or to discharge the losses incurred by British Leyland and the British Steel Corporation.

I should like to see the close monitoring and interventionism of the Government removed from the three companies that I have mentioned, particularly in view of the poor record of Governments over the past 35 years. The managements of the companies share my view. Furthermore, why should the taxpayer provide additional funds and capital for any of those companies? If they want additional funds they can go to the market, the banks or any shareholders that they can find.

On a point of order, Mr. Deputy Speaker. The hon. Member for Bedford (Mr. Skeet) is dealing with the affairs of the National Nuclear Corporation. The Bill has nothing to do with the NNC.

It is interesting that the informed and erudite hon. Member for Bristol, North-East (Mr. Palmer) should have made a speech without, apparently, having read the Bill. I must take him to task. Clause 1 states:

"This section applies to the power of the Atomic Energy Authority to dispose of shares held by the Authority in any company and to the power of the Secretary of State to dispose of shares held by him in any company whose activities include the development of atomic energy or research into matters connected therewith or the production, treatment, storage or disposal of radioactive substances."

When dealing with treatment and storage, we are concerned with BNFL. When dealing with research, we are concerned with the AEA. I am surprised that the hon. Member for Bristol, North-East, who has such an acute mind, should have overlooked the elementary matters contained in clause 1. Perhaps he would like my copy of the Bill.

The point that I was making is that the Bill is related essentially to radioactive substances.

No. I should like the Bill to be entitled The Radiochemical Centre Limited (Disposal and Miscellaneous Provisions) Bill. However, the Government have made it even broader. Fortunately, we can dispose of all the companies. We could even dispose of the AEA with the Minister's assent. However, the Government have been wise. They have provided that disposals may take place only if they will promote the national interest. That is the safeguard. I should not like the hon. Member for Merthyr Tydfil to complain about the national interest. The number of things done by the Labour Party in the national interest is legion. One thing can be relied upon. Conservative Ministers take it very much into account.

The hon. Gentleman and I often meet in these debates, and we know each other's views about atomic energy very well. Can the hon. Gentleman tell us how much he would like to see sold off? Would he like to see it all sold off? Does he look forward to the idea of a private enterprise nuclear waste dump in the middle of Wales? As one of the great advocates of the industry, what does he see the Bill leading to? How much does he want sold off?

The hon. Member for Truro can ask me all sorts of questions. For my part, I am only too glad to give him an indication. Two years ago I had a Private Member's Bill setting up a nuclear waste disposal corporation which would be 100 per cent. Government owned. It would never have been profitable. I think that there is an argument for keeping a State holding in the Atomic Energy Authority for some years to come.

I believe that the three companies that I mentioned could suitably be sold off in the course of time. The market has a unique way of looking after such assets. I can deal with this point more fully by considering the situation abroad. The New England Nuclear Corporation, to which the hon. Gentleman referred, dealt with radio isotypes in the United States. That enterprise has now been acquired by a chemical company. I do not see President Reagan and others getting excited that that may let down the national interest. Far from it—all these matters can be referred to the appropriate authorities at the appropriate time. If the undertakings abuse their authority, they can be taken over.

In France, apart for Amersham France SA, which is a subsidiary of TRC, the comparable body is the International CIS company which is owned by the CEA and Sorin Biomedica. There we have the State largely controlling the company. But when one moves a little further, to the comparable situation of British Nuclear Fuels Ltd., one finds the following situation in France. I mention France because it is one of the leading nuclear countries of the world.

The company in France is Franco-Beige de Fabrication de Combustible. That is owned by a number of enterprises—Framatome, Pechiney-Ugine Kuhlmann, Westinghouse Electric—I understand that that holding is probably being returned to local private enterprise—and Creusot-Loire. Those companies, with a few others, hold an interest in the nuclear fuel manufacturing enterprise. So, even with their philosophy, the French believe in and tolerate having the shareholding of the company very broadly distributed. That is the position in France compared with that of British Nuclear Fuels Ltd. in the United Kingdom.

Let us consider the National Nuclear Corporation, which we hope will build a number of nuclear power stations here. The French one is Framatome. I do not think that anyone doubts that that has been successful. It has about 60 reactors either built or under construction. That company is owned by the Empain Schneider Group, through a subsidiary, Creusot-Loire, 55 per cent., the CEA, which is the State body, 30 per cent., and Westinghouse, which has now been retired, held the other 15 per cent. The current position is 70 per cent. private enterprise and 30 per cent. held by the national body, the Commissariat a L'Énergie Atomique.

What France is doing—and this is what I recommend that the United Kingdom should do—is gradually phasing out the State enterprises or at least some of these enterprises, particularly the three with which I am primarily concerned. Let the private sector come in and gradually take them over and manage them. What is left for the Government to do is to lay down safety regulations, to see that they can be properly monitored, as all private companies can be, even in a sector of this nature, and to see that they are properly administered.