asked the Secretary of State for Social Services if he will ask the Social Services Inspectorate to investigate the provision of social services to members of ethnic minority groups.

The Social Services Inspectorate is continuing the work on this subject already started by the former Social Work Service. We have sponsored research, disseminated the results of that research, and held seminars with staff of social services departments on this subject. The inspectorate's programme of work outside our formal powers will be decided shortly by a joint steering group of representatives of our Department and local authority associations. I will ensure that the needs of ethnic minorities will be discussed when that programme is being decided.

As this is a very important topic, especially for those hon. Members who live in areas with substantial ethnic minority populations with special problems of language, culture and age structure, will the Minister bear in mind the long-term need for a special development group in his Department to co-ordinate progress and research in that area and perhaps provide information and advice to local authorities with these problems?

I am not sure about the hon. Gentleman's proposal, but I will consider the matter. A great deal of research is being carried out, and the results are being disseminated among local authorities. I agree, however, that there is some evidence that ethnic minorities have less access to social services than the bulk of the population. I am sure that everyone would wish to address themselves to that problem.

I appreciate that we should consider the ethnic minorities, but may I say that, as a member of an ethnic minority, I sincerely hope that we shall not be treated any differently from or better than anyone else?

The main purpose of social services work is to aim at the needs of deprived people, of whatever racial origin. However, we must consider the special problems of particular sections, and we are doing so.

When considering the connection between ethnic minorities and social services, will the Minister take the opportunity to pay tribute to the members of the Asian minority for the way in which they not only look after their own elderly people but serve the elderly of the rest of the community? Without them, we could not keep open the old people's homes in areas such as Leicester.

I quite agree. One reason why the Asian community makes so little call on the work of the social services departments is its excellent record of caring for its own old people in a wide family network. However, even among the Asian community, social patterns are changing. We must ensure that we do not over-rely on that aspect of the Asian community, with the result of neglect.

May I remind my right hon. and learned Friend that the ethnic minorities have already been damaged by the Department of the Environment's policy of reverse discrimination in the granting of various forms of financial aid? If my right hon. and learned Friend's Department now adds a policy of reverse discrimination in the social services, the ethnic minorities will be severely damaged because they will come to be deeply resented by the white majority.

I take my hon. Friend's point. We have to make sure that we give sensible assistance to local authorities to help them to deal with the problems of ethnic minorities. We are researching into the problems of aging and of the under-fives in ethnic communities, and so on, and we are trying to develop a sensible pattern of provision that will not unintentionally damage the interests of those ethnic minorities.

Does the right hon. and learned Gentleman recognise that there is some evidence that members of ethnic minority groups do not have equal access to services? Would it not be helpful for local authorities which are attempting to provide services for all those who need them to have a development group set up to advise them? Will the Minister ensure that such a development group, if set up, has enough money to do the job, that it starts soon, and that the Government provide the finance to ensure that the proposals that it makes are carried out?

Access to services must be based on need rather than on statistics, as the hon. Lady will agree. We have sent to all local authorities works such as that by Juliette Cheatham, entitled "Social Work Services for Ethnic Minorities in Britain and the United States". So long as her approach is applied sensibly, we can add to the work of social services departments. We must beware of some of the pressures from so-called anti-racist groups, which probably do more harm than good.

Is it the Minister's opinion that the recruitment of social workers from the ethnic minorities is both culturally and linguistically useful? Will he encourage such recruitment?

Yes, Sir.

asked the Secretary of State for Social Services how many health authorities have so far appointed chief executive officers in pursuit of the recommendations of the Griffiths committee; and if he will make a statement.

The appointment of regional general managers is almost complete. Thirteen have been appointed, and the remaining post has been advertised. Good progress is also being made in appointing district general managers. One hundred and sixty-five district health authorities out of a total of 191, and six out of eight special health authorities, have now appointed general managers.

Will my right hon. Friend bear in mind the importance of chief executive officers in the proper and efficient disposition of human and physical resources in the Health Service? Is he satisfied, from the appointments made, that the salary scales are sufficient to attract applicants of the necessary calibre?

Yes, they are. Of the total that I have just given, about 30 have been attracted from outside the Health Service.

Is the Secretary of State aware that I have considerable sympathy with general managers who have been appointed, especially those who were in similar posts before the Griffiths report was introduced? They face two major problems: first, the considerable reduction in the number of hospital beds since 1979; and, secondly, the transfer of resources from the Health Service, for which they are responsible, to local authority services for the care in the community policy.

The hon. Lady will agree that improving the management process inside the Health Service will help with those problems, as with all others. The reforms that we have made in that area are some of the most important that have been made during the past 10 years.

Is my right hon. Friend aware that his Department refused to sanction the appointment of the chief executive to Scunthorpe district, and that that has caused anxiety to the health authority there? Will he look at the matter again? Will he not refuse to sanction such an appointment because the terms and conditions of service, for example, may not be in line with what some of his departmental officials believe is right?

We are recognising the terms of service of that appointment. The Department and I would be much more open to criticism if we rubber-stamped every proposal from health authorities.

When did the Secretary of State last discuss the Griffiths appointments with Mr. Trevor Clay and the Royal College of Nursing? Has he taken into account the fact that the only paramedical workers in the National Health Service, on whom his Department spent millions of pounds on training management, are nurses? Will he alter his present policy, under which too few nurses are being appointed as managers?

I am entirely happy to talk to Mr. Trevor Clay about that situation. Indeed, I have in the past talked to him about it, but I am content to talk about it again.

I entirely agree with the hon. Gentleman's second point. I should like to see more nurses appearing in management jobs, because the potential of nurses in the Health Service is one of its underused strengths.

asked the Secretary of State for Social Services what assessment he has made of the effect of housing problems on the demand for social services.

There may be important connections between housing conditions and demands on the personal social services, but research has not so far established and quantified the various relationships.

As bad housing is causing outbreaks of dysentery in some parts of the country, and in Hackney is placing such a strain on the health and social services departments that people are dying before their time, will the Minister plead with his right hon. Friend the Secretary of State for the Environment to restore the cuts in the capital housing programme to prevent poisonous and deadly consequences?

I am sorry that the hon. Gentleman should speak in such extravagant terms about the connection between dysentery and housing conditions and spread unnecessary alarm. I understand that there is anxiety in Hackney about housing conditions, and that the director of social services has produced an interesting report suggesting some connection between bad housing and the demands on social services. I ask the hon. Gentleman to produce some real results and statistics rather than unfounded general allegations.

When taking note of the relationship between demands on social services and housing conditions, will the Minister use all the means at his and his right hon. Friend's disposal to ensure that the Department of the Environment ploughs money into the housing programme at a time when the care in the community programme will offload more mentally ill people, in a welcome sense, back into the community? Does he agree that they will need housing and special services to achieve the objective of the programme?

Bad and inadequate housing conditions are taken into account when the personal social services element of the grant-related expenditure assessment is calculated.

asked the Secretary of State for Social Services what is the policy of his Department on the provision of secondhand cookers to people on supplementary benefit.

Single payments of supplementary benefit for cookers are intended to meet the cost of reconditioned items, if these are available, and of new items if they are not.

Is the Minister aware that many of the cookers that people in receipt of social security are compelled to buy because of the price limit are dangerous and inefficient? Is he further aware that recently one of my constituents bought a cooker which subsequently exploded while her four children were in the house? Does he agree that it is about time that this matter was considered? Simply because people are in receipt of social security, they should not be put at risk in that way.

I am aware of the case to which the hon. Gentleman referred, and I have called for a further report from the Garston local office about that incident. On the hon. Gentleman's general question, I should say that the guide set by local officers for such cookers allows for the purchase of safely reconditioned cookers and for proper safety standards in their installation.

Does my hon. Friend agree that the important point is not only that the cooker is properly tested, but that its installation is tested?

Of course, I agree with that. The allowances made under the single payments arrangements allow for such installation.

Will the Minister confirm that single payments for items, such as cookers, for those on supplementary benefit—2 million of which were made last year at an average value of £77 — will be axed under the Government's supplementary benefit review? The Government are already taking back £700 million a year from the unemployed through the taxation of unemployment benefit, have already ended the earnings-related supplement to unemployment benefit, which was worth £16 a week, and are now apparently demanding that the unemployed and those in receipt of supplementary benefit should pay one fifth of their rents and rates. How much further will this vendetta against the unemployed and those on supplementary benefit be taken?

The hon. Gentleman must contain his impatience about the contents of the social security reviews until those reviews are published. I remind him that spending on the social security programme has increased in real terms by 28 per cent. since the Government came to office.

asked the Secretary of State for Social Services if he will make a statement about personal social services in Nottinghamshire.

In Nottinghamshire, as with every other local authority having a social services department, the provision of personal social services is a matter for the local authority to decide, taking into account its statutory duties, local circumstances and its priorities.

Exactly. Will the Minister take note of the local election results 10 days ago, when my constituents showed that they were delighted with what the Labour-controlled county council was doing for them? They voted on a basis that would have increased my majority from 3,000 to almost 11,000, and the Labour party would have won back three seats in the city of Nottingham and in Sherwood. Does the Minister accept that if he continues with his plans to remove earnings-related pensions, maternity grants and death grants, that trend will sweep the country and his party will be out of office?

My recollection is that the net loss to the Labour party in Nottinghamshire in the local elections was about six seats. Matters may have been all right at the hon. Gentleman's end of the county, but the Labour party is now almost extinct at my end of the county, and it lost seats in Nottingham and in Gedling. There is no doubt that the social services in Nottinghamshire have greatly advanced during the past five or six years, despite the allegations of so-called Tory cuts. I hope that the electorate in Nottinghamshire will ensure that they get proper value for money from the increased expenditure that the county council is incurring.

Will my right hon. and learned Friend take note of the fact that in constituencies covered by the same county council we actually won seats back from Labour, so presumably the same criteria apply? Will my hon. Friend also take note of the extensive and worthwhile review by the Nottinghamshire social services committee on the position of the mentally ill? There is a great deal of concern that the community care policy, which both he and I support, should be carried out in the most intelligent and sensible way, and that there should be adequate provision by the social services in Nottinghamshire for those who would be better off in community care than in institutions.

I accept what my hon. Friend says. There is considerable commitment to the idea of moving over to a community-based service in Nottinghamshire. It is vital to have the right level of community services in place as the patients are transferred from hospitals, and that will require a high level of co-operation between the health authority and the county council. We have to ensure that that co-operation is forthcoming, regardless of political control, over the next two or three years.

I point out to my right hon. and learned Friend and to the hon. Member for Bassetlaw (Mr. Ashton) that more than three quarters of the spending on social services in Nottinghamshire goes on wages for its employees. I remind him that for one administrato—

Order. The hon. Gentleman should be asking questions of the Minister.

Is my right hon. and learned Friend aware that in Nottinghamshire the social services are spending the money for one administrator per 1,995 people, whereas in the rest of the country the figure is one administrator for nearly 1,000 people more?

The background in Nottinghamshire is not one of cuts. In the past five years, spending on social services has gone up by one quarter over the rise in prices. Nottinghamshire, rather more than most shire counties, has to ensure at least that amount of added service and value to the community. Administrative costs are high there compared with most other Conservative-controlled county councils.

asked the Secretary of State for Social Services what steps he is taking to reduce the number of children in care.

I am glad that the number of children in local authority care has been decreasing. We support the growing emphasis on preventive measures in child care. It is for local authorities to provide services for children in need, so as to keep them with their families or, in the interests of the children, to provide alternative arrangements for their care.

Will the Minister take steps to amend section 1 of the Child Care Act 1980 to enable local authorities to spend money on preventing children from going into care as well as spending resources to get them out of care? Secondly, as the number of children in care is often concentrated in the areas of greatest deprivation, will he in future disregard, for rate support grant penalty purposes, the money that local authorities, such as Lambeth and Southwark, spend in keeping children out of care instead of penalising those authorities for spending money in that way?

Matters relating to rate support grant penalties are for my right hon. Friend the Secretary of State for the Environment, and not for me or my right hon. Friend the Secretary of State for Social Services. However, the hon. Gentleman raises a serious point, and I know that he means it seriously. The provisions under section 1 of the Child Care Act 1980 are very important. Some councils use them in such a way as to aid preventative measures, and social workers do a very good job by and large in preventing children going into care. We are adding our contribution by doing more to get children out of care. Yesterday, we announced the bringing into force of the provisions of custodianship from 1 December this year, and we are seeking to introduce a new and better system of review of the cases of children in care so that they will be brought out of care as soon as possible and put into a proper family environment where possible.

Will my hon. Friend confirm that the best place to bring up children is in the family? Will he remind the House of the actions that his Department has taken over the past five years and what it proposes to do in future to ensure that more children remain in the family?

Above all else, we want as soon as possible to get out of care as many children as we can from among the 85,000 children in care at the moment—and that is a fall from 100,000 five years ago. That is why we introduced the custodianship provisions of the Children Act 1975. That is why we are seeking, through regular and better reviews of children in care, to get them out of care and into foster homes, homes that provide custodianship or adopted homes, as soon as possible.

asked the Secretary of State for Social Services how many people were waiting for urgent operations at Basildon hospital in each of the last five years.

On 31 December 1984 the provisional inpatient waiting list total for all surgical specialties in Basildon hospital was 1,720. The corresponding figures for the years 1980 to 1983 were 2,194, 3,190, 2,100 and 1,891, respectively, the figure for 1982 reflecting the effects of the unfortunate National Health Service industrial action in that year. It is not known centrally how many of these were urgent cases.

Will my hon. Friend join me in condemning the alarmist and highly irresponsible remarks of one or two of the Opposition Front Bench spokesmen when they visited Essex, and Basildon in particular, and take this opportunity to put the record straight by praising our local health service?

I think that my hon. Friend must be referring to the hon. Members for Holborn and St. Pancras (Mr. Dobson) and for Peckham (Ms. Harman) who have got hold of a set of totally incorrect and fallacious figures and have used them to knock the National Health Service, in particular the National Health Service in Basildon, which has a splendid record of increased numbers of operations and, best of all, has brought about since 1979 a radical reduction in the number of people on waiting lists for over a month.

As the Minister says that his Department does not hold figures centrally relating to those on urgent waiting lists in Basildon, perhaps he will explain to me why I am in possession of a document headed "Form SBH 203, Dept of Health and Social Security", which records that on 30 September 1984 no fewer than 436 inhabitants of Basildon and Thurrock were awaiting urgent operations and that no fewer than 279 of them had been waiting for more than a month for urgent treatment.

I do not know where the hon. Gentleman gets his figures from and in which brown envelopes the figures were delivered to him. What I do know is that the waiting lists in the Basildon area are decreasing, that waiting times are coming down fast and that the standard of health care has improved radically in the last five years.

asked the Secretary of State for Social Services what estimates he has made about the effect on the budgets of regional health authorities of the introduction of privatisation.

None, Sir. All savings derived from competitive tendering will be retained by health authorities and used to improve their services to patients.

Are not all of those savings being made on the backs of National Health Service workers by cutting their wages? Is it not immoral for the Minister to instruct the West Cumbria district health authority to vary its standing orders in such a way as to secure wage cuts? Is he aware that many members of that district health authority believe that such action is morally indefensible and that it simply cannot be done by means of a resolution?

The savings are being made by better management of the services and by reducing costs to an acceptable level. Failure to do that can only be at the expense of patients and patient services. I understand that West Cumbria has made a commendable proposal, whereby its in-house service will save about £100,000 each year. That is a good bid, which should be compared with what reputable contractors can make in order to examine whether greater savings can be made. Other health authorities are saving almost £500,000, or more, on their services, and that is £500,000 that can be spent extremely well by the health authorities concerned.

Is it not the case that private contractors usually effect savings of about 20 per cent. by means of greater productivity and increased efficiency, which surely must mean that more money is available to be spent on patients? Will my right hon. and learned Friend therefore resist those who seek to let expensive sleeping dogs lie and instead continue to pursue his present policies?

I shall certainly take my hon. Friend's sensible advice. It is pointless deliberately to put up the cost of cleaning, cooking and laundry at the expense of patient services. Despite all the controversy about a number of contracts, there are hospitals that have found a marked improvement in the standard of those services when they have gone out to good and reputable contractors.

Is the Minister aware that the North-West regional health authority recently wrote to the Trafford district health authority telling it that if it did not withdraw the fair wages clause in its privatisation contract it would not pass on to it some £70,000 which should have been made available for the elderly and severely mentally infirm and, more importantly, to deal with the drug abuse problem, a programme which the Government have been emphasising? This is clearly a case of blackmail. Will the Minister condemn that and tell the regional health authority to give that money to Trafford, or does he condone such an action?

Off the cuff, I cannot remember the precise details of Trafford's proposed tender documents, but where the so-called fair wages clauses are being insisted upon they tend to involve a combination of pay terms and conditions, sickness benefit, holiday and pension entitlement, trade union rights and so on. That is an absurd attempt by health authorities to intervene in negotiations between private contractors in their areas and their employees. If a district health authority insists on proceeding on a wastrel basis, a regional health authority is entitled to consider whether that health authority should have the difference made up, usually at the expense of other districts in the same region, which carry out the policy sensibly.

Is the Minister aware that there is a disagreement about privatisation in Salford? Will he give a firm undertaking to the House that he will not be involved in any disproportionate cuts in the allocation to Salford as a result of that dispute?

The hon. Gentleman may not be aware that the Salford district health authority has, I am glad to say, resolved to follow the Government's tendering policy. I am sure that the patients of Salford and the service there will benefit as a result.

Are there not many hidden benefits from privatisation within the NHS? Is it not amazing how hospitals all over Britain have rushed to put their house in order in their laundries, kitchens, transport services and other areas because the very mention of privatisation has crystallised their thinking about efficiency within the Health Service in their desire to prove that they are as competitive as private enterprise, which, of course, they are not?

The benefits are not that hidden. So far, savings of about £13 million have resulted from the tendering exercise, and that is being spent on patient services. But the process has only just begun and we expect substantial benefits to come to the NHS when all authorities have made proper progress in implementing the policy.

What co-ordination is there in the Department of Health and Social Security to ascertain the transfer costs of low-paid workers from one part of the DHSS to another? Is it not the case that there is no saving whatever simply because the cost of low-paid workers is transferred under social security either through family income supplement or unemployment benefit?

A standard pattern is for most employees who already work for the in-house service to be taken on as employees by the contractor who wins the contract if it goes outside. If the hon. Gentleman is trying to say that somehow family income supplement claims wipe out the benefit to the Health Service, his mathematics are way out.

Is the Minister aware that, whatever profits privatisation is producing, it is also worsening standards of care in the NHS? Is he aware that a hip operation on a woman in her sixties had to be cancelled last month at Addenbrooke's, Cambridge, when blood and bone was found on the floor because the private contractors, Office Cleaning Services, failed to clean the theatre after the previous day's operation, and that such examples are frequent? How does he justify the fact that the level of cross-infection in hospitals has now reached the record level of 9 per cent., which it has never been anywhere near before, and is undoubtedly due partly to the squalid standards of much privatised cleaning?

A great deal of scandalous propaganda is going on in support of vested interests, largely in the trade union labour movement, which wishes to keep cleaning costs up. The example that the hon. Gentleman quotes is entirely untrue in the way that he has given it. The blood and bone dust found at Addenbrooke's was found m a part of the hospital not included in the specifications of the outside cleaners. A great deal has been made of it, when in fact the fault cannot be laid at the door of the outside contractors. There is no intrinsic reason why the service should be better whether the employees are employed in-house or by a contractor. It does not make any difference to the standard of service whether they are in the union or not. What matters is good management to produce a cost-effective service of the right standards. Many health authorities find it easier to get the standards of outside contractors improved than to cope with the low standards of some in-house cleaners, when bad management over the years has allowed standards to decline.

asked the Secretary of State for Social Services what plans he has to increase the number of places available in public sector day nurseries for children aged under five years.

This is a matter for local authorities.

Is it not right to say that the Minister's own Department feels it necessary to put £2 million a year until 1986 into voluntary bodies, while at the same time the Secretary of State for the Environment is attacking the public sector and it is very likely that there will be no increase in day nursery places, either full or part-time, if he does not stop this attack on the public sector by attacking the rate support grant?

The hon. Gentleman's question presupposes that most people think that day nurseries are the best form of help and care for under-fives. That is not the case with a great many authorities. Indeed, the Select Committee on Social Services said

"it is expensive and unwieldy to provide unlimited facilities of day care."

What we need is a mixed economy of care for the under-fives, including an increased number of places with child minders and an increased number of places in play groups. All of this must be supported and underpinned by the excellent under-fives initiative to which the hon. Gentleman has already referred.

Are not day nurseries of great value in giving children a sense of security? Is it not an unkind and needless act for the Richmond upon Thames borough council to threaten to throw out 38 Vietnamese boat orphans at present in the care of the Save the Children fund at Hampton Court house? Will my hon. Friend repeat the offer that he has already made, in view of the fact that the sale of the house has been advertised in the latest number of Country Life, to provide not only for the maintenance of the children but for the payment of a fair rent to the borough council?

I am deeply concerned about the welfare of the children. There have been suggestions that Richmond upon Thames borough council, which I understand is under Liberal party control, is more interested in making money than in the welfare of the children. I do not know whether these allegations are true, but Liberal-controlled Richmond upon Thames borough council has a fine opportunity now to demonstrate that it does have those children's interests at heart.

asked the Secretary of State for Social Services when he now expects to announce the results of his review of supplementary benefit; and if he will make a statement.

asked the Secretary of State for Social Services if the review of the social security system has now been completed; and if he will make a statement.

asked the Secretary of State for Social Services when he now expects to announce the results of his review of housing benefit; and if he will make a statement.

asked the Secretary of State for Social Services if he will now publish the evidence submitted to his review committees; and if he will make a statement.

The Government's proposals on social security will be published in a Green Paper after Whitsun. Over 4,500 written pieces of evidence were received. Those who submitted evidence are free to publish it and many have done so.

Does the Secretary of State agree that the phasing out of the state earnings-related pension scheme will mean that more pensioners in the future will have to rely on supplementary benefit and that both workers and employers will have to pay higher national insurance contributions for workers to get far less by way of pensions in the future? Does he further agree that the Prime Minister has moved on from being the milk snatcher to being the pension snatcher?

No, I think that that is a pretty silly statement, even by the hon. Lady's standards. The House will have to wait for the proposals. I am entirely content to be judged on the proposals in the Green Paper, but I am not prepared to be judged on half-baked scare stories put forward by the Opposition. Whatever changes are made, the proposals do not affect the basic pensions, and our position on that is clear. The basic pension has increased by 84 per cent. compared to a 77 per cent. rise in prices, and we remain absolutely committed to the pensioners of the country.

Is not the much-heralded campaign to scrap the earnings-related pension scheme yet another attempt to cut public expenditure so as to give further tax handouts to the rich, irrespective of the fact that 11 million contributors could lose their pension rights and that many thousands more could be living in poverty at the turn of the century?

I certainly do not accept the last part of the hon. Gentleman's comments, and nor will he when he sees the proposals. It would be utterly irresponsible of any Government not to look forward and make some judgment about the costs that the country will have to meet.

Instead of devising ways to take money from those in our community least able to support themselves and instead of devising ways to scrap housing benefits for millions of people, why does the Minister not consider in his review ways to help those in most need? For example, why does he not extend to the elderly living in public sector housing the right to live rent-free in the way that owner-occupiers, having received, quite rightly, income tax relief on their mortgages, live mortgage-free after 25 or 30 years of subsidy?

One of the aims of the social security review—and I think that there is no difference between the two sides on this—is to have an overall look at social security provision. Another aim is to seek to simplify the system, and again I think that there is a consensus on that. A third aim is to make the best use of available resources and to channel them to those most in need. That is the right way to proceed, which is why the Government set up the review.

Does my right hon. Friend accept that many of us are eagerly looking forward to his review, in the confident expectation that it will fully protect the standard of living of those of our fellow citizens who are genuinely in need?

Yes, and that will be one of the standards which my hon. Friend and the country will want to apply to the proposals when they are set out. There appears to be total agreement that the social security system must be reviewed. The Government are doing that, while other Governments have funked it.

Have not our society and the needs of our citizens changed during the past 40 years? Would we not be failing in our duty if we did not take this opportunity to review the system?

My hon. Friend is absolutely right. It is clear that need, and the definition of need, have also changed. One of the areas that gives me most cause for concern is that of families with children, where there is undoubted need. We must have a modern social security system, which is why the Government are putting forward a Green Paper. The public will then know what the issues are.

Since extending private pension cover to those covered by the state earnings-related pension scheme seems likely to cost about £3 million to £6 million in tax reliefs alone, can the Secretary of State tell us how soon we can expect the Chancellor to renege on his commitment not to change tax reliefs for occupational pensions, as thoroughly as the Secretary of State and the Prime Minister have reneged on their commitments to pensioners?

There are no plans to change the tax relief on occupational pensions. The biggest deceit is to make the promises that the hon. Member for Oldham, West (Mr. Meacher) does, when he knows perfectly well that they cannot be fulfilled. The biggest swindle of pensioners was carried out in 1976 by the last Labour Government when they changed the basis of uprating and saved £1,200 million. That is what the Opposition did when they were in government.

When announcing his reforms in his statement after the recess, will my right hon. Friend be careful to leave open the possibility of moving towards an integrated tax benefit system as one of the longer term consequences of his proposals?

It is an important aspect of the study, and the debate which will follow it, to consider the relationship between the social security system and the tax system. I am conscious of that, as is my right hon. Friend the Chancellor.

asked the Secretary of State for Social Services when he will announce the membership of the team to review private residential care for the elderly.

asked the Secretary of State for Social Services what has been the percentage increase from 1979 to the latest available date of the number of private, not voluntary, residential care homes for the elderly.

I assume the hon. Member for Houghton and Washington (Mr. Boyes) is referring to the proposal that has been put forward by the Social Care Association for a general review of residential care, which would not be confined to the private sector nor to the care of the elderly alone. We are currently consulting the local authority associations about this proposal, and I shall be meeting them later this week. As far as the number of private homes for elderly and disabled people is concerned, these have increased by 99·3 per cent. between 31 March 1979 and 31 March 1984.

During the discussions, will the Minister take into consideration the fact that in the newly introduced regulations on board and lodging for people living in the voluntary sector the allowance is far too low? I understand that the Leonard Cheshire Homes, for example, have to raise over £1 million to carry on their services. Is not this attack on the elderly and disabled another example of the Government's hit and run philosophy?

It is no attack whatever on the elderly and disabled. My hon. Friend the Minister for Social Security has the issue under active consideration.

Is not the boom in private profit-making old people's homes being largely subsidised by the Department of Health and Social Security? Would not public money be better spent on allowing local councils to provide meals on wheels and home helps to enable people to stay in their own homes rather than on subsidising institutionalisation in private homes?

The private sector has an important part to play. We are also concerned about the public sector. The hon. Lady will be aware from the position in her own constituency, at Nye Bevan lodge old people's home. that there seems to be a substantial cover-up by Southwark borough council, which is not making information available to Opposition members of its social services committee. I believe that the hon. Lady is very keen on the disclosure of information. I hope that she will join me in pressing Southwark council to make all the information available.

asked the Prime Minister if she will list her official engagements for Tuesday 14 May.

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

Does the Prime Minister repudiate the views of ex-Cabinet Ministers in her own party that the Government should intervene directly in industry to create jobs and that the Chancellor's cherished tax cuts are becoming a victim of his own economic strategy"

As the hon. Lady is aware, the Chancellor's tax cuts, indicated in the Budget recently, will take effect this month. I do not think that the hon. Lady will oppose them. With regard to what has been said by former members of my Cabinet, I heartily agree with the comments on the Labour party:

"Labour is riddled with anti-democratic elements and saddled with policy commitments that would undo most of the good of the past six years."

I am grateful for the support of my right hon. Friend who made that comment.

In view of the succession of Conservative swings in the last three council by-elections in Lewisham, East, culminating in the outstanding victory last Thursday in a once safe Labour ward, does my right hon. Friend agree that their Lordships would be wise to listen to the views of those in Lewisham rather than pay attention to the redundant and ill-informed propaganda above County Hall, behind the far Left of this Chamber?

I heartily congratulate my hon. Friend on the excellent election result in Lewisham. It is an absolute confirmation of the wisdom of rate capping.

As we grieve with those who were most directly affected by the tragedy at Valley Parade on Saturday, may I ask the Prime Minister two questions of immediate relevance, on both of which immediate reassurance is required? First, will the Government ensure that none of the bereaved or those who suffered grievous injury on Saturday will have to endure additional suffering if it becomes evident that Bradford City Association Football Club does not have sufficient insurance cover to meet all legitimate claims? Secondly, are the Government prepared to use part of the large revenues which they derive direct from football for the purpose of immediately undertaking an extensive programme of improvements to safety at public sports grounds?

The answer to the first part of the right hon. Gentleman's supplementary question is that it would be best if he allowed us time to look into all the financial matters first to see exactly how much is covered by insurance. Various disaster funds have been started. The answer to the second part is that I shall be seeing the chairman of the Football Trust tomorrow. The right hon. Gentleman will be aware that the situation is complicated, in that £7 million a year goes to the Football Trust from 20 per cent. of the turnover from "Spot the Ball" competitions. Half of that goes to the Football Ground Improvement Trust for ground improvements at Football League clubs. Last year, 1984, the Football Ground Improvement Trust accumulated £3·3 million in its bank balance because there had been insufficient extra demand from league clubs for improvements. That money was distributed, on the initiative of the Football League, as retrospective grant to those clubs that had already received grants from the trust. I have been inquiring into the finances. It would be best if we made a very thorough inquiry before jumping to any conclusions.

I trust that the inquiries will not merely be thorough — as I would expect them to be, and I certainly support the right hon. Lady's activity in that respect—but will also be urgent, because, both in terms of those who are now in deep anxiety and in terms of the implications for crowd safety, it is clearly necessary that effective action is taken as quickly as possible.

As I told the right hon. Gentleman, I shall be seeing Lord Aberdare tomorrow. I had intended to see him long before the tragedy last Saturday; that makes it all the more urgent.

Does my right hon. Friend agree that the remarks attributed in the Falklands to Labour's Front Bench spokesman on foreign affairs will have left the Falkland Islanders in no doubt that Labour has not the faintest interest in protecting their rights?

Yes, Mr. Speaker —[Interruption.] Those remarks must have been deeply wounding and we on these Benches reject them absolutely.

asked the Prime Minister if she will list her official engagements for Tuesday 14 May.

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

Will my right hon. Friend today extend congratulations to those involved in the building of the Falkland Islands airport? Nowhere else in the world has a project of this nature been achieved under such difficult conditions in such a short time. Does my right hon. Friend agree that it is evidence of British industry and the British work force at their very best?

Yes, I gladly join my hon. Friend in congratulating all of those concerned in the building of the airstrip—[Interruption] —and I should have thought that Labour Members would have been more generous-minded and would have wished to congratulate the work force, which achieved the building of that airstrip in 16 months from the date of its being started — a truly brilliant achievement.

asked the Prime Minister if she will list her official engagements for Tuesday 14 May.

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

During the right hon. Lady's busy day, will she reflect on the fact that since she first came to power in 1979 the last shiprepair yard in my constituency has closed, the last shipbuilding yard in my constituency has been put in mothballs, the last pit in my constituency has been closed, the last steelworks in my constituency is to be phased out at the end of this year and that MacGregor has just announced that the Whitburn workshops in my constituency will be closed?—[Interruption.] If some Conservative Members would stop shedding crocodile tears about unemployment, we might get somewhere.

Is the Prime Minister aware that in my constituency one in three men are unemployed and that of those 40 per cent. have been unemployed for more than 12 months? [Interruption.] This is no laughing matter and if some Conservative Members tasted unemployment, they would not be so niggly and sniggly about it. Is the right hon. Lady further aware—

Order. The hon. Member is taking a long time over his supplementary question.

Some of the hooligans on the Government Benches should be called to order, Mr. Speaker, rather than me, because we are talking about men and women who are anxious to earn a living. Will the Prime Minister speak to the Secretary of State for the Environment—bearing in mind the devastation that Conservative policies have caused to my area—and tell him to redesignate the area from a programme authority to a partnership authority?

I shall of course speak to my right hon. Friend. May I point out to the hon. Gentleman that he knows some of the answers to some of the problems? In shipbuilding, there is a surplus of world capacity. We cannot go on keeping a surplus capacity here. We cannot compete, even with the generous subsidies that have been given to shipbuilding. In steel, he will be aware that his Government also had to close surplus steel plants. As for coal, he will be aware that if we want a successful coal industry we must concentrate on the pits of the future. No Government have put greater investment into the coal industry than this one.

Will my right hon. Friend take time today to study the latest CBI report about a 50 per cent. reduction in the number of strikes? Will she consider ways of promoting such an achievement by this Administration, in order to encourage not so much the Centre Forward but those of us who play left back?

I saw the report. I believe that it is partly due to the legislation passed by this Government to give each and every person in trade unions the right to a secret ballot, first, to elect their own officers and, secondly, to reach a decision about whether there should be a strike if the union is to keep its protection and immunities.

Does the Prime Minister recall telling the House a fortnight ago in answer to a question from me that the matter of planning permission for the Palumbo tower was not for her but for the Secretary of State for the Environment? If that is the case, will she confirm press reports that she was round at the Department of the Environment the next morning looking at the planning application? If so, what was she doing there, and what is her attitude to the application?

Yes, Mr. Speaker. That visit had been arranged long before the right hon. Gentleman asked his question. Of course 1 went round and looked at the model. The decision was, and is, for my right hon. Friend the Secretary of State for the Environment, and I hope that he will be making it shortly. I hope that the right hon. Gentleman realises that it is not unknown for a Prime Minister to visit a Department to see exactly what the problem is.

Has my right hon. Friend noted the apparent Damascene conversion of the Labour party with its decision to allow council house tenants to buy their own homes? Does she agree that, while there may be greater joy in Heaven over the one sinner that repenteth, council house tenants should remember that it was the Tory party which gave them that right?

Yes, Mr. Speaker. But I note that the Labour party's conversion is far from complete. I understand that it has left it to Left-wing authorities to opt out. I can, therefore, hardly say that the Labour party has been converted. I should be more likely to say that it was shown in its true colours when it fought the Bill line by line during its passage through the House. Those who own their council houses owe that to the Government's courage and determination.

asked the Prime Minister if she will list her official engagements for Tuesday 14 May 1985.

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

Will the Prime Minister note that tomorrow is the launch of the coalfields community campaign? [HON. MEMBERS: "What is that?"] I regret that that remark shows the opposition's ignorance. [Interruption.] It shows the ignorance of Conservative Members about organisations, led by many eminent people in the House and outside, representing over 11 million people who are worried by the Government's policies on colliery closures, which have raised unemployment figures to 18 and 20 per cent. in those areas. Will she send a message of congratulations to that campaign and insist that collieries do not close, except for economic reasons, unless there are replacement jobs?

No, Mr. Speaker. The hon. Gentleman is fully aware that he is asking for management to opt out of its responsibilities to manage and for unlimited amounts of subsidy from the taxpayer. He is well aware that this Government have poured more investment into the coal mines of the future than any other. He is also aware that there were more colliery closures under Labour than under the Conservatives.

With regard to the earlier question from the hon. Member for Jarrow (Mr. Dixon), will my right hon. Friend find time today to refresh her memory on what was known as the King's Lynn scheme whereby 100 jobs and 100 houses were offered to unemployed workers in Jarrow? Does she recall that only 36 people applied for those jobs and that, at the end of one year, only 15 remained in King's Lynn? Will my right hon. Friend consider getting in touch with my right hon. Friend the Secretary of State for Trade and Industry and asking him to send a load of bikes to Jarrow?

I think that we would all wish that we could bring more jobs to people. As my hon. Friend knows, that can be done only if more people are prepared to start up businesses and more goods are sold in this country and overseas. That means good design and good salesmanship. There is no other answer.

asked the Prime Minister if she will list her official engagements for Tuesday 14 May.

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

Will the Prime Minister take time this afternoon to ponder on the fact that, during Prime Minister's Question Time last Thursday — [HON. MEMBERS: "Reading".] I am not reading. I am prepared to let hon. Members see the document. Will the right hon. Lady ponder on the fact that, in response to a question from her colleague the hon. Member for Langbaurgh (Mr. Holt), she allowed herself to be misled, that in doing so she misled the House and that, in her anxiety to malign the honourable and dedicated teaching profession, she misrepresented the facts relating to the Endeavour school in Middlesbrough? Will the right hon. Lady agree this afternoon to accept a copy of a letter setting out the truth, which was written by a constituent of mine who is a member of the staff at that school? Having had that letter checked, will she have the decency and courage to return to the Chamber and admit that, yet again, she has got it wrong and apologise not only to the teaching profession but to the staff of a very dedicated establishment?

Of course I will receive that letter. I believe that the hon. Gentleman is referring to a question about a school where supervision at a meal times had been withdrawn. I understood that that school was in the constituency of my hon. Friend the Member for Langbaurgh (Mr. Holt) and that he was well aware of the matter. If I am wrong, I apologise. But I wish to see the facts.

On a point of order Mr. Speaker. We often consider the question of the Prime Minister's accountability to the House of Commons. Question Time is a treasured opportunity for Back Benchers to render that accountability real. Is it not important, Mr. Speaker, to remind the House that questions to the Prime Minister should be related to her executive responsibility and not to statements made by members of the Labour party and to matters that have nothing to do with her executive responsibility?

I think that I was in error in not pulling up the hon. and learned Member for Burton (Mr. Lawrence). Of course questions to the Prime Minister must be about her responsibility.

On a point of order, Mr. Speaker. Did you receive any nods or winks during Prime Minister's Question Time from members of the Centre Forward team? It has come to my notice that one of the members of the Centre Forward team—the right hon. Member for Chesham and Amersham (Sir I. Gilmour) — looks as though he was tripped up by a dirty centre half. His arm is in plaster.

I am sure that we all commiserate with the right hon. Member for Chesham and Amersham (Sir I. Gilmour). I do not always read the newspapers, so I do not know what the hon. Member for Bolsover (Mr. Skinner) is talking about.

On a point of order, Mr. Speaker, arising from questions to the Prime Minister. You will recall that the hon. and learned Member for Burton (Mr. Lawrence) asked a question that referred to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I ask you, in the interests of fair play, to ensure that my hon. Friend is given the opportunity to give his account of recent events, in view of the fact that not all statements in recent months and years on the Falklands have been shown to be entirely accurate.

The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) will have to seek an opportunity to do so.

On a point of order, Mr. Speaker. May I draw your attention to the fact that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) had the opportunity on the radio this morning to explain to the nation what he said in the Falklands? I think that when one reads the transcript one will—

Order. That is an extension of Question Time. We have already dealt with that matter.

With permission, Mr. Speaker, I should like to make a statement about the Government's proposals for legislation to give some relief to certain ratepayers in Scotland who have in 1985–86 seen the rateable values of their property increase very steeply.

In the August 1983 White Paper on rating reform in Scotland — Cmnd. 9018 — the Government reaffirmed our earlier decision to have a full Scottish revaluation in 1985. That was approved by all parties in Scotland and by the Convention of Scottish Local Authorities, which considered it important that the valuation rolls should reflect fairer and more up-to-date values.

As information became available from assessors about the likely general effect of revaluation, I took various steps to offset the more extreme effects. In particular, I have twice increased the domestic element of the rate support grant—by a total of some £88 million—so that it now amounts to 8p in every £1 rateable value for domestic ratepayers: and, because of the benefits secured by industry overall, I reduced the percentage of industrial derating from 50 per cent. to 40 per cent.

Nevertheless it is all too clear that there are still many domestic ratepayers whose valuation increases have been particularly steep and who still face very substantial increases in their actual rate bills. Furthermore, in the commercial sector, though the average effect of revaluation has been neutral, there are significant numbers of businesses facing very severe increases. No small business man, however enterprising, could ever have been expected to plan for a rates demand like some of the hugely increased bills that have now arrived.

The Government have therefore decided to introduce a scheme to help ratepayers faced with very high increases in their valuations. They will be given a new statutory right to claim 100 per cent. relief in respect of that part of their 1985–86 rates bill related to all of their new valuation which is in excess of three times their 1984–85 valuation. That will be subject to a limit to the total relief payment in the case of any particular subject, to ensure that maximum help is targeted towards the smaller businesses. The right will extend to domestic and commercial ratepayers alike; it will not extend to property occupied by local authorities and the Crown; public undertakings valued by statutory formula; and manufacturing industry and freight-transport subjects. The scheme will be administered by rating authorities, to which I shall reimburse the full cost of the payments. The new relief will have no effect on statutory rights of appeal or on other rights and duties, though where an appeal is successful, the amount of relief will fall to be adjusted accordingly.

The new relief is intended to ease the immediate burden arising from the high valuation increases that took effect at 1 April and will apply in the year 1985–86. I shall consider in due course whether there is a case for any special relief in 1986–87. I estimate that the relief will probably cost at least £50 million. That will be new money from the taxpayer.

A Bill providing for the new relief will be published as soon as possible. I hope that hon. Members opposite will, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) has already said, give support to us in our endeavours to bring the scheme into force at the earliest possible moment. There is no need for any ratepayer who thinks that he will benefit from the scheme to act until the Bill has been brought into operation.

Of course we welcome any decision by the Government that will help ratepayers in Scotland. It is—if I may say so—remarkable how fear concentrates the mind. A Secretary of State, who has repeatedly said, "Not a penny more," is now scrambling for safety. We do not complain about any retreat by the Government. We would welcome retreat in a number of other fields. However, it is a sad spectacle to see Scottish Office Ministers in incoherent and confused disarray, being driven from pillar to post and desperately claiming as triumphs policies that they never planned and which have been imposed upon them by public opinion and the wrath of their own supporters. The pass has been dragged from the right hon. Gentleman, and the concession made only because necessity drives.

The Secretary of State's statement was ingenious. No hint was given to the faithful in Perth that the scheme would extend beyond the commercial sector. The scheme looks much less generous to the commercial sector once the whole domestic sector has been included.

What percentage of the £50 million will go to commercial, and what to domestic ratepayers? We will want the limit figure to be designed to make sure that the lion's share does not go to supermarkets and national chains but helps those who are really at risk—those under pressure. Will the Bill settle such matters? Will the Bill contain details, or is it to be an enabling Bill and will we have to wait for an order?

The Opposition will wish carefully to analyse the effect on the domestic sector. I suspect that there will be little cheer for those at the bottom end of the housing market and the vast majority of council tenants. We will wish to take a long, hard look to make sure that a disproportionate share does not go to Eastwood, Pollokshields, Newton Mearns and Ayr. We recognise the difficulties and the tottering prestige of many of the Secretary of State's hon. Friends in their own areas, but there is a limit to the distortion of the pay-out that will be acceptable to us.

Will there be a cut-off on the amount of relief to an individual householder, analogous to the one that the Secretary of State has announced for commercial ratepayers? How does he estimate the impact of this announcement on the average increase in the domestic rates bill in Scotland? I am sure that he has made the calculation.

I welcome the fact that this is to be new money and that the right hon. Gentleman has assured us that the Scottish Office budget will not be raided in any way to meet the bills, but it is essential that guarantees be given that the help will be extended throughout the remainder of the quinquennium. It would be fraudulent to offer help in 1985–86 but leave those who receive it now to bear the full impact in subsequent years. That would confirm the feeling that the whole exercise was a squalid manoeuvre designed to defuse the explosion of rage at the Tory party conference.

It may be unfair to mention the somewhat unpleasant subject of the Chancellor of the Exchequer. However, we cannot ignore the Chancellor's harsh arrogance at Perth, when he is reported as having said:

"no more money is likely next year…he would not be in the same unaccountably open-handed and generous mood."

I hope that the Secretary of State accepts that will not do. During the passage of the Bill we will want to be given an undertaking that at least in principle—we will not hold him to exactly the same level—this help will continue to be available throughout the rest of the quinquennium.

If we are satisfied on those matters, we will of course help the Bill through. We want all the cash that we can get from the skinflint Treasury that landed us in this mess and ought to foot the bill for it.

The crisis is not over. The Secretary of State has not muddled through with this announcement. The root of the trouble has been not just revaluation but the constant and vindictive assault on local government finance for the past three or four years that has deprived local authorities in Scotland, on our calculations, of about £1,000 million since 1980–81. If the Secretary of State would reverse that policy, he would be doing the greatest favour to ratepayers in every sector and would give the system a breathing space that would allow us all to look for the considered and effective method of reform that the Opposition certainly want.

The last part of the statement of the hon. Member for Glasgow, Garscadden (Mr. Dewar) is wholly incorrect. If I did what he recommended at the end of his rerbarks, councils would merely spend even more and ratepayers would face even bigger rate increases. It was an extraordinarily ineffective smokescreen from an hon. Gentleman who has always supported the principle of five-year revaluations, who pressed for the revaluation to be this year and not postponed further, and who knows perfectly well that the level of the increases proposed are the job of the assessor, and not in any sense of anyone else. His criticisms of that are wholly without foundation, and he knows it.

As for the hon. Gentleman's suggestion of a retreat, this is the normal statutory process, which he fully supports. The Government have not merely produced assistance first for domestic ratepayers and now for commercial ratepayers, but produced assistance which is vastly greater than anything for which the hon. Gentleman asked and, indeed, than the maximum demanded—the Liberal party asked for the maximum, which was about £4 million to £5 million. We are providing £50 million, and that shows who in Scotland cares about helping ratepayers. The hon. Gentleman should recognise that.

Regarding the hon. Gentleman's question about the sum, the difference between £40 million, which I mentioned earlier, and £50 million, which I gave today, is accounted for by the fact that the latter includes domestic ratepayers. The previous figure referred only to commercial ratepayers, as the hon. Gentleman will now realise.

I have still to collect the fullest information about the limit. I have in mind a figure of the order of £10,000, up to which any one subject would benefit from the help. The hon. Gentleman must wait and see the terms of the Bill when it is published. The Bill will arrange for the principle of the matter and regulations will spell out the details in full, and they will obviously be debated.

I gave my right hon. Friends the Prime Minister and the Secretary of State for Scotland my warmest congratulations on what they achieved for domestic and commercial ratepayers. The assistance is more than was asked for by the Labour Opposition, the alliance and the National Federation of Self-Employed and Small Businesses.

Now that my right hon. Friend has made that great achievement, will he put tremendous pressure on high-spending authorities, and will he give the money that he saves from them to prudent authorities, which need the resources for essential services?

I appreciate my hon. Friend's last point, and I shall bear it in mind. Regarding high spending, my hon. Friend knows, as I do, that of the average increases which ratepayers face, one third is caused by the rate support grant or inflation factor, and two-thirds by the overspending of irresponsible authorities. Ratepayers in Scotland will fully realise that truth, and will be interested to see that the Opposition's attitude to the package is not in support of ratepayers' interests.

It is wonderful to hear the Secretary of State lecturing the House on how much money he has managed to find, when he has often told us how difficult it is to find money. Obviously, we welcome the fact that he has responded to pressure from all sides.

Does the right hon. Gentleman recognise that a one-off settlement this year will not be enough? Does he recognise that, if all commercial ratepayers received relief this year, he would merely be delaying the execution of many small businesses? As he has found this sum to meet the rate crisis, cannot he now come forward with new money to meet the education crisis, or is that simply a sign of the rather warped priorities of a Government threatened with extinction in Scotland?

The Prime Minister and the Secretary of State have promised to reform, and indeed to abolish, the rating system. How many more times will they make that promise before they get round to doing it? Can we expect legislation in this Parliament to obviate the need for an emergency package simply to save the Secretary of State's skin rather than to deal with the underlying problem, which was caused by the Government's cuts in rate support grant and in funding to local authorities?

I admire the hon. Gentleman's courage in speaking on this issue when, for the past couple of months, he has purported to be campaigning for commercial ratepayers, but got all his figures hopelessly and completely wrong from the start. He was only £35 million out on what is needed to help commercial ratepayers in Scotland. Extra help for next year will be considered at the time of next year's general settlement.

As for the teachers, I do not know where the hon. Gentleman has been for the past few months, but since December there has been an offer on the table from me not only to consider a package from the teachers but to find more money from the Scottish block to help them. The only problem is that they have not taken up that offer.

Will my right hon. Friend give top priority to the reform of the rating system within this Parliament? Does he accept that his statement will be greatly welcomed by many thousands of small business men, who will owe their survival in Scotland to his decision? Is not the figure that he announced much more realistic than the one tenth of that figure suggested in the House a few days ago by the hon. Member for Gordon (Mr. Bruce)?

I am grateful to my hon. Friend, and I can confirm that the ministerial committee, on which my hon. Friend the Minister responsible for home affairs and the environment sits, is considering local government finance with a view to producing proposals for change. As to helping commercial ratepayers, whereas many people have talked about it for months, the Government have acted, and commercial ratepayers will be grateful for that.

While we obviously welcome this further attempt by the Secretary of State to extricate himself from a mess of his own making, may I tell him that, if he believes that it will resolve the rating crisis, he will soon be disabused of that notion? The extra £10 million for domestic ratepayers will reduce the average increase in their bills this year from 21 per cent. to about 20 per cent. If the right hon. Gentleman believes that that will satisfy domestic ratepayers, he could not be more out of touch with the feelings of ratepayers in Scotland on this matter. In any case, why does he not tell us the whole story? The crisis relates not only to revaluation but to successive cuts in rate support grant. Is it not utter hypocrisy to talk about the £50 million being new money when we know that, before the summer recess, the Secretary of State will impose penalties of £100 million on Scottish local authorities? He will be imposing penalties twice as great as the sum that he announced this afternoon. Is it not complete humbug to talk about this being new money?

I do not know whether the right hon. Gentleman has done a U-turn. If he is with the rest of his party, he solidly supports revaluation, believes that it should take place every five years, and believed that it should take place this year. I hope that that is now clearly on the record. He cannot shelter behind the fact that it was someone else's decision; he supports it. The objective of the help for commercial and domestic ratepayers is to give 100 per cent. help, subject to a cut-off, to those with the biggest increases. It will do that, and they will be grateful for it. I admire the right hon. Gentleman's courage in mentioning cuts in the rate support grant. Only he ever cut it by 4 per cent. in one year.

The ratepayers in my constituency will be relieved that the Secretary of State acted so quickly. The ratepayers in commercial premises in Angus will be especially relieved, because their rates would have exceeded greatly those in other areas. Does my right hon. Friend agree that this is another example of the Government acting quickly to reverse problems that were created by Labour legislation, and that that has been the record of the Government during this Parliament? The humbug is on the Opposition Benches.

My hon. Friend is perfectly right. He is particularly concerned about the ratepayers in Angus, about whom he has been in touch with me many times over the past few weeks. I am glad that he has confirmed that this measure will be a help to those ratepayers. I am also glad that my hon. Friend mentioned speed, because at every point in its process, which was supported by the Opposition parties, all of whom agreed that there should be revaluation now, as soon as the Government have seen the information about what the scale of the increase will be, we have responded with extra help, first for domestic and then for commercial ratepayers. It is only the Opposition parties, with their blinkered attitude to helping ratepayers, who have not welcomed this speedy, efficient help.

Is the Secretary of State aware that the scheme that he has announced today will still leave a substantial body of ratepayers paying 300 per cent. more than they have previously paid for rates? Does he think that he can project himself as a Santa Claus by coming with £50 million when the Government have just spent £450 million on an airfield in the Falklands? We have to keep the matter in that context. As the right hon. Gentleman accepts that there is a case for relief in this year, he cannot deny that this relief must be continued on an even wider scale until the Conservative Government relieve the ratepayers of the present system.

I explain again to the right hon. Gentleman, as it may not have been clear from what I said, that no ratepayer in Scotland, either commercial or domestic, will be facing an increase of 300 per cent. I have said that three times the rateable value will be the trigger for this help, which will mean that increases in what ratepayers have to pay will he paid at a much lower level than that. I am not responsible for airports in the Falklands, but only for airports in Ayrshire.

Is my right hon. Friend aware that the ratepayers in the city of Aberdeen and in Grampian region will not share the view of the hon. Member for Gordon (Mr. Bruce) that my right hon. Friend has a warped sense of priorities in bringing forward such a measure of relief but that they will thank him for it? It is good that smaller businesses will benefit from this, as a large number of commercial concerns in my constituency were suffering and will welcome this measure.

I am grateful to my hon. Friend, and he is right to say that our principal objective for commercial ratepayers has been help for small businesses. Strong representations about the increases have been made to us by those people, and I am glad to be able to help. I could not more agree with my hon. Friend. It will be interesting to have on record that the hon. Member for Gordon (Mr. Bruce), and I presume the Liberal party, think that this is a wrong set of priorities.

Whatever the motivation of this statement, it is a significant one, as it changes the rates liability for, a minority of ratepayers, both domestic and commercial. How many people does the Secretary of State expect will benefit? Is it the intention to have a discretion about the upper limit of relief? Will there be consultation with COSLA and the assessors association before the regulations come to the House?

I am grateful to the hon. Gentleman for making an important point. It is unusual, and I do not know whether this has ever been done before in Scotland following a revaluation. As to the numbers affected, I expect — it is difficult to be precise — that this will probably help about 50,000 commercial ratepayers and it might help as many as 250,000 domestic ratepayers. The regulations will spell out the methods by which this will happen, but the Bill will spell out the general principles of allowing help to be given to commercial ratepayers, which is not possible at the moment.

I warmly congratulate my right hon. Friend on his success in obtaining fresh funds to help the hardest pressed Scottish ratepayers. His statement will be most warmly welcomed by the many family owned businesses, particularly in Strathkelvin and Bearsden, which are facing significant increases in their rates bill this year.

Further, does my right hon. Friend agree that it is a measure of the pathetic inability of alliance Members to calculate figures that two weeks ago they were seeking relief amounting to £4 million for commercial ratepayers as opposed to the £40 million of relief which my right hon. Friend has announced today?

I thank my hon. Friend for his welcome of this measure. I can only contrast it with the fact that the Opposition, including the Liberal party, appear to be highly unhappy about the fact that we are providing help which is not only generous but about 10 times the maximum level asked for by any of the Opposition parties. It is clear who is prepared to put their money where their mouth is for Scottish ratepayers.

Would the Secretary of State care to explain to the House exactly what he means by "new money"? Is this not recycled money? He has won back from the Chancellor money which the Chancellor had already taken. Will he explain to the House the position about revaluation and the rating system in Scotland? Would it not be better for him to say that he is interfering with revaluation and that we ought to postpone the whole exercise so that local government finance can be placed upon a reasonable footing?

The answer to the hon. Gentleman's first question is that "new money" means what it says. It will not lead to reductions in any other part of the Scottish Office programme. Therefore, it will come from the contingency fund. As for the hon. Gentleman's second point, he is absolutely right. This is interfering with the results of revaluation. Whether or not he has decided to change his mind, I would remind him that he, through his party, has solidly supported revaluation.

I have not.

Yes — under the leadership of the hon. Member for Glasgow, Garscadden (Mr Dewar) and his predecessor, I was pressed to ensure that revaluation took place this year. So did the Convention of Scottish Local Authorities. As for its interfering with the results of revaluation, of course it is, because we can see the hardship that it is causing to domestic and commercial ratepayers and we are prepared to do something about it.

I apologise to my right hon. Friend for having missed hearing him make his statement, which will be warmly welcomed by those in the commercial sector who are most affected. Is he aware that for the average ratepayer in Fife the real problem lies with the overspend by 8p in the pound of Fife regional council? In addition to helping those who have been hit by revaluation, can my right hon. Friend assure the House that he will shortly be announcing selective action against wildly overspending authorities such as Fife?

My hon. Friend is absolutely right about the effect of overspending. As I said a few moments ago, two thirds of the increase that, on average, people are facing in Scotland is due to the overspending of councils. That is the main point and my hon. Friend is quite right to make it. As for the rest of his question, I agree that this matter will have to be carefully considered, but I am not yet in a position to make an announcement about possible selective action against any particular authority.

Will the right hon. Gentleman accept that the word "overspending" is a Government term plucked out of thin air, and that it is based on nothing else? Secondly, will he accept that this turmoil did not arise over previous revaluations, because the rate support grant settlements at that time anticipated events? Finally, will he discourage his hon. Friends from insulting local authorities which will have to deal with the changes that have been announced in this statement, because their good will is essential if they are to rescue their ratepayers from the muddle created by the Government?

The hon. Gentleman is failing to give the whole picture—unintentionally, I am sure—when he questions the level of overspending. The truth is that local authorities in Scotland are still planning to spend next year nearly 2 per cent. more in real terms than they were spending in 1979. That is a measure of the overspending of certain councils, bearing in mind that a large number of councils—about half of them—are not overspending but are spending within the guidelines. That puts the matter into perspective. I hope that the hon. Gentleman will agree that, whether or not we wish it to be that way, all Governments have to exercise some control over local Government spending. The hon. Gentleman's own Government, when he was in COSLA, had to propose in 1976 the most stringent and severe reductions that were ever made. The hon. Gentleman should recognise that the right hon. Member for Glasgow, Govan (Mr. Milian) did that.

Does the Secretary of State forget that, long before revaluation, both parties of the alliance called for the relief of commercial ratepayers from the burdens of revaluation and from the system, which we called upon him to change? Does he remember, though he dismissed this appeal in the House at the time, that we pressed him to take commercial subjects into general taxation and out of rates altogether and to allow local authorities to recoup some finance by way of charging for their services? Therefore, his attack on the Liberal party is wholly misplaced. The Liberal party and the Social Democratic party have been urging radical reform. If the Secretary of State chooses to overlook this fact, commercial ratepayers in Scotland, like commercial ratepayers in England, will not, when given the opportunity.

If the hon. Gentleman and his colleagues have been campaigning for not having a revaluation, they have been doing it silently, which seems to be a very strange way of going about it. I have looked up the record. They did not object to revaluation or oppose it in any way. The hon. Gentleman may have been campaigning for the relief of commercial ratepayers, but I have not noticed him doing so. If he was, he was calling for a maximum sum. The biggest sum was about £5 million. [HON. MEMBERS: "No."] That is the biggest sum asked for by anybody. Most of them were much smaller. This Government have produced a great deal more money. From his neutral position in between the two parties, I should have thought that the hon. Gentleman would be glad to congratulate the Government upon having done so.

Will the Secretary of State let us in on a wee secret about the priorities which were in his mind when he was compiling this interesting package? Was it, on the one hand, the resolution of the long-term problems of local government finance in Scotland, or was it, as some of us believe to be more likely, the short-term preservation of Conservative seats in Scotland?

The priority which I have had in mind, if the hon. Gentleman has not, has been the plight of those ratepayers who have suffered very large rates increases. I am prepared to do something about that. The hon. Gentleman, apparently, is not.

I welcome the statement that has been made by the Secretary of State for Scotland. It will give me the opportunity to tell the good people of Kilmarnock, hopefully on Radio West Sound tonight, that the representations and protests that I have made steadily over the past six months to the Secretary of State on their behalf have eventually borne fruit. If the £50 million which is to be paid back is added to the £38·5 million that was previously redistributed to ratepayers in Scotland, it totals almost £90 million. If this had been added to the cut in rate support grant in 1984, it would have brought the rate support grant back to the level at which it stood last year, a level which the Opposition have been arguing for the past nine months ought to have been retained. It will be a financial nightmare to try to work out this formula. We await with interest just how much pleasure or displeasure will be shown by some ratepayers over the pay-out system.

I am very encouraged to learn that the hon. Gentleman, who is a constituency neighbour of mine, has, apparently, second sight. I understand that he started campaigning for help six months ago. He was therefore in the position of supporting revaluation, but before he knew the results of revaluation he demanded that it should be modified by help for commercial ratepayers. That is very nice to know. I am grateful for the hon. Gentleman's welcome of the proposals. May I reassure him that the calculations are relatively simple to make. If one's valuation has gone up by more than three times and one is either a commercial or a domestic ratepayer, one is entitled to help on this basis of 100 per cent. of the amount applicable to that, above three times, subject only to the £10,000 cut-off.

The right hon. Gentleman is wrong in stating that in 1983 everybody in Scotland was in favour of the 1985 revaluation. May I remind him that some of us have been warning him not only about the effects of the 1985 revaluation but also about the effects of the 1978 revaluation, because revaluation in England has been halted since 1973. In 1978, I had the right hon. Gentleman's support against that revaluation, but at the time he was in opposition. When will the Government and all the other political parties in the House stop tinkering with the rating system in Scotland, abolish it and the assessors' departments and introduce a 100 per cent. Government grant? When will they get rid of all this and allow local authorities to spend their money in whatever way they want? That is the only solution; I hope that the right hon. Gentleman will allow that to be considered during the passage of his Bill.

I appreciate the hon. Gentleman's point. Perhaps I have done him an injustice. I always assume that, whatever the Labour party is in favour of, he will be against. I should have realised that earlier. I notice his wish, which I have known for a long time, to abolish the rating system altogether. That is one of the things that will be taken into account in the further review that is now under way.

Will the right hon. Gentleman accept that the real crisis in local government is that he has taken £1,000 million from local government since 1979 and that Fife region has suffered severely from that policy. If Conservative Members want to change the policies of Fife region, they should do so by the ballot box at local authority elections, not by Government diktat. Will the right hon. Gentleman now answer one question that he has so far omitted to answer? Will there be relief for domestic and commercial ratepayers next year—yes or no?

On the £1,000 million, the hon. Gentleman has made a calculation of what might have happened, but he has ignored the fact that local government spending has gone up in real terms since 1979. That puts his remarks entirely in perspective. Ai a time when many other parts of the public sector have had to cut back, local government has not yet succeeded in doing so.

I appreciate that Fife region would like to spend more money, but I note that it appeared to have no difficuIcy in finding £2 million to spend in support of striking miners, so it cannot have been that pushed for money.

I have already said that next year will fall to be considered in the normal way when next year's public expenditure is under consideration.

Why does the right hon. Gentleman keep insisting that he has acted on the basis of new facts, when the Government must have known the effect of revaluation six months ago? Is it not the case that the only facts that the right hon. Gentleman has taken into account over the past few weeks are the opinion polls in Scotland, local government election results and the letters that he has been receiving from thousands of his constituents and from his Back Benchers?

Will the right lion. Gentleman accept that the answer that he has just given about next year simply is not good enough? Will he make it clear that he repudiates the statement made by the Chancellor of the Exchequer at Perth last weekend and that if he does not win the argument between himself and the Chancellor in the Cabinet he will resign as Secretary of State for Scotland?

On the question of new facts, the hon. Gentleman needs to study the timings of this revaluation a bit better. Nobody, not even the Secretary of State, can know the results of the assessors' calculations before the assessors have made them.

The right hon. Gentleman was warned by the assessors as far back as November last year.

The hon. Gentleman anticipates what I am about to say. The first information came in late October. As soon as the first information was to hand I took action and raised the domestic rate relief from 1p to 5p. When the further refinement of the figures was available in February we went further and at the first moment increased the 5p to 8p. During the last few weeks we have been assessing the details of the assessors' views on the valuations for the commercial subjects. In the face of the fact that there is no legislative provision for helping them now, we have assessed the matter and have produced proposals and a larger sum of money than anyone asked for in order to help them. In all honesty anybody who is being at all objective would say that that is a pretty good response to a difficult problem.

Reference has been made to the contents of my ten-minute Bill and I want to take the opportunity to put the record straight. First, I welcome the proposal. I do not want to be niggardly about that. I think that my hon. Friends will also welcome it. Anyone who studies my introduction to the ten-minute Bill will see that I talked about £5 million being a start, but, there is an important second objective in the proposal that I was putting forward. It is that the Bill was designed to help those whose increases were in the same order of magnitude as the level of profits. My worry is that some of the £40 million will go to a lot of businesses in Scotland which do not need that to survive. That is why there is a difference in scale. It is a bit unfair for the Secretary of State to imply anything different about the scheme which was worked out by the National Federation of Self-Employed and Small Businesses.

I have made no mention of the federation; I have been referring to that august body, the Liberal party, which has been posing as the supporter of the commercial ratepayer without the faintest idea how much money was being asked for or what it was for. With great respect to the hon. Gentleman, before he introduces another ten-minute Bill he had better get his figures right.

A threefold increase in rateable value will be necessary before commercial or domestic ratepayers are eligible for this new form of relief. I know that the Scottish Office will reimburse the authorities' expenses, but how will the money be paid out by the rating authorities? The Secretary of State said that in the commercial sector the average effect of revaluation had been neutral. How many in the commercial sector fall between that neutrality and the threefold increase in rateable value that was referred to in the statement? How did the right hon. Gentleman work out that those eligible in the commercial and domestic sectors will roughly equate to £40 million and £10 million?

Finally, the Secretary of State says that it is not his job to do the work of the assessors. May we take it that in terms of administering the scheme he is really proposing that the cut-off point of the threefold increase should be entered into the valuation roll, or will it simply apply to the demand notices for 1985–86? With hindsight, does he not wish that he had looked a bit more closely at the provisional figures that he was receiving last November instead of creating all this chaos in the rating and valuation system?

On the hon. Gentleman's last point, however closely I looked at the figures given in November they showed the commercial sector as neutral. It was only when the detailed figures began to come through that we discovered, as did the hon. Gentleman that while the generality is neutral there are some with vast increases at the top end, and, of course, there are also some with vast reductions, but people keep quiet about that.

The hon. Gentleman asked about the method and the threefold threshold. That has to be seen against the background that the average increase in valuation for domestic ratepayers is 2·7 times. That is pretty generous in that it is pretty close to three. For commercial ratepayers the average increase in rateable value is 2·2 times and, again, we cannot be said to be ungenerous when we are going to start the extra help at three times. I think that most hon. Gentlemen will agree with that when they think about it.

As for the commercial sector being neutral, I cannot make the calculation at the moment as to how many are not affected by the assistance, still less the breakdown between those who are between the 2·2 times and the three times and those who are below 2·2 times and who will therefore receive reductions in their rates. It is difficult to give those figures, but, as I said earlier, about 50,000 of the worst affected commercial ratepayers will get this relief for which I am sure they will be grateful.

A ratepayer who feels that he comes within the scheme need do nothing immediately, but, if the Bill is enacted, he will apply to his local authority for relief which he will get in due course. On the method of doing that I shall have to consult COSLA and obtain its views.

I beg to move,

That leave be given to bring in a Bill to make further provision as to the circumstances in which possession of a dwelling-house is recoverable under Case 11 in Schedule 15 to the Rent Act 1977 and Case 11 in Schedule 2 to the Rent (Scotland) Act 1984 and as to the parliamentary procedure applicable to an Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 which states that it is made for corresponding purposes.

The Bill seeks to put right a flaw in two previous Rent Acts which has come to light only recently as a result of an Appeal Court decision.

It was the universally held view that case 11 of schedule 15 to the Rent Act 1977, which repeated the provisions of the Rent Act 1965, meant that an owner who let his or her home on a contractual tenancy while he or she was away could repossess that home once the contract had ended. The Appeal Court, however, in the recent case of Pocock v. Steele found that, because there had been a further letting during the absence of the owner, that provision did not apply. Therefore, my constituent, Mrs. Pocock, was unable to get back her home and her possessions inside it.

The result of that judgment is that many people who have let their homes in good faith for a short period while they are away overseas—perhaps on Crown service or on private business—may not now be able to repossess either their homes or their goods and chattels inside their homes.

The purpose of the Bill is, therefore, to restore the law to that which Parliament thought it was when it enacted those measures—first, the Labour Government in 1965, the Labour Government again in 1977 and the Conservative Government in the Housing Act 1980. We seek to restore the position to that which every Member of the House thought it was at the time when those measures were enacted.

It will not be news to the House that this sort of legislation cannot be enacted by a private Member without the consent of all the parties in the House. I am happy to say that this is one of the more civilised occasions in the House when all parties are agreed that the Bill should become law at the earliest possible moment.

I am grateful not only to the hon. Member for Copeland (Dr. Cunningham), but to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) who has written to me in generous terms:

"I write on behalf of the Official Opposition to confirm that we have no objection to your proposed Bill. Indeed we hope it reaches the Statute Book."

I am grateful also to the hon. Member for Southwark and Bermondsey (Mr. Hughes), who speaks on housing matters on behalf of the Liberal party, and to the hon. Member for Woolwich (Mr. Cartwright), who does the same on behalf of the Social Democratic party. The fact that I have not contacted hon. Members representing all the minor parties is a matter for which I apologise, but I have been unable to identify who speaks on this matter.

I therefore hope that I shall be given leave to bring in the Bill and that, with the help of all concerned, it will have a speedy passage through the House and become law, so that the law returns to that which we all thought it was until the Appeal Court, in its correct independence, informed us otherwise.

Question put and agreed to.

Bill ordered to be brought in by Mr. Michael Mates, Mr. John Cartwright, Sir Paul Hawkins, Mr. John Heddle, Mr. Simon Hughes, Mr. Allan Roberts and Mr. Neil Thorne.

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

The House is familiar with the background to the Bill. Over the last six months we have had two reports from the Select Committee on Energy and, as a result of the reports of that Committee, we have had two debates on the Supplementary Estimates which the Government have asked the House to approve for grants to cover trading losses of BNOC. On 13 March I announced the Government's conclusions regarding the future of BNOC. At this stage I should like to pay tribute to the work of the Select Committee on those two reports.

I appreciate that the conclusions to which the Government have come are not of course the conclusions of the Select Committee, but it is significant that the analysis that led up to those conclusions was very helpful to the Government in reaching their conclusions. Indeed, I think that there is not a great deal of difference between the Government's analysis of the background and the analysis of the Select Committee. I certainly pay tribute to the work of the Select Committee leading up to the Bill. I wholly accept that the Select Committee will not neccessarily agree with the Government's conclusions, and I make that point plain. The analysis was very helpful, as was the evidence taken by the Select Committee.

When I announced the Government's conclusions on the future of BNOC I mentioned—and I repeat today—that it is our belief that the balance has shifted decisively against the retention of BNOC in its present form. At the time of the announcement and in the brief debate on the report of the Select Committee, I made it clear that the Government believe that there are a number of functions currently performed by BNOC that should be retained. First, there is the function of the custody of participation agreements; secondly, there is the power to dispose of royalty in kind; and thirdly, the power to act as agent for the Government in the management and running of the Government's oil and pipeline system. The conclusion that I announced on 13 March was that it was appropriate to establish a small oil and pipelines agency to perform these functions. The Bill, if approved, will give effect to these conclusions.

I do not intend to go into all the details and the background of the reasons for the abolition because I outlined those in my statement, and the House considered them in the debate on the Supplementary Estimate initiated by the Select Committee.

The Bill seeks to preserve what we believe to be of continuing value with regard to BNOC's current institutional arrangements and to discard those parts of its arrangements which we believe have become outdated or in some cases a potential liability. The one item which we believe is outdated and has a potential to become a liability concerns the contractual arrangements under which BNOC acquired and sold participation oil. Although, as I freely acknowledged in earlier debates in the House and in my evidence to the Select Committee, that is a function which has been important in the past and one which BNOC has performed with distinction, I believe that for a number of reasons it has now ceased to provide a means to prevent instability. It was in the means to prevent instability that the main purpose of the exercise of this function lay. The reason, as I explained to the House previously, is that in recent years, and particularly in recent months, we have seen fresh developments in the market which I believe give these arrangements for contracting and trading in participation oil the potential to spark off a cycle of competitive undercutting which, far from being a force againt destabilisation, would run a serious risk of dragging down prices to an unsustainable level.

That was very much the basis of the evidence that I put before the Select Committee, and which we discussed during our debate on the Supplementary Estimate. Therefore, we have had a full debate on that matter. Basically, it stems from the growth, not only in the United Kingdom but worldwide, in the spot market and the decline in contract sales at a term price. As we do not envisage those forces changing in the foreseeable future, we believe that it is right to change the institutional arrangements to take account of the changes in the oil market over recent months and years.

I wish to make it clear that this is not a case—as the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) tries to make out—of trying to cut down some lame duck state corporation that has been losing money through inefficiency or failings. That is most certainly not the Government's view. What we are doing is no reflection on the corporation or its staff. The corporation maintained its prices after consultation with the Government and taking account of the national interest. It is our continuing belief that those decisions were correct in the national interest. However, because of those decisions it was necessary to come to the House for a Supplementary Estimate to cover the losses. Our proposals today are a reflection not on the staff or the operation of the corporation, but simply on the development in the structure of oil markets that we have discussed at length on previous occasions.

Although we are discarding the major function and purpose of BNOC, it has other functions and purposes. One of those, to which the Select Committee attached importance, is security of our supplies. That is central to the whole matter. On its other functions, while there were contract sales at term prices BNOC served a useful purpose in providing transparent evidence of arm's length prices for North sea oil. That was helpful to the oil taxation office for transfers of oil within integrated oil companies. However, that must be considered apart from the structure and organisation of BNOC, because the virtual disappearance of term prices for oil destroys the value of the diminishing evidence available to the oil taxation office. Therefore, although it served a useful purpose in the past, it is not appropriate in the changed market circumstances.

Even if we accept what the Minister says—which we do not—what steps are the Government taking, through the oil taxation office or by any other means, to deal with changing circumstances to ensure that the taxpayer is not ripped off by fancy transfer prices or various devices to reduce the tax burden?

The right hon. Gentleman has a direct interest in these matters, so I am surprised that he does not agree with my analysis of the background. He knows that one of the problems that the Government have had to face —I am sure that he has read the evidence before the Select Committee — is that the loss of contract sales — with sales taking place at different values, sometimes at spot price — has thrown considerable doubt on the use of the prices established by BNOC for taxation purposes. Under the legislation, what is required is actual evidence of the price at which the oil passes from one affiliate to the other. The oil taxation office is in discussion with the oil companies about that —as it would have had to have been regardless of what we are doing in the Bill. It is an important issue, but one that would have arisen anyway.

Another useful purpose of BNOC has been as a marketing agency for smaller licensees. I know that many of the smaller companies have found it convenient and helpful to market through the corporation. However, I do not believe that it is in any way an essential purpose of the corporation. There are other possibilities, such as disposal to larger producers or—and discussions are taking place on this now — the possibility of setting up either independent agencies or co-operative agencies. Therefore, although that purpose was useful in the past, it is not one that necessarily requires or demands the need for intervention by a state corporation.

On the issue of security of supplies—

On the marketing of oil by the smaller companies, has my right hon. Friend sought any assurances, and can he confirm reports in the press, that the larger multinationals have reached an accommodation with the smaller companies, or are in the process of doing so?

Obviously, any arrangements are commercially confidential to those making them. I have certainly received indications that discussions are taking place. If the arrangements are not actually made, they are in the course of being made. There is also a certain amount of talk about other initiatives, such as the setting up of independent or co-operative agencies. I have not seen any evidence that shows that the normal commercial organisations will not be able to cope.

Of course they can cope.

The hon. Gentleman underlines his political motivation in wishing to keep in being a state corporation when there are perfectly adequate organisations available in the commercial sector.

I know that security of supply has concerned the House, and I made considerable reference to that during my speech on the Supplementary Estimate. It is important to look not only at the role that BNOC has performed in carrying out the contracts in participation oil, but to examine the background to the security of supply and the existing arrangements.

If, for example, there was an interruption of supply from the Gulf, we could turn to the international agreements—which have been refined and developed over the years and especially since BNOC was established —through the International Energy Agency and the EC to make arrangements to take care of any severe disruption. I use the words "severe disruption" advisedly because the international arrangements under the IEA can be triggered only where the shortfall is of the scale of 7 per cent. or more of OECD country supplies. Therefore, the IEA arrangements exist where there has been a severe disruption. Where there is a less severe disruption there are informal arrangements.

Where there is severe disruption the arrangements through the IEA guarantee to the United Kingdom an appropriate share of the remaining production in the free world, irrespective of the companies. corporations or agencies that may be handling the production. Where the shortfall is big enough to trigger the international obligations, access to North sea oil is not as important as it may have seemed at one time. In any case, as a fallback under the Energy Act 1976 the Government have power in a crisis to control oil production on the United Kingdom continental shelf, whoever produces it and whatever the contracts may be.

On security of supply the real concern must relate to minor interruptions up to the 7 per cent. trigger point which comes under the IEA agreement. Again we must remind ourselves that in that case it is not an interruption of access to crude oil that matters, as has been shown in the past, but rather access to the oil products that are needed by industry, transport and so on. The real burden of the responsibility to meet a crisis of a smaller nature would fall on the private refining and marketing companies which supply those products and not on the state itself or on any agency of the state.

The Government have obtained from the refining and marketing companies assurances that we believe would meet that kind of crisis. Most important, they are concentrated on products where the demand and the need would be. To put it in a form that is easier to understand, a shortfall of 7 per cent. is equivalent to 25 or 26 days of actual supply. Since, currently in the United Kingdom, subject to the informal arrangements that we have. stocks of products stand at 92 days' supply, obviously the arrangements we have with the refining and marketing companies are adequate to fill the gap and would give time to reactivate participation if it was felt to be necessary, and which the agency could do with the consent of the Secretary of State. Given the arrangements that I have taken some trouble to describe to the House, I do not believe that the abolition of BNOC should in arty way diminish the country's security of supply of oil or of its products, which are most important.

I have searched high and low to find the character and nature of the assurances upon which the Minister rests so much of his case. Are they published? Are they available? Will they be made available to the House or to the Committee on the Bill so that hon. Members can judge for themselves how real the assurances are?

These are informal assurances that the Government have from the oil companies. That is the basis on which they have been for some years. The Government and I are confident that they would be carried out in the kind of crisis I have described. The details are confidential. I. shall see whether I can give more information to the hon. Gentleman and to members of the Committee. As there is still a fallback in a time of real crisis to exercise the participation rights, I believe the arrangements I have described are adequate. I emphasise that in the Bill we are not abolishing the power to exercise rights of participation.

In regard to some of the other functions of BNOC which we are continuing under the smaller agency, we have the Government pipelines and storage system which covers 1,000 miles of oil pipeline and 41 oil storage facilities. Over the period that it has operated the system BNOC has built up an effective team. We intend to retain that function.

Another function that we intend to retain is the power to operate in royalty in kind. Of course, the Government remain entitled to royalty in kind. Therefore, I wish to retain in the new agency the mechanism to obtain the best possible price for the realisation of the royalty in kind.

I have mentioned specifically four main functions—the exercise of participation rights, which the new agency will not operate but which it will have the power to operate, subject to the agreement of the Secretary of State, should it be thought necessary to activate that power; security of supply; the operation of the pipelines and storage system; and the power to operate the royalty in kind.

The Minister talked about the role the agency will play in marketing the Government's royalty oil in kind. That figure is theoretically 280,000 barrels a day. In the past there have been sale-back arrangements. If they were continued or conceded by the Government they would leave the agency with only about 100,000 barrels a day to trade. Can the Minister tell us the intention of the Government in relation to the royalty oil in kind?

The arrangements made between BNOC and companies will be taken over by the agency. The power to operate the royalty in kind will be in the legislation. The functions may be changed in the future while royalties in kind continue to exist. As the hon. Gentleman knows, they will eventually be self-extinguishing. The agency will be empowered to trade in that oil. I shall explain that more fully when I deal with the clauses in the Bill.

The Government think it important to get the new organisation moving as quickly as possible. Because of market sensitivity it was necessary to announce the decision as we did. I understand the uncertainty that the announcement caused immediately. It is important for the future that the organisation of the new agency becomes clear as quickly as possible.

My right hon. Friend the Secretary of State has already announced the appointment of the chief executive designate who will become the chief executive subject to the passage of the legislation. Mr. Kenneth Vaughan joined BNOC in 1978. He is, therefore, already a member of BNOC's staff. Prior to that, he was for 20 years with BP, and he spent 11 years with the Kuwait National Petroleum Company. For the last three years his responsibilities in BNOC have related to the piplines and storage system and to LPG trading. We are fortunate to have the services of someone with his wide experience and, in particular, with his experience of BNOC.

My right hon. Friend hopes to make an announcement as soon as possible about the appointment of the chairman designate. The appointment of the chief executive designate will help the future management to decide on the staff necessary for the manning of the agency, and I know that Mr. Vaughan is pressing ahead with that. I do not want there to be any unnecessary uncertainty, and, as the organisational arrangements go ahead, the details will be made known in the appropriate way.

I will explain the main provisions of the Bill. Clause 1 provides for the establishment of the agency and lays down its board structure. That is a straightforward provision, particularly bearing in mind the background that I have described.

Clause 2 sets out the functions of the agency, with its responsibility for the disposal of royalty in kind, for managing the Government pipeline and storage system and for maintaining the participation regime which I have explained.

The agency will also have power to trade in petroleum on its own account, but such trading will be subject to the Secretary of State's consent. That consent will be given only for limited purposes. The first purpose is to enable it to maximise the proceeds from the disposal of royalty in kind because, in the course of trading, it may be desirable to do that. The existence of this provision will, I hope, make it clear that the agency need not be hindered for legal reasons from maximising the proceeds.

The second purpose is to ensure that the agency will be able to trade effectively in participation agreements, were they ever to be reactivated. But, as I pointed out, the agency will not be empowered to act as agent for disposing of anyone else's oil.

Will the agency be empowered to subcontract out the sale of royalty oil if it thought it economically desirable to do that?

The agency will have responsibility in that respect, but obviously it will have to exercise that responsibility from the point of view of proper commercial accountability.

There has been some discussion about the role that BNOC has so far performed in trading in liquefied petroleum gases. The Government do not see any reason for the public sector to remain involved in the LPG market. At present, BNOC handles less than 30 per cent. of the UK continential shelf production of LPG and under 20 per cent. of the total UK output, including that from refineries. The agency could retain sufficient volume of LPG to trade effectively only if it continued to exercise options to purchase LPG under participation agreements. That could not be justified with participation trading in crude oil—this is one of the main purposes of the Bill— being wound up. In any case, since January 1982 BNOC has been precluded from exercising new options to take LPG.

Clause 2 enables the agency to enter into new participation agreements, as determined by the Secretary of State, and to give effect to those and to existing agreements. However, it may not, without the Secretary of State's consent, elect to take petroleum under a participation agreement. It is the Government's intention that as new oilfields reach the development stage the licensees should continue to conclude agreements which enable the agency to participate in the oil produced.

It is the Secretary of State's intention to consent to the exercise of an option to take petroleum under such agreements only if such an exercise was finally justified by an existing or imminent threat to the security of the nation's oil supplies.

Clause 3 allows all the property, rights and liabilities of BNOC to be vested in the agency on a day appointed by the Secretary of State. Statutory vesting provisions have been a common feature of legislation introduced by all Governments in recent years and it is our intention, in relation to the agency, to establish it and to use the powers under the clause as soon as the Bill has been enacted, so enabling an orderly transfer to take place to it from BNOC.

BNOC will have to be retained in existence for some time--although in the latter stage very much as a shell —to enable it to draw up final accounts and effect the transfer of property, assets and liabilities. Clause 3(5) requires BNOC to be dissolved formally as soon as those tasks have been completed.

Schedule 2(2) makes provision for the contracts of employment of BNOC staff to be transferred in their entirety to the agency, so that the employees' terms and conditions are not adversely affected by the transfer. It also makes appropriate provision for pension rights.

Apart from altering participation agreements and BNOC's role in obtaining oil, selling it back and otherwise operating in the market, the Government could have reached the conclusion that BNOC should remain in place but should not, for the foreseeable future, set a price.

It is sad that the hon. Gentleman did not attend the meetings of, or hear my remarks before, the Select Committee. I said that it would have been perfectly possible to have done what he suggested — there is here a straight political divide between myself and the hon. Gentleman—but that we saw no point in keeping it in being if its function was simply to trade in oil at the market price, a function which others were perfectly able to do.

I appreciate that the hon. Gentleman is devoted to state organisation and interference in trading in this and other matters. However, so long as BNOC is not performing the function that it had before in relation to avoiding destabilising the market, and is simply trading at the market price, that purpose is, in our view, outdated. I am sorry to have to repeat that, and I do so for the hon. Gentleman's benefit.

Clauses 4 and 5 and schedule 3 make the financial provisions to enable the agency to perform the responsibilities that I have described.

I have paid tribute to the effective way in which the staff of BNOC have worked in the past. The board of BNOC is paying particular attention to the question of assisting the staff, the majority of whom will have to move from the corporation, although, as I have pointed out, some staff will be needed for the new agency.

The board has already told its staff the terms of the compensation arrangements for those who become redundant. That is a matter for the board, but I understand that the terms are in line with benefits paid by oil companies generally when staff are made redundant.

During April, my right hon. Friend the Secretary of State met Mr. Roy Grantham, the general secretary of the Association of Professional, Executive, Clerical and Computer Staff, and discussed the genuine anxieties felt by the staff. The corporation is providing special counselling services to help those who will become redundant. I am sure that the board will do all that it can to ease the transition and to solve the genuine problems faced by those whose careers will be disrupted as a result of the Government's decision.

The Bill is a direct consequence of changes in the oil market. Given those changes, although BNOC served an extremely useful purpose in the past and, as I have acknowledged, served it well, I do not believe that there is any longer a need to maintain a public body to carry out the activities that I have described, many of which can be equally well carried out in the private sector. The new small agency will be better geared to the limited functions that we are retaining. I therefore commend the Bill to the House.