My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

My Lords, the Soviet Union has a significant advantage of about 3 to 1 in land-based LRINF missiles in Europe. This imbalance is even more marked since each SS20 has three warheads. Details are contained in the annual Statement of Defence Estimates.

My Lords, did my noble friend see the tables set out in yesterday's issue of The Times, which showed that, in terms of warheads, NATO has 96 warheads in Europe whereas the Soviet Union has more than 1,400 warheads? That is a ratio of 15 to 1. Does that not show the necessity of carrying on with disarmament talks and trying to persuade the new Soviet regime to reduce this massive imbalance?

My Lords, I am not sure that I agree with the precise figures which my noble friend offers, but certainly they are of that order. The figures also underline how impossible it is for us to agree to a freeze with that sort of imbalance existing.

My Lords, can the noble Lord the Minister explain why he restricted his reply to land-based missiles? The Question asked by the noble Lord, Lord Orr-Ewing, refers to the total East-West longer-range intermediate-range nuclear forces. Surely the Minister's Answer should have included the Polaris and Poseidon submarines allotted to SACEUR, and all the French systems.

No, my Lords; I do not think it would have been right to include those figures. They never have been included, as the noble and gallant Lord will know. In any event, our system is of course a strategic system.

My Lords, bearing in mind the fact that the Russians have deployed new intermediate-range missiles since the breakdown of the talks, can the Minister say how the balance today compares with the balance when those talks broke down?

My Lords, again I fear that I do not have the precise figures before me, but certainly there has been an increase in the number of SS20s deployed during that time.

My Lords, as even a cruise missile is 15 times more destructive than the weapons used on Hiroshima, and since any one of them could destroy a city the size of London and all its inhabitants, is not questioning the numbers rather a lunatic exercise?

My Lords. I do not know about "a lunatic exercise", but it certainly makes all the more important the talks which are presently going on.

My Lords, was not the supplementary question asked by the noble and gallant Lord, Lord Carver, perfectly realistic in all the circumstances? Given that we are on the threshold of very important talks, would it not be best to allow them to proceed, hoping that they will be successful and that we may participate in due course, rather than have this rather useless exchange at this time?

My Lords, I certainly hope that the talks to which the noble Lord has referred will proceed and will be successful. The role of the United Kingdom is a peripheral one as far as those talks are concerned, because our own nuclear forces represent such a tiny part of the whole.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

My Lords, the Government do not intend to make representations to British Telecom about the design of call boxes. It would not be appropriate for the Government to intervene in a matter which is entirely for the judgment of the company.

My Lords, I thank my noble friend for that Answer. In spite of what he has said, may I ask whether local planning committees will be consulted before red boxes of Sir Giles Gilbert Scott's distinguished design are demolished wholesale? Furthermore, is there any chance that at least some of the existing boxes might be listed, as are, I believe, some pillar boxes?

My Lords, British Telecom's proposals allow for detailed consultation with a wide range of interested organisations, including groups for the disabled, local authorities, environmentalists, planning associations and representatives of business. Noble Lords should make their views known directly to the company.

My Lords, can the noble Lord tell the House what endeavours were made to ascertain public reaction to the proposed new colour and new design? Is the noble Lord telling the House that, in spite of the fact that Her Majesty's Government still have a majority holding in the company, they are willing to dissociate themselves completely from the spread of this hideous yellow rash over the countryside?

My Lords, British Telecom carried out a number of surveys and consulted widely before introducing their new proposals. I would point out that the Government do not hold a majority shareholding in British Telecom: theirs is a minority shareholding of 48½ per cent.

My Lords, is the noble Lord, Lord Brabazon of Tara, too young to remember that the colour red has not always had a political connotation? Indeed, when I was young the colour red on the map represented the British Empire.

My Lords, I am too young to remember that directly, but I certainly take note of the noble Lord's observation.

My Lords, will the Minister use his good offices to encourage British Telecom to keep to the red telephone boxes, of whatever design, because in very thick fog, which we still get in this country, red can be seen whereas other colours cannot?

My Lords, I understand that the new telephone boxes are to be made mainly of glass. However, they will be better lit than the existing boxes and should, therefore, be more visible.

My Lords, can my noble friend the Minister assure the House that, whatever design prevails, representations will be made by the Government to the company on the need for the disabled and those in wheelchairs to be able to use whatever telephone boxes are eventually chosen?

Certainly, my Lords; this is very encouraging news, particularly for the disabled and wheelchair-bound users of the boxes. The new boxes will be much easier for them. The doors will be big enough for wheelchairs to enter. The boxes will be flush with the ground, with no step. The actual machinery will be placed lower down so that it can be used from a sitting position.

My Lords, will the noble Lord explain to the House what is so objectionable about pillarbox red? Is he aware that in your Lordships' House red is favoured, albeit of a rather deeper hue? Does he anticipate the re-covering of furnishings in your Lordships' House in this sickly yellow?

No, my Lords, I do not anticipate that. On the other hand, I do not think we have proposals to sell your Lordships' House.

My Lords, is my noble friend aware that what the noble Lord opposite calls a "sickly yellow" and a "yellow rash" could, by a less jaundiced eye, be seen as a golden glow?

My Lords, I agree with my noble friend.

My Lords, will my noble friend tell the House what is the timescale of replacement and say whether large numbers of boxes are to be replaced in one area at one time or whether there will be a staged phasing over the country? Secondly, has the Royal Fine Art Commission been consulted about the design?

My Lords, to answer my noble friend's last question first, I cannot tell him whether the Royal Fine Art Commission has been consulted. I shall endeavour to find out and then write to him. It is a 10-year programme which involves the replacement of about 60,000 red telephone boxes with expenditure approaching £160 million.

My Lords, bearing in mind that the noble Lord said earlier that a number of bodies and commissions had been consulted, and bearing in mind also that he did not know whether or not the Royal Fine Art Commission had been consulted, which I should have thought was crucial. will he say which bodies have been consulted?

My Lords, I am afraid that I do not know the answer to that. I know merely that a number of bodies have been consulted, but I cannot give details as to which they are.

My Lords, does my noble friend the Minister not agree that the point about American telephone boxes is that the telephones in them actually work? Is that not the objective which British Telecom should have in mind?

My Lords, that is indeed the objective that British Telecom has in mind. It proposes to convert the public telephones into a modern, reliable and clean service.

My Lords, will the noble Lord say whether with the new boxes it will be easier to get your money back when you cannot get through?

My Lords, I think that that is a matter for British Telecom. I am not quite sure how the new boxes will work.

My Lords, may I ask whether, in the light of the enormous usefulness and convenience of these telephone boxes, when they are being replaced, a tribute will be paid to Fred Jowett, who was Commissioner of Works and installed them as far back as 1924?

My Lords, I think that the best I can do is draw the remarks of the noble Lord to the attention of the appropriate parties.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

My Lords, from 1st April 1985 family practitioner committees will be autonomous health bodies directly accountable to the Secretary of State. Within their statutory responsibilities they will continue to administer arrangements for the provision of family practitioner services; to monitor aspects of the quality of service provision, to investigate complaints and to inform the public, practitioners, community health councils, health and local authorities on matters for which they are responsible.

My Lords, I thank the noble Lord the Minister for that reply. Does the Minister agree that family practitioner committees do not have control of many of the factors concerned with family practitioner expenditure? How is it proposed to monitor this in the future? Secondly, will this new authority have responsibility for the recommended drug list, and if so, how?

My Lords, as regards expenditure, yes, the FPCs will be expected to monitor expenditure on the family practitioner services and also on their own administration. The management responsibilities of FPCs will encompass personnel, organisational and finance functions involving their own staff and administration. FPCs will be expected to operate within such guidelines and administrative cash limits as are notified to them.

As regards the limited list of drugs, any complaint that by prescribing or dispensing a scheduled item a doctor or pharmacist has breached his terms of service will be considered by the family practitioner committee in the normal way.

My Lords, will the noble Lord let me know whether the new system will help or hinder closer co-operation between local authority personal social services and the health service?

My Lords, our belief is that it will help.

My Lords, can the noble Lord tell the House what will be the estimated full cost of running these committees once they have taken over all their new functions?

My Lords, I am afraid that I do not have the figures for costs in front of me, but I shall let the noble Lord know.

My Lords, can the noble Lord tell the House whether the family practitioner committees under their new status will be cash limited? If so, how will that affect their capacity to employ more ancillary staff with the object of providing more services at primary level? Would all those doubts not be cleared up if the Government were finally to publish their Green Paper on primary care?

My Lords, cash limiting family practitioner services was one of the options which Binder Hamlyn was asked to look at, and until we have completed our studies of that report and the related issues no decisions will be taken on it. So far as publishing the Green Paper is concerned, the noble Lord will be aware that it pulls together other strands, apart from those contained in the Binder Hamlyn report. The noble Lord will have to wait and see.

My Lords, is the noble Lord aware that his negative answer to my noble friend Lord Cledwyn causes concern? The Government must have an idea of the cost of these committees. Will he eventually make the House aware of what the total cost is? Secondly, what will the relationship be in the future between community health councils and the new family practitioner committees?

My Lords, so far as cost is concerned, I am sorry, I do not have the figures. I shall of course let the noble Lord know what they are. To turn to the relationship with community health councils, the existing arrangements will continue and community health councils will have the role that they have at present. The importance of family practitioner committees generally should encompass district health authorities, community health councils and all those associated with them.

My Lords, I gather from what the Minister said that family practitioner committees are to be autonomous. If there is a dispute as to any action they take or decision that they make, who will be able to question it?

My Lords, we took the decision to change the status of FPCs—and I think that the noble Lord probably took part in the debates on the Bill last summer which dealt with this—because we saw an opportunity to increase the emphasis on primary health care within the NHS as a whole. The arrangements that will exist from 1st April will mean that FPCs are directly accountable to my right honourable friend the Secretary of State.

My Lords, will the noble Lord take steps to ensure that the figures for costs which he promised to let my noble friend Lord Wallace have are made available to the whole House? There is a public interest in this matter.

Yes, of course, my Lords. If the noble Lord would like to put down a Written Question I shall give the figures in that form; or, alternatively, I can put a letter in the Library. I can do whichever is suitable to the noble Lord.

My Lords, is the noble Lord aware that that answer is not satisfactory? He promised to let my noble friend have the figures. All that I am asking is that he should let the whole House have them at the same time.

Precisely, my Lords. That was why I was suggesting a suitable device for doing that which would be available for all to see. If the noble Lord has any other means that he would like me to use, of course I shall do so. However, I think perhaps a Written Answer would be the best way; although if he wishes me to pursue another avenue I shall certainly consider it.

My Lords, may I ask the Minister whereabouts he says the Government are envisaging an expansion of general practice in the future with an increase in the variety of services offered, as is hoped for by the general practitioners?

My Lords, the noble Lord asks a very wide question, but it is the policy of the Government to make the best use of the resources available in all the different parts of the health service.

My Lords, does the noble Lord recollect that the normal practice of informing the House following a Question is that the Ministry, via the Private Office, advises the Library and that the Library has the information available? Is he further aware that, having checked that following a Question which I put to the Leader of the House, I find that it is working very well?

My Lords, I am delighted that the noble Lord finds that the system is working well. If in this particular case that is considered to be the best way of dealing with the problem which has arisen, I shall deal with it in that way.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

My Lords, the licence granted to British Telecom under Section 7 of the Act takes full account of the duties set out in Section 3. As British Telecom is a private-sector company, its choice of a second digital switching system is a commercial decision.

My Lords, while I thank my noble friend for that Answer, may I point out that it really does not go quite far enough in view of the fact that British Telecom is such a vast monopoly and has more power than it should have? Would it not have been more in keeping with the duties in the reference that I gave to have given an opportunity to the manufacturers of System X at least to tender last October?

My Lords, British Telecom's decision to introduce a second digital switching system into the main network is intended to accelerate its modernisation programme and to provide a yardstick against which the competitiveness of System X can be measured. That is why it went to other manufacturers, I believe, and not to the manufacturers of System X.

My Lords, is the noble Lord aware that the requirements laid on British Telecom in terms of the statute as cited by the noble Lord, Lord Mottistone, are quite specific? The requirements on British Telecom are to enable persons procuring telecommunications apparatus in the United Kingdom to compete effectively in the supply of such apparatus. How can British firms compete if they are not permitted to tender and no inquiry goes out to them? Will the noble Lord give the House an assurance that the attitude of British Telecom has in no way been influenced by the outrageous attack on GEC last Friday by his right honourable friend the Secretary of State for Wales, as reported in the Financial Times of the next day?

My Lords, as to the second part of the noble Lord's question, I am not fully familiar with what my right honourable friend said about GEC and therefore I would not wish to comment upon it. Regarding the introduction of the second digital switching system, the pre-evaluation proposals went to six companies, of which one, a British company, STC, was involved. This was then narrowed down to three companies which were invited to tender—Northern Telecom, Thorn-Ericsson, which is, I believe, 50 per cent. British in any case, and AT and T/Philips—and they made offers which were technically and commercially acceptable to BT.

My Lords, does my noble friend recall that on 16th February last year we debated this matter extensively and the Opposition were probing very carefully to see whether British Telecom would keep to the 95 per cent. purchase of British equipment? Is it not therefore the responsibility—which was laid under the subsection referred to—of the Secretary of State and Oftel to see that British firms are given a proper opportunity? Can my noble friend say whether that 95 per cent., which we were assured came from the noble Lord, Lord Cockfield, in reply, is being upheld, or is this to be whittled away by the present intentions of British Telecom?

My Lords, I understand that the order for the new System Y will amount to about 10 per cent. of British Telecom's requirements. I understand also that those manufacturers—although I am not entirely clear how it will be done—will give substantial orders to be made in this country.

My Lords, I represent telecommunications interests and I declare my interest. I ask the noble Lord whether he is aware that unless the British electronics industry can open up its ideas to the whole of Europe, and persuade Europe to open up that market to us, there is little prospect of our being able to compete in future with either the Japanese or the Amercans.

My Lords, I am most grateful to my noble friend for his remarks. If British Telecom is giving a yardstick against which the competitiveness of System X can be compared, I should have thought that was admirable.

My Lords, with regard to the earlier less friendly question from his noble friend the noble Lord, Lord Orr-Ewing, can the Minister say whether they are sticking to the 95 per cent. British orders as promised in the previous debate?

My Lords, I am afraid I cannot answer that. I have a figure: as I said, I am told that the figure on this new order would be about 10 per cent. I am not aware of the promise of 95 per cent. which was made; I shall have to look into it and write to the noble Lord.

My Lords, does not my noble friend consider that he has been most seriously ill-advised to hide behind the skirts of commercial decision in his original Answer? I ask that because the Act makes it quite plain that it is the duty of both the Secretary of State and the Director-General of the Office of Telecommunications to exercise their functions in such a way as to enable those producing telecommunications apparatus in the United Kingdom to act in a fair and proper manner.

My Lords, I am informed that there is no basis for the inference that the Government refused to intervene. Any understanding of that kind would have led the Government into immediate conflict with its international obligations under GATT and the Treaty of Rome.

My Lords, perhaps I may ask the noble Lord an easier question. Will the noble Lord unequivocally confirm to the House that it is the intention of Her Majesty's Government to comply with the law, with Section 3(2)(h) of the Telecommunications Act 1984, as mentioned by the noble Lord, Lord Mottistone, in his original Question?

My Lords, naturally, the Government will always conform with the law, especially when it is in Acts which they have themselves brought in.

My Lords, is not the noble Lord misunderstanding—I am not saying that he is being misleading—the purport of these questions, which is that when we adopt a new technique in electronics or in any other project, there is a danger of creating more unemployment unless British firms receive a fair share of the work? What is the answer to that?

My Lords. I am sure that the noble Lord is quite right. However, if British industry is to continue to be competitive, or is to become as competitive as possible, it is in my view essential that there should be some element of a spur to make sure that it is competitive.

But, my Lords, is it not likely that sometimes you can be over-competitive and yet create more unemployment? Is not that a factor to be taken into consideration?

My Lords, I think that the more competitive industry becomes. the more chance it has of receiving overseas orders and creating employment.

My Lords, would the noble Lord not agree that the first of the points enumerated in the supplementary question of the noble Lord, Lord Mottistone, is of fascinating interest to many of us in this House and to many people in the City, in industry and in commerce? The noble Lord was quite honest and said that he did not know what his right honourable friend the Secretary of State for Wales said last Friday. That inhibits us from asking further questions on that point. Will he therefore please find out what his right honourable friend said and then write to my noble friend Lord Bruce of Donington with his views on the statement made by his right honourable friend?

No, my Lords: I think that what my right honourable friend said is his affair. No doubt when I read what he said I shall understand it better.

My Lords, in view of what the noble Lord, Lord Shinwell, has said. how can we ever make an impact on the appallingly high level of unemployment in this country when a major utility such as British Telecom limits the tenders for a major order to foreign firms? Cannot a 49 per cent. shareholder assert some influence in such a situation?

My Lords, in the prospectus for British Telecom the Government made it quite clear that:

"Her Majesty's Government does not intend to use its right as an ordinary shareholder to intervene in the commercial decisions of British Telecom".

My Lords, if the manufacturers of System X had been allowed to tender, maybe they would not have got the contract, but at least they would have known what was the specification. That would have helped them to improve their manufacture in the future so as to make themselves competitive in the world, as my noble friend Lord Thorneycroft so clearly pointed out to us. Indeed, as my noble friend the Minister has said, it would also have helped the unemployment situation by making us more competitive in the world market. This particular ploy has not helped manufacture in Britain and I submit to your Lordships is therefore still contrary to Section 3(2)(h).

My Lords, British Telecom has made it clear that System X will remain the dominant system in the United Kingdom network and it has placed huge orders with the suppliers of System X, GEC and Plessey. Providing those companies are competing effectively, they will have nothing to fear from whichever second source BT chooses. However, I hope that the two United Kingdom suppliers will use their large BT ordering programme as a springboard from which to pursue with vigour export opportunities.

My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Avon will, with the leave of the House, repeat a Statement that is to be made in another place on the British National Oil Corporation.

It may also be for the convenience of your Lordships if I announce that the debate on the Motion of my noble friend Lord Home of the Hirsel, on relations with the Soviet Union, which was originally to have been taken this afternoon, will now be taken on Tuesday, 23rd April, and not on Monday, 22nd April, as announced by my noble friend the Chief Whip on Monday.

My Lords, I beg to move that this Bill be now read a second time.

This Bill had its origins in the first report from the Home Affairs Select Committee of another place, Session 1982–83, on the Representation of the People Acts. That report was published in April 1983. Its main recommendations were: an extension of the franchise at parliamentary and European parliamentary elections to British citizens resident in the European Community; changes in absent voting arrangement to enfranchise electors who are away on holiday on polling day; an increase in the deposit required of a candidate at a parliamentary election from £150 to 1,000, together with a reduction in the threshold for forfeiture; and a reduction in polling hours. The Select Committee's work on the franchise was paralleled by the European Committee of your Lordships' House which, at about the same time, also recommended an extension of the franchise at European Parliament elections to British citizens in the European Community, but only for a period of 10 years after they leave the United Kingdom.

After the 1983 General Election the Government decided that the time was ripe for a major Representation of the People Bill, the first since the 1969 Act lowered voting age to 18. Changes in electoral law have always been preceded by consultations between the parties represented in another place. The parties were accordingly consulted on the Select Committee's report at the end of 1983. As a result of those consultations, the Government published a White Paper outlining their proposals for change. Most of these proposals were in accordance with the Select Committee's recommendations, but there was one significant change—the proposal to limit the period for which a British citizen may vote while resident abroad to seven years after departure. The White Paper proposals formed the basis of the Bill as introduced in another place, but as the Bill went through my right honourable friend engaged in further consultations with the parties and further change were made. The Bill which is now before your Lordships' House is thus substantially an agreed measure, and it was given an unopposed Third Reading in another place.

Clause 1 gives British citizens resident abroad the right to vote in parliamentary elections for a period of five years after the expiry of the last register in which they were included before departure. I ask noble Lords to note that period of five years; although it is correctly printed in the Bill, it is wrongly stated as seven year in the explanatory memorandum. The correct term is five years, not seven. The Government have made it clear that we should have preferred a longer period, either the seven years proposed by the White Paper or something longer still. But we accept that on a major constitutional issue of this kind no Government should seek to impose change on those with sincerely held reservations about the principles involved. The importance of the Bill is that it establishes the principle that British citizens should not be disfranchised solely because they are not resident here on the qualifying date. British citizens working abroad in either the public service or the private sector make an invaluable contribution to British interests. It is no longer acceptable that they should have no say in this country's affairs.

Clause 2 deals with the mechanics. It allows a person who qualifies as an overseas elector in relation to a particular constituency to make an overseas elector's declaration by virtue of which he may be included in the register of electors. The procedure is based on that which already exists for service voters. An important change which was made to this clause in another place was the addition of paragraph (e) to subsection (3). This requires the overseas elector's declaration to include a statement that he does not intend to reside permanently outside the United Kingdom. This means that a person who has left the United Kingdom to take up permanent residence abroad will not be able to get a vote under the new provisions.

Clause 3 extends the new arrangements to European Parliament elections. Subsections (2) to (9) are of particular interest to your Lordships' House because they entitle noble Lords (who, of course, do not have the right to vote at parliamentary elections) to make an overseas elector's declaration solely in relation to European Parliament elections. I should at this point say that the Bill does not give overseas electors the right to vote at local government elections.

As your Lordships may be aware, the Council of Ministers has resolved to renew its efforts to reach agreement on a uniform electoral procedure for European Parliament elections, including agreement on a uniform franchise, in time for the next elections in 1989. The Government have made no secret of their preference for a uniform franchise based on the so-called residence principle. This would involve each member state giving the vote at European Parliament elections to nationals of other member states who are living there. But it would clearly be indefensible, in the absence of agreement, not to extend the franchise at European Parliament elections in the same way as is proposed for parliamentary elections. That is what is achieved by Clause 3. It is broadly in line with the recommendation of your Lordships' European Committee, although it is a matter of regret to the Government that there was not general support for the ten-year limit on the extension which that committee recommended.

The next important part of the Bill is Clauses 5 to 11. These replace the existing provisions of the 1983 Act on absent voting, which have become very difficult to understand, and they make a number of significant changes. The biggest change comes in subsection (1) of Clause 7. This extends the right to vote by post or proxy to all those electors who cannot reasonably be expected to vote in person at the polling station, most notably those who are on holiday on polling day. It is a matter of great satisfaction to the Government that this long-sought reform now has the agreement of all the parties represented in another place.

The Bill proposes other notable changes. First, it gives all absent voters the right to vote either by post or by proxy. The right is subject to the existing requirement that those who vote by post must provide an address within the United Kingdom to which a ballot paper may be sent. The Government would have preferred to have given absent voters who are outside the United Kingdom on polling day the right to vote by post, but on this, as on other points, we bowed to the view of another place. Another significant change, which may not be apparent from the face of the Bill, is that it extends postal and proxy voting to parish and community council elections in England and Wales. This corrects a shortcoming of the present law which the Government have often been asked to put right, and I am glad that we could take the opportunity to do so.

Clause 10 calls for special mention. The Government's initial view was, as I have said, that the new absent voting arrangements could not be made to apply in Northern Ireland. Intimidation of postal voters and other forms of malpractice are common in the Province, and increasing the numbers of postal voters could only have added to the opportunities for abuse. It became clear, however, that our original proposals were not acceptable, and we have therefore adopted a different approach. While Clauses 7 to 9 put the right to a postal or proxy vote on the same basis in Northern Ireland as in Great Britain, Clause 10 empowers the Secretary of State, if he is satisfied that it is necessary to do so in order to prevent serious abuse of postal voting, to introduce the special polling arrangements for which provision is made in Schedule 1. Under these arrangements, a Northern Ireland elector who is in Northern Ireland on polling day but who cannot vote at his own polling station may apply to vote in person at one of a number of special polling stations throughout Northern Ireland. So long as these arrangements are in force, Northern Ireland electors may not apply for ballot papers to be sent in respect of a particular election to addresses in Northern Ireland. The Government hope that they will not have to exercise the power in Clause 10, but if it should become necessary to use it the power is there.

Clause 13 deals with the deposit. At present, a candidate at a parliamentary election is required to deposit with the returning officer the sum of £150 which is returned in full if the candidate polls more than one-eighth, that is to say, 12 per cent., of the total votes cast in the constituency. The deposit has stood at its present level since 1918, and both the Select Committee and the Government took the view that an increase was necessary to reduce the number of purely frivolous candidatures which have become such a feature of recent elections. The Select Committee proposed—and so, originally, did the Government—that the increase should be to £1,000. This would still have been rather less than half the level at which the deposit would now stand had its value kept pace with inflation. However, the proposal was widely criticised, and during the Committee stage the Government accepted an amendment bringing the increase down to £500. The Bill also reduces the level of the threshold to 5 per cent., or one-twentieth, of the total votes cast in the constituency, to protect the interests of the smaller parties. Few candidates outside the major parties can keep their deposits with the present 12 per cent. threshold. The 5 per cent. threshold gives them a significant chance of doing so.

That is the last of the major changes introduced by the Bill, but as your Lordships will have seen over half its pages are taken up with smaller changes in the electoral machinery. We have taken this opportunity of reviewing the whole field of electoral law to see what changes are desirable. Wherever possible, the changes have been the subject of consultations with the political parties and local authority associations in the usual way.

Clauses 15 to 17 introduce a general system for the combination of polls when more than one election is held on the same day. When the 1979 parliamentary general election was held on the same day as the ordinary district councils that year, special legislation had to be passed to combine them. Clause 18 postpones the ordinary day of election in 1986 for a week in response to representations from the Board of Deputies of British Jews. Clause 19 simplifies and rationalises the various provisions relating to the computation of time for electoral purposes. Clause 20 replaces provisions of the Meeting of Parliament Act 1797 under which the old Parliament is recalled if a demise of the Crown occurs after dissolution at a general election with a provision postponing polling day by a fortnight.

Clause 21 puts right a defect in parish and community council elections to which our attention was drawn by the National Association of Local Councils. Clause 22 makes it easier for my right honourable friend to prescribe versions of statutory elections forms partly in English and partly in Welsh. Clause 23 gives effect to the new penalities for corrupt and illegal practices and other election offences for which provision is made in Schedule 3. Clause 24 gives effect to the whole host of minor amendments to the 1983 Act listed in Schedule 4. Finally, Clause 25 reinstates a provision which was inadvertently repealed by the Police and Criminal Evidence Act 1984.

This is a substantial Bill, which makes a number of important changes in our electoral arrangements. The Government have done their best to accommodate views put forward from different points of the political spectrum, and I understand that the proceedings in another place were conducted with an unusual degree of harmony and consensus. The Bill was even, as I say, given an unopposed Third Reading. I believe your Lordships will wish to give it a swift passage on to the statute book so that its provisions can be fully implemented in time for the next general election (whenever that may be). I commend it to your Lordships' House. I beg to move

The Question is—

My Lords, before my noble friend the Minister sits down, would he be good enough to comment on a short point, as I do not propose to trouble your Lordships with a speech on Second Reading?

My Lords, I am in a little difficulty. My noble friend on the Woolsack has not put the Question. This is a Second Reading debate to which I shall be replying, and I can therefore give the answer that the noble Lord wants if he asks his question in the gap.

My Lords, may I ask that—

The Question is that this Bill be now read a second time.

My Lords, may I now put Noble Lords: No!

My Lords, I really do think that we must stick to the list of speakers. There is a gap in which any noble Lord who wishes to speak may put his name.

My Lords, is it in order in this ancient home of deprived citizens (in this context) to say that franchise is the very air which our British parliamentary democracy breathes? Therefore, when a Bill of this kind comes before Parliament it deserves to be looked at with the greatest of respect but also with the greatest of attention.

We are always grateful to the noble Lord the Minister for the way in which he introduces those Bills with which he is charged and his subsequent treatment of them; we are no less grateful on this occasion. I must confess, however, that I thought it was a most unusual compliment to my right honourable friend Mr. Gerald Kaufman to say that this Bill was treated in the other place in a very calm atmosphere. I have had the privilege of studying the Second Reading debate in another place and I shall report to my right honourable friend that his language—which I thought was the usual form—has been interpreted by the noble Lord the Minister as being most moderate and charitable.

It is a great shame—and it was the first point that I was going to make on this Bill—that a constitutional matter of this kind affecting such an important subject as franchise did not appear to merit, in spite of what was said by the noble Lord the Minister, very much consultation at all. One of the things which I noted as being complained of in the other place at this very peaceful Second Reading was the lack of consultation which had taken place. Indeed, it is a parliamentary tradition, as I understand it, that matters of this kind—so that they may be as non-controversial as possible, and so that one may get the maximum amount of agreement—are dealt with at a Speaker's Conference. No such Speaker's Conference was held on this occasion, and the result of this was that there were many debates, many arguments, and many amendments which were put down and which took a great deal of time in another place. I think that is to be regretted.

This Bill flows—as the noble Lord the Minister has said—from the deliberations of the Home Affairs Committee which sat upon Representation of the People Bills of the past. They issued a report, the Government issued a White Paper and there was a debate upon that in the Commons in June of 1984. That was all that preceded the introduction of this Bill into another place.

Possibly, I ought now to turn to the Bill itself and I propose, with your Lordships' permission, to deal with three things which are in the Bill and three things which are not and which, in my submission, should be in the Bill. First of all, I shall deal with what is in the Bill. As the noble Lord the Minister quite rightly said, the vote is to be given to those who are genuinely on holiday. I was surprised to find that on average the number of people who are deprived of this great privilege of a citizen because they are on holiday is some two million. I think therefore that your Lordships will welcome, as do we on these Benches, the inclusion in the electoral right to register a vote of people who are genuinely on holiday.

What I think is a little regrettable is that that right, as I understand it, is still to be withheld from citizens of Northern Ireland. It is an odd situation—is it not?—that you could have two citizens in adjoining bedrooms in an hotel in France, one of whom was a Northern Ireland citizen currently resident in Northern Ireland, and the other a Northern Ireland citizen who had ceased to be resident in Northern Ireland; in precisely the same election one would have a vote and the other would not. That strikes me as an oddity that we ought to be looking at in the course of the passage of this Bill. Having said that, perhaps I may repeat that we on these Benches welcome the inclusion of the genuine holidaymakers whether they be in the United Kingdom itself or whether they be abroad.

Now I come to the second matter dealt with in this Bill—dealt with in its very opening clauses—and that is the right of the expatriate to be given a vote. The noble Lord the Minister, while paying very courteous and deferential respect to the Home Affairs Select Committee, did not mention to your Lordships that a recommendation of that committee which confined this right to those who left this country and went by way of residence to another country in the EEC, only got through by five votes to four. Your Lordships may well think that it is by no means a very well backed recommendation to give the right to vote in our parliamentary elections to expatriates, limited now to five years after they leave these shores. Is it a very sensible provision? Is it very sensible to include those expatriates who decided to leave this country because they did not like paying taxes? Is it right to give this right to people who have fled our shores in order not to come up against our criminal courts? It seems very odd, does it not?

Quite obviously, one extends this right immediately to members of the diplomatic service, to members of the Armed Forces and to those who are on official duty abroad. But is it right for people who can influence near-vote elections—and we have had examples of it—where a government are in by a small majority? Is it right that those who have voluntarily decided that they are not going to pay any of our taxes at all should be responsible for electing a government who pass Finance Acts? Is it right that those who have fled our shores in order to avoid coming before our criminal courts should influence the election of a government who may be dealing with a Criminal Justice Bill? These seem to be oddities, and it seems to Members on these Benches to be necessary, without any doubt at all, that we should certainly have a right to vote for those who are abroad on official duties; but to extend that right, in our view, is wrong.

My Lords, will my noble friend forgive me for intervening? Some of us were deeply disturbed by his representations on this particular matter. We are, after all, members of the European Community. There are many persons who are working on behalf of that Community who are not officially employed by Her Majesty's Government but who are nevertheless rendering a service to their country and should be given greater consideration than my noble friend has found it proper to afford.

My Lords, may I thank my noble friend for that intervention, because she enables me to repeat the words that I used. I specially used very broad terms. I said, "those on official duties". I did not say, "those who are on duties, employed by Her Majesty's Government on official business". I intentionally said, "official duties", and I have no doubt that at the Conmittee stage one can define what official duties may be.

My Lords, I am sorry to interrupt again, but there are in Brussels many representatives of British industry and commerce—banking, financial institutions and other reputable bodies—who are also working on behalf of or in connection with the European Community.

My Lords, again, if I may say so to my noble friend—whose views I obviously respect, as will the House—this is a question of defining those who should have the privilege of a vote, and this can be dealt with possibly at subsequent stages of the Bill. The main point that I made was this: to put under a very broad umbrella all those who happened to be resident abroad, for whatever reason they have left our shores, seems to be a very wrong thing to do, especially when all of us know that some of our citizens have decided to be resident abroad purely and simply because they did not wish to pay taxes in this country. If there be a principle of no voting or no representation without taxation, presumably that principle should apply.

May I ask the House, as well as my noble friend, with great respect: in regard to our electoral law what are the things that decide? Is it not uniformity as the first principle? In regard to uniformity, are not those of us resident in this country who are British subjects bound to register, by law, and is there uniformity when various people resident abroad will have the option as to whether or not they register? Furthermore, is there not uniformity in our case that there should be residence within the United Kingdom, and does it not breach that fundamental law, except for the matters that my noble friend dealt with, if those who decide to be resident abroad, for no other purpose—I repeat—than to evade our tax laws or to evade our criminal laws, are included in this right to vote, which can be so important in affecting which government we have or do not have?

My Lords, will the noble Lord allow me to intervene? Would he agree, nevertheless, that a citizen who has residence in this country but consistently and systematically evades our tax laws, and also disobeys our criminal law, still has the right to vote even though he is resident in this country?

My Lords, not if he is in prison.

My Lords, it would indeed be a difficult thing to decide who of our citizens evaded tax and who did not.

My Lords, would the same apply to a citizen who lives abroad?

My Lords, it may very well do so. But if you had a category of those who are resident abroad for reasons of business, for reasons which are useful to this country, and the category that I spoke of, and that we all speak of with great respect—the forces, the Diplomatic Corps; you can go on beyond that, quite obviously, to those who are on official duties, whatever they may be—you can obviously define them and you can decide, by reason of their decision to reside abroad, whether or not others come within those categories. I know of no language at all in a statute which would be able to decide who of our citizens resident in this country had paid all the taxes they should or should not. If I may continue—

My Lords, I am much obliged to the noble Lord for giving way, with his characteristic courtesy. Can he comment on the position of one specific category? I refer to the officials serving in the European Parliament. He may have seen the submission of some of them. The noble Lord puts his point on the question of liability to taxation. Has he considered the effect of Article 14 of the protocol on the privileges and immunities of the European Communities, which provides that British officials of the institutions remain resident, for tax purposes, in this country? Would it not follow from that that any curtailment or denial of voting rights to them would constitute an infringement of the principle of no taxation without representation?

My Lords, I am flattered by the number of interventions, all of which are courteous and helpful. I hope I shall be forgiven if, because of them, I go on for a little longer than I had intended to do, out of consideration for your Lordships. I merely answer the intervention of the noble Lord in this way. I have at no time suggested that those who, fortunately or otherwise, do not pay taxes in this country should be excluded from the right to vote if they happen to be living abroad. It happens to apply to everyone who has decided not to be resident in this country. As I understand the situation, they will not be liable to taxation in this country provided the Revenue is satisfied that they are in fact now resident abroad. I was merely saying that it seems a rather unfortunate state of affairs if, within provisions which may have the greatest of justification in certain circumstances, we include among those who are entitled to elect a government who decide upon our taxation those who have deliberately left this country in order to avoid taxation. That is a very different point, if I may say so, from that which the noble Lord was quite properly making.

I turn, for the second question upon which I want to address your Lordships, to the matter of the deposit. It seems to us on these Benches a wrongful use of the deciding factor, as to whether someone is a genuine candidate for parliamentary election or what I believe has been termed a "freak" candidate, to ask what is the state of his bank balance. Where he becomes genuine is presumably where he is able to put down a £500 deposit as against the £150, which the noble Lord the Minister was quite right in reminding us dates from 1918. If we are to look at the deposit provisions again, is it not much more sensible to decide that matter by seeing how many supporters of the nomination can be found? If one looks at that as the deciding factor, one finds that one is deciding upon a proper democratic basis, and not making money the determining factor.

Having spoken about those three factors, may I merely say that there are certain matters which are not dealt with in the Bill and perhaps I may very briefly deal with them. The first I can deal with very briefly because I believe that the noble Lord, Lord Allen of Abbeydale, will deal with this matter in much greater detail and with much greater authority. The matter concerns the voting rights of people in mental illness hospitals and mental handicap hospitals, many of whom are there purely and simply because unfortunately our community does not manage to house them and look after their needs elsewhere.

Under the present state of the law, those people cannot use the hospital in which they reside as an address of residence for election purposes. That means that they must give another address, very often outside their own constituency and outside the place where they would expect to vote. As I have said, this is a matter with which I believe others with greater authority than I dare present to your Lordships will deal later in the debate.

I turn briefly to two matters which I believe will command the sympathy of your Lordships, although the noble Lord the Minister will no doubt say when he replies whether one of them can be dealt with in the Bill. The first is the matter of the public meeting place and the right given—and it is a very generous right—to parliamentary candidates in an election. They have certain privileges in regard to the public meetings that they hold and the places at which they hold them. One party in particular—and I refer quite openly to the National Front—uses these privileges at election time and does so with no intention at all of having a genuine public meeting. Indeed, it seeks to ensure that members of the public—and that includes the police—are not allowed into the public meeting at all. As some of us know, that public meeting is used for the most vicious racial purposes that can ever be imagined by Members of your Lordships' House and in a way that is completely contrary to the tradition of the British people.

Then I come to the question of how one deals with that situation. I should have thought that in this Bill we could define a public meeting as being one in which a certain proportion of the unoccupied seats must be available for members of the public, provided of course that anyone deliberately attending the meeting to try to break it up can be excluded, thus providing protection for those conducting the meeting.

The last point that I make on the omissions from the Bill concerns the wretched question of the demonstrations and marches which are also used by the National Front in order to terrify minorities in various parts of our country and to inflame others with racial prejudice. Whether something can be done about this under the Bill or whether the Government intend to deal with the matter under the public order legislation which I know is under consideration, the noble Lord the Minister will be able to tell us.

I apologise for having taken up more than the time to which I rationed myself. However, I can say in one sentence that this is a Bill which at present has imperfections; perhaps I may be allowed to say without disrespect that it was very sensibly revised by another place after a great deal of discussion, which could have been avoided if only the proper constitutional traditions had been observed.

My Lords, with the leave of the House, I shall now repeat a Statement being made in the other place by my right honourable friend the Minister of State for Energy on the subject of the British National Oil Corporation. The Statement is as follows:

"With permission, Mr. Speaker, I wish to make a Statement about the British National Oil Corporation. I hope it is for the convenience of the House that I should make this Statement now in view of the debate arranged for tomorrow.

"In the summer of last year the Government reviewed the institutional arrangements and operations of BNOC. They then concluded that the balance of advantage lay in retaining the corporation in its present form, given the contribution it was able to make to deriving full benefit from our oil resources.

"Since then the environment in which BNOC has to operate has undergone important changes. BNOC has traditionally operated by purchasing and selling oil under term contracts at prices fixed for a period of months ahead. Its purchases under participation contracts have been in this form which, as I explained to the Select Committee on Energy, has enabled BNOC to make a contribution to stability of markets in the short-term.

"There has however now been a major change in the structure of the oil market away from term contracts and towards spot and similar short-term transactions. This trend is unlikely to be reversed in the near future.

"In these circumstances BNOC could avoid the risk of losses only by linking its prices for participation oil closely and continuously to movements in the spot market. Such a system would mean that BNOC could no longer contribute to stability in the market. The Government have concluded that this shifts the balance of advantage decisively against the retention of BNOC in its present form. I see no advantage in retaining a public sector body to operate on that basis.

"The change in market structure I have described has led me to the conclusion that BNOC should no longer purchase oil by exercising its options under participation agreements. Dealing in participation oil has been the dominant part of BNOC's activities.

"The Government consider it essential to retain powers that would enhance security of supply if that proved to be necessary. We will therefore retain the participation agreements themselves so that we can activate them to have access to these oil supplies should the need arise.

"We will also retain the arrangements under which we have the power to receive oil from Continental Shelf licensees as royalty in kind. These two factors together mean that security of supply will continue to be safeguarded.

"I see a need in present circumstances to retain one other function of BNOC; namely, the management as agent for the Government of the Government oil pipeline system. This system is important for both defence and civil purposes.

"The retention of these three functions—custody of the participation agreements, disposal of oil received as royalty in kind and management of the Government pipeline system—requires the establishment of a small Government oil and pipelines agency as a successor body to BNOC. The abolition of BNOC and the establishment of the agency for the purposes I have described will require legislation and I intend to introduce this in the present Session of Parliament.

"Finally, I wish to express the Government's thanks for the valuable work carried out by the chairman, board and staff of BNOC."

My Lords, that concludes the Statement.

My Lords, I should like to thank the noble Earl for repeating the Statement made in another place. May I say to him that I, and indeed my colleagues, are profoundly shocked by this utterly disgraceful Statement? On 18th December the Minister spoke in the House of Commons on the important and vital role of BNOC in securing and controlling the nation's oil supplies, yet a few weeks later the same Minister comes forward in the House of Commons and announces the abolition of the BNOC which he praised so highly in December.

The notion that the Department of Energy, even through an agency, can exercise participation agreements and be involved in the complex problems of buying and selling oil, is incredible. In fact it is yet another example of this Government's centralist, corporatist attitude. I thought that Stalin was dead, but he seems in fact to have been revived, resuscitated, and brought back to life by this Government.

How many people of experience and professionalism in oil trading has the Department of Energy—that is, compared with Mr. Grossart and his expert BNOC team? I should like the Minister to tell me that. Would not the department in fact be better employed in properly and more efficiently discharging the existing duties rather than taking on even more?

The single, lame excuse for abolishing BNOC is that it could no longer contribute to the stability of oil prices. Does the noble Earl not understand that that was never the corporation's original purpose? It is only the deliberate intervention of Government in the last few months which has caused BNOC's problems, as in fact the Select Committee on Energy noted in its fifth report, published last Monday.

Did not the Minister of State himself recently review the role of BNOC and totally reaffirm the vital part it can play in the management of our oil affairs? Furthermore, has the noble Earl noted that the Select Committee on Energy in its fifth report did not even consider the abolition of BNOC as a possible option? Have not the Government, by this announcement, kicked the Select Committee firmly in the teeth and rendered the massive work it has done on this issue completely useless?

May I ask the noble Earl what arrangements will be made to ensure that Parliament and the public are kept informed of the Department of Energy's operations in the oil market, particularly in respect of relationships with OPEC and the cost to the taxpayer of market interventions? We have heard that the Prime Minister's Private Policy Unit has been further reviewing BNOC's role. Is it not now absolutely clear that on a major aspect of energy policy the Department of Energy is being taken over by the Prime Minister's policy unit? Given the very personal involvement of the Minister of State in supporting BNOC, will the noble Earl recommend that he should now resign?

This announcement is the final act of vandalism which began with the dismantling and breaking up of the successful and profitable British National Oil Corporation under the Oil and Gas (Enterprise) Act. The national corporation belonged to the nation. It was the only corporation which had 100 per cent. loyalty to this nation. I assure the noble Earl that the Labour Party will oppose this legislation tooth and nail. We commit ourselves now to re-establishing a national oil corporation which will safeguard and develop our precious oil resources for the benefit of the nation and the British people.

My Lords, I understand the logic behind the Statement made by the Minister this afternoon. It is obvious that if you guarantee a certain uptake to the oil companies at a certain fixed price as part of the participation agreement and the market weakens against you the taxpayer is bound to incur substantial losses. Indeed, the Select Committee in the House of Commons reviewing this matter only last week reported that current losses for BNOC amounted to £61 million last year, and that a continued weekly deficit has continued to operate.

I have no doubt that the Minister will defend the Statement he has just made this afternoon on the grounds that covering the loss of £61 million plus current daily losses by buying oil at guaranteed prices and selling it on a very weak spot market incurs further liabilities to the taxpayer. But I wonder whether the Minister would tell the House what will be the net revenue losses to the taxpayer as a result of this exercise?

If Exxon or other of the oil companies sell at an appreciated price rather than the guaranteed price, they make a profit, but these profits are taxed to the extent of 80 per cent. and presumably the taxpayer gets back a substantial part of the profit that has been made. If you abolish the BNOC purchasing power then it means that the price of oil falls, the net revenue to the taxpayer arising from PRT is consequently depleted, and in fact the net advantage from this exercise is not as substantial as is claimed in the Select Committee report. Perhaps the Minister will enlighten us as to what is the net revenue impact of these changes.

Perhaps too he will answer the question put so forcefully from the Labour Benches as to why the Minister, only a few weeks ago, giving evidence to the Select Committee, defended the continued existence of BNOC, whereas today he announces that BNOC, under his auspices, is to be abolished. Perhaps he will also tell us a little about the consequences of this for the small companies operating in the North Sea. The large companies can offset the loss from a reduction in price against their downstream and refinery activities, but the small companies have no such activities and depend on the guaranteed offtake price, which BNOC presently guarantees. Under the circumstances, can the Minister make some estimate of what the consequences of this policy may be for the smaller operators—not the Exxons and the Texacos but the smaller operators, who are very lively and who have invested large sums in North Sea development?

As I say, I accept the logic of what the Minister is saying and I accept that the market is bound to be a soft market for the foreseeable future. We are moving into summer, the miners' strike has been settled, and presumably the consumption of oil in world markets will be reduced, and I can understand why he is taking these measures. But I hope that he will deal with these consequences and say whether he anticipates that there will be any effect on future exploitation and exploration policy as a result of the removal of this guaranteed price for 51 per cent. of the output.

I accept the Minister's statement that the old argument about security of supplies no longer exists, and that that was the original justification for BNOC, because the pipeline has come ashore anyway, and I am delighted that, while he is not exercising the powers involved in the participation agreements, he is in fact retaining the power to exercise these if the market rises or if we are in any danger.

Perhaps I may join with the Minister in paying a compliment to Ian Grossart and the staff of BNOC, who have discharged this difficult responsibility well. Perhaps the great mistake was in splitting the marketing activities of the oil operation in Britain from its exploration and exploitation activities, which are now vested in Britoil. But that is past, and I am delighted that certain powers involved in this operation are going to be retained to be used when necessary.

My Lords, I am grateful to the noble Lord, Lord Taylor, for his reception of this Statement. I am rather astonished by the reactions of the noble Lord, Lord Stoddart. I am particularly astonished that there should be any question of Stalin or anybody being chained up. I thought that what we were doing was easing the chains. I find it extraordinary that he should have such a reaction about something which saves the public an unnecessary expense, which is why we have moved swiftly to save them from a corporation which is no longer required.

The Government have been consistent in their policy of seeking to avoid action which could risk destabilising the oil market. They share this objective with their Western allies. They would gain no advantage from a violent fall in oil prices, which might be followed by an even greater surge in prices. Because of changes in the oil market structure, BNOC could no longer make a contribution to stability, but the terms under which it acquires participation oil developed a strong potential for destabilising the market. The policy is that prices should be determined by the balance of supply and demand and that Her Majesty's Government should seek to avoid actions which could risk destabilising the market. With a change in the structure of the oil market, the BNOC price had gained a potential for destabilising the market. The only way to achieve the Government's policy is abolition of that price and the supply arrangements which made it necessary.

The noble Lord, Lord Stoddart, mentioned the Select Committee's report on oil pricing. I am rather surprised that he used that in support of his arguments, because I should have thought that the result was about two-thirds of the way towards what the Government have done today. The noble Lord, Lord Taylor, asked particularly about tax revenue. Tax valuation will continue to be based on the market price, and this would not be affected by abolition of BNOC. I am also told that there would be no effect on small companies.

My Lords, is my noble friend aware that there is much sympathy for the Government in facing the dilemma that BNOC was set up at a time of rising prices and we are now in a period of falling prices? But in recognising that, is the Minister quite sure that he has read his brief correctly when he says that BNOC is no longer able to contribute to market stability? Surely the fact is that, trading about 1.3 million barrels of oil a day out of the total free world market of 45 million barrels a day, of which half is on the spot market, considerable influence at the margin is exerted by BNOC. So to withdraw the use of that instrument will surely be to encourage instability of prices rather than the opposite. Can the Minister say whether the Government have been able to discuss this problem with the industry, notably the United Kingdom Offshore Operators' Association? Is he not aware that some oil companies, notably BP, have been arguing that we should keep BNOC but that its trading and price fixing methods should be more flexible?

My Lords, my understanding of my noble friend's question was to ask me why we were doing this, and the answer, I thought, is basically in the different operation of the market. There is now so much oil being dealt with at spot prices that the question no longer arises. Do I hear my noble friend say that that is not true?

My Lords, what I wanted to say is that it is the case that about half the 45 million barrels of oil traded in the free world each day is now traded on the spot market and not by long-term contract. While half of the free world's 45 million barrels a day is traded at contract prices, the half that is traded on the spot market is an area in which the 1·3 million barrels a day handled by BNOC can have an effect and has been having an effect.

My Lords, I am grateful to my noble friend for his clarification. Concerning his question on consultation, no, we did not.

My Lords, I wonder whether I have misunderstood the Minister, and perhaps he could clarify this. I assume it is correct that tax revenues will not be affected, and that the overall rate of tax will not be affected, by these decisions. But if the off take price of oil is reduced by the major oil companies, thereby reducing their revenues, then presumably the taxation revenues will be consequently reduced. I am asking: what is the net effect of these measures on our total revenues? I presume we shall save £60 million on the abolition of BNOC—that is the figure for last year—but what will be the consequence of this on the taxation revenues which result from a reduction in the offtake price, which is inevitable? What is the net advantage to the nation?

My Lords, I cannot honestly say that I have the answer to that question today. I hope that I can find it for the noble Lord and write to him. The one figure I do know is that we shall receive back three-quarters of the cost of BNOC as a result of tax.

My Lords, will my noble friend add just one piece of information? When the legislation comes, is it not only to keep BNOC in being but to keep in reserve the same powers for the compulsory buying of oil to steady the price if we reach a period, which many oil companies think will be coming in four or five years, where we have rising prices again?

Yes, my Lords. The original Statement says that we shall retain the participation agreements themselves so that we can activate them to have access to these oil supplies should the need arise.

My Lords, is the noble Earl aware that the case he has sought to make and the Statement itself give the House no confidence that the Government are doing a prudent thing in abolishing BNOC at this time? Is he further aware that the reaction to this in the markets will tend to destabilise rather than to stabilise the position? Can he say briefly what consultations the Government had before they came to this serious conclusion? In a whole catalogue of divisive legislation this has been the most divisive.

The Minister has the obligation to tell the House that in addition to interdepartmental discussions there were cogent and clear discussions with the other parties involved. Can he say what discussions have taken place with the oil companies in this country; will he say what discussions have taken place with the trade unions: and. finally, can he say whether there were discussions with the chairman and members of BNOC, who have rendered signal service to this country during the existence of BNOC? The Minister's duty at this moment is to explain to us what consultations took place.

My Lords, I am astonished that the noble Lord should speak in these terms on a measure which I find to be totally explicable. No consultations have taken place because of the risk of speculation about the changes in the oil market. The chairman of BNOC was asked to come in this morning, and he was told of the decision.

My Lords, It is absolutely disgraceful that the distinguished chairman should be called in and presented with a fait accompli without being given the opportunity to state a case. Can the noble Earl tell the House now what were the reactions of the chairman when he was told in this fashion?

My Lords, I am informed that his reactions were what any good civil servant's reactions would be.

My Lords, I am delighted that the noble Earl finds the situation "totally explicable". He will forgive me, however, for reminding him that one question has been asked twice and not answered. We are all very interested in it, and may I put it. therefore, a third time? Those of us who listen carefully to what the Government have to say recollect that three weeks ago the Government, through their official spokesman the Minister in question, said the very opposite to what is now being stated. It is a simple question. May we have the answer?

My Lords, I did not get the noble Lord's supplementary question. Is the noble Lord asking why my right honourable friend changed his mind over the space of three weeks?

Yes, my Lords.

My Lords, the answer is that the situation has changed in the oil market structure. BNOC can no longer make a contribution to stability; the terms under which it acquires participation oil have developed a strong potential for destabilising the market.

My Lords, my question to the noble Earl the Minister, while thanking him for the Statement, was to ask whether he is not faced with a fait accompli like the rest of us. This matter is of such devastating importance to me that I think it is worthy of time being allowed for the House to debate it fully and to go into it in depth and with understanding. That is not casting any aspersions on the Minister. I thank him for the answers that he has given us.

My Lords, I thank the noble Lord for his appreciation that I am doing my best. I will certainly go through the normal channels to see what can be done.

My Lords, in his reply to me the noble Earl suggested that the report of the Select Committee went two-thirds of the way towards supporting the abolition of BNOC. I really would ask him to reflect on that. Is it not a fact that the Select Committee did not consider abolition as an option? From paragraphs 27 and 28 of the report it is quite clear that the Select Committee had no idea that BNOC should be abolished. Indeed, the only criticism they make—and they make no criticism, as far as I can see, of BNOC—is criticism of the Government's interference with BNOC which has made it difficult for it to carry out its task. Would the Minister kindly comment on that?

My Lords, as I understand it, the Select Committee considers that BNOC should move to setting term prices for shorter periods and in more direct relationship with market values, in preference to the alternative of strengthening BNOC's ability to stabilise the short-term market by allowing it to invest in storage and intervene more actively in the forward market. I hope that the noble Lord and I will be able to discuss this again at some later date.

My Lords, while I do not complain about the Minister's clarity, for clarity is one of his attributes, I find it difficult to follow all this. For quite a long time we have been exercising our pride, if we have any pride left in matters of this sort, because we control oil, North Sea oil—and that is the language we use: "North Sea oil"—and the revenues from North Sea oil. Is the Minister going to derive any revenue from North Sea oil in the future? If so, could he exercise his mind on the issue? He spoke about something associated with new technique but there is no clear concept about whether the revenues would be continued. If they are to be continued, will they he used by the Government as before?

My Lords, I would underline everything that the noble Lord, Lord Shinwell, has said. Indeed, we have got an enormous pride in what is going on in the North Sea and that pride will in no way be abashed by this particular measure. The noble Lord might like to know that the North Sea oil production which we are getting at the moment represents 5 per cent. of the oil production of the world. Therefore, on the taxation situation, as I mentioned to the noble Lord, Lord Taylor, we can have another look at this shortly.

My Lords, may I ask my noble friend the Minister the nature of the change in circumstances to which he referred when answering an earlier supplementary?

My Lords, without having a look at Hansard I am afraid, since I have been on my feet for such a long time, that I cannot remember.

My Lords, if noble Lords have finished pouring trouble on oily waters, perhaps we can continue with the Representation of the People Bill. My Lords, like the noble Lord, Lord Mishcon, I was somewhat surprised at the terms in which the noble Lord, Lord Elton, presented this Bill to us. The peace and light which apparently had reigned in the other place did not sound like that from my reading of the Second Reading debate there or even from certain exchanges at the Committee stage; although I would accept that by the time the other place came to the end either they were exhausted or they had given up any hope of persuading the Government to make any further modifications and they therefore gave the Bill a very calm Third Reading. I was a little surprised also at the terms in which the noble Lord described the Bill when he said it was an important reform of franchise. Anybody who has been listening to this debate today will not, I think, go away with the feeling that they have been listening to the great reform Bill of 1985. I do not think that it quite comes into the category of some of the Bills of a century ago.

Nevertheless, it is a welcome Bill. The minor amendments that are made to the electoral laws are important and there are some important extensions of the franchise. It does not, however, make any vast extension of the ability of the people to be represented and the electoral system as we have it still does peculiar things for minorities.

It will not surprise your Lordships that I am going to spend a minute or two on the subject of proportional representation, but I can assure the House that it is to be only for a minute or two; and that when I mention the serious effect on minorities I am not, of course, referring to the effect on the Social Democrats and the Liberal Party and the Alliance. I am talking of the curious effect it has on the minority which represents the Government; because, of course, the Government are a minority party just as we all are minority parties today. It simply happens that they have a lot more seats in another place on the basis of their minority representation. They are seriously over-represented and we are seriously under-represented. One of these days there will be a new Reform Bill, put in by an Alliance Government, under which proportional representation is included.

I was interested to hear what the noble Lord, Lord Mishcon, said about the subject of uniformity. The sort of uniformity that we should like to see from these Benches is the uniformity of equal votes of equal value, if I may put it that way—having said which, I do not propose to say anything more on proportional representation either at this stage or at any subsequent stage of this Bill.

We certainly welcome in Clause 1, the votes for British citizens abroad, but we feel that the five-year period is far too short. We realise that this was (dare I say?) the carve-up between the two Front Benches in another place, but I hope that later in the stages of this Bill we can come back to further discussion of this matter because it will certainly be my intention to put down amendments to try to extend that period beyond five years.

I really cannot go along with some of the remarks of the noble Lord, Lord Mishcon, on people who reside overseas. They are not all tax exiles—I know that he did not say that they all were—and neither are they all inhabitants of the "Costa del Crime", and I know that he did not say that they were; but it seems to me that he gave those people undue representation in his remarks. I thought that the intervention of the noble Baroness, Lady Elles, really touched on the point. We do not actually differentiate between those people who are paying taxes and those people who are dodging taxes when it comes to a question of whether or not they should have a vote, however despicable it may be to move your residence abroad to avoid tax.

The noble Lord, Lord Mishcon, seemed to introduce a new concept into the category of people who are entitled to vote. That was the category of usefulness. I think that that leads us down a very difficult path and one that should be avoided at all costs. Certainly many of these people are making a useful contribution to the life of this nation and to the future wealth of this nation. And not only that, but they are making a useful contribution to the wealth of the world at large. My honourable friend the Member for Berwick-upon-Tweed referred to this in another place when he spoke about the work that missionaries were doing overseas.

There are people who clearly have every intention of returning to this country on retirement, but they may spend most of their lives abroad. They are precisely the people who cannot afford to keep a residence in this country and who therefore would be disqualified under the terms of this Bill after the five-year period. I think we ought to take that into consideration because they are the kind of people who are interested in what is happening in politics in this country, whether they be matters concerning citizenship, economics, pension rights, foreign affairs, defence, or even something as simple as the BBC's overseas service, about which they probably know more than most people in this country. They may also be interested in matters of trade policy. They would retain an interest and would surely wish to participate in the democratic processes of this country, on the understanding that it is their intention to return.

There are, as we see, provisions in the Bill whereby people should make such a declaration. I suspect that tax exiles or people such as the gentleman referred to by the noble Lord, Lord Mishcon, and his right honourable friend in another place, who are at present residing in Spanish sun, would be unlikely to sign such a declaration.

It seems to me that at the end of the day the crucial question is whether you are a citizen of this country. I must say I am surprised that the Labour Party, which spent so much time defending the kind of people I am talking about when we were debating the nationality Bill, should so lightly abandon them when it comes to the question of their ability to vote. So I think that their ultimate test should be that British citizens abroad should have the right to vote, and I regret that this Bill does not go far enough down that line.

We certainly welcome the extension of postal voting, particularly as regards parish councils, as the noble Lord, Lord Mishcon, has suggested. Again, to a certain degree at the behest of my honourable friend the Liberal Chief Whip in another place—this is not a Chief Whips' appreciation society; it just happens that this is a subject with which Chief Whips tend to get landed—I think the extension to parish councils is valuable. Often parish council and district council elections occur on the same day and it has been rather foolish to be able to have a postal vote for a district council election but not for a parish council election held on the same day.

There are two provisos that I wish to make about postal ballots. The first is that, of course, they are less secret; and that is something that I believe we should bear in mind. I suspect we all know of cases where elderly people are assisted to fill in their ballot papers for postal votes by members of one political party or another. However improper that may be, it does happen, and I merely make the point that we should remember that these ballots are less secret and therefore there is perhaps some justification for what has happened in the Northern Ireland situation. It is much less easy to police a postal ballot than it is to police a ballot box in a polling station.

The other matter is that the extension of postal voting should not be allowed to extend the effect of multiple registration. One of the questions to which we on these Benches will return at later stages is that of multiple registration, because we believe that it is an abuse that people can register in more than one place and then can decide, because of geographical or geopolitical considerations, where they are going to exercise their vote. Where people vote in holiday areas in order, as it were, to achieve better value from their vote because there is a better chance of their candidate getting in there than is the case with the candidate at the place of their main residence, that seems to us to be a wrong way of dealing with the situation. Certainly we shall seek to remove from the Bill the opportunity for multiple registration.

When it comes to EEC regulations, it is our belief that EEC citizens should be allowed to vote in the countries in which they reside; in other words, citizens of the EEC living and working in Belgium ought to be able to vote in the Belgian part of the European party elections. We are some way away from that, but I believe that it is the direction in which we ought to be going.

As regards deposits, we certainly welcome that reduction to 5 per cent. I must say I was slightly surprised that when the noble Lord said that this reduction would be of help to minor parties he looked in our direction. I have to tell him that this provision would have saved the Labour Party an awful lot more money at the last election than it would have saved us—to the tune, as I see it, of about £14,000. The 12½ per cent. was always, of course, a very silly figure. Candidates who got that number of votes in a constituency were clearly serious candidates, and where candidates lost a deposit after polling many thousands of votes that was always an anomaly.

The whole matter of deposits was introduced at the end of the First World War in order to stop supposedly frivolous candidates trying to get out of the Army rather sooner than they otherwise would have done; and I think that is why the hurdle was then set at rather a high level and has not been changed since. However, we still believe that the deposit system is the wrong one and. like the noble Lord, Lord Mishcon, we would much rather see a system of nominations. The 5 per cent. rule penalises some quite serious political candidates. The Ecology Party and the, dare I say it, Wessex Regionalists, who have written to me and have no doubt also written to other noble Lords, have a serious political point of view to make. These people are to be distinguished from the really very silly candidates who turn up at by-elections. I would not grace them by naming them in your Lordships' House, but we all know that there are poseurs who come along, or there are some people from the entertainment world who use the poll as a form of advertising.

Of course they will still be able to afford to do this. The fact that it will possibly cost them £500 is of no consequence to them. The fact that they have to pay £5,000 would probably be of little consequence to them; they would simply charge it against their professional expenses and treat it as a piece of publicity.

So I do not believe that the deposit system actually stops the very people whom the Government are anxious to stop. Indeed, I am not at all sure that it is very sensible to stop these people, anyway, since on occasions they add a certain amount of fun to by-elections and perhaps stop us from taking ourselves too seriously at times. The better test is, of course, to have an increase in the number of nominations, and again I hope that we can test this point at greater length during the Committee stage of the Bill.

There are just a couple of minor points I should like to make. First, on the question of expense, I think that changes in the provisions there are sensible. I also think it is time that we started to look at the control of national expenditure on elections, because it seems to me that we keep a very tight rein on expenditure at constituency level but that there is virtually no control over the amount of expenditure at national level. Since television, broadcasting and so on play such a large part in our elections these days, I think that in the interests of democracy we must look at this very closely and see whether there is not a national limit on expenditure that ought to be Considered for parliamentary elections.

The other point that comes into this same area is that we believe that challenges in the courts over election expenses and the like should not be left to individual petitioners but should be followed up through criminal proceedings in which the DPP plays a part. Noble Lords no doubt will be aware of a case not a thousand miles away from here where election petitions were brought in regard to a large number of supposed offences. One minor technical offence was found to have been committed, and the candidate was faced with a very large sum of expenses and court costs amounting to many tens of thousands of pounds. That seems to us to be a somewhat whimsical way of dealing with what is certainly a serious problem. One does not want to allow corruption in electoral practices, but it seems to me that it is best left to the criminal law and to the DPP to decide whether or not prosecutions should be brought.

Arising out of what the noble Lord, Lord Mishcon, said about the National Front, I well understand and support his views about the National Front. No one has a greater hatred of that sort of racialism than I and my noble friends here. However, I certainly would not stop these people having halls. I believe that if there is a candidate he has a right to have a public hall. But the noble Lord came at it in a slightly different way from the ways that I have heard before, and what he said bears serious consideration. If they are going to use public halls, then they should use them in the proper way and any hint of racialism should immediately be stamped on by the due process of law.

Similarly, I do not believe that provocative marches are to be tolerated, but I do not think they come within the terms of this Bill and they ought to be dealt with in other ways. It is a difficult problem to stop people having the right to march on political matters, whether they be on the extreme Left or on the extreme Right. But in many cases, a march is clearly a serious provocation and a threat to public order, and it should be dealt with as such, and not within the terms of the Representation of the People Bill.

This is a useful Bill, but it is not a great Bill. We broadly go along with the provisions of the Bill, but will certainly seek to make some changes to it, as I have indicated today.

My Lords, much of what is in this Bill is of considerable interest to me, in view of my past experience, but this afternoon I wish to raise only one issue and that is one which is of concern to me in my current capacity as chairman of MENCAP. This point, which has already been clearly explained by the noble Lord, Lord Mishcon, relates to the voting rights of long-stay voluntary patients in mental illness and mental handicap hospitals. Noble Lords will look in vain among the long list of miscellaneous provisions in the Bill for anything on this point. There is nothing there and it is my contention that there ought to be something there. If this opportunity is missed, there is no saying when another one might arise.

It is a problem which has been very fully discussed before and I certainly do not propose to weary your Lordships with a detailed historical review. Rather, I take as my starting point the present provisions to be found in Section 7 of the Representation of the People Act 1983, which re-enacted provisions made in the Mental Health (Amendment) Act in the previous year. I should say that I am not unmindful of the improvements which were effected by those provisions, compared with what had previously held the field. Putting it as briefly as I can, Section 7 now provides that a voluntary patient in a mental illness or mental handicap hospital is entitled to be registered to vote, provided that he can pass, as it were, a test of capacity each year by completing the declaration for which the section provides and getting it attested by an authorised member of the hospital staff.

The difficulty is that he can be registered only if in the declaration he can give an address where he,

"would be resident in the United Kingdom—

and I am quoting the words of the Act —

"if he were not a voluntary mental patient or. if he cannot give any such address, an address (other than a mental hospital) at which he has resided in the United Kingdom."

These words have the slightly odd result that an individual who can be registered can normally be registered in any constituency except the one where he happens to be residing at the time.

But the real trouble is the words "other than a mental hospital". The inclusion of those words in the subsection means that if the hospital is the individual's sole address, even if he has lived there for years and it is in any ordinary sense his permanent address, he is ruled out for registration. This is an anomaly which I should very much like to see removed. It was at an earlier stage suggested that if a change of this kind were made, there would be a risk of the electoral roll in a particular constituency being swamped by the addition of vast numbers of patients in a hospital there. But it is a little difficult now to take that argument too seriously when, for one thing, there is a well advanced programme for reducing the numbers in the hospitals and putting them back into the community, whatever views "Panorama" may have about that programme, and when the numbers of those who have taken advantage of the concessions in the 1983 Act, and who have been able if they wish to make the necessary declarations, have not been all that great.

What I am recommending is, after all, what the Speaker's Conference in 1973–74 thought appropriate. It was their wish that someone whose only residence was a hospital should be entitled to call that hospital his residence. I am very conscious of the fact, too, that those in the psychiatric wing of an ordinary hospital are not barred from registration. What we are currently doing therefore, it seems to me, is to continue to disfranchise a number of people who are perfectly able to exercise their vote intelligently and responsibly, and who differ in no way from considerable numbers of mentally handicapped or mentally ill people in the community or in other institutions who can be registered. I cannot persuade myself that that is a sensible or indeed a humane thing to do.

My Lords, I have listened to the noble Lord, Lord Allen of Abbeydale, with the greatest attention, but he will, of course, understand that I shall not be following him in the point that he has been making. As president of the British Conservative Association in France, and having met, listened to and received correspondence from hundreds of British citizens working abroad for this country, I should like in particular to address myself to the problem of the right to vote of citizens who live abroad.

Of course, I welcome very warmly the fact that the Government have accepted the principle of British citizens being given the right to vote, even if they are not resident in this country on the qualifying date. I also welcome these faltering footsteps going in the direction of following the United States, France, Italy and other democracies, who for many years have given the right to vote to their citizens wherever they may live, whether in the country of nationality or outside it. In particular, France, which has a system for the time being based on constituencies, is very little different from our own, so the excuse that is sometimes given by the Government that it is more difficult because we have constituencies has been overcome so far as France is concerned.

But almost immediately, having established the principle, my right honourable and learned friend when introducing this Bill in another place, said that there was a problem and that the extension of the right to vote had to have a restriction put upon it. As a result of the Bill going through another place, the restriction at the moment is that those who have lived abroad for longer than five years as from the qualifying date will again be deprived of the right to vote. I know from my contacts abroad, not only in the European Community, but in many other places as well, that many British citizens will feel frustrated, disappointed and rather embittered by the action of this Palace of Westminster, which is, after all, meant to be the seat of democracy and is held out as a shining example. Only the other day, when addressing a large audience in France I mentioned that I was returning to your Lordships' House to speak on this matter, and those people were simply amazed to learn that we do not have the vote when we go to live abroad.

I wonder whether your Lordships will place yourselves in the position of those British citizens who live abroad. Perhaps it is not fully recognised that British laws—and I use the term "British" in the general sense because I know laws can be English, Scottish or Northern Ireland laws—passed in the Palace of Westminster affect these people, whether those laws concern nationality, matrimonial or tax matters, or are laws relating to pensions, social security or education: and a vast number of British citizens abroad send their children to be educated in this country. British citizens living abroad have a direct interest in the results which come from this Palace of Westminster.

We should remember that the economic policies of this country, too, directly affect them. I must say to the noble Lord, Lord Mishcon, who is always extremely courteous and kind, how offended would be many of the people whom I meet abroad to hear themselves described as ex-patriots fleeing from these shores to avoid taxes; or, if I may say so, to be lumped in the same category as people who might be criminals escaping from this country. I must tell the noble Lord that I go abroad quite frequently, as I know he does, and I have yet to meet one of those particuliar characters. Perhaps the noble Lord meets them, but I have not done so.

My Lords, the noble Baroness is extremely courteous in describing my friends and associates abroad. I should like to make it perfectly clear. as I hoped I made it clear in my speech, that I have nothing but admiration for those resident abroad because of ill-health—I did not earlier mention that category, but do so now—or those who serve this country in industry, commerce, and in every other way. There are the "other" people and those who, unfortunately, have to have knowledge of all our British subjects abroad know that they are a fairly sizeable category.

My Lords, I thank the noble Lord for that intervention. If we were to argue about statistics, we could go on for a long time and they would be impossible to prove. I imagine, as I have already indicated, that possibly those who vote in this country might also fall into some of the categories which the noble Lord has mentioned.

I remind your Lordships that we are a trading nation, and we send vast numbers of young people abroad. Many of them go not voluntarily but as employees of a business. Whether they are working in Swindon. Windsor, Birmingham, Bangkok or Singapore, they are working for British prosperity and in British jobs. The fact that they are employed by British companies, wherever they may work in the world, makes totally irrelevant their actual place of residence.

I was interested to read a speech made by Mr. David Royce of the Institute of Export, who said only the other day that it takes at least four to five years to establish a market abroad. We know the situation in Japan in particular, where we are trying to break into the market. One cannot expect employees or business personnel to go to such a country for fewer than five years. They not only have to establish their markets, but also have to develop them. Ten years is probably the minimum length of time required to do that. Yet these are the kind of people whom the Bill seeks to deprive of the right to vote.

We talk about tenuous links. It is said that those who have lived outside the United Kingdom for five years and one day since the qualifying date will be deprived of their vote, whereas those who have lived abroad for five years minus one day, according to the date of any election which might be called, will be able to vote. It is incredible to think that one can be chopped off at five years from the country where one has been born and bred, and where one's relations live, and which one visits from time to time.

I sometimes wonder about the beleaguered mentality of the Opposition, who seem to be living in the age of the schooner rather than in the twentieth century and the age of the airplane; to say nothing of the twenty-first century from which we are only about three general elections away. Practically every British person I meet abroad returns to this country at least every year or every two years to visit their family, to deal with their business interests, to keep up the education of their children, or for other reasons. The vast majority of them have their links firmly in this country. Now there is a clause in the Bill which requires them to declare an intention to return to this country. I should have thought that was sufficient reason to remove the five-year limit.

I hope that my next point will be seen in the right context and within the framework of the argument I am using. Surely someone who has been born and bred here and who has to go abroad in order to keep his job and to work for his company has as much right as a British Commonwealth citizen, who perhaps does not even know English, who gains the right to vote within six months of having put his or her name on an electoral roll; or a citizen from the Republic of Ireland who may come over on 9th October, put down his name on 10th October, and within six months have the right to vote in a general election. I do not question such rights because such is the law of the land and I accept it. But surely their links are no less tenuous than those of the people to whom I have referrred.

I now turn to the question of elections to the European Parliament. I was somewhat concerned by a statement made by the Home Secretary in his Second Reading speech when he said,

"further primary legislation on European elections only will probably be needed if agreement is reached in the Council".—[Official Report, Commons, 10/12/84; col. 756.]

There was no agreement reached in the Council before the last European elections in 1984. Consequently, this was the excuse given for there being no change in the rights of citizens abroad. I remind the House that the citizens of other member states were all given the right to vote wherever they were living within the Community, including Belgium and the Netherlands, who gave the right to British citizens living in their countries because they knew that those people were deprived of that right in respect of their own country.

I am reminded of the comment of the noble Lord, Lord Mishcon, when he said how ludicrous was the situation in the case of a person living in one bedroom in Northern Ireland and another person living in a bedroom in another part of the United Kingdom. One had the right to vote but the other did not have the right to vote. Without wishing to speak too much of my own family, I would say that my son and his wife share the same bedroom. My son, being a British subject, did not have the right to vote, but his wife, who is French, did. That is an example of the folly of the system that exists.

If the Council does not come to an agreement over a uniform electoral procedure for 1989, I am anxious that the Government should give an undertaking that they will at least consider introducing measures to give the right to vote to citizens who are within the European Community for European parliamentary elections. I draw the attention of the House to the fact that only two weeks ago in the Political Affairs Committee of the European Parliament in Brussels we adopted almost unanimously a provision concerning the right to vote. It states:

"Nationals of member states shall be entitled to vote in the country of which they are nationals. Member states shall take all necessary measures to enable their nationals where place of residence is outside their country of origin to exercise their electoral rights without hindrance in the member state of which they are nationals".

I hope that that will be taken on board by the Government and that they will at least consider introducing measures for 1989, regardless of whether or not there has been a change in the electoral system itself.

One more important point was raised by my noble friend. As the Bill stands, only those who left the United Kingdom after October 1983 will be able to vote in June 1989. That will exclude nearly all the 1,500 or more officials working in the European Community institutions; in fact, they will be the only people deprived of voting in both national and European parliamentary elections. Many of those officials have served in Government departments at home. Many of them hope eventually to return to this country. Indeed, all those I know either have homes to which they hope to retire or have children at school in this country, and they thus have very close and direct links with this country.

Surely it is myopic, if I am not being too aggressive to my noble friend the Minister, that the Government should seek to deprive these people of the right to vote when they are the only officials in the Community institutions who do not have the right to vote; yet they are expected to work loyally and to support British interests whenever they can and on every conceivable occasion. It seems to be an extraordinary attitude and I hope that, with assistance from noble Lords, we shall possibly be able at least to amend the Bill in that direction.

It was clear from debates in another place—I know the noble Lord on the Front Bench opposite had a slight difference of colour, if I may say, with the opinion of my noble friend the Minister—that at the end of the day, whatever else, there was a certain element of consensus; or at least the Bill was changed in order to get it through another place. However, I remind my noble friend the Minister that every Government, regardless of colour, has an overriding duty to protect the fundamental rights of all its citizens, wherever they may be. One of those fundamental rights in a democracy is surely the right to take part in elections. I feel that this Bill has not shown that the Government have fulfilled that overriding duty. I hope that in this House we shall be able to contribute to seeing what can be done to make the Bill closer to what we regard as the protection of the fundamental rights of our citizens, wherever they may live.

My Lords, before my noble friend sits down, is she aware—and I am sure she is—that I, too, share a bedroom with my wife while I am disenfranchised but she is not?

My Lords, this is a major Bill on the representation of the people, in spite of what the noble Lord, Lord Tordoff, has said to reduce your Lordships' regard for it. It makes a number of significant changes in electoral law and there have been only four such Bills this century which have made changes of this order. These were in 1918, 1928, 1948 and 1969.

We have done our best to accommodate different points of view in areas where all-party support is not always possible. I think it is a sign of our success that there is such a short list of speakers this afternoon and that, whatever the temperature, tempo, length, volume or acerbity of exchanges in the other place in the earlier stages, the Bill proceeded from that House with no Division on Third Reading. I shall try to use this opportunity to comment on the positions which your Lordships have staked out for yourselves for the Committee stage.

I first correct, with all deference, the noble Lord, Lord Mishcon, in what I think may be a misunderstanding of how the Bill will work in regard to absent voters in Northern Ireland. Northern Ireland holidaymakers can vote by post or proxy on the same basis as those from Great Britain, subject to the reserve power in Clause 10. That applies exclusively to postal voters and, as the overseas vote is by proxy, it will not be affected; and that is a matter of interest to the person delivering the croissant and café to the adjacent rooms in the French hotel which we were asked to consider, because the post will be the same in each case.

The noble Lord also referred, as did others, to election meetings. We accept that there is a problem, but there is a substantial problem also as regards enforcement, both with the present law and with proposals for change so far advocated. At present we do not have a workable solution to the difficulty of the unpleasant meeting to which the noble Lord referred. As to demonstrations and marches, that is, as he suggested, a matter for the public order review to which he referred.

The noble Lord felt rather strongly that we had done too little by way of preparation for the passage of this Bill. He suggested that we should have used what I think he said was the normal procedure of a Speaker's Conference and that there should have been wider consultations. I understand that it is now generally agreed that Speaker's Conferences are not a satisfactory way of suggesting changes in electoral law. The noble Lord may recall that the Labour Government's 1969 Act failed to implement the most important recommendations of the Speaker's Conference which preceded that Act and neither this Government nor the previous Labour Government were able to implement any of the recommendations of the Speaker's Conference of 1973–74. Experience, therefore, suggests that that method of progress is not fruitful.

We did, however, write to all the Opposition parties in November 1983, seeking their views on the Select Committee's report. The replies were taken into account in the White Paper. There were then detailed consultations with the parties and local authority associations at official level before the Bill was introduced. Further discussion took place across the Floor of another place and doubtless will continue.

Lord Tordoff: My Lords, will the noble Lord give way? I should be glad if he will clarify this point. I thought I read in the debates of another place that the Scottish National Party and Plaid Cymru had not been consulted on these matters. That may not be true but some sort of assertion of that nature was made in debates in another place.

Lord Mishcon: My Lords, perhaps I may be allowed to ask the noble Lord the Minister to answer two noble Lords on one matter. It was also stated in another place at Second Reading, by a responsible spokesman, that there was consultation with the official Opposition on only one minor matter relating to this series of electoral reforms.

Lord Elton: My Lords, I can give only the briefest answer to those two interventions. I understand that both the SNP and Plaid Cymru were consulted. I also understand that the consultations with the main Opposition party in another place, if I may so describe it, went beyond the very narrow point that the noble Lord, Lord Mishcon, suggests.

During the noble Lord's speech we had an interesting debate within a debate on who should be given what I call the overseas, or expatriate vote. His principal attack was directed at those whom we call tax exiles. With them he swept up those whom we call criminals. We shall no doubt return to the matter of definitions at a later stage. The other essential point he seems to have missed, or at least to have ignored, is the fact that the right to an overseas vote is a temporary right lasting only five years, which is a matter of understandable regret to my noble friend Lady Elles—a regret I share even with noble Lords in the Alliance. On the other hand, exile, whether in flight from taxes or the law, is a permanent condition. It was for this very reason that our own preference for a 10-year right was overturned in favour of a right for only five years and, therefore, most often for only one general election. Your Lordships will recall that that curtailment is backed up by the requirement inserted in the Bill, in Clause 2(3)(e), to make a declaration that the applicant does not intend to reside permanently abroad. It was specifically put into the Bill in another place to deal with the anxiety which the noble Lord has expressed. Therefore, although he may not be satisfied with the provision, it is there. I have said that we think the five-year rule is shorter than we should like it to be. The Government have made no— Lord Harris of Greenwich: My Lords, if the noble Lord is saying that it is shorter than the Government would like it to be, is he indicating that the Government would be happy to accept an amendment in Committee?

Lord Elton: My Lords, I sought to make it clear in my speech introducing this Bill that on matters of the election of representatives to another place we have to proceed, as far as is possible, by agreement between the parties. What we have before us in the five-year rule is, in fact, such an agreement. It was arrived at by what I can only describe as retiring from the 10-year position, via the seven-year.

My Lords, would it not be more correct to say that it was with the agreeement of some of the parties?

My Lords, if we are to get into historical comparisons of detail we should reserve that for a later stage. Nonetheless, it is the position which we now occupy and which we are persuaded to occupy because it appears to represent the overwhelming balance of opinion in the political field in the elected House.

As I have been seeking on three occasions now to say, the Government have made no secret of the fact that this is a compromise. It is a compromise between those who would prefer a longer time limit, or indeed none at all, and those who are opposed in principle to any extension of the franchise to British citizens resident abroad. There is nothing shameful I think about the need to compromise. Major representation of the people legislation has always been brought forward on the basis of consultation and, where possible, agreement between the parties represented in another place. The Government would have set a dangerous precedent had they attempted to force this Bill through in the teeth of opposition from the other parties. In the Government's view, the provisions of the Bill extending the franchise to British citizens resident abroad marks a significant step forward. It could add perhaps up to half a million new electors to the register.

My Lords, is that figure based on seven years or five years? I understand that in the Government's reply to the Select Committee they gave 600,000 and 100,000: but that I think was based on seven years. Does the figure that my noble friend has given now apply to five years?

Yes, my Lords. My noble friend will not have been as aware as the rest of your Lordships that, whatever the answer is, it is based on five years. I think that there are certain skills exercised at Cheltenham this afternoon that have extended themselves into the House.

My Lords, will the Minister agree that his very worthy colleague had a hand in his reply?

Indeed, my Lords. The new provisions ensure that British citizens who go to work abroad may vote in at least one parliamentary general election and one European parliamentary general election after they leave, provided of course that they have not already left, as my noble friend was at pains to point out. But the real significance of these provisions is that they establish the principle that British citizens should not be disenfranchised because they are not resident here on the qualifying date. In establishing the principle it is right that we should move cautiously, but it will always be open to a future Parliament to extend the five-year period once the new provisions have been seen to be working.

I tried to make it clear at the outset that the Government's aim has been so far as possible to secure all-party support for this Bill. The noble Lord, Lord Tordoff, has nonetheless announced his intention to try, may I say yet again, to convert your Lordships to the principle of proportional representation. I think that, while everybody can have his own view on that issue, and those views may not be divided on party lines, one thing is very clear. There is not the slightest prospect of all-party support for the introduction of any form of proportional representation at parliamentary, local government or European Parliament elections at the present time.

The noble Lord, Lord Allen of Abbeydale, raised the question of the voting rights of the mentally ill, as did the noble Lord, Lord Mishcon. I know that many other noble Lords have that interest very much at heart—the rights of mentally ill and mentally handicapped people whose sole place of residence is a psychiatric hospital. Your Lordships will recall that this was extensively discussed in the House in 1982 during the passage of the Mental Health (Amendment) Act. I recall exchanges with the noble Lord on this issue myself and with other noble Lords who will doubtless return to it.

The Government then responded to views expressed from various quarters by giving mental hospital patients the right to register as electors at an address outside the hospital. A great deal of satisfaction was expressed at the outcome. But I should add that the inclusion of the right to give a mental hospital as the address of the voter was mooted during the passage of the Mental Health Bill in 1982 and it did not command the necessary support to carry it into the Bill on that occasion.

The provisions introduced in that Bill and translated, as the noble Lord has reminded us, into the 1983 Act have been in force for only about a year. We shall be studying their operation with care and we by no means rule out changes in the future. This is, however, a sensitive issue. Further changes at the present time would certainly be controversial, and we feel that it is too soon to judge whether in fact the present conditions are operating satisfactorily. I thought I ought to give the noble Lord that faintly discouraging indication at this stage.

My noble friend Lady Elles brought before your Lordships the concern of European Community officials who work in the institutions of the Community and who argue that they should be given a status akin to that of Crown servants resident abroad who have a right to vote for the constituency where they would be resident if it were not for their circumstances as service voters. Successive governments have encouraged British citizens to take up posts in Community institutions, and British officials make a significant contribution to the success of our membership of the Community. The Government accept that those officials are in a special position, reflecting the uniqueness of the Community itself in international affairs. But, subject to anything which my noble friend may have to say at a later stage, we think that it would be wrong to put them in a special position as regards voting rights.

We should have preferred, as I have said before, a longer time limit than five years, but now that we have reluctantly accepted it, it is hard to see how we could justify creating an exception to it for Community officials, because to do so would cast doubt on the contribution made by many other British citizens working abroad in the private sector whose work, as my noble friend has herself pungently said, is every bit as vital to our membership of the Community as that of British citizens in the public service. Any view that she expressed would have to be sufficient to persuade not only your Lordships but another place. I see that she wishes to add to that in advance of the next stage, so I shall give way.

My Lords, I am grateful to my noble friend. I merely wish to recall to him that we managed to make an exception for such people in the British Nationality Act, and possibly, that would be a guidance when discussing this. But perhaps we could raise this matter during the Committee stage of the Bill.

My Lords, I am grateful to my noble friend for revealing to us some of the basis of her optimism in this matter, which I cannot as yet do much to encourage.

My noble friend also would, I know, wish the Government to take the opportunity of giving all British nationals resident in the European Community the right to vote at European parliamentary elections. The present position is that Belgium, the Netherlands and the Republic of Ireland give the vote to all Community nationals who are resident in their territory. The other member states all give the right to vote to some or all of their nationals resident abroad. Before the 1984 European Parliament elections the Council of Ministers discussed proposals from the Parliament for a uniform franchise under which all Community nationals resident within the Community would have been given the right to vote by their country of origin. These proposals raise substantial difficulties for several member states and no agreement was reached.

The Government do not accept that it would be right in the absence of a Community agreement to extend the franchise for European Parliament elections to all British nationals resident in other member states. To do so would involve creating an artificial link between the elector and his United Kingdom European Parliament constituency, a constituency in which he may not have been resident for many years or, in some cases, in which he never may have resided at all. In the Government's view, it would be preferable, if other member states agree, for the Council to decide that Community nationals who live outside their own member state should be given the vote by the member state in which they reside.

My Lords, before my noble friend leaves that point, will he be good enough to supplement the point put to him by my noble friend Lady Elles in regard to the voting rights of officials in Community institutions and particularly officials in the European Parliament? Has he had an opportunity as yet to consider the anomaly of non-representation coupled with liability to taxation? Has he perhaps, with the assistance of the assiduous and athletic noble Baroness who sits next to him, as yet been able to familiarise himself with the protocol to which I ventured to draw attention in the speech of the noble Lord, Lord Mishcon?

My Lords, neither assiduity nor athleticism can always suffice to overcome difficulties of communication. I shall either have to return to this matter at another stage, or write to my noble friend, or, more than likely, both.

We have covered a number of points to which we can return if the House wishes to do so and if the Bill is, as I trust it will be, given a Second Reading. We shall, of course, listen very carefully to everything that is then said. In general, however, we hope that an acceptable balance has now been struck and that on the main issue covered by the Bill your Lordships will not seek to tilt the balance too far in one direction or the other, having in mind the great difficulty of achieving it at all. I believe that this Bill is more clearly drafted than some with which we have to deal, although it legislates by reference—unavoidably, I may say—more than one would wish. I trust that your Lordships are in sympathy with its main objectives. I beg to move.

On Question, Bill read a second time and committed to a Committee of the Whole House.

rose to ask Her Majesty's Government what success is being achieved in the establishment of an effective internal market within the European Community.

My Lords, one has only to walk down an ordinary British high street and look into a shop window, or to venture into an ordinary British supermarket, to realise how much has been done in establishing a true common market between our ten countries. By the same token, though, one only has to be involved in import-export within the Ten, or to be involved in the European institutions that monitor such movement of goods, to realise how much remains to be done. So much has been achieved and trade has expanded to such an enormous level between us that we have now reached, unfortunately, something of a bureaucratic bottleneck. This is shown by the phenomenon of trucks and railway wagons stacked up at frontiers, non-tariff barriers and problems that arise because too much is apparently being moved for customs authorities and immigration authorities to deal with.

This is why I welcome very much the short debate initiated by the noble Lord, Lord Ezra. I hope that this enormous subject that deserves perhaps more than one or two speakers on an Unstarred Question can nevertheless be tackled seriously as a matter of urgency by Her Majesty's Government. We know that the Government set great store by the implementation of a true common market. We know that they agree with the emphasis placed on this matter by President Delors in his speech to the European Parliament a few weeks ago. Ministers point out frequently the undeniable truth that we do not yet have a common market or that we have it only in certain areas and that the conspicuous gap in the Common Markt occurs in the area where this country excels—in particular, the service sector.

The Foreign and Commonwealth Secretary has pointed out again and again the need to establish freedom of trade in banking, insurance, and of course in air travel. The idea that we may have to wait until 1992 to achieve freedom in these areas is very distressing and disappointing. I want to pay a tribute here to the work done by my European parliamentrary colleague, Mr. Basil de Ferranti. I am sure my noble friend the Minister has heard of his group—called the Kangaroo Group—which draws attention to the flaws in the Common Market through publication, meetings, lobbying and careful preparation for the improvements which we hope will come soon.

Examples abound in the publications of that group of nonsenses at frontiers, quotas placed on the movement of lorries from one place to another, the absence of new technology to be used by customs officials in dealing with the forms which are being presented, and the need of some lorry drivers to present as many as 40 documents if they wish to cross a European Community frontier. This is a very far cry from the pledges of President Delors and the hopes of Her Majesty's Government. We must hope that these barriers will be overcome.

Every week Members of the European Parliament receive complaints from traders about problems caused by value added tax, by differential rates and by different rules from one country to another in the imposition and timing of the levying of VAT. All this causes important barriers to trade.

As the noble Lord, Lord Ezra, mentioned, perhaps the most disgraceful elements of all in this equation are the disguised import controls, the so-called health checks, the so-called safety checks on automobiles, the confinement of import points to one airport or seaport. All this is done not to make trade easier but to make it harder, and particularly to prevent imports of one product or another in order to protect the market. It can be done through restrictions on labelling of ingredients. It has been said, whether accurately or not I cannot swear, that, taking a tube of Smarties as an example, the red ones may be illegal in Italy because their safety laws prevent the use of cochineal whereas the blue ones may be illegal in Germany because the particular dye in them is not considered safe in that country. An absence of harmonisation—that dreadful word which is sometimes used in order to criticise the Community—is responsible for hold-ups and barriers which do none of us any good.

I should like therefore to put specific points to the Minister and hope that he can encourage the idea that we are making steps forward and that the 1992 date is at least realistic. Can he tell us anything about the windscreen card—the sticker that can be placed on an automobile windscreen travelling across the European Community frontiers whether on the Continent or arriving at Dover? It would permit a car with its passengers and goods to travel without let or hindrance subject only to spot checks by immigration and customs officials. I understand that this has been proposed by the Dooge committee. Can the Government say whether or not it will be accepted?

I should also like to draw attention to a red herring, a false trail which is sometimes laid in the discussion of this matter. I refer to the twin scourges of terrorism and drug abuse. Whenever we talk about dismantling immigration or customs control we naturally hear cries of protest from those who believe that it will increase the danger from terrorism and drug abuse. I should like to turn that argument on its head and say that an increase in European co-operation, and an increase in the pooling of information and intelligence through the Pompidou committee on drug abuse and through other institutions yet to be set up on terrorism, would be a positive act by the Community to stamp out those two evil activities. It is surely not beyond the wit of human invention to make our Community an extra shield against terrorism and drug abuse instead, as some people do, of using them as a pretext for saying that we cannot dismantle controls on frontiers.

I do not believe that the average terrorist or drug-pusher is particularly deterred by checks at frontiers. What we need, I suppose, if we are to stamp out those two evils, are more checks at other places: within cities or within places where the terrorists or drug pushers work. The frontier may be purely incidental to this. After all, a criminal makes very careful provision if he is crossing a frontier and the time to catch him is when he is off guard, not necessarily when he is going through a frontier well-prepared and well-armed with forgeries and ready to deal with any danger which might arise. I hope that the Government will be able to indicate what they are doing in these two areas.

I should like to turn briefly to a point raised in the previous debate: the problem of criminals from this country taking refuge in other European countries. We have problems with one member country (the Irish Republic) and in one applicant country (Spain). I believe it would be absurd if Spain were to join the Community and were at the same time to remain a place of refuge for people wanted in this country on criminal charges. There must surely be "free movement of criminals", if one may call it that, as well as free movement of goods between Community countries. If they are wanted in Britain it must be possible to remove them from Spain or anywhere else, and the idea of taking political asylum in another Community country must be the ultimate absurdity.

I should like to conclude by adding my voice to that of the noble Lord, Lord Ezra, who moved this debate, and others, on the question of the European Monetary System. The noble Lord, Lord Ezra, is quite right, and those of us who spend a lot of time on the Continent will fully realise that he is quite right to stress the political importance of this country joining the EMS as soon as possible. It is seen very much by our colleagues as a litmus test; an earnest of our good intent in the European Community. Sadly, not everyone on the Continent believes that we in Britain want a true European Community. Many people there believe that all we want is some sort of a free trade area and they see Britain's commitment to Europe as being something less than wholehearted. Sadly, they quote the very poor turn-out in last June's European elections as evidence of Britain's general lack of enthusiasm for and interest in the European enterprise.

I know that the Government want a true common market, true European political co-operation and closer European unity. But there is a crediblity gap, and, spending as much time on the Continent as I do, I believe that our credibility will live and flourish there if we join fully in the European Monetary System. I hope very much that we shall do so. I have emphasised the political reasons for doing so; there are, of course, financial and economic reasons as well.

If this can be done, I believe that we shall make progress over the areas which are emphasised by the Foreign and Commonwealth Secretary in drawing attention to the need for a common market in services. Britain would make tremendous gains and profits if this could be done. There are trade-offs in Europe. I believe that if we were to join the EMS there would not be a straight trade-off for the common market in services, but it would be so much easier politically for Continental leaders to concede these points and give a common market in services, which would be greatly to Britain's advantage. Therefore, I look forward very much to my noble friend's answer to these points. I know that they are being studied very carefully and in great detail by the committee under the chairmanship of the noble Baroness, Lady White, so this debate is only one of many that will take place on this vast subject. It is one of the most important areas of parliamentary concern. I look forward to what the Minister will say, and I am grateful to the noble Lord, Lord Ezra, for introducing the debate this afternoon.

My Lords, may I intervene very briefly without having my name down to speak. I have just returned from Australia, where I have had several weeks of discussions of all kinds. One of the main requests to me was that for information about our progress in the Common Market. I think that we are treating our old trading partners very badly. We are far too insular and far too inclined to look inwards. We should be telling our old partners precisely why we went into the Common Market and what progress we are making. I implore the Government to get the Central Office of Information, or whoever it may be, to disseminate this information as soon as it can possibly manage to do so.

Last year we on Sub-Committee D on the EC investigated the question of motor-cars. It was stated at that time that the EEC's new regulations were aiming at preventing car prices from differing by more than 12 per cent. from country to country. This is a prime example of how it is not a common market. I want to make a plea for the firming up of the regulations which were aimed at preventing car prices from differing since the time we debated this question last year. Motor-car manufacturers' profits and losses must not be the only criteria in assessing the benefits of competition in the EC market. Lower prices for cars would increase the real income of most households in this country, and the consequential increase in spending power would, in turn, mean more consumption and so lead on to more output and more jobs.

High prices have attracted importers to the British bonanza. Surely, whatever the exact size of British Leyland's loss, it is the height of folly to subsidise that company by rigging the whole of the British car market, and incidentally helping British Leyland's competitors more than British Leyland itself. What is happening is that practically every car the Japanese make and distribute in this country—one of the most lucrative countries in the world to sell in—represents an extra subsidy to the Japanese so that they can modernise their factories. Would it not make more sense to pay the subsidy to British Leyland out of taxation and thus enable the British consumer to get his car at a fair price? Sooner or later we shall have to do it. Why not now?

As matters stand at the moment we can expect more and more cars to be imported. Our car industry is not big enough to cope with the world's great giants any more. There will have to be a subsidy for motor-cars. Why not make it a direct subsidy? That is all I wish to say. This debate has given me an opportunity to get this off my chest. I have spent a lot of time on it in the sub-committee upstairs. I should like to know what progress has been made towards making a better common market for motor-cars. Sooner or later we shall have to do it, and it might as well be now.

My Lords, I, too, should like to congratulate the noble Lord, Lord Ezra, on raising this most important topic. I am glad that my noble friend Lord Rhodes was able to give us a few words, using his own long experience in industry and trade. I want to make it quite clear that I am only too well aware of the problems that Ministers have in making progress in this area. Anybody who has attended Council of Ministers' meetings would not wish to criticise a fellow Minister, or a successor Minister, for not having made progress. In those days it was not even 10 Ministers. I am very much aware of the problems, and I do not want to say to the Minister or the Government that they are to be seriously criticised because we have not got a fully integrated market at the present time. The noble Lord, Lord Bethell, talked about bureaucratic bottlenecks. I wish they were only bureaucratic, but I fear it goes rather deeper than that, as I am sure he will agree. Indeed, he gave examples where the problem clearly goes much deeper and goes, unfortunately and sadly, to the root of political decisions made in member countries.

I must say it has been a pleasure that in this brief debate we have got away from the sterile arguments we sometimes have when we debate the Common Market, whether one is pro-market or anti-market. I see that the last time this matter was debated in this House, on 13th December 1982, my old and trusted noble friend who years back served (if that is the right word) with me in the Treasury was once again seeking to blame the Community for most, if not all, of our industrial problems; although I am happy to say that on that occasion even he was willing to recognise—I quote him—that:

"the EEC can hardly be held responsible for our present troubles any more than can the world recession, which is another favourite excuse of Ministers".—[Official Report, 13/12/82; col. 423.]

So even my noble friend Lord Kaldor, on that occasion, having quoted some of the figures of trade between 1973 and 1981, was willing to recognise that the problems are not ones relating to making the case for or against our membership of the Community. The fact is we are members, and I would hope that all of us would want to see it work as well as possible, not only in Britain's best interests but in the interests of all the people of the Community, particularly workers in the Community and in our own country who are now unemployed but who would not be unemployed if we had a more integrated market.

Having said that, I should like to say that it is obvious, as the noble Lord, Lord Ezra, said—the noble Lord, Lord Bethell, also made the point very clearly—that we do not have a fully integrated market. Both noble Lords gave examples of the lack of progress. In view of the lateness of the hour I shall not mention some of those I had in mind, because I should only be repeating the points they made. I know that the noble Lord, Lord Ezra, will understand if I do not repeat them. I think the major case was made very well in the report of our own Select Committee in the Session 1981–82—the seventeenth report.

The part to which I was particularly attracted is contained in paragraph 66. There the committee said:

"The main common feature of all the various types of barriers to free trade in the internal market of the EEC is uncertainty".

Anyone who has had anything to do with trying to export to the Community—and I have had a little experience and know of many others who have had greater experience—will know that one of the main reasons companies decide not to bother any more in the case of some countries is the certainty that they will have great difficulties in getting through the barriers that are put up against them. It is that certainty, and the uncertainty in other cases when companies know that so many problems will be put in their way and so many barriers of one kind or another will be erected against them, that makes traders in this country say "What the devil, I might as well look elsewhere".

I do not wish to take up the points made by the noble Lords, Lord Ezra and Lord Bethell, about the EMS and the exchange rate mechanism. I think that I have upset my own party enough for one week and so I shall not repeat my arguments on that front—they are well known. The noble Lord, Lord Bethell, said that there is a lack of credibility as regards Britain among member states of the Community. I do not think that we need to be too defensive about that because there are many member states other than Britain who put up real, practical barriers of the kind to which the noble Lord referred. When those member states criticise us for not wishing to be in the EMS—and in my view it is wrong that we are not in the EMS—we have a good reply for them. We can say that they, too, should learn to be purely communautaire in their actions, rather than use words in relation to the barrier which they actively support in their own countries to prevent a truly free trade across borders.

One of the useful comments that I noticed from the last time that we debated this subject on 13th December 1982 was that the noble Lord, Lord Cockfield—who, incidentally, should now be in a position to do something about this, always assuming that the Council of Ministers will enable him to do so—said, when referring to the 17th Report of the Committee of this House, that he was hoping to see real progress before the end of March 1983. I suppose that as Minister one has to be reasonably optimistic. However, that is perhaps stretching matters a bit; it is now two years later, and there is still much progress to be made.

Ever since that debate we have been told in successive Answers to Questions both in this House and in the other place that, to use the phrase used by the Minister of State Mr. Channon in another place in December 1984, "We shall continue to press", and again in February 1985, "We hope to see this or that in operation very soon". I hope that tonight the Minister will give us some concrete examples as to where some of this progress is in operation now.

In your Lordships' House we should also be aware that not only Ministers and politicians are at fault for the lack of progress in removing barriers to trade, goods, services and people. My own profession, the accountancy profession, and many other professions will find many reasons to put barriers in the way of preventing freedom of movement across frontiers. There are many in industry who complain bitterly about the problems that arise from the barriers that are imposed, who will also bring pressure to bear on Ministers and politicians not to be too quick to remove barriers because they would regard that as damaging their particular industry. Therefore, it is not only politicians and Members of this House who should be taking all the blame; there is plenty of blame to be attached to others, too.

When the Minister replies perhaps he will give us his own realistic assessment as to when he sees some of the specific barriers to which reference has already been made this evening being removed. Above all, perhaps he will give us some indication as to how soon the Council of Ministers—because at the end of the day it is the Council of Ministers rather than the Commission which will have to take the real decision—would hope to see a realistic end at least to some of the uncertainties, so as to enable us to move more freely into the area of true integration in trade, services and persons, which would do so much to help us in Britain, particularly in the field of employment.

My Lords, first, I must apologise for the absence of my noble friend Lord Lucas of Chilworth, who otherwise would of course have been answering this Unstarred Question. My noble friend is away in Germany and Switzerland promoting trade and inward investment, and I am sure that all noble Lords will hope that he is successful.

We are all grateful to the noble Lord, Lord Ezra, for raising this important question. As the noble Lord said, the time is most opportune. Negotiations are being completed for the entry of two more democracies, Spain and Portugal, into the Community, which will increase the Community's size to 320 million people—a very powerful market base for industry. We also have in Brussels a new Commission who have made it clear that the completion of the common market in both goods and services is their top priority.

It is a priority which the Government share. Behind the Community's common external tariff wall is a single market which offers industry a basis to develop its international competitiveness, and which offers the consumer a much greater breadth of choice. The Common Market is much more than just a free trade area, and I should like to touch further on that theme in a few minutes. But I shall first briefly cover our trading performance and prospects in the Community.

Our deficit with the rest of the Community in manufactured goods has come in for a considerable amount of comment recently. Although our deficit on visible trade was offset by a roughly similar surplus on oil, it certainly points to the scope that exists for increasing our exports of goods to the rest of the Community. And there is, indeed, encouraging evidence that British exporters' attitudes towards the wider Community market are changing. United Kingdom exports to the rest of the Community began to rise strongly towards the end of last year—and that was happening before the recent fall in the exchange rate, which should give a further edge to our price competitiveness in most European markets.

These markets are of course of increasing importance to United Kingdom exporters; 39 per cent. of United Kingdom exports of manufactures now go to Community countries compared with 29 per cent. in 1970. Despite this very considerable realignment of our trade towards the Community, the common market can seem very far from being just an extention of the domestic market.

Part of the problem is that of catering for different consumer preferences and in different languages. Those are the facts of business life which United Kingdom industry has to master in order to sell in Europe. I do not believe that if you build a better mousetrap, the world will beat a path to your door. Industry itself has to get out and sell it in terms that make sense to the consumer. Government can only set the right business framework.

In terms of this framework, doing business in the Community internal market is less straightforward than it should be. Differing national standards and regulations, form-filling, transport permits and frontier delays all add to industry's paperwork and costs. Surprisingly little of this is protectionist in intent. It is largely the accretion of decades of national administrations collecting taxes, trade statistics or MCAs, or responding to legitimate preoccupations about the safety and health of employees and consumers, in their own way. It may produce a system which suits each national administration, but can make life much more difficult than is necessary. Your Lordships' Select Committee on the European Communities produced in 1982 a most helpful and sober assessment of these detailed barriers to the internal markets and so I shall not detain your Lordships further with the problem.

In terms of a solution considerable progress has been made over the last two years. Heads of Government in December 1982 set the Council of Ministers a number of tasks on the internal market. I am pleased to say that most of these tasks have now been discharged and the results, starting to come on stream this year, should be seen in terms of reduced goods delays at borders, simpler and less paperwork for traders and much fewer of the sudden changes in national regulations which can be so disruptive to exporters. All of these are welcome assistance to industry and free of the annoyance of "harmonisation for its own sake".

That is by no means the end of the task, however. Noble Lords will know well the imaginative and forceful character of the noble Lord, Lord Cockfield, the new commissioner for the internal market. He has made an energetic start. At their February meeting, the Council of Ministers considered a Commission proposal for a much faster and more effective means of removing barriers to trade caused by differing national regulations or standards, as the noble Lord, Lord Ezra pointed out. It rests on the simple premise—embodied in the European Court's Cassis de Dijon judgment—that other things being equal if a product is safely marketed in the United Kingdom its exporters should be able to market it without further ado in Germany, France or wherever. And vice versa. In other words, that there is much less difference in member states' objectives for health and safety than the differences in techical solutions to these objectives would appear to suggest. Of course, if national standards are in principle to be equally valid there need to be safegurds to ensure that the level of protection for consumers and employees is not undermined. The United Kingdom has worked closely with the Commission in developing the detail of this initiative and strongly supports its general direction. The new Commission are also giving high priority to liberalising trade in services in the community which, again, we fully support.

Our objective is to see the City of London as a major financial centre in an increasingly integrated market, enjoying so far as possible freedom to provide services throughout the Community without needing to establish abroad. The Community market in financial services is at present far from free. The rights of establishment and particularly of services are extensively nullified by national regulations, and the free movement of capital is restricted by national exchange controls. I do not underestimate the real problems here in reconciling member states' differing approaches to the regulation of financial and other services; and the legitimate preoccupation with protecting the investor has to be taken very fully into account. But the obstacles to a free market in goods must have seemed just as daunting in 1957; so the challenge is not an impossible one.

The Government will continue to press for a liberal market in non-life insurance, unit and investment trusts and accountancy services. We shall look sympathetically at proposals—as a modest first step—to liberalise non-frontier housing finance in the Community. We have recently received a proposal from the Commission for a directive on freedom of establishment and services in the field of mortgage credit, which the noble Lord, Lord Ezra, mentioned.

I do not want to prejudice the consideration which a sub-committee of your Lordships' Select Committee on the European Communities is currently giving to these proposals, but I hope that we can match the positive interest in cross-frontier business being shown by the building society movement with the Government's strong support for internal market measures which will bring competition and practical help for the ordinary citizen. I hope that we shall be able to work out a good directive on this subject.

We shall press the Commission for increased vigilance on the severity and duration of national exchange controls. There have been some encouraging signs, albeit minor as yet, towards a relaxation of exchange controls in some member states—and we of course have played our part in full—and of moves towards a more integrated capital market for industry with the rapid growth of the Eurobond market and the private sector's lead in developing further the role of the ECU.

Our support for the concept of the free movement of goods, services and capital also extends of course to free movement among the professions. A number of Community directives have already been adopted to ease freedom of movement in jobs and professions. In the medical field for example there are directives permitting suitably qualified doctors, dentists and nurses to practise in all member states. These recognise the key importance of maintaining standards of training which guarantee the preservation of member states' qualities of health care. Subject to the same general proviso that professional standards must be maintained, the Government would like to see continued progress in Community work on the rights of establishment for the professions; for example, through agreement on suitable directives on accountants, pharmacists, architects and engineers. Our own professional standards in these and other fields are a matter for pride, and our professions should benefit to the full from the Community internal market.

I should not like to mislead your Lordships' House that the creation of a genuine internal market is simply a matter of completing unfinished business. In democractic societies there will always be fresh pre-occupations to which governments have to pay heed. The Community faces such an issue at present with the very real environmental and political problem faced by German criticism about damage to her forests. Part of her response is to require the introduction of American emission technology on cars. That risks erecting a new and potent trade barrier to an already hard-pressed European motor industry in requiring a separate production run for the German market.

The Community is urgently engaged in finding a common solution which gives a radical environmental improvement but one which makes sense in terms of European technological development, is effective in its use of Community resources and does not harm the international competitiveness of a key European industry. For international competitiveness is what the internal market is about—free competition as a spur to the increased efficiency which we need in today's harsh world, and free opportunity for industrial co-operation.

In the industries of the future particularly, European firms are at some risk of being overtaken by American and Japanese multinationals. That is why the Government have strongly supported efforts in the Community to give a cost-effective pump-priming stimulus to common research effort as the noble Lord, Lord Ezra, mentioned—and the ESPRIT programme is a good example—and to establish common industrial standards for information technology, telecommunications and robotics. These prevent wasteful duplication of research effort, and to enable European firms to match their area of specialist expertise to create a broadly based set of products to compete with Japan and America. This is important too for users of these products. General Motors in America has shown what can be done to improve efficiency by linking "islands of automation" in their factories. European users cannot afford to miss this chance, either.

My Lords, the Government attach the highest importance to ensuring that industry keeps to the forefront of technical developments. The challenges presented by the new technologies are now so great, the pace of development so fast, and the cost of research so high that no one country can be expected to face them alone. The Community therefore plays an important role in supplementing national R & D efforts by providing a framework in which member states' resources can be pooled together. For this reason the agreement reached by the Research Council held on 19th December 1984 to commit a further 1,225 million ecu—approximately —736 million—towards Community R & D activities for the next four or five years is to be welcomed.

The research council also succeeded in agreeing a number of important new programmes—radiation protection, radioactive waste management, fusion, biotechnology, the stimulation of S & T interchange, basic research in industrial technologies, third non-nuclear energy, reactor safety, and European strategic research and development programme in international technology, which I have already mentioned.

Those accord with our perception of Community R & D in that it should be in appropriate areas and be cost-effective. In general, United Kingdom priorities for future Community R & D remain as research aimed at the efficient management of energy resources and enhancement of the Community's industrial competitiveness, of which the Esprit programme is an excellent example.

The noble Lord, Lord Ezra, my noble friend Lord Bethell, and the noble Lord, Lord Barnett, mentioned the European monetary system. This is the first time that I have spoken on the European monetary system, but I suspect that noble Lords will probably have heard before the answer I am going to give. The Government accept that EMS has contributed to exchange rate stability in Europe and furthered European integration. It is said that the United Kingdom will join the exchange rate mechanism when conditions are right. However, while the oil market remains volatile sterling may be subject to special pressures which would make our participation difficult.

My noble friend Lord Bethell mentioned air transport. We all recognise the efforts which the noble Lord has made to give people better and cheaper air services in Europe. The Government are doing all they can. We have secured new liberal arrangements with the Dutch and Germans, and we are pressing all our European partners to do likewise. Progress in the Community has been poor, but the Council has committed itself to adopting a first group of measures on fares, capacity controls, and competition policy by the end of this year. We shall do everything possible to ensure that this deadline is kept. Air transport is an essential aspect of the Common Market.

My noble friend also mentioned the green sticker system used in France and Germany for motor cars. That system only applies to passenger traffic at land borders and not to goods vehicles, which suffer the most serious frontier delays. Nonetheless, we shall be following the green sticker experiment with interest to see if any useful lessons can be drawn for United Kingdom port procedures.

I was also interested in the comments of the noble Lord, Lord Rhodes, on the Commission's recent regulations for motor vehicle distribution. In the case of motor vehicles, selective distribution can clearly bring benefit to consumers as well as to manufacturers and dealers. The block exemption, which gives greater legal certainty to the parties concerned than a case by case approach, is therefore to be welcomed, but the Government could not accept a situation in which the selection of dealers and the acceptance of territorial or other restrictions by both the dealer and manufacturer resulted in partitioning of the Community market. That would be wholly inconsistent with the objective of a genuine common market. The safeguards in the Commission's regulations are therefore an essential part of the package and the Government will be watching with close interest to see how the Commission applies them in practice.

We have had a most interesting and useful debate. I hope I have managed to answer as many as possible of the questions that were raised. I will read most carefully what has been said and if there are any questions which I have not answered I will endeavour to write to noble Lords.

House adjourned at twelve minutes past six o'clock.