Clause 1

Safety of Children in Cars – in the House of Commons at 12:00 am on 14th March 1979.

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INCREASE IN LIMITS ON LOANS, ETC., TO NATIONAL ENTERPRISE BOARD, SCOTTISH DEVELOPMENT AGENCY AND WELSH DEVELOPMENT AGENCY

4.30 p.m.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

On a point of order, Mr. Deputy Speaker. I draw your attention to the misprints in amendments Nos. 5 and 6. Perhaps the misprints illustrate the way in which we all talk bureaucratic mumbo-jumbo to each other: nobody notices, and therefore it does not matter. There is a reference in these amendments to an unknown body described as the"Public Sector Earning Limit ". It should be the"Public Sector Economy Unit ". That correction may be helpful to Ministers.

I beg to move amendment No. 1, in page 2, line 1, leave out ' £3,000 ' and insert ' £2,700 '.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine):

With this we may take amendment No. 2, in page 2, line 2, leave out ' £4,500 ' and insert ' £3,000 '.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The characteristic of our Committee stage on the Bill was that the Government were unable to defeat any of the amendments put forward by the combined Opposition parties. Inevitably, as a result, our proceedings today have a slight air of deja vu—we have more or less a re-run of the Committee stage amendments. One fresh element in today's proceedings is that we all welcome back the right hon. Member for Manchester, Ardwick (Mr. Kaufman), who was absent from the Committee stage while he was moved to deal with the industrial situation and his right hon. Friend the Member for Swansea, West (Mr. Williams) substituted for him.

It was evident both on Second Reading and in Committee that there were considerable disagreements between the two sides. The Minister of State was quite consistent in his criticisms of us, and we have been equally consistent in our views about the National Enterprise Board. We think that the NEB, put in the most optimistic light, is irrelevant to Britain's industrial problems and probably will prove extremely harmful. It is doing nothing to strengthen the competitiveness of British industry. It brings a dimension of politics into British industry and it is a wrong concept. It is wrong to think that there is an industrial structure which a group of politicians or people in Whitehall or Grosvenor Gardens can decide upon as a blueprint for the type of structure that we should have. We also take the view that viable companies can obtain finance from the markets and those that cannot do not deserve it.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

Will the hon. Member tell us whether this means that the Conservative Party, if elected in the next general election, will dismantle the NEB?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The hon. Member has anticipated my very next words. I am about to outline our policy and attitude towards the NEB.

When he moved the Second Reading of the Bill, the Secretary of State referred to the NEB as the sixth largest group in British industry. What is it sixth in? Is it turnover or employment? It is certainly not profitability. But beyond any question of doubt the NEB now has an important and sizeable allocation of resources, and it is our fear that the way in which it is conducted will lead to gigantic misallocation and waste of public money. Nothing in the NEB's track record so far gives us any cause to revise our original view or any reason to think that it will be anything other than irrelevant to British industry.

Since the Committee stage there has been one new development. We have all read the comments of Sir Douglas Wass, permanent secretary to the Treasury, about the gigantic sums of money that the Government are diverting into low return projects. This point arises again in our next group of amendments. That is precisely the criticism that we have made repeatedly of Government industrial policy. They are diverting huge sums of money into areas of very low or negative return.

We believe that the NEB should be compelled immediately by the Government to sell off as much as possible of its portfolio. We also believe it should be prevented from making any new acquisitions and should not be given more money in order to go marauding through the private sector of British industry.

Given that that is our view, most people will agree that the figures in our amendment are extremely modest and reasonable. We want to limit the amount of money going to the NEB in a way that will allow it to honour its existing commitments to Rolls-Royce and British Leyland.

The figures in the Bill are a little deceptive. The figures relating to the financial limits in the Bill are not comparable with the financial limits in the previous legislation. For the first time the financial limits in this Bill include the private sector borrowings of partly owned subsidiaries of the NEB. Not all the money is a huge increase in public expenditure.

This is precisely what has put the Government in such a dilemma. They do not know whether to present this as an enormous increase in public expenditure or as a rather modest increase in public expenditure. Characteristically they have decided to do both. When the Minister faces his hon. Friends below the Gangway he talks about a great advance for Socialism and a massive increase in public expenditure. When he is upstairs in Committee and there is some possibility that our proceedings may be delayed, or when he is talking to the CBI, a rather different tone is adopted. He tends to claim that this is a very modest increase and points out that for the first time the figures include the private sector borrowings of the partly owned subsidiaries.

We believe that the money to be made available through this Bill is far too much. That is why we are opposed to it and have put forward these amendments. I shall explain the precise basis of the figures. At present the NEB has spent and is committed to about £830 million of public expenditure. The private sector borrowings are another £800 million. Over the next three to four years, those private sector borrowings are expected to increase to about £1·2 billion. Therefore, £830 million in existing commitments and expenditure and £1·2 billion of private sector borrowings make a total of £2 billion. In addition, the existing commitments of the NEB to British Leyland and Rolls-Royce amount to between £600 million and £700 million. Altogether, that adds up to £2·6 billion or £2·7 billion. That leaves, under the existing limit, an amount of £300 million to £400 million for the other activities of the NEB.

I have outlined the simple arithmetic so that the House can see that our proposal, in opposition to the NEB and its activities, is extremely modest. It aims to cut back the expenditure of the NEB to prevent the other activities—the private sector marauding—over and above its commitment to British Leyland and to Rolls-Royce. We regard many of the recent activities of the NEB as totally irrelevant and unnecessary.

The NEB has offered finance to many people who have been turned down by provincial bank managers from John o'Groats to Land's End. It has become involved in endless projects—tanning, machine tools, office equipment, clock making at St. Leonards and selling private medical services overseas. The diversity of its activities is a worrying feature. The sheer variety of problems and different types of businesses that it has to consider makes one doubt the competence of the NEB.

Photo of Mr Giles Radice Mr Giles Radice , Chester-le-Street

Would the hon. Gentleman, in view of his criticisms of the NEB, tell us whether the Conservative Party if, by some misfortune, it were returned to power after the general election, would do away with the NEB?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I have devoted several minutes to that point. Without wishing to be churlish, I suggest that the hon. Gentleman studies my speech in Hansard.

We strongly reject the argument that there is a gap in the capital market which only the NEB is able to fulfil and that smaller companies cannot get finance from sources other than the NEB. This is an old argument that we have heard over and again—we heard it in the 1930s. A number of different Government backed institutions have been brought into existence to deal with the problem, such as FFI and the Equity Bank. None of the bodies found that there was an enormous demand for its services. Like other lending institutions in this country, they found that, far from there being a lack of money, there was too much money. The problem arises from the lack of opportunities and high returns to be earned in British industry. That is the fundamental industrial problem—not the lack of finance but the poor rate of return on capital. None of the activities of the NEB makes the slightest difference to that problem.

4.45 p.m.

Photo of Mr Giles Radice Mr Giles Radice , Chester-le-Street

The hon. Gentleman told my hon. Friend the Member for Preston, South (Mr. Thorne) that during the course of his speech he would answer his question about the NEB. I have given the hon. Gentleman an opportunity to do so, but he has not taken it up. I wonder whether I can give him a further opportunity to say what would happen to the NEB if, by some misfortune, the Conservative Party were returned to power?

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I have made it crystal clear that a Conservative Government would, first, remove the power of the NEB to make any more acquisitions—to go marauding over the private sector—and, secondly, compel it to sell immediately as much of its portfolio that can be sold straight away.

The amendment proposes to reduce the amount of money from £3 billion to £2,700 million. It also proposes to reduce the amount for which the Government have to get the approval of the House by order—the increase from £3 billion to £4·5 billion. Some detailed information was received in Committee about how the £3 billion was to be broken down, but we received no explanation of the need for the further increase to £4·5 billion. Perhaps the Minister will tell us what it is intended that the NEB will do with the money.

Under the revised plan for British Leyland—the Edwardes plan—there is a £200 million to £300 million investment only to be made. However, under this increase there is to be a further total increase in public expenditure and private borrowings amounting to £1·5 billion. My hon. Friends and I do not believe that there is an excuse for that. That is why the second amendment totally rejects that increase and leaves the maximum upper limit of money available to the NEB at £3 billion.

We believe that the proposed increases are unnecessary. We disapprove of the NEB's activities in smaller companies. Furthermore, the NEB has assets in its portfolio that we believe it should be encouraged to sell. Why does it continue to hang on to its shares in Ferranti? Those could be sold off easily and some of the money used for further investment.

Why does the NEB maintain its shareholding in ICL? What is the function of the NEB in relation to ICL? On Second Reading the Secretary of State tried to justify the existence of the NEB by reference to what it had done for ICL. But it has not given ICL any money and has even forgotten to put a director on the board. It appears to have nothing to do with ICL. I can understand why the Secretary of State says that the one company that the Government have not interfered with is one of the few companies in the NEB's portfolio which has been an outstanding success. However, we believe that it should be compelled to release its holdings in ICL.

We do not believe that the NEB needs the vast sums that the Government are considering in the Bill. Its track record is not good. The rate of return that it has earned on its investments is well below the average in British industry. The rate of return projected for the NEB for next year is well below the average for British industry. It makes no sense to devote these huge sums of money to areas of low and negative return. Sir Douglas Wass made that criticism in his memorandum when he criticised the Government's industrial policy.

The Government are spending more and more taxpayers' money on low-yielding investments. They are not saving jobs in soundly based companies but destroying them. They are undermining profitable productive companies in the private sector. For that reason, we do not believe that there is justification for the huge allocation of money, and I ask my right hon. and hon. Friends to support the amendments.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I shall not delay the House for long. I am not satisfied with the reply—if it can be called that—of the hon. Member for Kingston-upon-Thames (Mr. Lamont) to my question. He seemed to be saying that the Tories would not dismantle the NEB and that it was necessary to keep it alive because it would have to continue its interest in Rolls-Royce and British Leyland. I am forced to ask what other companies would be regarded by a Conservative Government as worthy of NEB intervention. It is difficult to foresee, but the last Conservative Government's decision to get involved in Rolls-Royce was a recognition that the private sector had failed there and needed public intervention in order to assist it over a hump—to put it no stronger.

It may be argued that Rolls-Royce was a prestigious part of the British private sector and that the then Government would not have treated other industries in the same way. However, that argument does not stand up because Governments of whatever complexion take decisions about industry and the economy on the basis of prevailing circumstances. Had the present Government not encouraged NEB intervention in our economy, many private sector firms would have made a much smaller contribution to our economy.

The Conservatives fall back on the ideological argument of private, as opposed to public, sector involvement in British industry. They have made no secret of the fact that they believe that we should have a largely private-based business economy. Some of my hon Friends—though I wonder from time to time how far it extends—believe that what is stated in clause four of the Labour Party's constitution about achieving public ownership of the means of production, distribution and exchange should be implemented.

It must be acknowledged that the setting up of the NEB was an attempt to get involved in industry with public money in a way that would be to the advantage of the British people in terms of planning some, if not all, sections of the British economy. However, it has seemed that all too often intervention has taken place as a result of particular problems relating to the market, employment and so on in certain sectors. That could be described as negative rather than positive intervention.

I want the NEB to get more involved in profitable sections of industry and in industries with a high potential. I welcome the Board's involvement in Inmos, because that sector will be taking off and making a substantial contribution to our economic growth. I hope that it will not be too long before we see the first factory in production. I hope that it will be in a depressed area, such as the North-West. If that happens, it will be another reason for welcoming the work of the Board and the part of the Bill giving it the additional funds that are necessary for it to carry out its functions.

The hon. Member for Kingston upon Thames mentioned Ferranti. That is a particularly unfortunate part of the NEB's involvements. The shareholders and the Ferranti family made a killing from their shares as a result of the Board's involvement and I regret that. It would have been advisable for the Board to do a little more research about where its money was to go. It is unfortunate—I put it no higher than that, but I would not blame anyone who put it in stronger terms—that much of the money finished up in the pockets of the private shareholders of Ferranti.

We are on a straight question whether we support or reject Government involvement in the private sector and an increase in the number of public sector enterprises.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

Can the hon. Gentleman tell us whether he thinks that the NEB paid too much for its stake in Ferranti?

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I understand that about £9 million of public funds was involved and if those funds finished up in the pockets of Ferranti shareholders I view that with some misgivings. Perhaps the Minister can clarify the position.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

It may be of assistance to the House if I remind hon. Members that the NEB did not pay anything for Ferranti. That enterprise collapsed before the Board was set up. It was rescued by the Labour Government and when the NEB was established the shareholdings of the Government were transferred to the extremely safe care of the Board.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I hope that that answer satisfies the hon. Member for Chingford (Mr. Tebbit). It still leaves in my mind at least two or three questions that I do not intend to go into at this stage. I welcome the proposals in the Bill—warts and all—and I hope that the Bill will pass as soon as possible.

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

It is a great misfortune for the NEB and, therefore, for the British economy that we have this wholly contrived and artificial confrontation. The blame must be laid at the door of the Government which originated these mischievous proposals.

I can say without risk of effective contradiction that the House would not be debating the amendments if the Government had been more reasonable in the legislation. There were tied votes on all the amendments in Committee. The Liberal vote would not have been given to a restriction of the Bill if the measure had been a workmanlike piece of legislation for furthering the real interests of the NEB instead of being a propaganda exercise to give some sort of superficial comfort to the Left wing of the Labour Party and to establish a temporary unity before the general election.

The Liberal Party does not share the doctrinaire hostility of the Conservative segment of the Opposition to the NEB. We have made clear from the beginning that we regard the Board as a civilised device which has already performed a considerable service to the economy, not-ably in the case of Ferranti.

We would have given a fair wind to legislation that satisfied two simple conditions. First, since the Government have been extremely dilatory and ineffective in producing a permanent system of direct accountability of the NEB to Parliament, we are forced back on the position, on which we have to stick, that public money should be doled out to the NEB in such rations that at least once a year the House should have a major occasion—not just a late-night debate on an order—to discuss the affairs of the NEB.

5 p.m.

We are wholly opposed to the fantastic figures in this legislation which the National Enterprise Board itself says it will be unlikely to need in full for at least three and a half to four years. I am not suggesting that this business of annual legislation for increasing the funds of the NEB is the ideal procedure but since the Government have been obstinate in refusing to set up any more sensible system of accountability direct to Parliament, we are forced back on the view, which we hold tenaciously, that the money must be granted in such sums as require the NEB to come back to the House for legislation at least annually so that the House can exercise proper scrutiny.

The other consideration is our long held view that a body such as the National Enterprise Board should be positively encouraged and, if necessary, strongly nudged to re-cycle its own funds. I share the view of the hon. Member for Kingston upon Thames (Mr. Lamont) that the NEB holdings in Ferranti and ICL, if not at this moment, at any rate in the foreseeable future, should be available in liquid form for the continuing work of the NEB. It is most unfortunate that the NEB's future course, depending, of course, on the votes of the British electorate this year, should be put in jeopardy because the Government, instead of coming forward with a reasonable measure, which would not have run into trouble in Committee, have turned the Bill into this propaganda exercise. Neither out of any ill will to the NEB nor through any desire to cripple it in the way that the Conservative Party, in its present mood, appears to want, but simply because the present Bill defies the doctrine of accountability to Parliament and defies the wisdom of pressing the NEB to re-cycle its own funds, I shall recommend my right hon. and hon. Friends to support these amendments.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

I am glad to follow the speech of the hon. Member for Colne Valley (Mr. Wainwright). He made his view clear in Committee and I agreed with a good deal of what he said today. We have had an extremely difficult task on this Bill, trying to pin down the numbers that we are talking about. We have had little indication of any future opportunity to get more detailed scrutiny.

I support what the hon. Member for Colne Valley said regarding the role of the PAC and the need to trim the figures, if only to register the way in which we are concerned about the levels of public expenditure involved. However we slice this argument, the levels of borrowing of the NEB cannot be divorced from the preemption of resources which may be required for many competing claims. That is why we attempted in Committee to get down to the detailed arguments of the breakdown of the £4,500 million. In this endeavour we totally failed.

Those of us who served on the Standing Committee received a publication entitled"The National Enterprise Board: Facts and Figures"published by the Department of Industry. That document was sent to us by the Minister of State, who was a member of the Committee sitting on the Bill but who is no longer taking part in these proceedings. He did his best to rectify some appalling gaps—

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

The Minister of State is here, but he is still not taking any interest in the debate.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

As my hon. Friend points out, the Minister of State for Emergencies is now back in his place. I hope that he will bend his mind to this debate. We were sorry when his emergency role took him away to deal with other matters. His right hon. Friend provided this booklet of facts and figures but, as I shall show, these answer practically none of the simple and straightforward questions which I would like to repeat to the Minister of State, although his hon. Friend is to reply. My heart sinks even lower at that thought, because we got even less information from that hon. Gentleman than from his right hon. Friend.

I will go carefully through the numbers game again so that even at this late hour the Government can make clear what they are attempting to do with this Bill. My hon. Friend the Member for Kingston upon Thames (Mr. Lamont) spelt out the figures clearly. He gave an estimate of £2,700 million and contrasted that with the figures produced by the Minister of State, as they stood at 31 January 1978. The figures that the Minister of State gave totalled £856 million of known commitments, made up of £452 million of PDC, £164 million of the National Loans Fund, £5 million of guarantees and £55 million for the wholly-owned subsidiary commitments. It would be helpful if the Under-Secre- tary could update these figures from 31 January 1978. I hope that he will have a more recent figure than the £856 million that was given to us in Standing Committee.

The only other information relating to the future, which is what this Bill is all about, is that about £1,500 million—the amount has not been updated in"Facts and Figures "—may be required over the next five years by the non wholly owned subsidiaries. With the present limit of £1,000 million, that would leave £2,000 million to be accounted for. That is the nub of the argument that the hon. Member for Colne Valley was touching upon. We are no further forward in knowing how that take-up is to operate. We were told by the Minister of State that if one took the sum of £275 million a year over the next five years, at the current rate of expenditure of funds by the NEB, the take-up over the five years would be £1,375 million. We were told that this would leave £575 million, or £115 million a year, for contingencies.

Contingencies of £115 million a year is the most mind-boggling concept in accounting that we have ever come across. It is the kind of money that any entrepreneur in the country would leap to get his hands on. It shows the incredible range, even within the Government's own first"guesstimate ", to which this whole Bill brings us.

The hon. Member for Colne Valley is right. It reflects the propaganda exercise that is going on. Even at this late stage, I would like to put on record that all the discussions that hon. Members have had with the NEB convinces us that these figures have no relation to the needs that the board has expressed. I urge the Under-Secretary to deny, if he can, that the limits now offered to the NEB are well in excess of the figures it has called for. I know that he will not be able to deny that.

In our proceedings in Committee the Government fell back on that hoary old chestnut, the 1972 Electricity Bill, and talked about the £2,000 million in this Bill being comparable. We had to point out that the Electricity Bill of 1972 dealt with investment over a 25-year period, by a massive industry, looking in a clear, direct way to its investment needs. In this Bill, we are talking about an extra £2,000 million for which we have had no chapter and verse. We look at detailed questions and our fears continue. As the Bill has proceeded on its tortuous path, we have dragged out information bit by bit. When we come to further amendments, we will have a chance to examine what stage we have reached.

Let us examine the requirements of British Leyland and Rolls-Royce. We referred in Committee to our understanding that the present anticipated requirements were £400 million for British Leyland and £200 million for Rolls-Royce within these borrowing limits. Can the Under-Secretary confirm or deny that these figures are approximately correct? That would at least help us to understand the breakdown of the largest single element within the NEB commitments.

As to how far the NEB can reduce its borrowing limits by self-generated funds, my hon. Friend reminded the Government Front Bench of the situation over ICL and Ferranti. My hon. Friend the Member for Surrey, North-West (Mr. Grylls) pointed out that on our reckoning at least £70 million could be realised quickly and easily, which would be a gesture towards the NEB's self-financing propensity rather than once again the pre-emption of natural resources on a massive scale. Similarly, the question was raised of the return on public dividend capital. Is any assumption of dividend to be written into this five-year period? That at least would be some return to the taxpayers for their commitments.

Finally—this is a matter of great importance, on which we have not yet touched—what is the specific position regarding loss-making companies? Will the loss-making companies continue to draw uninterrupted provision of capital or will some kind of financial discipline be imposed upon them regarding their continued loss-making?

I should like to quote a specific example, and I should be grateful if the Minister would bend his mind to it. I hope that he is as concerned as I am. I understand that Cambridge Instruments is being threatened by its creditors regarding the payment of bills going back to last October on the basis that, unless those bills are paid by Friday of this week, the company will be sued. I can give details to the Minister if he wants to follow up this matter more closely afterwards. The answer being given to the creditors is that their bills cannot be paid because there is no provision of funds available from the NEB. If the NEB is not making funds available to Cambridge Instruments to meet its current commitments, surely we are entitled to know what attitude is being taken by the NEB towards the future financing of Cambridge Instruments, to name but one company.

I could continue with a review of the many questions to which we have not yet had answers. We shall hope to deal with some of them on later amendments. If the Government, with all the prompting and opportunities that they have now had, cannot begin to spell matters out and give us chapter and verse, they must understand that they will have a rough ride before the Bill gets on to the statute book.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

My mind is confused by an earlier occasion today when the Prime Minister, with righteous indignation and pride, told us how he had lambasted our European partners—I suggest, with an unacceptable degree of personal rudeness—because they pursued a policy of subsidising inefficient agriculture. He made the point—for once, I found myself in some sympathy with him—that contributing endless sums of money towards agriculture resulted not in its restructuring, thereby making it more efficient, but in it continuing in its present structure and remaining equally inefficient, but building up surpluses which caused further problems of finance.

It seems strange to find myself favoured by your calling me, Mr. Deputy Speaker, to contribute to the debate when I hear extolled on both sides the virtue of pouring equally large, or even larger, sums of money into industry which is greatly more inefficient than European agriculture. I cannot help feeling that the result will be not to restructure our industry so that it becomes competitive but to give it the hope that it may continue with its practices without changing its ways on the reliable assurance that money will be forthcoming.

We are already below half the levels of industrial efficiency of our major competitors. As the years go by, the gap widens. As the gap widens, we become relatively poorer. Therefore, the take of taxation bites deeper into our ailing industry. In order to keep that ailing industry at the same level of subsidised existence, the amount of taxation that has to be given to it will have to increase. From a dwindling tax base we are now contemplating giving an increasing subsidy to a dwindingly efficient industrial sector.

That is evidenced by those who take the simple precaution of looking at the yield of corporation tax against the total money paid out through the Department of Industry. It is worth remembering that corporation tax is paid by financial and commercial institutions which have nothing to do with industry. The net contribution to corporation tax by industry is probably a small fraction of the total yield of that tax. Yet subsidies to industry are growing fast and have now exceeded the total yield of corporation tax. Therefore, industry is a net beneficiary of the Budget and the subsidies are growing fast.

5.15 p.m.

The Prime Minister goes to Brussels and talks about the possibility of a tax revolt here because British taxpayers no longer want to contribute to the inefficiencies of European agriculture, but he is wrong. In fact, the taxpayers of Europe are subsidising our food through the monetary compensatory amounts. Indeed, he is even more wrong, because taxpayers in this country cannot afford to pay the taxes to provide the subsidies outlined in the Bill. That, incidentally and by the way, is why I wholeheartedly support the amendment, though I wish that it went a little further.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

I hope that my hon. Friend will not stretch too far the analogy between money that goes into the common agricultural fund and that which goes to the NEB. After all, no one has yet suggested that we are in danger of having a British Leyland car mountain or anything of that kind. We do not get anything for this money, whereas we do get surpluses of food for the money which goes to the common agricultural fund.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

No. The Russians get them.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

My hon. Friend the Member for Chingford (Mr. Tebbit) made a fair point. I concede it. However, it does not interrupt the argument that I am putting forward. The results of inefficiency in Europe have been to build up surpluses; but the results of our industrial inefficiency have been that we do not produce. An elementary point often missed by Labour Members is that we can only export a surplus. To export one extra motor car now would cause us to import another to replace it.

This dilemma was highlighted in the letter from Sir Douglas Wass to Sir Peter Carey. I think that the House owes a debt of gratitude to whoever had the wisdom and public spiritedness to make this letter available to us. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) interrupts from a sedentary position, so I cannot deal with his point.

In his letter, Sir Douglas states that The startling and disturbing conclusion is that we have been accumulating prospective losses of real resources at a rate faster than the growth of national income. The Bill, as we all know, is one step along that road. I shall not go through the seven projects that are listed in the letter. If we are accumulating industrial losses at a rate greater than the growth of our national income, should not someone say"Stop "? If the effect of the Government's so-called industrial strategy is not to make our industry more efficient but to land upon us ever greater tax bills to pay, causing us to raise ever greater taxation, ought we not to stop and consider where we are going?

A whole lot of jargon has for years been thrown about this Chamber. The hon. Member for Preston, South (Mr. Thorne) talked about the State getting involved in industry. The Government seemed to think that buying into a few companies, investing in a few profit-making companies and a few loss-making companies, and pouring in resources in order to save them, was a way of tackling our basic industrial inefficiencies.

We cannot go on pretending that there is nothing wrong with British industry except that here and there it needs a touch of financial assistance and a little investment or that it needs only a little guidance from sector plan and the National Enterprise Board. This is not true. Some people blame management and some blame trade unions. I think that both views are unlikely to represent the truth. The idea that every industrial manager in Britain is bad is ridiculous. It would be just as ridiculous to say that every hon. Member of this House is bad at his job. There are good and bad in all professions and the same applies to trade unions.

There is something fundamentally wrong in the relationships between managers, shareholders, workers and customers. This is not the time to try to find detailed answers, but if that is so, should this House not be addressing itself to that problem? We should not pretend that, by forking out money on the scale proposed in this Bill to such organisations as the National Enterprise Board—which we all know to be the candy floss of industrial society—will solve our problems. Such schemes are totally irrelevant to the man on the shop floor, the man trying to sell in the Middle East, or those trying to deal with a strike or a major design problem.

Putting more money into industry creates in the minds of those who work in industry a sense of security—a feeling that the present situation can continue. That deludes managers, investors and workers into thinking that there is nothing that deserves their attention. That is the worst sin of the present Government, aided and abetted, according to the speech by the hon. Member for Colne Valley (Mr. Wainwright), by the Liberal Party. He talked about the Liberal vote going this or that way and about the Liberals doing this or that. How marvellous it would be if I could describe myself as"the Ridley vote ", which might be decisive or divisive in any of these matters. I admire the hon. Member's presumption, but I do not admire his connivance at what is going on.

It can no longer be said that the mere provision of extra funds, whether for the rescue of lame ducks, or for successful companies, or for starting new companies, is all that is needed. That could be counter-productive, because we are at the point where British industry must face the reality of its own uncompetitiveness.

I do not know what is wrong, but I object bitterly when a nation will not face the realities. I object bitterly to the Labour Party trying to disguise the realities. Whatever may be the faults of the Tory Party, the Labour Party has always said that our problems are the fault of the City for not providing the money, or the fault of managers who drive Jaguars and who eat in separate dining rooms.

The truth is that our present state is the fault of the whole of British industry. I believe that we should cut off the supply of funds in order to concentrate the minds of both sides of industry. It is no good their believing that all they need to do is to sit and wait for the House to vote more money. Until we cut off those funds we shall not achieve the necessary changes in outlook that will give industry the chance, once more, of earning its own living instead of being parasitical.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is very experienced in these matters, since he was once a junior Minister at the Department of Industry. In 1970 the Vickers company decided to close the most up-to-date ship repair yard in Britain. I lobbied my right hon. Friends in the Labour Government who decided to put £250,000 into the company. They did that as an experiment.

Within six weeks of that yard being saved the Conservative Party came into office. One of the first deputations received by the hon. Member for Cirencester and Tewkesbury was a deputation led by myself and my hon. Friend the Member for Newton (Mr. Evans). The Tory Government said"Nothing doing. It is finished." Of course, that was because profitability was the only yardstick. If that is the only yardstick, we should abolish the Army tomorrow, because that does not make any profit.

Mr. John Brace-Gardyne:

Rubbish.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

The hon. Member for Knutsford (Mr. Bruce-Gardyne) should be quiet and listen. He has not been here long enough to treat me like that.

According to the Tory doctrine we should close down the Navy, because that does not make a profit, and we should get rid of the Air Force and the National Health Service, because they do not make a profit. We should also get rid of our education services, including the universities. One could go on.

I put it to hon. Members who are going to live much longer that I am—though that is only the law of nature, and not because they have superior qualities to mine—that when I was a young man pits, factories and steel works could be shut down, throwing thousands of men out of work. Nobody gave a damn about what happened to them. Those workers accepted the situation submissively. They had to sign on and, after six months, they had to undergo the means test. As a result of that, they suffered hardships, inequalities and injustices. They were forgotten men.

I beg hon. Members who seek a stable society to understand that such action cannot be taken against workers today. Our people are too articulate. Working men and women know that they count for something today. If they are not allowed to count, they will make trouble. I do not want them to make trouble. I want whatever changes which are coming in society to come about by peaceable means.

5.30 p.m.

Just over the river from me the Vickers company is closing a factory. The company has issued notices. About 750 men are to be thrown out of work. Deputations from the shop stewards have been here every week for the last six weeks. About 1,500 people have been declared redundant in Spennymoor.

Hon. Members may say that this does not matter, that we should not bother about it, that if a company wants to close a factory we should let it do so because that is its prerogative. But those men feel that they have as much right to a place in this society as any of us. If they feel that society and Parliament do not care, and they take a path to which everyone would object, we cannot blame them. We must blame ourselves.

The hon. Member for Cirencester and Tewkesbury referred to what the Prime Minister said today. We have been pouring hundreds of millions of pounds into the Common Market for nothing, ever since we joined. The hon. Member was one of those who held out the glorious spectacle of what would happen when the dynamism from the Common Market had its effect on this country.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

The hon. Member must wait a minute. I did not interrupt anybody. I was taught that patience is a virtue. The hon. Member for Chingford (Mr. Tebbit) was not taught the good manners that I was taught. He believes that he has a right to interrupt. He might be able to get away with that in the company in which he moves, but he cannot get away with it here.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

The hon. Member referred to Vickers. According to my memory of the 1960s and early 1970s, the only threat to Vickers was a damaging demarcation dispute which resulted in a six month strike about who should deal with copper tube. That dispute nearly brought Vickers Barrow to a close.

One of the principal architects of that strike was the right hon. Member for Barrow-in-Furness (Mr. Booth), who was working in Vickers at that time. That was the threat to Vickers, not what I did.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

The hon. Member is mixed up about his geography. Barrow is on the West coast and Jarrow is on the East coast. About 150 miles divide them.

I have enough problems in my own constituency without worrying about what happens in Barrow. But presumably the hon. Member for Cirencester and Tewkesbury has no problems in his constituency. Apparently all his constituents are happy and satisfied so he has all the time in the world to worry about what happens in Barrow and Jarrow.

The hon. Member should read the speeches that he made when we were being induced, or seduced, to join the Common Market. Nobody said then what the Prime Minister said this afternoon—that we should be making a net contribution of £1,000 million a year. The benefits were supposed to flow this way, not the other. We have not found being a member of the Common Market to be a benefit. We have to make substantial payments to it all the time.

The hon. Member for Cirencester and Tewkesbury said that British industry is now a net beneficiary from the budget. What will happen if, God forbid, the hon. Member and his colleagues occupy the Government Benches? Will they immediately do what the CBI says should be done? Will they withdraw all subsidies from British industry, including farming? Will they say that all industry must stand on its own feet? Will they say that nobody should receive Government aid?

Photo of Mr Tom Litterick Mr Tom Litterick , Birmingham, Selly Oak

If the hon. Member said that, the people of Cirencester would cut his throat.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

Everybody knows that the Conservatives would not cut off all subsidies. I shall not be here in the next Parliament.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

The right hon. Member will not be alone.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

There is much more chance of my successor being elected at the next election than there is of the hon. Member for Chingford being elected. We can have a bet on that.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

It is not. These are the facts of life which are borne out by history.

I do not know what Opposition Members say to the deputations of shop stewards who must occasionally come to them because, even in their constituencies, there must be factory closures. I do not know whether they say to the boys"I cannot talk to you. There is nothing that I can do. I am not prepared to lead a deputation." I would almost gamble that there is not an hon. Member in the House who has not sent letters to Ministers asking for public help for private enterprise. They will continue to ask for that help. Particularly as we near an election, hon. Members would not dare say to the lads of Vickers or to the lads of Courtaulds—if they represented them—" Boys, we are sorry, but there is nothing that we can do for you."

Everyone knows that Conservative Members would seek all the publicity that they could by pretending that they were going to move heaven and earth to save the jobs of those who were to be put out of work because of inefficient management.

Photo of Mr Cranley Onslow Mr Cranley Onslow , Woking

I exclude myself from that category. I should have no hesitation in explaining to any such deputation that it was entirely this Government's fault that they were in that predicament and that it had nothing to do with management.

Photo of Mr Ernest Fernyhough Mr Ernest Fernyhough , Jarrow

I am glad to exonerate the hon. Member. It is delightful to meet an hon. Member who is so out of touch with everyone else. I too was also a junior Minister. I listened to the speeches in the House and read the letters which hon. Members sent to me privately. What they said in the House had nothing to do with the contents of the letters which they sent to me.

I believe that what we say privately we should defend publicly. When factories are being closed or run down and redundancies are occurring, I should respect any Tory Member who said to workers"Boys, of course we are making no representations on your behalf. Of course we shall not ask for any Government money to project your jobs." If Conservative Members go with deputations secretly to Ministers and then make speeches such as we have heard today, I say that they are humbugs.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

My hon. Friend the Member for Kingston upon Thames (Mr. Lamont) spoke first about the waste of resources of the NEB and its inefficiency. I shall take that argument a little further. In doing so I much regret the absence of the hon. Member for Preston, South (Mr. Thorne). In his short and interesting speech the hon. Gentleman hit on the real nature of the NEB. He rightly said that the NEB is an essential part of the planned society that he wants. It is because I agree with him that I oppose the NEB's existence.

Of course the hon. Gentleman is right. The NEB is a part of the planned society of those who want administered prices, levels of employment, wages and an entirely political society. That is a total rejection of the philosophy of those of us who say that for all its hideous imperfections and all its harshness the market is the only instrument that will provide change according to the odd, Quixotic and irrational preferences of the people.

When listening to the arguments I realise that I should have been opposed to the NEB even if, for the sake of argument, every one of its investments turned out to be highly profitable. The activities of the NEB are not those in which the State should be engaged.

I advance an argument by way of analogy. If, for the sake of argument, the State decided to take part in the activity of betting on horses, I should not be interested in which horse the State backed in the 3.40 at Cheltenham. I should not be prepared to discuss ad infinitum whether the State backer had taken into account an especially heavy fall of rain shortly before the off. Even if the State backer backed every winner at Cheltenham, it would still be my opinion that the State should not be involved in that activity.

I argue that I am prepared to concede that Sir Leslie Murphy and his men are highly intelligent and honourable, honest, efficient, good administrators, good backers of the right people and that they make every concession that may be made in respect of them. Even if we conclude that they have a much better record of choice and rate of strike than any of the most sophisticated merchant banks in the City of London, I argue that they should not be in that business.

5.45 p.m.

When we come to consider the advantages of allowing the consumer to decide who shall prosper and who shall fail, I respectfully disagree with my hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and for Woking (Mr. Onslow). My hon. Friends talked about people being at fault when their businesses fail.

There is a simple market test of the success of a business. The test is whether the business makes a profit. However, a business may fail for a variety of reasons. It may fail because consumer preference has changed. It may fail because it has bad management, an awkward work force or an idle work force.

The puritan argument that failure is always a consequence of the inefficiency or corruptness of the work force or of the management is not true. Nor is the converse true—namely, that all those who are rich and successful in society are better, more honourable or more Christian than others. They are merely successful. They are merely those who happen to have succeeded in the market place. They are rich, but that does not mean that they are in any way better than those who are poor.

If somebody came to me in my constituency and told me that his firm was failing, I regret that I should not give the same answer as my hon. Friend the Member for Woking and say that the fault lies with the Government. If the firm is not making profits and if it fails, those concerned will have my deepest sympathy, but I shall not necessarily say that there is a political solution. That is because I completely reject the philosophy of the hon. Member for Preston, South.

In reflecting my deep hostility to the NEB, I do not pretend that I reflect the view of the majority of the Conservative Party. There is deep scepticism within the Conservative Party about the efficiency and cost-effectiveness of the NEB. I much agree with my hon. Friend the Member for Kingston upon Thames that he looks forward to the future of the NEB under a Tory administration. It is true that we want no more acquisitions. It is true that we want the NEB to sell its profitable parts, especially parts such as Ferranti and ICL.

We recognise that the NEB must have a short-term existence under a Tory Administration. I agree with the hon. Member for Colne Valley (Mr. Wainwright) that we must have regular reviews—I hope that they will be annual—of the NEB's financial requirements. I add a fifth principle that should guide an incoming Tory Administration. I say that the NEB has entered into contractual arrangements with private citizens and that the arrangements must be honoured.

It is true that those of us who have a strong philosophical distaste for the Labour Party must remember that there has to be continuity within the country. However much we disapprove of the idea of an administered political society as illustrated by the hon. Member for Preston, South, we must recognise that business men have to act within a changing society and that if the rules are immediately changed after a general election there can be no continuity and no stable existence within which they may make sensible decisions within a market framework.

The NEB must exist for some time. We must honour its obligations, but we must force it to reduce its activities so that we may above all reduce the element of political interference and—I go further—political corruption in our society.

Photo of Mr John Cronin Mr John Cronin , Loughborough

I imagine that the hon. Member for Wolverhampton, South-West (Mr. Budgen) does not want the House to take him seriously when he says that the market is the only proper criterion for economic decisions. If that were so, it is certain that British Leyland workers would be out of work on an enormous scale. Hundreds of thousands would be unemployed. Within my constituency, many Rolls-Royce workers would be out of work, and Rolls-Royce would not be producing the RB211 aero-engine, one of the most successful technological achievements and innovations in the world. I am sure that the hon. Gentleman was carried away when he made that rather unfortunate remark.

I was tempted to speak by the interesting remarks of the hon. Member for Kingston upon Thames (Mr. Lamont) when he moved the amendment. He told us in clear terms that it would be the policy of a future Conservative Government to remove from the National Enterprise Board its power to acquire more companies, and also to sell off its portfolios as soon as possible. I hope that I understood him correctly.

I should be grateful if the hon. Gentleman would say what a hypothetical Conservative Government would do if a disaster occurred such as that which happened to Rolls-Royce? That company was nationalised by the Conservative Government under the right hon. Member for Sidcup (Mr. Heath). What would such a Government do in the case of the disaster of Upper Clyde Shipbuilders, which was also nationalised by the Conservative Government? What action would his Government take? Would they do without the help of the National Enterprise Board, which has special expertise in these matters, or would they indulge in some ad hoc arrangement? We should know what would happen.

The leaked letter of Sir Douglas Wass was quoted by the hon. Gentleman. I am not sure that it is good to quote such letters. We do not know whether it is accurate. Nor do we know what were the replies. I should have thought that Sir Douglas was properly putting the strict Treasury point of view, calling attention to the Treasury accountiug point of view. He did not refer to the national interest and the interests of industry. I hope when we hear the results of the inquiry we shall know what was the reply to the letter which Sir Douglas wrote.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

The hon. Gentleman says that the paper by Sir Douglas Wass did not take account of the wider national interest. I imagine that one of the subjects the hon. Gentleman has in mind is employment. Does he agree that it was crystal clear from what appeared in The Guardian that Sir Douglas said that after deducting the sums invested in these loss making projects and taking the potential employment benefit into account, there would still be a massive loss and amount spent by the Treasury on projects which could not hope to become viable?

Photo of Mr John Cronin Mr John Cronin , Loughborough

I accept what the hon. Gentleman says. Sir Douglas Wass objected to money being spent by the Treasury on a large scale. That is why he is there. He is the permanent secretary to the Treasury. Other Departments have taken into consideration the national interest and the effects on industry generally. I suggest that Sir Douglas Wass's letter put only the limited view of the Treasury.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

The hon. Gentleman is on to a serious point as to whether such documents should be quoted. It seems to me that after the publicity that the matter has received, chapter and verse, this is a good opportunity for Ministers to reply to points made.

The hon. Gentleman said that there were other considerations. He has not touched on the commercial judgment that went into the RB 211. Does he, with his experience, accept the view of Sir Douglas Wass that this was an inherently risky project, even on the most optimistic assumptions, and could not break even until 1993?

Photo of Mr John Cronin Mr John Cronin , Loughborough

I thought that the hon. Gentleman was going to make a sensible intervention. How can Ministers reply in advance of a proper inquiry into the matter? That would be wrong and im- proper We should leave the subject of Sir Douglas Wass.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

I understand why the hon. Gentleman is anxious to leave the subject of Sir Douglas Wass. My objection, which I hope that the hon. Gentleman will understand, is that in that memorandum the Treasury produces figures which presumably had not been invented but which were totally contrary to the figures that Ministers gave at the Dispatch Box when they asked the House to grant money for the projects. The worry is that Ministers and the Treasury were not telling the same stories.

Photo of Mr John Cronin Mr John Cronin , Loughborough

I do not think that we should pursue this matter. We shall know all about it when we hear the result of the inquiry. The hon. Gentleman must contain himself. He gets carried away sometimes. It is generally accepted in the Civil Service that there was some criticims of the nature of Sir Douglas Wass's figures.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

If we are to debate these matters—and there are other amendments—it would be helpful if we did so on the basis of fact. One of the facts about the British Aerospace projects mentioned in that memorandum was that neither of them required Treasury spending apart from the £50 million grant to the airbus, which the House approved and which the hon. Member for Chingford (Mr. Tebbit) supported on behalf of the Opposition when he said: At this stage we must to a considerable extent trust in the judgment of the board of British Aerospace."—[Official Report, Second Standing Committee on Statutory Instruments; 7 February 1979, c. 21.] The hon. Gentleman said that when he supported the £50 million grant. The main expenditure on the airbus comes not from the Treasury but from the highly profitable British Aerospace, and the entire financing of the British Aerospace 146 comes from British Aerospace. Not a penny comes from the Treasury.

Photo of Mr John Cronin Mr John Cronin , Loughborough

I am grateful to my right hon. Friend. I had not wanted to touch on that matter further. It makes it clear that Sir Douglas Wass' views in this letter were quoted erroneously.

I return to the speech of the hon. Member for Kingston upon Thames. I am wondering how he will put the idea of removing the power of the NEB to acquire more companies across to his Back Benchers. We heard from the Minister of State on Second Reading, and from my right hon. Friend the Member for Jarrow (Mr. Fernyhough) today, that the Minister has been overwhelmed with letters from hon. Members opposite demanding an increase in the activities of the NEB in their constituencies. It seems that there is some inefficiency on the part of the Whips if they do not bring about more co-ordination between their Front Bench and Back-Bench members, when Back Benchers write letters to the Minister of State containing requests that are contrary to the policy of their own Front Bench colleagues.

The hon. Gentleman was insistent that it would be Conservative policy to sell off portfolios as soon as possible. I assume that he refers to the profitable portfolios, as the unprofitable portfolios are obviously unsaleable.

I assume that the hon. Gentleman has had some experience of market operations. I wonder whether he appreciates the massive loss that would be involved if those portfolios were sold on the open market. We know that if it is the policy of the Government to sell portfolios the price would drop immediately; the price would go down consistently. The selling of portfolios as soon as possible would result in a massive loss of public money. [Interruption.] It is no use hon. Gentlemen laughing. I suspect that the hon. Gentleman does not know much about this. How would he explain the massive loss of money that would result in the fall in the value of the portfolios? I doubt whether he would have an explanation.

Photo of Mr Cranley Onslow Mr Cranley Onslow , Woking

In many cases if there were to be such a book loss that would occur because the NEB, in its anxiety to acquire a stake in British industry, paid considerably above the market value, as it has done in many cases.

Photo of Mr John Cronin Mr John Cronin , Loughborough

I understand that it is the policy of the Conservative Party to sell off NEB's portfolios immediately. That would be laughed to scorn by an office boy in any stockbroker's office. That is a naive policy and would cause a great loss of public money. What would a Conservative Government do with the proceeds of selling off portfolios? Would they put the proceeds in the bank? What would they do with them? They must do something with the proceeds. What would happen to the morale, and consequently the efficiency of those companies, when they learned that their portfolios had been sold off for a nominal price? I suggest that the hon. Member for Kingston upon Thames—who, judging by his bigoted remarks is no doubt due for high office in any prospective Conservative Government—ought to do his homework more carefully about operations in the City. [Interruption.]

I gather from these noises, Mr. Deputy Speaker, that Opposition Members are in some doubt about my competence to pronounce on these matters. I am admittedly a consultant surgeon, but I am also a director of a £500 million company, so I know something about financial matters.

6 p.m.

The hon. Gentleman also complained of the very inadequate explanation of the increase. How much explanation did we receive during the Conservative Government presided over by the right hon. Member for Sidcup? Their electricity Bill brought about a staggering increase in borrowing powers of the Electricity Council from £5,200 million to £7,700 million. Their Post Office Bill increased the borrowings of the Post Office from £2,800 million to £4,800 million. These are staggering figures and I cannot recollect that we had any satisfactory explanation of them at that time. We had only an eight-paragraph memorandum about the Electricity Bill, and we had a glossy pamphlet, with coloured pictures, from the Post Office. The present Opposition have had much fairer treatment than that.

The most important aspect of this matter is that the NEB subsidiaries employ directly 330,000 people, and about another 100,000 are employed in supplying companies. If the hon. Gentleman and his hon. Friends had their way, a lot of these people would lose their jobs. It would be a most disastrous tampering with the activities of the NEB.

I should like to see a real expansion of the activities of the NEB. I understand that, of the extra money to be borrowed, £2,000 million is for the purpose of promoting the efficiency and competitiveness of British industry. This is really needed. I hope that no Opposition Member will suggest that we can be particularly proud at the moment of British industry, which is lagging behind most of its competitors.

There are many reasons for this, and I am prepared to accept the suggestion that it is partly due to over-manning and to industrial troubles, but I suggest to the House that most of the problems of British industry are due to the inefficiency of management. There are too many self-perpetuating boards of directors. Some directors are voted on to boards only because they own large blocks of shares. Often they are completely incompetent. Chief executives often hold their jobs because they have inherited their fathers' shares in the companies.

There is far too much inefficiency in industry and I think that the Bill will go a long way towards making a contribution to enable the efficiency and competitiveness of British industry to be improved. More importantly, I suggest that the Bill will contribute much to reducing unemployment. The amendment, if it were agreed to, would grievously hamper the activities of the NEB. That would not be surprising, because Opposition Members have voted consistently for the past five years against measures to reduce unemployment. I hope that the House will have the good sense to ensure that they do not achieve their purpose this time.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

I cannot remember whether the hon. Member for Loughborough (Mr. Cronin) has supported the Freedom of Information Bill, but I assure him that I share his enthusiasm for looking at the whole of the relevant correspondence, following the revelations of Sir Douglas Wass, and I would certainly support the hon. Member in any efforts he made to ensure that it came to light.

I cannot, however, support the hon. Member in his contention that the amendment is a threat to jobs. It proposes a very minor reduction—what might even be called a probing reduction—in NEB expenditure in order to try to get some information out of the Government. The amount of reduction proposed in the amendment, £300 million, is less than the £575 million proposed in the Bill for contingencies.

We are not talking about closing British Leyland. I am proud of British industry and I do not knock it, or its management or its work force, in the way that some Labour Members do. Let us have no talk about the amendment being a threat to employment. That is absolute rubbish.

The hon. Gentleman asked what would be done with the money were the NEB to sell off some of its activities. There is a very short answer to that question. There would be less call on the taxpayer. This is something that I have been pressing on the Government, not only for other NEB companies but also in regard to British Leyland activities.

Photo of Mr John Cronin Mr John Cronin , Loughborough

The hon. Gentleman's argument is rather naive. If the NEB were to sell any of these portfolios, there would come a moment when it received a cheque from the stockbrokers. How would that help to reduce taxation?

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

If the NEB were turning its money over, it would not be requiring continual extra huge sums of money, with no accountability whatever to this House. That is what the amendment is about. Even from British Leyland there should be a contribution towards its own capital investment.

It is very interesting that I received through the post this morning from SP Industries Limited a communication on exactly this subject, dealing with the future of British Leyland's Prestcold Holdings, from which it is quite plain that that enterprise and its future strategy cannot continue to be linked with and be dependent on funds made available for the modernisation of the motor car industry in this country. That is a very concrete and immediate example in rebuttal of the hon. Gentleman's point. There is no reason why the NEB should not be turning over its assets. We very much wish, for example, that the same thing was happening in new towns and in various other fields of Government activity. But I must not stray, Mr. Deputy Speaker, outside the bounds of the amendment.

We have to get the amendment quite clearly into perspective. We are looking for a great deal more information from the Government. These global sums of hundreds of millions of pounds are being ballooned around the Chamber. Let us get them into the context of the taxpayer. I believe that the expenditure of £3 billion would raise the threshold tax for every taxpayer in this country by £10 a week for starters. It is equivalent to about 15 per cent. VAT. These are very large sums of money indeed, and they must impinge very directly on everybody's take home pay. That is what we are talking about here.

Having put this into context, I want to consider briefly the operations of the NEB. It is quite clear that the NEB will have to continue in some form or another, but it does the NEB no credit to be party to an operation of this description. This is a bogus prospectus for raising funds. No sufficient detail is given. The contingencies item alone would be enough to laugh it out of court if the NEB were seriously trying to look for finance for its operations. Some details would have to be given. We shall be coming in the next amendment to the NEB's corporate plan. This measure does the NEB no credit, and that saddens me, as one who has supported part of its operations.

My hon. Friend the Member for Arundel (Mr. Marshall) raised the very important question of the creditors of Cambridge Instruments. This is a question which has been asked for some time. What is the status of creditors of NEB companies? I take it that the guarantees that are included in this greatly increased limit do not extend to guarantees to creditors. The Government must make up their minds on the position of creditors of NEB companies. At the moment we have only the statement that the NEB will behave as a reputable holding company. That does not clarify the position sufficiently. When I pressed the Secretary of State on this, when the subject was last debated, he said that those words had been"advised ", and that he could not go beyond them or modify them in any way. The time is rapidly approaching in regard to Cambridge Instruments when the Government will have to go beyond those words.

In proposing this amendment, we seek to draw out of the Government exactly what these funds are for. All we seek to do is to limit the amount of the contingencies. We are not seeking to limit the amount of the real funds. We are trying to get from the Government what their position is on self-financing, the turning over of these assets, and the creditors.

The hon. Member for Loughborough (Mr. Cronin)—who I notice has been unable to withstand this assault—raised once more that hoary old myth that all that is needed to improve British industry is more investment. That is clearly not so. We need to make better use of the capacity we already have and to restore fuller utilisation. Any recent survey shows that our utilisation of capacity is woefully inadequate, which is why our cost structure is so bad. We also need to increase our productivity. Just pouring in huge additional sums, as is presently proposed, is not an answer to the problem. That is why I have the greatest pleasure in supporting the amendment.

Photo of Mr Anthony Nelson Mr Anthony Nelson , Chichester

I should briefly like to add my name to those of my colleagues, particularly my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), who have supported this amendment.

Since the passage of the Industry Act 1975, we have had ample opportunity to judge the success of the National Enterprise Board and, indeed, the operation of the Industry Act 1972 as substantially extended and changed by the legislation of 1975. By any objective reckoning, the performance of the NEB has been found wanting in financial terms and certainly in political terms. I believe the House must support the amendments that we have before us.

One of the most interesting—perhaps emotive, but nevertheless sincere—speeches during this debate was that of the right hon. Member for Jarrow (Mr. Fernyhough), who referred to his long experience in representing his constituency, which I know plays an important part in the annals of the Labour Party. He also referred to his close association with and representation on behalf of many industrial enterprises. During the course of his speech he said that he found it inconceivable that hon. Members could not respond in the fullest possible fashion to representation from collapsing industrial concerns, in their constituencies or elsewhere, and that they would be pressing as hard as they could to get such companies bailed out and save jobs.

I am bound to say to the right hon. Member for Jarrow—and he made particular reference to the shipbuilding industry—that his assumption is wrong. We all want to see a thriving shipbuilding industry in this country. I, like many other hon. Members on both sides of the House, have had the privilege of visiting Japan in recent years. One of the many companies that I visited there was Sumitono Heavy Industries Shipbuilding Subsidiary. What I saw there changed, and certainly developed, my own attitude to the question of financial assistance and support for shipbuilding. I saw there vast acreages of factories where steel was rolled out, where numerically controlled machine tools carved up lengths of steel, where automatic welding devices were employed almost entirely in the construction of ships and vast cranes moved together sections of those ships. The only people who appeared to be employed were those pressing buttons in computer rooms and those who, at the end of the day, swept up the bits of steel which had been left on the floor of the factory.

That description may not be welcomed by Labour Members, but what it meant to me was that there is no way, simply by improving the productivity of labour in this country, that we will begin to compete with automated industries such as that.

6.15 p.m.

By pumping money—whether by the NEB or by the various Industry Act schemes—into companies merely to subsidise and maintain those companies in productive manufacturing industry which simply cannot compete in an international market, we are only storing up greater problems for ourselves in the future. Therefore, although I recognise that the right hon. Member for Jarrow has more experience than I of the history of these matters, I venture to suggest that I have more concern for the long-term future. I believe that major changes are needed.

I am not a nineteenth-century Liberal. I do not believe that there have to be sudden changes in policy which cause industries to collapse. However, I believe that there must be a radical period of change over the longer term, certainly over the next 10 or 20 years, if we are at least to maintain our standard of living in this country. Experience over the last 10 years has shown that unemployment, in shipbuilding, mining and agriculture, amounted to over 1 million yet this figure has been more than made up by new employment over that some period.

In the short term, and regionally, of course there will be problems within that overall unemployment figure. But what it shows is that, if we have a reasonably buoyant economy, alternative jobs can be found over a period of time. I think that our energies, and indeed the extent to which Government's provide support and financial assistance for industry in the future, should be directed much more to new and growing areas of industrial enterprise than to those which are encountering greater and greater problems.

As somebody who, I am sure like every other hon. Member, has queued at the Stationery Office for the first publication of the Official Report of the debates in Committee on this Bill, and as one who has followed the proceedings with great interest, I expected to see, in the initial discussions of the amendments by the Committee and today a really detailed exposition of why this extra money is needed.

As a Back Bencher who has not been so closely involved in these matters so far, I am bound to say that there has been no adequate explanation. In simple terms, as I understand it, the NEB has already spent or committed over £830 million. Private sector loans amount to £1·2 billion, and a further £700 million will be required for British Leyland. Over and above that, the provision for hundreds—indeed thousands—of millions of pounds, by way of loans and contingent liability on the taxpayer, provided for in the Bill, is excessive and imprudent.

I ask hon. Members what can be the reason for this greatly raised financial limit and why was it that the Minister of State was unable in Committee to budget for the way this money was to be spent? As he gave no indication of how the NEB was to spend this money, fears arose in my mind that the real reason might be a much greater economic problem which lies ahead for the country. That is a fear which, I think, has been predicted in only one major newspaper—the Financial Times—and the increasing impression is that we are moving into another recession. I hope that is not true, but there are indications in terms of falling demand, interest movements, industrial activity and investment, that a period of recession lies ahead. I sincerely hope that this is not so, regardless of who wins the next general election. If it is to be so, there will be many more companies circling round the Whitehall money pot looking for funds and hoping to be bailed out.

If the Bill really amounts to a provision for a major source of finance to bail out companies over the next three to five years which suffer from a recession induced by the economic policies of the present Government, I feel that the Government should say so. Without a more adequate explanation, the one I have given is the only one I can imagine. I find very little argument, either politically and financially, for supporting the terms of the Bill. To the extent that my hon. Friend's amendment is in no way a wrecking amendment but one which simply seeks to reflect the budgetary requirements of the NEB over the years which lie ahead, it seems to me to be eminently worthy of support. It will receive my support and, I hope, that of my hon. Friends.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

I rise to urge my right hon. and hon. Friends to reject these amendments. They have one simple purpose, namely, to emasculate the activities of the NEB and to curtail its time scale of operation. We think that that will certainly result in unemployment and in less investment of the kind that has been ascribed to our competitors. We believe that it would lead not to the regeneration of British industry, which it desperately needs, but to the kind of backward philosophy and backward thinking towards industry that has been reflected in the speeches of Tory Members this afternoon.

Despite all that they said, Tory Members have not told the House which companies they would not support. Would they not support Rolls-Royce, or British Leyland, or Alfred Herbert? For all the opposition that we have had to the NEB and its borrowing powers, a great number of Tory Members who have been loudest in their denunciation of the NEB and this Bill have also been very loud on behalf of their constituents. They have written to my right hon. Friend and myself asking if they can have NEB projects in their constituencies, and have made sure that they have told the local newspapers at the same time.

It therefore does not do for Conservative Members to come here this afternoon and criticise the Bill and the NEB, while at the same time wanting to make sure that anything it does goes to the benefit of their constituents. The numbers of Tory Members who have asked for Inmos to be located in their constituencies now constitute a very long list indeed.

My hon. Friend the Member for Preston, South (Mr. Thome)—unfortunately he is no longer with us—asked what the Conservatives will do with the NEB. What is their attitude towards it? They have not spelt that out, nor have they spelt out their attitude towards Rolls-Royce or British Leyland. Many constituents who are represented by hon. Members on both sides of the House can only wonder and worry in the absence of any pronunciation of a definite policy about the NEB. The constituents of the hon. Member for Bromsgrove and Redditch (Mr. Miller) will particulary have to worry.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

Since the Minister referred to my constituents, will he kindly confirm that the reduction of £300 million that we have proposed is less than the contingencies that are provided for and in no way affects any current NEB operation? If that is incorrect, will he for the first time give us the correct figures?

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

It is rather difficult to reply to an ad hoc intervention of that sort. The hon. Gentleman may be prepared to make those kinds of reductions, but he knows that others of his hon. Friends certainly want to make far more substantial reductions. We know where they want their axe to fall.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

Will the Minser at least concede that in moving the amendment I specifically added up the figures relating to the NEB and said that our amendment was to delete the amounts on top of British Leyland and Rolls-Royce? That was the purpose of the amendment. The Minister need not address himself to an amendment that has not been moved.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

That makes it even more worrying, because we can now see exactly what Conservative Members want to do. They want to curtail severely the activities of everything that the NEB wants to do.

If we look at the level of expenditure that has so far been allocated to the NEB—about £275 million a year for the next five years—we get the figure of £1,375 million to which hon. Members have referred. If we look at the existing borrowings of the non-wholly owned subsidiaries, we get a total of slightly less than £550 million. Of course, that can be projected over a period of five years, to about £1,500 million. That means that the sums about which we are talking are of very much the same order of magnitude as those with which the last Administration came to the House in 1972 in connection with the Post Office, the Electricity Council and the electricity industry. We are dealing with precisely the same kind of magnitude, except that their figures were at 1972 prices.

When one reflects on the paucity of information that we had when the House debated those figures, and on the paucity of information that we were then given by the Conservatives, one realises that it does not do Conservative Members any kind of credit to talk in the way that they have done this afternoon.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

I want to answer some of the points that hon. Members specifically made. On top of the figures that I have mentioned, we can project over the next five years about £50 million in guarantees. Then we have the figure of £575 million which one can allocate for contingencies. Although Conservative Members made a great feast of that this afternoon, what they do not seem to have regard for—what they seem so conveniently to neglect—is the fact that that figure represents a mere 3 per cent. of aggregate turnover for the NEB during that period.

I should have thought that that 3 per cent. of aggregate turnover for the period about which we are talking was a very prudent size of contingency allocation to make. Certainly, if the NEB were not to make that kind of provision we could expect criticism from both sides of the House.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

I want to answer some of the specific points alluded to by hon. Members. The hon. Member for Colne Valley (Mr. Wainwright) referred to the sterile debate that we had in Committee. I can only say that he certainly joined in, and eagerly participated, because he voted with the Tories every time. Had there been a more independent and objective analysis on his part, I believe that he would have been more fitted to make the kind of comment about sterile debate that he made this afternoon.

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

Does the Minister realise that he is attributing to me a word that I have never used, either in Committee or this afternoon? I have never suggested that we had a sterile debate. I described it—I still do—as an artificial and contrived confrontation, provoked by the silly figures in the Government's Bill.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

Whatever the hon. Gentleman called it, he certainly took an active part in it, along with the Tory Party.

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who unfortunately has left our company, went through the whole of his speech apparently not realising that between one-third and one-half of the money about which we are talking will be coming from private sector finance. I do not know whether the hon. Gentleman has read the Bill, or whether he understands it, but he ought to understand that we are not proposing to allocate the whole of the totals to the public sector borrowing requirement. Had the hon. Gentleman read the Committee proceedings and understood the Bill he would realise that a significant proportion of the finance that we are discussing will come from private sector contributions.

The hon. Member for Wolverhampton, South-West (Mr. Budgen)—I can only hope that he will not leave at this moment—talked about the State getting into horse racing. In view of his description of the totalisator board, I hope that he will not forget that it was a Tory Government who set it up in 1961. I hope that he will not forget that the board includes such well known"Socialists"as His Grace the Duke of Devonshire and Nigel Broackes, who heads Trafalgar House, which is well known for its contributions to Tory Party funds. I hope that the hon. Gentleman will recognise that the track record of his party in intervening in such matters as horse racing does not correspond with what he is saying this afternoon.

6.30 p.m.

The hon. Member for Arundel (Mr. Marshall) asked me for the latest figures on NEB borrowings. As at 28 February £666 million was outstanding against the existing limit. About £170 million was committed by the National Enterprise Board, which will count against the limit. Four million pounds constituted loans guaranteed by the Board. Forty-eight million pounds constituted borrowings of wholly owned subsidiaries. These figures fluctuate from time to time, and there is a slight difference between the figures as at 31 December 1978 and 31 January 1979. Because they fluctuate, some of the figures will be slightly lower.

The hon. Member for Arundel also mentioned Cambridge Instruments. The provision of further capital for such a company is primarily a matter for the commercial judgment of the NEB in the first instance. No proposals have been put before my right hon. Friends and myself at present.

I am glad that my hon. Friend the Member for Loughborough (Mr. Cronin) and my right hon. Friend the Member for Jarrow (Mr. Fernyhough) paid tribute to the activities of the Board, but I wish that hon. Gentlemen had paid more attention to the information that my right hon. Friends and I have provided to the House this afternoon. Not only did we provide the"Facts and Figures"document resulting from the Committee stage; my right hon. Friend has taken great trouble

Division No. 91]AYES[6.35 p.m.
Adley. RobertBendall, VivianBoyson, Dr Rhodes (Brent)
Aitken, JonathanBennett, Sir Frederic (Torbay)Bradford, Rev Robert
Alison, MichaelBennett, Dr Reginald (Fareham)Brains, Sir Bernard
Amery, Rt Hon JulianBenyon, W.Brittan, Leon
Arnold, TomBerry, Hon AnthonyBrocklebank-Fowler, C.
Atkins, Rt Hon H. (Spelthorne)Biffen, JohnBrooke, Hon Peter
Atkinson, David (B'mouth, East)Biggs-Davison, JohnBrotherton, Michael
Awdry, DanielBlaker, PeterBrown, Sir Edward (Bath)
Baker, KennethBody, RichardBruce-Gardyne, John
Banks, RobertBoscawen, Hon RobertBryan, Sir Paul
Beith, A. J.Bottomley, PeterBuchanan-Smith, Alick
Bell, RonaldBowden, A. (Brighton, Kemptown)Buck, Antony

to see that British Leyland's interim account statement is available in the Vote Office. I hope that hon. Gentlemen will peruse that and the accompanying press release, including the chairman's statement.

Michael Edwardes, referring to the breaking of the £3 billion barrier in revenue, states that In doing so we pushed up exports to a record £910 million making us Britain's biggest net earner of foreign currency in manufacturing industry and biggest vehicle exporter. The hon. Member for Chingford (Mr. Tebbit) said that we get nothing for our money. When a company such as British Leyland has a revenue of £3 billion and records an achievement of £910 million in export earnings, it will not do to say that.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

Will the hon. Gentleman tell us how much cash British Leyland has had from the taxpayer and what it has returned to the taxpayer in dividends?

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

If the hon. Member for Chingford studies the accounts that we have made available he will see that it is considerably less than the figures to which I have referred. Before making such an interjection, the hon. Gentleman should study the information that we have placed before the House. That is unfortunately not the hon. Gentleman's only ill-informed comment this afternoon.

We reject these amendments. They would curtail the activities of the National Enterprise Board and prevent it from carrying out the investment that the hon. Member for Chichester (Mr. Nelson) rightly says British industry desperately needs. We resent that restriction on the National Enterprise Board, and I urge my right hon. and hon. Friends to reject the amendment.

Question proposed, That the amendment be made:—

The House divided: Ayes 264, Noes 273.

Budgen, NickHowell, David (Guildford)Penhaligon, David
Bulmer, EsmondHowells, Geraint (Cardigan)Percival, Ian
Burden, F. A.Hunt, David (Wirral)Peyton, Rt Hon John
Butler, Adam (Bosworth)Hunt, John (Ravensbourne)Pink, R. Bonner
Chalker, Mrs LyndaHurd, DouglasPowell, Rt Hon J. Enoch
Channon, PaulHutchison, Michael ClarkPrentice, Rt Hon Reg
Churchill, W. S.Irving, Charles (Cheltenham)Price, David (Eastleigh)
Clark, Alan (Plymouth, Sutton)James, DavidPrior, Rt Hon James
Clark, William (Croydon S)Jenkin, Rt Hon P. (Wanst'd&W'df'd)Pym, Rt Hon Francis
Clarke, Kenneth (Rushcliffe)Jessel, TobyRaison, Timothy
Clegg, WalterJohnson Smith, G. (E Grinstead)Rathbone, Tim
Cockcroft, JohnJohnston, Russell (Inverness)Rees, Peter (Dover & Deal)
Cooke, Robert (Bristol W)Jones, Arthur (Daventry)Rees-Davis, W. R.
Cope, JohnJopling, MichaelRenton, Rt Hon Sir D. (Hunts)
Cormack, PatrickJoseph, Rt Hon Sir KeithRenton, Tim (Mid-Sussex)
Costain, A. P.Kaberry, Sir DonaldRhodes James, R.
Craig, Rt Hon W. (Belfast E)Kershaw, AnthonyRidley, Hon Nicholas
Critchley, JulianKilfedder, JamesRidsdale, Julian
Crouch, DavidKimball, MarcusRifkind, Malcolm
Crowder, F. P.King, Evelyn (South Dorset)Roberts, Wyn (Conway)
Dean, Paul (N Somerset)King, Tom (Bridgwater)Rodgers, Sir John (Sevenoaks)
Dodsworth, GeoffreyKnight, Mrs JillRoss, Stephen (Isle of Wight)
Douglas-Hamilton, Lord JamesKnox, DavidRoss, William (Londonderry)
Drayson, BurnabyLamont, NormanRost, Peter (SE Derbyshire)
du Cann, Rt Hon EdwardLangford-Holt, Sir JohnRoyle, Sir Anthony
Durant, TonyLatham, Michael (Melton)Sainsbury, Tim
Dykes, HughLawrence, IvanSt. John-Stevas, Norman
Eden, Rt Hon Sir JohnLawson, NigelScott, Nicholas
Edwards, Nicholas (Pembroke)Le Marchant, SpencerShaw, Giles (Pudsey)
Elliott, Sir WilliamLester, Jim (Beeston)Shelton, William (Streatham)
Emery, PeterLewis, Kenneth (Rutland)Shepherd, Colin
Eyre, ReginaldLloyd, IanShersby, Michael
Fairbairn, NicholasLoveridge, JohnSilvester, Fred
Fairgrieve, RussellLuce, RichardSims, Roger
Farr, JohnMcAdden, Sir StephenSinclair, Sir George
Finsberg, GeoffreyMcCrindle, RobertSkeet, T. H. H.
Fisher, Sir NigelMcCusker, H.Smith, Dudley (Warwick)
Fletcher, Alex (Edinburgh N)Macfarlane, NeilSmith, Timothy John (Ashfield)
Fookes, Miss JanetMacKay, Andrew (Stechford)Spence, John
Fowler, Norman (Sutton C'f'd)McNair-Wilson, M. (Newbury)Spicer, Michael (S Worcester)
Fox, MarcusMcNair-Wilson, P. (New Forest)Sproat, Iain
Fraser, Rt Hon H. (Stafford & St)Madel, DavidStainton, Keith
Fry, PeterMarshall, Michael (Arundel)Stanbrook, Ivor
Gardiner, George (Reigate)Marten, NeilStanley, John
Gardner, Edward (S Fylde)Mates, MichaelSteel, Rt Hon David
Gilmour, Rt Hon Sir Ian (Chesham)Mather, CarolStewart, Ian (Hitchin)
Gilmour, Sir John (East Fife)Maude, AngusStokes, John
Glyn, Dr AlanMawby, RayStradling Thomas, J.
Godber, Rt Hon JosephMaxwell-Hyslop, RobinTapsell, Peter
Goodhart, PhilipMeyer, Sir AnthonyTaylor, R. (Croydon NW)
Goodhew, VictorMiller, Hal (Bromsgrove)Taylor, Teddy (Cathcart)
Goodlad, AlastairMills, PeterTebbit, Norman
Gorst, JohnMitchell, David (Basingstoke)Temple-Morris, Peter
Gow, Ian (Eastbourne)Moate, RogerThatcher, Rt Hon Margaret
Gower, Sir Raymond (Barry)Molyneaux, JamesThomas, Rt Hon P. (Hendon S)
Gray, HamishMontgomery, FergusTownsend, Cyril D.
Grieve, PercyMoore, John (Croydon C)Trotter, Neville
Griffiths, EldonMore, Jasper (Ludlow)van Straubenzee, W. R.
Grimond, Rt Hon JMorgan, GeraintVaughan, Dr Gerard
Grist, IanMorgan-Giles, Rear-AdmiralViggers, Peter
Hall-Davis, A. G. F.Morris, Michael (Northampton S)Waddington, David
Hamilton, Archibald (Epsom & Ewell)Morrison, Hon Charles (Devizes)Wainwright, Richard (Colne V)
Hamilton, Michael (Salisbury)Morrison, Hon Peter (Chester)Wakeham, John
Hampson, Dr KeithMudd, DavidWalker, Rt Hon P. (Worcester)
Hannam, JohnNeave, AireyWall, Patrick
Harrison, Col Sir Harwood (Eye)Neubert, MichaelWalters, Dennis
Harvie Anderson, Rt Hon MissNewton, TonyWells, John
Haselhurst, AlanNott, JohnWhitelaw, Rt Hon William
Hastings, StephenOnslow, CranleyWhitney, Raymond
Havers, Rt Hon Sir MichaelOppenheim, Mrs SallyWiggin, Jerry
Hawkins, PaulPage, John (Harrow West)Winterton, Nicholas
Hayhoe, BarneyPage, Rt Hon R. Graham (Crosby)Wood, Rt Hon Richard
Heath, Rt Hon EdwardPage, Richard (Workington)Younger, Hon George
Hicks, RobertPaisley, Rev Ian
Hodgson, RobinPardoe, JohnTELLERS FOR THE AYES:
Holland, PhilipParkinson, CecilMr. Michael Roberts and
Hordern, PeterPattie, GeoffreySir George Young.
Howe, Rt Hon Sir Geoffrey
NOES
Abse, LeoArmstrong, ErnestAtkinson, Norman (H'gey, Tott'ham)
Allaun, FrankAshley, JackBagier, Gordon A. T.
Anderson, DonaldAshton, JoeBarnett, Guy (Greenwich)
Archer, Rt Hon PeterAtkins, Ronald (Preston N)Barnett, Rt Hon Joel (Heywood)
Bates, AlfGrant, John (Islington C)Orbach, Maurice
Bean, R. E.Grocott, BruceOrme, Rt Hon Stanley
Benn, Rt Hon Anthony WedgwoodHamilton, W. W. (Central Fife)Ovenden, John
Bennett, Andrew (Stockport N)Hardy, PeterPadley, Walter
Bidwell, SydneyHarrison, Rt Hon WalterPark, George
Bishop, Rt Hon EdwardHart, Rt Hon JudithParker, John
Blenkinsop, ArthurHattersley, Rt Hon RoyParry, Robert
Boardman, H.Hayman, Mrs HelenePavitt, Laurie
Booth, Rt Hon AlbertHealey, Rt Hon DenisPerry, Ernest
Boothroyd, Miss BettyHeffer, Eric S.Price, C. (Lewisham W)
Bottomley, Rt Hon ArthurHome Robertson, JohnPrice, William (Rugby)
Boyden, James (Bish Auck)Hooley, FrankRadice, Giles
Bradley, TomHoram, JohnRees, Rt Hon Merlyn (Leeds S)
Bray, Dr JeremyHoyle, Doug (Nelson)Richardson, Miss Jo
Brown, Hugh D. (Provan)Huckfield, LesRoberts, Albert (Normanton)
Brown, Robert C. (Newcastle W)Hughes, Rt Hon C. (Anglesey)Roberts, Gwilym (Cannock)
Buchan, NormanHughes, Robert (Aberdeen N)Robertson, George (Hamilton)
Buchanan, RichardHughes, Roy (Newport)Robinson, Geoffrey
Callaghan, Jim (Middleton & P)Hunter, AdamRoderick, Caerwyn
Campbell, IanIrving, Rt Hon S. (Dartford)Rodgers, George (Chorley)
Canavan, DennisJackson, Miss Margaret (Lincoln)Rodgers, Rt Hon William (Stockton)
Cant, R. B.Janner, GrevilleRooker, J. W.
Carmichael, NeilJay, Rt Hon DouglasRoper, John
Carter, RayJeger, Mrs LenaRoss, Rt Hon W. (Kilmarnock)
Carter-Jones, LewisJenkins, Hugh (Putney)Ryman, John
Cartwright, JohnJohn, BrynmorSandelson, Neville
Castle, Rt Hon BarbaraJohnson, James (Hull West)Sedgemore, Brian
Clemitson, IvorJohnson, Walter (Derby S)Selby, Harry
Cocks, Rt Hon Michael (Bristol S)Jones, Alec (Rhondda)Sever, John
Cohen, StanleyJones, Barry (East Flint)Shaw, Arnold (Ilford South)
Coleman, DonaldJones, Dan (Burnley)Sheldon, Rt Hon Robert
Concannon, Rt Hon JohnJudd, FrankShore, Rt Hon Peter
Conlan, BernardKaufman, Rt Hon GeraldShort, Mrs Renée (Wolv NE)
Cook, Robin F. (Edin C)Kelley, RichardSilkin, Rt Hon John (Deptford)
Corbett, RobinKerr, RussellSilkin, Rt Hon S. C. (Dulwich)
Cowans, HarryKilroy-Silk, RobertSillars, James
Cox, Thomas (Tooting)Kinnock, NeilSilverman, Julius
Craigen, Jim (Maryhill)Lambie, DavidSkinner, Dennis
Crawshaw, RichardLamborn, HarrySmith, Rt Hon John (N Lanarkshire)
Cronin, JohnLamond, JamesSnape, Peter
Crowther, Stan (Rotherham)Latham, Arthur (Paddington)Spearing, Nigel
Cryer, BobLee, JohnSpriggs, Leslie
Cunningham, Dr J. (Whiteh)Lestor, Miss Joan (Eton & Slough)Stallard, A. W.
Davies, Bryan (Enfield N)Lever, Rt Hon HaroldStewart, Rt Hon M. (Fulham)
Davies, Rt Hon DenzilLewis, Ron (Carlisle)Stoddart, David
Davies, Ifor (Gower)Litterick, TomStott, Roger
Davis, Clinton (Hackney C)Lofthouse, GeoffreyStrang, Gavin
Deakins, EricLomas, KennethStrauss, Rt Hon G. R.
Dean, Joseph (Leeds West)Luard, EvanSummerskill, Hon Dr Shirley
Dempsey, JamesLyon, Alexander (York)Taylor, Mrs Ann (Bolton W)
Dewar, DonaldLyons, Edward (Bradford W)Thomas, Dafydd (Merioneth)
Doig, PeterMabon, Rt Hon Dr J. DicksonThomas, Jeffrey (Abertillery)
Dormand, J. D.McDonald, Dr OonaghThomas, Mike (Newcastle E)
Douglas-Mann, BruceMcElhone, FrankThomas, Ron (Bristol NW)
Duffy, A. E. P.McKay, Alan (Penistone)Thorne, Stan (Preston South)
Dunnett, JackMacKenzie, Rt Hon GregorTierney, Sydney
Eadie, AlexMaclennan, RobertTilley, John
Edge, GeoffMcMillan, Tom (Glasgow C)Tinn, James
Ellis, John (Brigg & Scun)McNamara, KevinTomlinson, John
English, MichaelMadden, MaxTomney, Frank
Ennals, Rt Hon DavidMagee, BryanTorney, Tom
Evans, Fred (Caerphilly)Mallalieu, J. P. W.Tuck, Raphael
Evans, Gwynfor (Carmarthen)Marks, KennethUrwin, T. W.
Evans, Ioan (Aberdare)Marshall, Dr Edmund (Goole)Varley, Rt Hon Eric G.
Evans, John (Newton)Marshall, Jim (Leicester S)Wainwright, Edwin (Dearne V)
Ewing, Harry (Stirling)Mason, Rt Hon RoyWalker, Harold (Doncaster)
Faulds, AndrewMaynard, Miss JoanWalker, Terry (Kingswood)
Fernyhough, Rt Hon E.Meacher, MichaelWard, Michael
Fitt, Gerard (Belfast W)Mellish, Rt hon RobertWatkins, David
Flannery, MartinMikardo, IanWatkinson, John
Fletcher, L. R. (Ilkeston)Millan, Rt Hon BruceWeetch, Ken
Fletcher, Ted (Darlington)Miller, Dr M. S. (E Kilbride)Weitzman, David
Foot, Rt Hon MichaelMitchell, Austin (Grimsby)Wellbeloved, James
Ford, BenMolloy, WilliamWhite, Frank R. (Bury)
Forrester, JohnMorris, Rt Hon AlfredWhite, James (Pollok)
Fowler, Gerald (The Wrekin)Morris, Rt Hon Charles R.Whitehead, Phillip
Fraser, John (Lambeth, N'w'd)Morris, Rt Hon J. (Aberavon)Whitlock, William
Freeson, Rt Hon ReginaldMorton, GeorgeWigley, Dafydd
Garrett, John (Norwich S)Moyle, Rt Hon RolandWilley, Rt Hon Frederick
Garrett, W. E. (Wallsend)Mulley, Rt Hon FrederickWilliams, Rt Hon Alan (Swansea W)
George, BruceMurray, Rt Hon Ronald King
Gilbert, Rt Hon Dr JohnNewens, StanleyWilliams, Alan Lee (Hornch'ch)
Ginsburg, DavidNoble, MikeWilliams, Rt Hon Shirley (Hertford)
Gould, BryanOakes, GordonWilliams, Sir Thomas (Warrington)
Gourlay, HarryOgden, EricWilson, Rt Hon Sir Harold (Huyton)
Grant, George (Morpeth)O'Halloran, Michael
Wilson, William (Coventry SE)Young, David (Bolton E)
Wise, Mrs Audrey
Woodall, AleeTELLERS FOR THE NOES:
Woof, RobertMr. James Hamilton and
Wrigglesworth, IanMr. Ted Graham.

Question accordingly negatived.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

I beg to move amendment No. 3, in page 2, line 2, at end insert: ' such additional limit shall be subject to the laying before Parliament of the National Enterprise Board's current cash flow forecast '.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

With this we may take the following amendments:

No. 5, in page 2, line 2, at end insert: ' such additional limit shall be subject to the laying before Parliament of an up to date examination of both the investment record and future investment plans of the NEB by the Public Sector Economy Unit in the Treasury ' No. 6, in page 2, line 2, at end insert: ' such additional limit shall be subject to the laying before Parliament of an up to date examination of the prospects of both British Leyland Ltd and Rolls-Royce Ltd by the Public Sector Economy Unit in the Treasury '. No. 7, in page 2, line 2, at end insert: ' Such additional limit shall be subject to the laying before Parliament of the latest trading results (if necessary in the form of unaudited accounts).'. No. 8, in page 2, line 2, at end insert: ' Such additional limit shall be subject to the laying before Parliament of the National Enterprise Board's latest corporate plan.'

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames

All the amendments deal with information about the NEB being made available to the House. They make the provision of finance conditional upon the production of certain documents and information—the corporate plan of the NEB, cash flow forecasts, the latest trading results, and the updating of the"Facts and Figures"memorandum that the Department has provided about the NEB. Amendments Nos. 6 and 7 deal with the publication of the review by the Treasury's public sector economy unit. That is the unit with which Sir Douglas Wass has been connected and for which his memorandum was produced recently.

My hon. Friends and I are amazed that the Government should ask Parliament to vote these huge sums of money without making available much more information, but there is embarrassment on the Government Benches about that. The only defence of their position is that in the past, under Conservative Govern- ments, nationalised industries have occasionally raised large sums of money for capital investment and that that is comparable to the present matter. At least in the nationalised industries it was known upon what industries the money would be spent. In this case, Parliament is being asked to spend money without knowing whether it will go on areo-engines, computers or medical services in the Middle East.

There is another difference between nationalised industries and the NEB. The nationalised industries are called upon to answer to the Select Committees of the House. They have periodically to give the House information about what they are doing. That is not so with the NEB. We have taken up that point time and again in Committee. As long as the NEB exists—we have our doubts about that—there should be a relationship with a Committee of the House. Sir Leslie Murphy argued strongly against that. He argued with the PAC that he should not be forced to come before it. His argument was that responsibility to the Minister is responsibility to Parliament. I do not believe that to be the case and I do not believe that the House regards answerability to a Minister to be the same thing as answerability to the Chamber or to a Committee of the House.

In Committee we repeatedly pressed for information. The Under-Secretary of State took our breath away with the absence of any definite information. At one point, he boasted that he had devoted three paragraphs to describing the activities of Inmos, British Leyland and Rolls-Royce. What he did not tell us was that each paragraph consisted of one sentence. He simply read out the names of the investments of the NEB and fell back on the usual device of saying that there was a full debate a year ago and that the matters had been frequently raised at Question Time. But those questions were not answered at that time, either. We think that the House is entitled to more information than has been given hitherto about the activities of the NEB.

The Minister of State, Department of Industry appeared to be embarrassed about the matter. After the thoroughly inadequate answer of the Under-Secretary of State the Minister promised the Committee more information. That was contained in the"Facts and Figures"document. The Minister wrote to each member of the Committee and said that he hoped that we would regard the document as being the rough equivalent of a prospectus.

We thank the Minister for that information, but it does not take us far forward. A prospectus in the case of a commercial company does not deal with the past only; it gives an indication about the future—the profits to be expected and the areas into which the business will venture. There are reasons why one should not push the analogy with a prospectus too far, but I do not believe that there can be a remote comparison unless more information is provided about the future of the NEB and its expected profitability.

In the amendments we have attempted to put forward a series of choices of documents which would provide more information. We are not wedded to any one of them or to all of them, but, for example, why cannot the House have more details about the corporate plan of British Leyland? We understand from written answers that there are two corporate plans—a short-term one and a long-term one. Why have no details of those been provided?

Corporate plans, with confidential material removed, have been presented to the House. Last year we received the NEB's comments on British Leyland's corporate plan. Labour Members are addicted to corporate plans and the presentation of blueprints. One would have thought that they would want to rush to the House with information on the future of the NEB.

In the"Facts and Figures"document a number of figures have been provided about British Leyland's market share and productivity per head. Those figures have already appeared in papers, but it is good to have official confirmation of them. However, what is missing more than anything else is an official comment upon them. What is the Government's view of the progress of British Leyland and the achievements of the NEB in managing the investment in British Leyland?

We were told that there would be a review of British Leyland last November and every November. There has been no explanation of what has happened to that review. One would have thought that all those statistics compiled for the Standing Committee could be presented. Why cannot the Government give their views on it in the review? Why is there no explanation of what has happened to the review?

Another amendment deals with the trading results of the NEB. I appreciate the difficulties of compiling up-to-date trading results for a conglomerate that consists of many businesses with different year ends, but, as the hon. Member for Colne Valley (Mr. Wainwright) pointed out, it is sharp practice to come to the House within weeks of the year end of the NEB and ask for these vast sums of money. If the NEB had waited a few more weeks the year end account would have been produced. There has been no satisfactory explanation for that and one can only draw the obvious conclusion from the omission.

It is two and a half years since the NEB came into existence and there is still no target rate of return set for Rolls-Royce. Why is that? Why do the NEB find it so difficult to work out the target rate return for Rolls-Royce? We know that it is a long-term business and we have read the chilling comments of Sir Douglas Wass. He has been a dominating figure in the debate. However, even if it is a long-term business one would have thought that the management of Rolls-Royce would have a target rate of return. If the management has a target rate of return, why can it not be agreed with the Government and why can the House not know what it is?

7 p.m.

We hope that our fears about Rolls-Royce will prove to be unfounded, but we have heard too many optimistic statements about Rolls-Royce in recent years. We remember the present Secretary of State for Energy saying that Rolls-Royce had won the"contract of the century ". The only trouble was that the terms of that contract were ruinous. That is what led Rolls-Royce into difficulties. Now we have the comments of Sir Douglas Wass, who said: It is inherently a risky project and, even on optimistic assumptions, is not expected to break even until 1993. There is something precise about the use of 1993, which makes one sceptical. I am surprised that Sir Douglas did not say"15 March 1993 ". Anything that is that precise about what is to happen in 1993 ought to be treated with considerable scepticism.

We have no information in"Facts and Figures"about Inmos and the microcircuitry investment. Some Labour Members talk about the NEB's involvement in Inmos as though that, by itself, justified the existence of the Board. I thought I heard the Minister of State say"That is true." To listen to the right hon. Gentleman and some of his hon. Friends, one would think that British industry was doing no work in microcircuitry and that the only developments in that area were coming from the NEB. That illustrates the foolishness and shortsightedness of politicians who seek to make judgments on these matters.

Many hon. Members did not know what was happening in microcircuitry until the NEB started its work. However, we then discovered that there were many firms developing standard chips and a number developing the 64K chip which is allegedly to be Inmos's money winner. Much is happening in this area, and much was happening long before the NEB entered the business. All that has happened is that the discussion has become more political and that politicians have become aware of the work and begun to talk about it. Many people are still extremely sceptical about the NEB's activities.

Inmos is meant to produce the 64K chip. It intends to leap into that degree of technology, but we have read in The Economist that ITT is already produsing the 64K chip from its world headquarters in Kent and that Motorola plans to produce the 64K chip at its factory in East Kilbride. Many people are sceptical and suspicious about what the Board is up to.

I was fortunate to have sent to me some of the comments that appeared in a recent publication of the American magazine Electronic News. It printed a number of comments by leading business men in this country and all over the world about the Inmos venture.

Dr. Ian Shepherd, the managing director of Ferranti Electronics, another NEB company, said, of the NEB's venture into microcircuits. They are starting in a country that only accounts for 4 per cent. of the world market and contains between 1 or 2 per cent. ' of the IC manufacturing capacity. As a result they are going to start slower and become actively involved much later than the Americans and the Japanese, and in this market, time is essential…All I can say is that I'm glad we're not in their business ". He predicted an uncertain future of falling prices for standard circuits and rising competition and said: We have no intention of following them into that ". Dr. Melvin Larkin, of Motorola, said that for Inmos to succeed it needed something exceptional to offer. If all they make is 64K RAMs, then their timescale is just all wrong, since it will take them at least three years to get into major production. I could read many of the other comments of those in British and international business who are extremely worried and sceptical about what the NEB is doing. We believe that there ought to have been much more information provided in Committee, in"Facts and Figures"and in this debate about the activities of the NEB.

Another amendment refers to the publication of documents from the public sector economy unit. Sir Douglas Wass's criticism of the Government covered some of the investments of the NEB. He referred specifically to the Rolls-Royce project, but his argument is applicable to everything that the NEB is doing. We are ploughing massive resources into areas of low return. The words of Sir Douglas would have been denounced if they had been uttered by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), but Sir Douglas's view sounds remarkably like that of my right hon. Friend. Sir Douglas said: The startling and disturbing conclusion is that we have been accumulating prospective losses of real resources at a rate Caster than the growth of national income in this country. In the name of job creation, we are putting increasing amounts of money into areas of lower and lower returns. The irony is that that will not save jobs, because the money has to come from other, competitive enterprises, but it goes into enterprises that, in the long term, will not be viable.

The Government wanted to put £1·3 billion into industry in a matter of a few months. The Treasury stopped them. We must be grateful that there is still at least one healthy spot of reaction in Whitehall. The Government wanted to buy votes at the cost of creating grave problems for the next Conservative Government.

The history of State intervention and of agencies like the NEB has not been impressive. State investment has not been successful. That is why we believe that the remarks of Sir Douglas Wass are all too near the truth.

The point of all the amendments in this group is to establish a better relationship between Parliament and the NEB, while it exists. The PAC has claimed that it is the Committee to which the NEB should report. We subscribe to the view that there ought to be a Committee to which the NEB makes regular reports. The Scottish and Welsh Development Agencies have to open their books to the PAC. How can we justify the same provision not applying to the NEB?

It is no answer to say that the SDA includes some environmental and industrial estate activities. The PAC is able to look at the investment activities of the SDA, as well as at its environmental activities. It is no answer to plead that the NEB is a different sort of body.

As long as the Board exists we would not be advocates of Parliament interfering on a day-to-day basis with its commercial decisions, but the NEB ought to be compelled to report regularly to Parliament and it ought to provide much more information when it asks Parliament for huge sums for unspecified purposes. The House is entitled to more information, but we have so far been treated with something bordering on contempt. I urge my hon. Friends to support the amendments.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

I shall centre my remarks upon amendment No. 6, and relate them particularly to the question of the obligation which would be laid on Rolls-Royce and the Government to produce figures showing what is going on in that company. Everyone knows that there have been some expressions of concern about Rolls-Royce Ltd. over recent months, due principally to the ambitious nature of the programmes in which it is engaged. These programmes will consume large amounts of capital. By their nature, they not only contain technical and financial risks but are also long-term projects. It is therefore clear that the return on the cash invested will not come at any early date.

It is worrying that views of the project seem to be circulating within Whitehall. If the House were to agree to amendment No. 6, we would be able to clear up the matter. I make my case for that amendment inevitably by referring, like many hon. Members, to the memorandum by Sir Douglas Wass. As my hon. Friend the Member for Kingston upon Thames (Mr. Lamont) has pointed out, Sir Douglas said that the RB211-535 project is an inherently risky project that is not expected to break even until 1993. My hon. Friend suggested that this was a very precise date. I suggest the reason was that someone said"Not in less than 15 years, sir"and that this memorandum was based on a remark of that sort made in 1978. It is a natural sort of remark to make. It is difficult to be more precise about these matters for reasons I will relate.

This project will require investment, generated internally and from the National Enterprise Board, of a capital cost of £250 million to £300 million according to the Treasury. The project, again according to the Treasury, in today's terms, is expected to make a loss of between £80 million and £170 million. The point at issue, which can be resolved only if we insist on the terms of amendment No. 6, is to have an up-to-date examination of the prospects of Rolls-Royce Ltd.

The Treasury obviously has a different set of figures from those that are circulating in the Department of Industry. If that is not the case, we must assume that Department of Industry Ministers came to the Dispatch Box advocating the launching of this project as being commercially viable while they had a brief in their hands saying that it was expected to lose between £80 million and £170 million. We must presumably accept that Ministers would not be so dishonest as to do that.

We are reduced, therefore, to assuming that the Treasury and the Department of Industry have different financial assessments of the results of an investment made by the National Enterprise Board in Rolls-Royce Ltd. and that this has not been made available to the House of Commons.

The amendments are precisely designed to ensure that in future that sort of information is available to hon. Members before we make this investment through the National Enterprise Board.

I do not want to argue the case one way or the other for this investment. It is an extremely difficult case to argue, but we are entitled to know how decisions were made in Government and in the NEB to make the investment. It is fairly common knowledge that Sir Kenneth Keith refers in semi-private gatherings to the consequences of exchange rate fluctuations between the dollar and sterling. He goes so far as to attach figures in relation to the profitability of Rolls-Royce and, therefore, of the National Enterprise Board for each cent of movement in the sterling-dollar parity. We have never been given those figures by Ministers. They must be available. I could quote them, but I do not think it is appropriate to do so since Rolls-Royce Ltd. may not want those figures to be widely broadcast, although I suspect that the figures are broadly known to most people in the business. It is extremely damaging that the Treasury's figures should be left to be seen by the customers of Rolls-Royce Ltd., by its competitors and by the public without Members of Parliament being able to discuss whether those figures are accurate.

7.15 p.m.

The Minister must know, but the only way he can now convince us about whether the Treasury's figures are correct is for him to agree to reveal the Department of Industry figures and the Rolls-Royce figures. That is the objective of amendment No. 6. If that does not happen, we may find Rolls-Royce accused of dumping in the United States market and customers may be afraid that the engine will not continue. It may be found that customers fear that the price of spares will be pushed up in order to cover the losses. All this may happen because we cannot get at the facts of the matter. Unless Ministers find some way of clearing up this matter, any Member of this House would be compelled to vote for amendment No. 6 in defence of the Rolls-Royce company and of the National Enterprise Board, let alone defence of the taxpayer and the taxpayer's money which is being sunk—I hope that is only a financial term, not to be understood in the sense of losing it for ever—in Rolls-Royce Ltd.

I expect that the Minister, in his reply, will indicate that he is happy for the House to know whether the figures on which he commended the Rolls-Royce RB211-535 project to the House are different from the figures being circulated by the Treasury. I hope that he will go further and accept that this House should not in future have to rely on leaks of Treasury papers to discover that hon. Members have been misled, presumably by accident or incompetence, by Ministers at the Dispatch Box.

Photo of Mr Richard Page Mr Richard Page , Workington

I want to make only a brief contribution to the debate. I wish to speak to amendments Nos. 6 and 8 which are typical of the Second Reading, the Committee stage and today's proceedings. They are a cry for help and information about what the NEB is up to. Page 11 of the Department of Industry guidelines for the National Enterprise Board, published in 1977, deals with the Government oversight of the NEB. Three sections catch the eye. The first states: Each year, the NEB shall prepare, and submit to the Secretary of State, a Corporate Plan setting out their strategy for the following years. I would like to ask a straight question, which has been asked before but to which we have not had an answer. Did the Secretary of State have laid before him a corporate plan for 1979? The document goes on: As part of their planning cycle, the NEB shall provide annually an investment and financing programme covering the period of the Public Expenditure Survey, for consideration by the Department in conjunction with the Treasury… Has that survey been carried out? Has that planning cycle been put before the Departments? I particularly want to mention the part of the document which states: The annual discussions will also enable the Department of Industry, in consultation with the Treasury, to set a ceiling to the amount of Government funds the NEB will receive by way of advances… Has the NEB presented these factors to the Secretary of State? Has it done so for this year, for last year, or has it just gone ahead and spent money as and when the Government dictated or as the Minister recommended? I shall willingly give way if the Minister wishes to say that the corporate plan has been put before the Secretary of State. There is silence. I hope that question will be answered in the Minister's winding-up speech.

Much play has been made of the fact that many hon. Members have written to the Secretary of State requesting consideration for their constituencies for Inmos plants. When the announcement was first made, it struck hon. Members as a new advance. Many hon. Members naturally wanted their constituencies to get in on the ground floor. It is only as information becomes available that we begin to find out how much is going on. Many hon. Members now question the viability of Inmos projects. That part of the corporate plan should be brought before us.

I do not blame the Government for appointing P and A Consultants of Birmingham to evaluate the plants and sites. I do not blame them for producing those consultants as a buffer between themselves and Members of Parliament who will be approaching them. But I feel that Inmos has been waved as a flag before an election. Therefore, it is the duty of the NEB and of the Department of Industry to inform the country about what is involved in an Inmos plant. What will it bring in terms of jobs? What will be its future viability and profitability?

It is a matter of concern when one hears companies—not only companies in this market—say"Leave that alone. Go into the applications of the silicon chip. Do not get into the manufacturing side." As my hon. Friend the Member for Kingston upon Thames (Mr. Lamont) said, some of those who are saying that kind of thing have considerable experience in this line of country.

In Committee the Under-Secretary of State said that the corporate plan may be part of the planning cycle but that it may not be relevant to the increase in financial limits that we are discussing. We have a paradox. How can we have a corporate plan which is irrelevant to any increase in financial limits?

I come back to the point that I made earlier. This is purely electoral flag-waving to be dragged round at the general election, particularly in the regions and marginals, as a treat in store.

The Minister of State sent us the further details which he promised. But those details do not take us much further down that particular path. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said that the money that the NEB is receiving could be argued to be squeezing out the private investment sector. The more money that is taken out of the economy in taxes, the less that can go into private investment. Therefore, the argument could be advanced that investment from the private sector is failing altogether.

If we could look at the corporate plans which we should have before us, we could gauge how much the NEB will take part in industrial productivity. According to a reply to a recent written question to the Chancellor of the Exchequer, if we take away North Sea oil and look only at our industrial production from the last quarter of 1973 to the last quarter of 1978, we see immediately that we are 4½ per cent. down. All other countries without the benefit of North Sea oil—for example, Canada, the United States and Germany—are 5 per cent. to 12½ per cent. up. Where will the NEB lead us? Will it produce the increase in productivity that we need to pay for all our various social requirements? Can anyone blame my hon. Friends for demanding more details?

I feel that we tend to argue against each other when we really want industry to improve. I have not been a Member of this House very long, but I have noticed that there is a tendency for"stable door"type debates. We debate everything after the horse has bolted out into public pastures to be nurtured by public money. Our parliamentary procedures and lack of accountability to Parliament may have been a great system in 1890, but it is certainly showing cracks in the facade in the 1980's. The Government must be less indifferent—almost arrogant—towards the House and stop sailing on their own course. They must give us the details. The information requested in the amendments should be provided.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch

I wish to speak briefly in support of the general spirit of these amendments without going into the details of each one. At stake is the question that more information should be provided before more money is voted. Whatever form that may take is not as important as the principle involved.

I have always supported an NEB-type institution because I wished operations of that nature to be removed from the day-to-day political inquisition. But, as a corollary to that, we must expect a greater degree of openness than we have had from the NEB about its plans and accounts.

The amendment deals specifically with the corporate plan. We must have some information on the corporate plan so that we can see how it ties in with the Government's plans and industrial strategy. We want more information on how it works together with the Government's strategy, the sector working party and so on. This information should be provided. Otherwise, there will continue to be political nit-picking, but with soundly-based fears that the strategy is not coherent and does not correspond.

Before providing more money, we need more information. After the money has been spent, we need more insight into how it has been spent. It is not good enough that the NEB is not subject to scrutiny by the Public Accounts Committee.

My hon. Friend the Member for Kingston upon Thames (Mr. Lamont) spoke of analogies with the Welsh Development Agency and the Scottish Development Agency. The defence has always been that the NEB is responsible to the Secretary of State and that he in turn is responsible to Parliament. But we can never get information from the Secretary of State and we can never exercise our responsibility or authority over him. I believe in a greater degree of freedom and commercial confidence for NEB operations, but, as a corollary, we must have better information before the money is provided and the right of inspection after the money has been spent.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

It might be helpful if at this stage I were to try to pull together some of our thoughts, recognising that the Minister of State, who is now happily restored to the bosom of his industrial family after his time away dealing with the emergencies, and so on, will have a great deal of ground to cover. Therefore, perhaps I should summarise some of the points which concern us.

I shall not seek to reiterate the valuable contributions made by my hon. Friends the Members for Chingford (Mr. Tebbit), Workington (Mr. Page) and Redditch and Bromsgrove (Mr. Miller) who followed clear and concise lines of questioning to which I hope the Minister will address his mind.

In the context of the task which the Minister of State has recently undertaken it would be helpful if he would indicate—I appreciate that it may not be easy to do so off the cuff—his impression of the impact of the emergency, particularly the road haulage dispute, on companies within the NEB. This is a relevant matter which should affect the operating results. It is reasonable to ask for the Minister's impressions based on his recent experience.

7.30 p.m.

These five amendments represent the ultimate heart-cry from the Conservative Benches. Time and time again when debating this Bill we have been thwarted in our effort to obtain the information that we need for a proper assessment of the Bill. The hon. Member for Colne Valley (Mr. Wainwright) will agree that an organisation which wished to provide for contingencies of £115 million a year would be laughed out of any auditor's office. That is the measure of the misleading exercise in which we are involved. That is why the lead amendment by dealing with cash flow forecasts faces the reality.

The reality is that, if we do not have a realistic view of past performance such as we have called for when we come to the final tranche of money we shall feel the need to pin down even more precisely what the NEB is doing. We shall want to see its expected requirement and what its overall operating results are likely to yield in relation to the kind of investment programme that it is undertaking.

For the same reason, on amendment No. 5, the review of investment record and future plans is or the highest importance. The slightly sinister feeling that we have about these proceedings is that Minister after Minister has spoken only of expenditure and made practically no reference to the profit record of individual companies.

We have had helpful information about the latest return on capital for NEB overall, but this consolidation of figures raises a worrying concept. The next annual report and accounts of the NEB is, tragically, only a few weeks away. That means that yet again we are struggling with inadequate information so close to the event. I should like the Minister of State to assure us. Dare we hope that the individual profit figures of the various NEB companies will still be provided? I hope that, in the consolidation of figures, we are not moving away from individual profit figures in relation to all NEB companies.

The arguments about the prospects of British Leyland and Rolls-Royce have been clearly made. The latest trading results cause us anxiety. The House is being invited to pass legislation approving the sum of £4½ billion on the basis of the only annual report and accounts which is available—to the year ending 31 December 1977. That was made available a year ago. We have to find a better way than that.

In looking at the corporate plan I can well understand the anxieties of my hon. Friend the Member for Workington. He will recall that on Second Reading we had two bites of the cherry. I asked both the Minister of State and his right hon. Friend the Secretary of State for details of the existing corporate plans, and about when they had been tabled. We asked about the proceedings of the Standing Committee, but we were given no answer. It was only from the answers to written questions on 9 February that I was able, at last, to establish the existence of the corporate plans.

I can understand why my hon. Friend has not had the opportunity to see those statements. If he had he would still, like me, be in the dark because all that we are told is that the existing corporate plans were tabled on 30 November 1977 and 13 November 1978 and are under the most general headings. The topics referred to are the financial implications of the plan, the current policy issues, the corporate action programme and sectoral strategies. We cannot understand how the Secretary of State promises us that we shall see the comments of the NEB on British Leyland's corporate plan and yet we cannot get to the guts of that plan which has such a vital effect on the NEB.

I cannot understand why we cannot see the NEB's corporate plan, if necessary with confidential aspects removed, because it would have been helpful and relevant to the House. That this has been denied to us reflects the low-key style in which the Government are seeking to go through this measure. The fact that we have no properly quantified breakdown has been made clear again and again. I urge the Minister of State, even at this late hour to try to reassure the taxpayer.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

I am grateful to the hon. Member for Arundel (Mr. Marshall) and to his hon. Friends for the way in which they have addressed themselves to these matters, quite apart from my gratitude for the generous personal remarks about myself. I place on record my thanks to my right hon. Friend the Member for Swansea, West (Mr. Williams) for the way in which he dealt with the Standing Committee. Having read the full reports of the Standing Committee I think that Opposition Members, as well as my hon. Friends, will agree that my right hon. Friend dealt with them most fairly and helpfully. They may have criticism of the Government as a whole, but my right hon. Friend did that Standing Committee proud.

The hon. Member for Arundel spoke of the Government's responsibility to the taxpayer. I would never seek to evade that. The Conservatives are hoping—I think that it is a vain hope—that they will be the Government before the end of this year. They will then have responsibility for the great principal companies held by the National Enterprise Board.

I appeal to the Conservatives to recognise that it is a matter of great importance that whatever partisan exchanges we have across the Floor of the House—exchanges from which I have never shrunk—we should not conduct our debates in such a way that if the Conservatives became the next Government their charge of these great companies would be made more difficult for themselves and those companies. I put it to the Opposition that trawling through the most intimate affairs of Rolls-Royce and implying that there may be arguments in favour of saying that the company is dumping its products can do the company no good in its greatest market, the United States.

Rolls-Royce has been a publicly owned company for eight years. Under Sir Kenneth Keith, appointed by the Conservatives and retained in his appointment by the present Government, I believe that the company has made a remarkable recovery and is a tremendous credit to this country. It has broken into the North American market in a remarkable way. It has achieved a great success for this country in becoming the first aero-engine manufacturer ever to be chosen by the largest airframe manufacturer in the world to provide its lead engine for a new product.

I believe that without in any Way relaxing our vigilance on behalf of the taxpayer we must assist Rolls-Royce to achieve the kind of sales and the kind of return that its chairman believes possible. He believes that within the next 15 years there will be a market of £1½ billion for the 535 engine. That would be a great contribution to the revenue of this country. It would be a great contribution to employment in many parts of the country, and I do not regard that as an unimportant or ignoble objective of Rolls-Royce.

This Government did not go to Sir Kenneth Keith and say"We have got seats in Derby and seats in Scotland and seats in other places, please come along with a wholly uneconomic engine and say that you want us to fund it ". Anybody on the Conservative Benches who knows Sir Kenneth Keith knows what he would have said to us had we suggested that to him.

Sir Kenneth does not mince his words. He has proved to be the most tremendous salesman for his company and for this engine. He has great confidence in this engine and his recommendation came to the Government through the NEB, which, having examined the project, recommended it to us. We examined it again, and of course there were different departmental assessments. If every Government Department looking at a project were to start with the same assessment and arrive at the same conclusions, what would be the point of having different Departments with different responsibilities? The Treasury, the Department of Industry and Rolls-Royce make their assessments. Comments will be made by the National Enterprise Board upon the Rolls-Royce assessment. Ministers will then decide their views, having examined all the assessments.

I have always wanted to ensure that the House obtains as much information as possible, but we must remember that Rolls-Royce—I am using it as a paradigm of the general question—is in competition with the two great American aircraft engine manufacturing companies. Those companies would be delighted to have access to the private commercial information of Rolls-Royce. Those companies have protagonists in the United States Congress who are longing to prove that Rolls-Royce is operating uneconomically in order to prevent Rolls-Royce engines being attached to the Boeing 757. Fortunately, such efforts have not succeeded. We are obliged to Boeing and Eastern Airlines for their support.

I recognise the wish of the House to have information—I want to accede to that wish as far as I can—but I cannot imagine that any other Parliament in the world would willingly place in jeopardy the needs of a great manufacturing company and a major exporter simply to conduct a partisan debate. I do not accuse the Opposition Front Bench of that. But when the House examines some of the information for which it is asking in its thirst for information it must recognise that if such information were published in the detail that is requested it could place in jeopardy the fate of a great British company.

I do not wish to be partisan about this matter. We are talking of a company which the Conservatives thought it right to rescue by placing it in public ownership. It has done well since then. It is now a great international company. It must not be hamstrung by pouring out confidential information so that Pratt and Whitney and GEC can lap it up and use it against us in the United States Congress.

I hope that the House will forgive me for delivering what appears to be a sanctimonious homily, but I deliver it to the Opposition simply because they hope to become the Government. They will not thank the House if we impose upon a Tory Government the restraints that the amendments seek to impose.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

I hope that the Minister will remember his homily later this year, when he is on the Opposition Front Bench. We did not produce the figures that resulted in accusations of dumping. They are the Treasury's figures. The Minister says that no other Parliament would ask for such figures. I suggest that he examines the Congressional record of what was asked of Lockheed before the United States Government assisted that company when it was in crisis as a result of the Rolls-Royce crisis.

The shareholders of the American General Electric Company and of Pratt and Whitney have a forecast of the profits that they can expect on the projects in which those companies have invested. We think that the Rolls-Royce shareholders should have at least that much information.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

If the Opposition divide in support of the amendments, all constraints would be removed from me if I ever sat on the Opposition Benches, because the Tory Party would be saying that there is one sauce for the goose and another for the gander.

We are not dealing with a rescue. We are dealing with a viable company, which has been made viable as a result of the support of two Governments.

When Rolls-Royce required rescue it was nationalised after 17 hours debate in both Houses. During that debate we did not receive the information that is now requested. All we saw was a panic-stricken rush to the House by a Tory Government who said that this company was important and that we must save it. The House obediently nationalised it and it was later handed over to the NEB.

7.45 p.m.

If one examines a company such as Inmos, one sees that different types of evidence are involved. I visited many microprocessing companies in the Santa Clara valley a few months ago. I had discussions with leading executives and with the leading figures in the Stanford Research Institute, which has enormous expertise and which is situated in the Santa Clara valley. Without exception, each executive told me that the NEB was right to go ahead with the Inmos project. They said that it was an important project for this country. One of the executives said that—although he believed that it would succeed—even if it failed it would be worth doing and be a great investment for the British taxpayer because of the infrastructure that it would create.

Photo of Mr Bob Cryer Mr Bob Cryer , Keighley

Does my right hon. Friend accept that the Conservative-controlled West Yorkshire county council, the Conservative-controlled Bradford district council and the Conservative-controlled Kirklees council are eagerly saying exactly the same? They say that the Inmos project is of vital importance and that it will provide jobs. They each want it in their area

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

They will get it in their area only over the dead body of the Conservative-controlled Greater Manchester council.

Photo of Kenneth Clarke Kenneth Clarke , Rushcliffe

I could not believe my ears when I realised that the Minister had left the subject of Rolls-Royce. Is he saying that a responsible Opposition should press him no further for any information? Is he saying that it is wrong to seek an assessment of the potential profitability of this project? Does he agree that now we have had a leak from the Government of a Treasury assessment the least that we can expect is some response to the forecast?

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

That is absurd. Does the hon. Member wish Parliament to operate on leak and counter-leak? Just because somebody sends something in a plain envelope to The Guardian does not mean that I should distribute plain envelopes round the Chamber to provide assessments of different bodies. That is an absurd proposal.

We are anxious to provide information. However, we shall not provide information of a kind which will be embarrassing to Rolls-Royce as an international trader and one of the most important exporters in the country. If we were to do that the Opposition, if they became the Government, would inherit something which they would wish that they had never started.

The NEB will be submitting the new Rolls-Royce plan to the Government in the light of decisions that are now being taken about financial arrangements. Much of the plan inevitably will be of a commercial and confidential nature. But when we have considered the NEB's report I shall put the Government's conclusions before the House.

It is an auspicious day to talk about British Leyland. Although its announcement today is by no means fully satisfying to anybody, it marks considerable progress. The Secretary of State received the NEB's report on British Leyland's 1979 corporate plan less than 24 hours ago. It is a lengthy document which requires careful study. Clearly, we have not had the time to study it. It would be absurd to try to comment on it or to disclose its contents in a piecemeal fashion. But the Secretary of State still hopes to be able to make a statement about the plan and to provide the House with a report on British Leyland before the Easter Recess.

I find somewhat troubling the text of some of the amendments. The body referred to in the amendment, the public sector economy unit, is an ad hoc body set up administratively. It would be absurd to make reference to it in an Act of Parliament when Sir Douglas Wass, if the fancy took him, could abolish it tonight. What would be the point of having that reference in those circumstances? The PSEU has not been operating for long. It was not operating when the Conservative Party was in Government. It was established only a short time after the Labour Party took office. It was part of the much greater controls on expenditure that have been introduced by the Government since the rocketing public sector borrowing requirement, which I am sure the hon. Member for Oswestry (Mr. Biffen) repines over in his few sad moments.

Do the Opposition believe that it is wrong to have projects that create jobs? We do not accept that the two aerospace projects and the Rolls-Royce project were cooked up by the Government and forced on Sir Kenneth Keith and the board of British Aerospace. In fact, Sir Kenneth and the board came to us with them. When we lose jobs in manufacturing industry it is a great problem to recreate them.

Nowhere was that more tellingly stated than in a speech made by the right hon. Member for Sidcup (Mr. Heath) almost a year ago. I have given the right hon. Gentleman notice that I shall quote from it. He referred to industries in difficulty and said: To those who say ' let them go to the wall', I ask what will happen to our balance of trade as a result?.. It is not sufficient to say that these companies should go to the wall.The same people claim that other companies will spring up in place of those that do go to the wall. Where has this happened? We have lost 500,000 people from agriculture in the past 15 years because of mechanisation. There is every justification for that, but we have still not found jobs for those people. The Scots and the Welsh can tell us that because it is more evident in those countries.All those concerned with industry know that to build a firm of any size takes at least a decade or two. Anyone who has had anything to do with regional policy knows the appalling number of firms needed in a region to employ 250 to 300 people."—[Official Report, 9 March 1978; Vol. 745, c. 1656–57.] Those were wise words from the right hon. Gentleman. It is much easier to lose jobs than to create them. That is why I do not regard it as a derisory objective of Governments to create or safeguard jobs, even though the projects were not put forward with that object in view.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

No, I shall not give way at the moment. I am trying to reply to the debate.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Waltham Forest Chingford

Is the right hon. Gentleman afraid to give way?

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

The last thing in the world that I shall be afraid of is the hon. Gentleman.

Photo of Gerald Kaufman Gerald Kaufman Minister of State (Department of Industry)

No. I do not want to give way.

The definition of cash flow is not clear from the text of the amendment, and it would not be clear in legislation. There could be many different definitions of cash flow. Cash flow in relation to the National Enterprise Board, which is not a manufacturing company but a holding company, would have a meaning entirely different from that of cash flow in a manufacturing company. The results would bear little resemblance to cash flow forecasts for an ordinary trading company. No commercial organisation, even when seeking to raise new capital, would make public its cash flow forecasts. Such forecasts are among the most sensitive pieces of information that a company can possess.

The Government are doing their best to provide information. My right hon. Friend the Minister of State provided a useful document for the House. We cannot accept that which is being requested in the amendment. Amendment No. 5 asks for the future investment plans of the NEB to be laid before the House. What a lunatic request. If the future investment plans of the NEB are requested to be laid before the House, that is asking that the world be told the companies in which the NEB seeks to invest. That would have a remarkable effect on those companies' shares regardless of whether the NEB decided to invest in them. If the NEB were to invest in them and it announced that intention months before doing so, that would force up the value of the shares. If it decided not to invest, the shares would still be forced up. That would be an extraordinary rigging of the market. Surely the Opposition do not want that.

I have mentioned the reasons why I hope that the Opposition will not press amendment No. 6. It has already been made clear that the corporate plan for the NEB is being considered by the Government. I hope that we shall be in a

Division No. 92]AYES[7.57 p.m.
Adley. RobertBottomley, PeterChurchill, W. S.
Aitken, JonathanBowden, A. (Brighton, Kemptown)Clark, Alan (Plymouth, Sutton)
Alison, MichaelBoyson, Dr Rhodes (Brent)Clark, William (Croydon S)
Arnold, TomBradford, Rev RobertClarke, Kenneth (Rushcliffe)
Atkins, Rt Hon H. (Spelthorne)Braine, Sir BernardClegg, Walter
Atkinson, David (B'mouth, East)Brittan, LeonCockcroft, John
Awdry, DanielBrocklebank-Fowler, C.Cooke, Robert (Bristol W)
Baker, KennethBrooke, Hon PeterCope, John
Banks, RobertBrotherton, MichaelCormack, Patrick
Beith, A. J.Brown, Sir Edward (Bath)Costain, A. P.
Bell, RonaldBruce-Gardyne, JohnCraig, Rt Hon W. (Belfast E)
Bendall, VivianBryan, Sir PaulCritchley, Julian
Bennett, Sir Frederic (Torbay)Buchanan-Smith, AlickCrouch, David
Bennett, Dr Reginald (Fareham)Buck, AntonyCrowder, F. P.
Benyon, W.Budgen, NickDean, Paul (N Somerset)
Biffen, JohnBulmer, EsmondDodsworth, Geoffrey
Biggs-Davison, JohnBurden, F. A.Douglas-Hamilton, Lord James
Blaker, PeterButler, Adam (Bosworth)Drayson, Burnaby
Body, RichardChalker, Mrs Lyndadu Cann, Rt Hon Edward
Boscawen, Hon RobertChannon, PaulDurant, Tony

position to make a statement about it. We have seen the corporate plan. It presents a detailed financial strategy. I hope that my right hon. Friend will make a statement on it in due course.

As I have said, we are anxious to provide information. We have provided a great deal more information than the Opposition did when in parallel circumstances. My right hon. Friend has provided an additional booklet even since the Bill was considered in Committee. I have made available in the House today, and to a number of hon. Members, the latest information that has come from BL. We do not shrink from providing such information. I shall provide as much information as I can.

The hon. Member for Arundel referred to the companies of the NEB. I assure him that I shall do my best to ensure that as much detailed and individual information as possible will be made available to the House apart from the Companies Acts reports, which will be made available automatically. We shall provide the information, but we think it unfair that the House should ask for great companies to be hamstrung in their international competitiveness and place a halter on the activities of the NEB. We shall provide as much information as we can, but we hope that the House will refuse to insert into the Bill amendments that would be damaging to not only the NEB but to many great companies of which the NEB has charge.

Question put, That the amendment be made:—

The House divided: Ayes 262, Noes 274.

Dykes, HughKaberry, Sir DonaldPrior, Rt Hon James
Eden, Rt Hon Sir JohnKershaw, AnthonyPym, Rt Hon Francis
Edwards, Nicholas (Pembroke)Kilfedder, JamesRaison, Timothy
Elliott, Sir WilliamKimball, MarcusRathbone, Tim
Emery, PeterKing, Evelyn (South Dorset)Rees, Peter (Dover & Deal)
Eyre, ReginaldKing, Tom (Bridgwater)Rees-Davies, W. R.
Fairbairn, NicholasKnight, Mrs JillRenton, Rt Hon Sir D. (Hunts)
Fairgrieve, RussellKnox, DavidRenton, Tim (Mid-Sussex)
Farr, JohnLamont, NormanRhodes James, R.
Finsberg, GeoffreyLangford-Holt, Sir JohnRidley, Hon Nicholas
Fisher, Sir NigelLatham, Michael (Melton)Ridsdale, Julian
Fletcher, Alex (Edinburgh N)Lawrence, IvanRifkind, Malcolm
Fookes, Miss JanetLawson, NigelRoberts, Michael (Cardiff NW)
Fowler, Norman (Sutton C'f'd)Le Marchant, SpencerRoberts, Wyn (Conway)
Fox, MarcusLester, Jim (Beeston)Ross, Stephen (Isle of Wight)
Fraser, Rt Hon H. (Stafford & St)Lewis, Kenneth (Rutland)Ross, William (Londonderry)
Fry, PeterLloyd, IanRost, Peter (SE Derbyshire)
Gardiner George (Reigate)Loveridge, JohnRoyle, Sir Anthony
Gardner, Edward (S Fylde)Luce, RichardSainsbury, Tim
Gilmour, Rt Hon Sir Ian (Chesham)McAdden, Sir StephenScott, Nicholas
Gilmour, Sir John (East Fife)McCrindle, RobertShaw, Giles (Pudsey)
Glyn, Dr AlanMcCusker, H.Shelton, William (Streatham)
Godber, Rt Hon JosephMacfarlane, NellShepherd, Colin
Goodhart, PhilipMacKay, Andrew (Stechford)Shersby, Michael
Goodhew, VictorMcNair-Wilson, M. (Newbury)Silvester, Fred
Goodlad, AlastairMcNair-Wilson, P. (New Forest)Sims, Roger
Gorst, JohnMadel, DavidSinclair, Sir George
Gow, Ian (Eastbourne) Marshall, Michael (Arundel)Skeet, T. H. H.
Gower, Sir Raymond (Barry)Marten, NeilSmith, Dudley (Warwick)
Grant, Anthony (Harrow C)Mates, MichaelSmith, Timothy John (Ashfield)
Gray, HamishMather, CarolSpence, John
Grieve, PercyMaude, AngusSpicer, Michael (S Worcester)
Griffiths, EldonMawby, RaySproat, lain
Grimond, Rt Hon J.Maxwell-Hyslop, RobinStainton, Keith
Grist, IanMeyer, Sir AnthonyStanbrook, Ivor
Hall-Davis, A. G. F.Miller, Hal (Bromsgrove)Steel, Rt Hon David
Hamilton, Archibald (Epsom & Ewell)Mills, PeterSteen, Anthony (Wavertree)
Hamilton, Michael (Salisbury)Miscampbell, NormanStewart, Ian (Hitchin)
Hampson, Dr KeithMitchell, David (Basingstoke)Stokes, John
Hannam, JohnMoate, RogerStradling Thomas, J.
Harrison, Col Sir Harwood (Eye)Molyneaux, JamesTapsell, Peter
Harvie Anderson, Rt Hon MissMonro, HectorTaylor, R. (Croydon NW)
Haselhurst, AlanMontgomery, FergusTaylor, Teddy (Cathcart)
Hastings, StephenMoore, John (Croydon C)Tebbit, Norman
Havers, Rt Hon Sir MichaelMore, Jasper (Ludlow)Temple-Morris, Peter
Hawkins, PaulMorgan, GeraintThomas, Rt Hon P. (Hendon S)
Hayhoe, BarneyMorgan-Giles, Rear-AdmiralTownsend, Cyril D.
Heath, Rt Hon EdwardMorris, Michael (Northampton S)Trotter, Neville
Hicks, RobertMorrison, Hon Charles (Devizes)van Straubenzee, W. R.
Higgins, Terence L.Morrison, Hon Peter (Chester)Vaughan, Dr Gerard
Hodgson, RobinMudd, DavidViggers, Peter
Holland, PhilipNeave, AireyWaddington, David
Hordern, PeterNeubert, MichaelWainwright, Richard (Colne V)
Howe, Rt Hon Sir GeoffreyNewton, TonyWakeham, John
Howell, David (Guildford)Onslow, CranleyWalker, Rt Hon P. (Worcester)
Howells, Geraint (Cardigan)Oppenheim, Mrs SallyWall, Patrick
Hunt, David (Wirral)Page, John (Harrow West)Walters, Dennis
Hunt, John (Ravensbourne)Page, Rt Hon R. Graham (Crosby)Wells, John
Hurd, DouglasPage, Richard (Workington)Whitelaw, Rt Hon William
Hutchison, Michael ClarkPaisley, Rev IanWhitney, Raymond
Irving, Charles (Cheltenham)Parkinson, CecilWiggin, Jerry
James, DavidPattie, GeoffreyWinterton, Nicholas
Jenkin, Rt Hon P. (Wanst'd&W'df'd)Penhaligon, DavidWood, Rt Hon Richard
Jessel, TobyPercival, IanYounger, Hon George
Johnson Smith, G. (E Grinstead)Peyton, Rt Hon John
Johnston, Russell (Inverness)Pink, R. BonnerTELLERS FOR THE AYES:
Jones, Arthur (Daventry)Powell, Rt Hon J. EnochMr, Anthony Berry and
Jopling, MichaelPrentice, Rt Hon RegSir George Young.
Joseph, Rt Hon Sir KeithPrice, David (Eastleigh)
NOES
Abse, LeoBenn, Rt Hon Anthony WedgwoodBrown, Robert C. (Newcastle W)
Allaun, FrankBennett, Andrew (Stockport N)Buchan, Norman
Anderson, DonaldBidwell, SydneyBuchanan, Richard
Archer, Rt Hon PeterBishop, Rt Hon EdwardCallaghan, Jim (Middleton & P)
Armstrong, ErnestBlenkinsop, ArthurCampbell, Ian
Ashley, JackBoardman, H.Canavan, Dennis
Atkins, Ronald (Preston N)Booth, Rt Hon AlbertCant, R. B.
Atkinson, Norman (H'gey, Tott'ham)Boothroyd, Miss BettyCarmichael, Neil
Bagier, Gordon A. T.Bottomley, Rt Hon ArthurCarter, Ray
Barnett, Guy (Greenwich)Boyden, James (Bish Auck)Carter-Jones, Lewis
Barnett, Rt Hon Joel (Heywood)Bradley, TomCartwright, John
Bates, AlfBray, Dr JeremyCastle, Rt Hon Barbara
Bean, R. E.Brown, Hugh D. (Provan)Clemitson, Ivor
Cocks, Rt Hon Michael (Bristol S)Jackson, Miss Margaret (Lincoln)Richardson, Miss Jo
Cohen, StanleyJanner, GrevilleRoberts, Albert (Normanton)
Coleman, DonaldJay, Rt Hon DouglasRoberts, Gwilym (Cannock)
Concannon, Rt Hon JohnJeger, Mrs LenaRobertson, George (Hamilton)
Conlan, BernardJenkins, Hugh (Putney)Robinson, Geoffrey
Cook, Robin F. (Edin C)John, BrynmorRoderick, Caerwyn
Corbett, RobinJohnson, James (Hull West)Rodgers, George (Chorley)
Cowans, HarryJohnson, Walter (Derby S)Rodgers, Rt Hon William (Stockton)
Craigen, Jim (Maryhill)Jones, Alec (Rhondda)Rooker, J. W.
Crawshaw, RichardJones, Barry (East Flint)Roper, John
Cronin, JohnJones, Dan (Burnley)Ross, Rt Hon W. (Kilmarnock)
Crowther, Stan (Rotherham)Judd, FrankRyman, John
Cryer, BobKaufman, Rt Hon GeraldSandelson, Neville
Cunningham, Dr J. (Whiteh)Kerr, RussellSedgemore, Brian
Davies, Rt Hon DenzilKilroy-Silk, RobertSelby, Harry
Davies, Ifor (Gower)Kinnock, NeilSever, John
Davis, Clinton (Hackney C)Lambie, DavidShaw, Arnold (Ilford South)
Deakins, EricLamborn, HarrySheldon, Rt Hon Robert
Dean, Joseph (Leeds West)Lamond, JamesShore, Rt Hon Peter
Dell, Rt Hon EdmundLatham, Arthur (Paddington)Short, Mrs Renée (Wolv NE)
Dempsey, JamesLee, JohnSilkin, Rt Hon John (Deptford)
Dewar, DonaldLestor, Miss Joan (Eton & Slough)Silkin, Rt Hon S. C. (Dulwich)
Doig, PeterLever, Rt Hon HaroldSilverman, Julius
Dormand, J. D.Lewis, Ron (Carlisle)Skinner, Dennis
Douglas-Mann, BruceLitterick, TomSmith, Rt Hon John (N Lanarkshire)
Duffy, A. E. P.Lofthouse, GeoffreySnape, Peter
Dunnett, JackLomas, KennethSpearing, Nigel
Eadie, AlexLuard, EvanSpriggs, Leslie
Edge, GeoffLyon, Alexander (York)Stallard, A. W.
Ellis, John (Brigg & Scun)Lyons, Edward (Bradford W)Stewart, Rt Hon M. (Fulham)
English, MichaelMabon, Rt Hon Dr J. DicksonStoddart, David
Ennals, Rt Hon DavidMcCartney, HughStott, Roger
Evans, Fred (Caerphilly)McDonald, Dr OonaghStrang, Gavin
Evans, Gwynfor (Carmarthen)McElhone, FrankStrauss, Rt Hon G. R.
Evans, loan (Aberdare)McKay, Allen (Penistone)Summerskill, Hon Dr Shirley
Evans, John (Newton)MacKenzie, Rt Hon GregorTaylor, Mrs Ann (Bolton W)
Ewing, Harry (Stirling)Maclennan, RobertThomas, Dafydd (Merioneth)
Faulds, AndrewMcMillan, Tom (Glasgow C)Thomas, Jeffrey (Abertillery)
Fernyhough, Rt Hon E.McNamara, KevinThomas, Mike (Newcastle E)
Fitt, Gerard (Belfast W)Madden, MaxThomas, Ron (Bristol NW)
Flannery, MartinMagee, BryanThorne, Stan (Preston South)
Fletcher, L. R. (Ilkeston)Mallalieu, J. P. W.Tierney, Sydney
Fletcher, Ted (Darlington)Marks, KennethTilley, John
Foot, Rt Hon MichaelMarshall, Dr Edmund (Goole)Tinn, James
Ford, BenMarshall, Jim (Leicester S)Tomlinson, John
Forrester, JohnMason, Rt Hon RoyTomney, Frank
Fowler, Gerald (The Wrekin)Maynard, Miss JoanTorney, Tom
Fraser, John (Lambeth, N'w'd)Meacher, MichaelTuck, Raphael
Freeson, Rt Hon ReginaldMellish, Rt Hon RobertUrwin, T. W.
Garrett, John (Norwich S)Mikardo, fanVarley, Rt Hon Eric G.
Garrett, W. E. (Wallsend)Millan, Rt Hon BruceWainwright, Edwin (Dearne V)
George, BruceMiller, Dr M. S. (E Kilbride)Walker, Harold (Doncaster)
Gilbert, Rt Hon Dr JohnMitchell, Austin (Grimsby)Walker, Terry (Kingswood)
Ginsburg, DavidMolloy, WilliamWard, Michael
Gould, BryanMoonman, EricWatkins, David
Gourlay, HarryMorris, Rt Hon AlfredWatkinson, John
Graham, TedMorris, Rt Hon Charles R.Weetch, Ken
Grant, George (Morpeth)Morris, Rt Hon J. (Aberavon)Weitzman, David
Grant, John (Islington C)Morton, GeorgeWellbeloved, James
Grocott, BruceMoyle, Rt Hon RolandWhite, Frank R. (Bury)
Hamilton, James (Bothwell)Mulley, Rt Hon FrederickWhite, James (Pollok)
Hamilton, W. W. (Central Fife)Murray, Rt Hon Ronald KingWhitehead, Phillip
Hardy, PeterNewens, StanleyWhitlock, William
Harrison, Rt Hon WalterNoble, MikeWigley, Dafydd
Hart, Rt Hon JudithOakes, GordonWilley, Rt Hon Frederick
Hattersley, Rt Hon RoyOgden, EricWilliams, Rt Hon Alan (Swansea W)
Hayman, Mrs HeleneO'Halloran, MichaelWilliams, Alan Lee (Hornch'ch)
Healey, Rt Hon DenisOrbach, MauriceWilliams, Sir Thomas (Warrington)
Heffer, Eric S.Orme, Rt Hon StanleyWilson, Rt Hon Sir Harold (Huyton)
Home Robertson, JohnOvenden, JohnWilson, William (Coventry SE)
Hooley, FrankPark, GeorgeWise, Mrs Audrey
Horam, JohnParker, JohnWoodall, Alec
Howell, Rt Hon Denis (B'ham, Sm H)Parry, RobertWoof, Robert
Hoyle, Doug (Nelson)Pavitt, LaurieWrigglesworth, Ian
Huckfield, LesPerry, ErnestYoung, David (Bolton E)
Hughes, Rt Hon C. (Anglesey)Phipps, Dr Colin
Hughes, Robert (Aberdeen N)Price, C. (Lewisham W)TELLERS FOR THE NOES:
Hughes, Roy (Newport)Price, William (Rugby)Mr. Bryan Davies and
Hunter, AdamRadice, GilesMr. Thomas Cox.
Irving, Rt Hon S. (Dartford)Rees, Rt Hon Merlyn (Leeds S)

Question accordingly negatived.

Photo of Mr George Younger Mr George Younger , Ayr

I beg to move amendment No. 9, in page 2, line 6, leave out '"£500 million"and"£800 million"' and insert '"£250 million"and"£350 million"'.

The amendment is exactly the same as one which was debated in Committee and upon which there was a tied vote. In accordance with custom, the Chairman exercised her vote so that the amendment was not carried, but you, Mr. Deputy Speaker, have very generously allowed us to debate it again.

The amendment refers to the extra money which the Government wish to give to the Scottish Development Agency under the Bill. As I said in Committee, it is right and proper that, when such huge extra sums of money are being asked for, any Opposition—and, indeed, any Members of Parliament confronted with it—have a right and a duty to inquire as to the reasons for the extra money required.

As the House will know, the SDA is not the same as the National Enterprise Board, although it has some powers which are similar to those of the NEB. It is important to bear in mind that the SDA, although it is a new body, has existed, in terms of most of its functions, for a very long time indeed. Most of the work done by the SDA has been previously done for many years by such bodies as the Scottish Industrial Estates Corporation, which has been running advance factories, and so on, in Scotland since before the War, by the Scottish Development Department, which organised the environmental improvement and clearance of sites, and so on, throughout Scotland for many years, and by the other agencies which have handed over some of their functions to the SDA, particularly the Council for Small Industries in Rural Areas of Scotland, which had done excellent work for many years in helping small businesses throughout Scotland.

We are faced with a request by the Government to raise the limit of moneys available to the SDA from a maximum of £300 million at present to a maximum of £800 million. The amendment proposes that the maximum should be raised from £300 million to only £350 million, and not by the very large amount of £500 million extra.

If the SDA were in need of extra money, I should be the last person to deny it to the SDA, if it could demonstrate the need for it, but the fact is that in the last full year reported in the annual report of the SDA, the usage of the funds towards its borrowing maximum was only £34 million. That is in the year 1977–78, as published in the SDA's last annual report. With the present limits, without any increase at all, it would therefore take approximately eight years for the SDA to use up the funds that it has at present, because it is clearly stated in the report that it has so far used only £147 million of the £300 million that it is entitled to use.

8.15 p.m.

We are faced with the position where the Agency could exist for eight more years on the present funds that it has—assuming a constant level of activity—without any increase at all. But, despite that, the Opposition are quite prepared to raise the limit by £50 million in order to give the SDA a little extra money to fall back on if times should change. The case has not been made, and the Minister of State did not make any case in Committee demonstrating that this money is needed.

I ask the Minister of State a perfectly specific question on this matter. Is it or is it not the case that the SDA has never yet had to turn down any proposition that it considered to be sensible and viable because of shortage of money? I should like the Minister of State to confirm to me that that is the case, because I am sure that it is. The SDA, in other words, has no shortage of funds and has on no occasion had to deny itself any investment that it thought was reasonable because of shortage of money, yet here we are being asked to give an extra £500 million over and above the SDA's present limits.

On the basis of the figure of £500 million, I calculate that at the level of activity that the SDA was carrying out in the year 1977–78, it would take at least 15 years for it to use up the funds that we are now being asked to vote to it. I suggest, Mr. Deputy Speaker, that in all conscience that is a wholly unreasonable request to make of Parliament, even at a time when funds are not scarce and when there are not other demands on public spending.

The extra allocation of £500 million is money that is not available to be spent on all sorts of other projects which hon. Members on each side of the House hold dear and on which they might wish to spend it. It is not available to improve the Health Service and it is not available to improve other facilities, such as education, for which many of us might have wanted to use it.

I have been so puzzled about this since the debates in Committee that I thought I had better ensure that there was not perhaps some great Government plan to expand the activities of the Agency so much that it would need much more money. The Minister of State, in Committee, hinted that it was his wish that the agency should spend a lot more money, and that that was one of the reasons that he wanted more money to be allocated to it.

I turn, therefore, to Cmnd. 7439,"The Government's Expenditure Plans ". On page 203 there is set out and analysed the expenditure that is within the Secretary of State's responsibility for a number of years ahead. It is true that there is not a particular column relating to the SDA. I imagine that that comes mostly within the heading"Trade, industry, energy and employment ". Even assuming for a moment that there are no other factors, not connected with the SDA, which may influence these figures in a different direction, one finds that the increase in spending in the coming years is extremely modest under this heading. For instance, for 1978–79, £113 million is allocated for this whole category. In the following year, 1979–80, it is £127 million—an increase of £14 million. The year after that, 1980–81, there is a drop by only £2 million to £125 million. The following year, 1981–82, there is a further drop of £2 million to £123 million, and in the last year that is mentioned here—1982–83—the amount goes up slightly by £2 million to £125 million. Therefore, there is hard and clear evidence in the Government's own White Paper on expenditure that they are not planning a vast increase in the expenditure of the Scottish Development Agency. We are therefore entitled to ask why the Government are now asking for this huge extra sum to be voted.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

Does not my hon. Friend share my concern that these extraordinary figures take no account of any undistributed profits? Does my hon. Friend think that there is some hidden loss which the Government are trying to keep from the House?

Photo of Mr George Younger Mr George Younger , Ayr

My hon. Friend may well be right. He may well have put his finger on part of the explanation, and I am grateful to him for making that point.

My object is to get information from the Minister by giving what I believe is the reason for this. It is a reason of which the House should be aware. From all this evidence it seems to me that the bringing forward of this demand for extra money to be made available to the SDA is nothing more than a public relations exercise. It is money which there is no possibility of this Government having to find, because they will go out of office this year. It is money which they are calling upon Parliament to vote without any knowledge of which Government will have to find the money, how it is to be spent, upon what it is to be spent or when it is to be spent.

It is simply a public relations exercise designed to give the impression that the Government who are presiding over the highest level of unemployment since the war—a level that has been sustained during all their time in office—are about to do something about unemployment in their dying days. It is a phoney prospectus. It does not mean anything. It is insulting the intelligence of the House, and, I believe, the Scots, to suggest that they will be taken in by this paper exercise of pretending that the SDA will somehow take off with this huge injection of funds.

The SDA will do no such thing. I hope that it will carry on with the valuable work that it does. I know that with the money it has already been granted by Parliament it has sufficient to carry out the work that it will be called upon to do. If the SDA ever should run short of money for valuable projects, I would be quite prepared to see that more money was given to it.

That is why this amendment has been put down. We put the amendment down so that the Minister could give an explanation as to exactly why the money is needed, what it will be spent on, and why, if it is to be spent, it is not recorded in the Government's White Paper on public expenditure. I hope that the Minister of State will give us the answers that he was not able to give in Committee, and tell the House the full background to this request.

Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire

This is a nasty and niggardly amendment, which presumably has been tabled as punishment to the people of Scotland for actually having voted in a majority for the establishment of a Scottish Assembly.

Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire

The hon. Member for Aberdeen, South (Mr. Sproat) says that the people of Scotland, by a majority of those who actually voted, did not—

Photo of Mr Iain Sproat Mr Iain Sproat , Aberdeen South

The hon. Gentleman did not say that.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. We are certainly not going to have a debate on the results of the referendum.

Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire

Thank you, Mr. Deputy Speaker. I suppose that this amendment was only to be expected from the party that actually voted against the establishment of the SDA in the first place. I note, in passing, that a similar amendment has not been tabled about the Welsh Development Agency. I can only assume that the Conservative drafting machine has broken down.

It is essential that the SDA should have room to move. The argument produced earlier concerning the NEB, to the effect that perhaps the United Kingdom was holding a lot of the money to finance it, does not apply in Scotland. This morning, along with some of my hon. Friends, I had discussions with the Scottish Council (Development of Industry) which, I believe, is lobbying other parties in the House. One point that the Scottish Council made very forcefully was that at least some of the revenues from the oil in Scottish waters should be used for the regeneration of industry. I certainly think that some of the moneys from Scottish oil should be channelled into the SDA.

During the progress of the SDA Bill through the House two or three years ago, the SNP made clear that it wanted an annual running budget, which would help the SDA with its forward planning. Of course, the SDA has made mistakes. It is in the risk-taking business. Some of those mistakes were made in my own constituency. Naturally, the SDA needs tighter monitoring of the projects in which it invests and, of course, it has had teething problems—no one will deny that. At the same time, it is my contention and that of my party that the SDA does not go far enough.

If we want an example of what can be done, we have only to look across the Irish Sea at the Irish Industrial Development Authority. Nevertheless, one of the great virtues of the SDA is that it has been totally approachable in a way that some private companies have not.

It is only fair to say that the buck stops with the SDA in relation to industrial development, unemployment and factory closures. In my constituency, the firm of Smedley's is proposing to close down at Blairgowrie, with the loss of 350 jobs. That is a large slice of the local economy. It may not be large in west central Scottish terms, but it is very large in the context of Perthshire.

When that closure was announced, I approached the SDA and got total help and co-operation from it, in a way that would not have been possible before the Agency was established. Therefore, the buck stops with the SDA. I can only hope that the Agency, together with the Scottish Office, will be able to do something about the potentially tragic situation in Blairgowrie.

With all its faults the SDA has shown itself to be a responsible body. I do not think that it will be showering vast amounts of money around if this Bill goes through. We should remind ourselves that there are many Smedley-type situations in Scotland. The SDA should be given the room in which to move. It should also be given the money. With that money it will have the tools to get on with the job of creating new employment and of regenerating industry in Scotland, which is sorely needed. The amendment must be resisted.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I was a member of the Committee that dealt with the Industry Bill. I should therefore like to deal with some of the points raised by the hon. Member for Ayr (Mr. Younger).

It is good to follow the speech of the hon. Member for Perth and East Perthshire (Mr Crawford) in his criticism of the Tories for opposing the SDA. We know that on the Second Reading of the Scottish Development Agency Bill the SNP voted against the SDA. Had the SNP had its way at that time, a Scottish Development Agency would not have been set up. I suppose that converts are sometimes better than people who are brought up in the original faith. We are, therefore, grateful to have the support of the SNP in this instance.

Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire

I think that we should get the record straight. The Scottish National Party voted for the establishment of the SDA on Second Reading. I can assure the hon. Gentleman of that.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I shall have to check that. My recollection is that the SNP voted against the SDA. I am willing to challenge the hon. Gentleman on that. I know that his memory is not very strong, and I believe that is the case in this respect. The case I make tonight is that the SNP voted against the Second Reading of the Scottish Development Agency Bill, but I concede that it might have voted for it during the Committee Stage.

Photo of Mr Jimmy Hamilton Mr Jimmy Hamilton , Bothwell

It voted with the Tories in Committee.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. I think that it might save a lot of time if I suspended the sitting for two minutes in order to get this matter cleared up. That would avoid the argument about which way certain hon. Members voted.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I accept that you, Mr. Deputy Speaker, are one of the best Deputy Speakers that we have. If you are willing to do that I would be willing to accept it. However, as a Labour Member who always accepts the opinion of the Scottish Whip, if the Whip tells me that the SNP voted against the SDA in Committee I am willing to accept that advice.

I am also surprised that the hon. Member for Ayr added his name to the rogues' gallery of Tory Members who tabled this amendment. I have always considered the hon. Gentleman a sort of gentleman Tory, unlike the hon. Member for Glasgow, Cathcart (Mr. Taylor), whom I consider to be one of the nouveau riche—someone who comes from the working class and joins the Tory Party in order to get quick promotion. The hon. Member for Ayr has always been an aristocratic Tory, who is connected with beer and all those other things that we in Scotland usually consider important. I always regard the hon. Member for Ayr, as he comes from an adjoining constituency, as a sort of gentleman. The hon. Member and I always take part in the various deputations that meet Government Ministers.

8.30 p.m.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

These references to personalities are getting a little out of hand. I suggest that the hon. Member sticks to the amendment before the House.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I was about to come to the amendment. I was saying that the hon. Member for Ayr and I take part in all the various Ayrshire constituency deputations and delegations to my right hon. and hon. Friends on the Front Bench, seeking Government money to safeguard the declining industries in our area. As a county, Ayrshire is one of the unfortunate areas of Scotland that have been dependent on traditional Scottish industries. We had coal mining in South Ayrshire. That is nearly wiped out. We had shipbuilding in Ayr, Troon, Irvine and Ardrossan. That is now completely wiped out, with the exception of Troon, in my constituency. We had the railway workshops, which are now wiped out completely. We had steel, which also is very nearly wiped out, with the exception of the remnants in my constituency.

If there is one area in Scotland that has been hit hard by redundancies and closures, it is the area represented by me and the hon. Member for Ayr. We have taken part in more deputations to Ministers of both Governments than has any other hon. Member, trying to get Government money because there was no hope of getting private enterprise money into the area. We were prepared to accept Government money—I was prepared to accept even Tory Government money—to build up declining industries in our area. Despite that, in my constituency there is still an unemployment rate of 14 per cent. The rate in the constituency of the hon. Member for Ayr is still much higher than the Scottish average, and it is well above the British average. Despite all the money which Governments of both parties have put into the declining industries of Ayrshire, we still have the highest rate of unemployment in Scotland.

I notice that my right hon. Friend the Minister of State has just returned to the Chamber. I am glad to see him back because I am about to congratulate him. I am expecting great things from him on these and other matters in which I am interested.

If there is one area which has been dependent on Government money and investment, it is Ayrshire. That is why I am sorry to hear the hon. Member for Ayr tying himself up with the reactionary Tories from England who are attempting to stop the Government giving an additional £500 million to the Scottish Development Agency. If we are to reduce unemployment in Ayrshire, we can do it only with Government money. Private investors are not interested in putting money into manufacturing industry in Scotland. They tell us that we are now in Europe, too far away from the markets, and not in the so-called golden triangle. Industrialists are moving out of Scotland down into the areas where they can make the most profit in the central belt of Europe.

Our only hope in Scotland is Government money. That is why I am glad that the Government have given additional money to the National Enterprise Board to help our colleagues in England and Wales and an additional £500 million to increase the limits of the SDA to build up industry in my area.

There are only two industries in Ayrshire that are doing well. One is Ailsa shipyard, which was nationalised and is now part of British Shipbuilders. Thanks to the help of my right hon. Friend the Minister of State, Department of Industry and my right hon. Friend the Minister of State, Scottish Office and Government money, we are assured of work right up into the 1980s. We are waiting for the bureaucrats in Brussels to clear the latest order for a dredger. If that comes to Ailsa shipyard, we are guaranteed work into the middle of 1980. If any other shipyard in Britain can say that, I am surprised.

Scottish Aviation would not exist had not the hon. Member for Ayr, myself and the other hon. Member for Ayrshire gone to the Labour Government and asked for it to be nationalised. The hon. Member for Ayr is a gentleman Tory and realises that he sometimes has to forget his Tory principles when dealing with jobs. He was part of a deputation that met the arch Left-winger, my right hon. Friend the Member for Bristol, South-East (Mr. Benn), who at that time was Secretary of State for Industry. He and I went down with my right hon. Friend the Member for Kilmarnock (Mr. Ross) and others to ask for Scottish Aviation to be nationalised, and it was nationalised.

With the help of the Labour Government and British Aerospace we are floating the Jetstream production line. That guarantees employment in Scottish Aviation up to the mid-1980s. It employs 1,400 or 1,500 people, and I hope that the labour force will further increase to 2,600. Then I shall have returned to the position of two or three years ago.

The only two industries that are doing well and have a future in the area are supported by a Labour Government, but the hon. Member for Ayr has the cheek to say tonight that we do not need more money. He is correct—the SDA has not spent the money that it has been given—but the SDA is a new agency and has to gain confidence. I hope that the chairman, Sir William Gray, is successful in his selection conference and becomes a Labour candidate for one of the Glasgow seats, and goes to Europe. A new chairman might have the confidence to spend more money and get things going.

In Ayrshire, Massey-Ferguson is faced with 1,100 redundancies. In my constituency SKF(UK) announced this week 682 redundancies, and we already have 14 per cent. unemployment. The only hope for these industries is a Labour Government and Scottish Development Agency money or any other money under section 7 or 8 of the Industry Act. If we do not get Government money for Massey Ferguson or SKF(UK), there is no future. We already have 14 per cent. unemployment, and with these redundancies it will be over 20 per cent. That is at a time when, in the Garnock valley and other areas of my constituency, unemployment could already reach 25 per cent. because of the closure of part of the steel industry at Glengarnock.

I thought that the hon. Member for Ayr, knowing the unemployment problems, would tonight be saying"To hell with the Tory Whip. I shall vote for the Labour Government in order to get this money. Without it these industries will die."

I am surprised that only two Scottish National Party Members are here. I am also surprised that the Scottish National Party yesterday gave the Government another fortnight, when a fortnight ago they gave them another fortnight. Yesterday the right hon. Member for Western Isles (Mr. Stewart) threw down the gauntlet for the Prime Minister, giving him only a fortnight. The SNP has said that if the Government do not do what it wants within a fortnight it will bring down the Labour Government. It will bring them down at a time when the result of a general election surely must be Margaret Thatcher and the Tories in power.

Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire

I correct the hon. Member on one point. Earlier he said that the Scottish National Party had voted against the Second Reading of the Bill to set up the Scottish Development Agency. I refer him to Hansard of 25 June 1975, which shows that the SNP voted for the establishment of the Agency.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I accept what the hon. Member says, but I shall check it. The point is that the SNP has thrown down the gauntlet to the Labour Government and treatened to bring them down. If it does that, and the Tories are returned to power with a majority of 100—as the public opinion polls indicate—it will be the death of industry in Scotland. There will be no hope for the people in Massey Ferguson and no hope for those in SKF(UK). There will be no hope for the steel workers in the Garnock valley. There will be no hope for any industrial workers in Scotland. The Tories will throw us to the wolves. They have made it clear that they see the future of Britain in Europe. I hope that the SNP thinks more of Scotland and its workers.

At the end of the day, this Labour Government have done well. They are doing the right thing for Scottish industry. I hope that we will push this Bill through in order to get the money to build up Scottish industry. This will achieve something that has not been achieved by the Tories or the private investors. This is the only way in which we will solve the unemployment problem. That is why I hope that the Government will reject these amendments and push forward with the Bill. They should remember that the Scottish industrial workers are mainly Labour voters, and they deserve some hope.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

The hon. Member for Ayr (Mr. Younger) has asked a number of important questions. He asked me specifically whether there had ever been an occasion when the SDA had to turn down any application because of lack of funds. It is certainly the case that the SDA has never had to do so yet, but that is not what we are talking about in this Bill. We are discussing financial limits against which future programmes can be planned, and we are telling the Agency the limits which will govern its medium and long-term planning. In fact, we are giving it a vote of confidence. We are not calling upon Parliament to vote any money at all. We are simply asking Parliament to fix the financial limits.

The hon. Member for Ayr also asked about the actual spending of the SDA. We indicated that on Second Reading. However, the most up-to-date figures available show that spending against the limit by the SDA now amounts to £78 million and the total committed is £177 million. I am sure that the hon. Member will have noticed that that is an improvement on the figures that I gave when we discussed this matter two months ago. Given the rate of spending that we expect—quite justifiably—the Agency could reach its present limit not in 10 or 15 years as the hon. Member says but in the next two or three years.

It has been said by the hon. Member that there is no good reason for the increases to the SDA to the extent that we are providing in the Bill. It is unthinkable to reject the opportunity of ensuring for the Agency the financial certainty that it needs to plan its programme for the next few years. In view of the confidence that the Government have placed repeatedly in the work of the Agency, it would be inconsistent to refuse that now. It provides the elbow room for the Agency to operate much more effectively.

8.45 p.m.

I was delighted when I re-read the speech made by the hon. Member for Ayr in Committee to see that he adopted a different tone towards the Agency from that of some of his hon. Friends. For some time I have thought that Opposition Members were adopting a niggardly attitude towards the concept of the Agency. There are some achievements that should be noted.

About £60 million has been spent or committed by the Agency on environmental and derelict land projects throughout Scotland. That has created about 5,550 jobs. Over 1½ million sq.ft. of advance and bespoke factories has been completed resulting in about 14,500 jobs and the potential for another 10,000 jobs. About 13,000 jobs have been provided by firms in which the Agency has invested. Therefore, more than 35,000 Scottish jobs depend upon the activities of the Agency.

I know that the hon. Member for Ayr is genuinely interested in small businesses. All hon. Members are genuinely anxious to assist in the development of the small business sector in Scotland. There have been difficulties, not just from the Government but often from the larger firms. However, the Agency is playing an important role in assisting small companies. It has invested about £2½ million in more than 200 small firms in Scotland and has provided technical and managerial advice to 200 more.

It was recently my privilege to open the consultancy services set up by the SDA. A recent survey of small firms showed that about 77 per cent. felt a need for outside assistance of some kind. That is a clear indication of the vital role of the Agency in the expansion of that important sector.

The Government took into account the environmental work, the factory work, the industrial investment and the work that the Agency does for small firms and decided to use the opportunity presented by the Bill to raise the Agency's financial limit. That is a firm demonstration of our confidence in the Agency's long-term future. The Government recognise the essential part that the Agency plays in Scotland's economic development

We are also mindful of the greater convenience in presenting the increase in the limits of the three bodies together, so that the related questions of their finances can be considered at the same time and not piecemeal. The hon. Member for Ayr asked me to give an indication of precise projects. His hon. Friend the Member for Edinburgh, North (Mr. Fletcher) asked the same thing in Committee. That shows a misunderstanding of the purpose of the Bill. The increase in the financial limits as set out in the Bill will allow the Agency the elbow room that is needed well into the 1980s. The figures cannot be, and are not, related to individual projects. The planning of those is covered by the annual estimates of the Agency which are presented to the House and which we discuss in the Scottish Grand Committee.

My hon. Friend the Member for Central Ayshire (Mr. Lambie) expressed his concern about shipbuilding and steel areas and the environmental work that needs to be done in the east end of Glasgow. It may be that there is similar work to be done in the Leith area of Edinburgh. There is much such work that the Agency still has to do.

The hon. Member for Perth and East Perthshire (Mr. Crawford) mentioned the closure of the Smedley factory in Blairgowrie. That is a subject of great concern to the hon. Gentleman and to every hon. Member who is interested in these matters. The loss of 300 or 400 jobs in such an area will have a tremendous effect on the local economy. The SDA will be willing to help and the Scottish Economic Planning Department is anxious that something should be done and is having discussions with several interested parties. We had one such meeting today. We shall be more than happy to provide any assistance that we can to help the factory. It is a difficult area of activity, but I can assure the hon. Gentleman that, provided that those who wish to take over the factory will provide long-term and viable jobs, I shall be prepared to help.

My hon. Friend the Member for Central Ayshire raised a number of problems. I am not sure that they were all associated with the agency, but he particularly indicated his concern about the Garnock valley. He will know the activity in which the Agency has been engaged in the Garnock valley and it was a little churlish of my hon. Friend to attack the chairman of the SDA as he did. The chairman has had that responsibility for only a short time. There have been teething troubles, but the Agency has shown, through the leadership of Sir William Gray, a considerable interest in the problems of Scottish people and of the Garnock valley in particular.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

My right hon. Friend must have misunderstood me. I was urging that Sir William Gray should be promoted to Europe and that someone else should be appointed chairman of the SDA. I was not being churlish. I wanted to give Sir William a promotion.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

That is not the sort of promotion that I would want. The Agency is doing a worthwhile job, especially in areas such as Garnock valley. It has had teething problems, but it has been in existence for only two years and has faced similar problems to those encountered by the Highlands and Islands Development Board some years ago.

The hon. Member for Ayr said that increasing the limits made it more difficult for the Government to make funds available for social and welfare services. That is not so. The activities of the Agency since its inception have been additional to all other central and local government spending. The Agency is fundamental to our economic development and we must allow it the freedom to fulfil its obligations.

The amendment is niggardly. It does not give the Agency enough elbow room to continue its effective work. I hope that my hon. Friends will reject the amendment.

Photo of Mr George Younger Mr George Younger , Ayr

I thank the Minister of State for his reply and echo what he said about the Smedley factory in Blairgowrie. I hope that something can be done because it is a most serious problem.

We were greatly entertained by the contribution of the hon. Member for Central Ayrshire (Mr. Lambie). His speech was a devastating indictment of the effects of five years of Labour Government on industry throughout Ayrshire. It was not my hon. Friends or I who took the decision in respect of Massey Ferguson at Kilmarnock. It was the Labour Government's economic policy that made its products difficult to sell. It was not the Conservative Government, the Conservative Opposition or myself who made the Glengarnock steelworks run down. It was the Labour Government's failure to get their steel policy going properly. It is not under a Conservative Government that unemployment in the hon. Gentleman's constituency and mine has soared to record levels. It has happened under a Labour Government. His devastating indictment of his own party's performance is sufficient for me. I am happy to leave it at that.

I am grateful to the Minister of State for his explanation on most of the matters he mentioned. He still has not appreciated my point that the money is already there and nothing like spent. The Agency has plenty to keep it going for a number of years. The Minister admitted that for two or three years there is plenty money. I would have thought this was an unwise time to put in a lot of extra money.

I must disagree with the Minister on one issue. It is economically illiterate to suggest that, because this money is allocated to the Scottish Development Agency, it is not taken away from somewhere else. We are not magicians. We are dealing with hard economic facts. If the money is allocated to the SDA, rightly or wrongly, it is not available for anything else. It is no use pretending it is. We have, however, heard a better explanation than was given upstairs. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North

I beg to move amendment No. 10, in page 2, line 7, at end add: ' such additional limit shall be subject to the laying before Parliament of the allocation between those funds required for investment purposes and those required for the remaining functions of the Agency.'. In Committee and again on Report today we have been asking repeatedly what the additional funds are for. We want to know what projects the Minister has in mind when asking for this large increase in the financial limits of the SDA. We are asking for a prospectus. It was not forthcoming in Committee and it is not forthcoming today. Ministers on the Front Bench are behaving like the representatives of a Government of some spendthrift banana republic when they come and ask for an extra £500 million for the SDA without producing any prospectus on the need for this money and the projects on which it might be used. It seems clear the demand for additional funds has not come from the Scottish Development Agency itself. As my hon. Friend the Member for Ayr (Mr. Younger) said, it is part of a public relations exercise by the Government on the eve of an election which cannot come too soon.

To explain the reason behind the amendment, it has been pointed out that there are two distinct functions of the Scottish Development Agency. There are what might be described as the inherited functions—the building of advance factories, the running of industrial estates and environmental work—and there is the investment function. It is not too difficult to imagine the sort of projects for which additional funds might be required to meet these inherited functions. While we would argue about the amount of the additional funds for these purposes, we would not argue about the principle or the need for this kind of work. The investment requirement, however, is of recent vintage and the investment function has a doubtful track record. It is not my purpose to repeat the points that have been made today and in Committee regarding the investment operations of the SDA.

The purpose of this amendment is to enable Parliament to distinguish between the two types of operation that the Agency carries out and to distinguish between the funds of the Agency in relation to its inherited and investment functions. If we had an allocation of this kind, we would be able to judge the significance of the investment function in the forward plans of the SDA. We would be able to relate the Agency's expenditure with the total amount of industrial aid being made available in Scotland. My hon. Friend the Member for Ayr has pointed out that the forward spending plans of the Government do not suggest that any great new funds will be available in Scotland.

9.0 p.m.

The fact is that financial assistance to Scottish industry suffered a severe cutback when the regional employment premium was withdrawn. So far nothing has been introduced to take its place, despite the fact that a new variety of employment aid has been made available. The Minister must know that when we add together the new kinds of employment and industrial assistance available to Scotland today, we still find that less money is being spent. That shows how the Government are trying to paper over the cracks in their failed economic policy and to suggest that much more money is being and will be made available in future. But they cannot deny their own statistics which prove the contrary.

I believe that the investment function, which requires special skills, should be separated from the Scottish Development Agency. I am of the opinion that, in order to meet the needs of small business in particular, it might be better to have a Government-sponsored investment bank funded 50 per cent. by the Government and 50 per cent. by private enterprise. Such an investment agency would be better able to resist political pressures to save jobs in circumstances when it might be wrong to pour good money after bad. If only to give that kind of independence, such an agency would be worthwhile.

We cannot do that in the Bill, but the amendment would provide an important step in that direction. As such, it should be supported. I hope that it will be supported by the Scottish National Party, which should be anxious to have better control over public expenditure and to know the use to which public funds are being put in Scotland.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

Given what the hon. Gentleman said, is not the import of the amendment that it calls for greater parliamentary scrutiny and accountability over the Agency's activities?

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North

Yes. The amendment seeks to separate the investment function from the other functions of the Agency. I am glad that the hon. Gentleman understands the point that I am trying to make and I hope that he will support us in the Lobby.

Photo of Mr James Craigen Mr James Craigen , Glasgow Maryhill

Earlier, the hon. Gentleman said that there should be less political influence in the activities of the Scottish Development Agency. Now he is suggesting that politicians have far too easy access to the Agency. My experience is that the Agency looks twice before it spends its money.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North

That is not what I said. I was on a different point. I said that it might be better if the investment function of the Agency were separated so that investment decisions would be free from political interference. That does not mean that, when money is being made available, Parliament should not know how it is to be spent. The amendment, if accepted, would ensure that Parliament had better control over the spending of £500 million. We do not know how much is for the investment function as distinct from the traditional functions inherited by the SDA. It is a simple but important move in the right direction. It is a reasonable proposition. It will give Parliament more say in and control over how public funds are spent. For that reason alone, I hope that Labour Members—and the Minister, too—will give the amendment a fair wind.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

I am not sure whether the hon. Member for Edinburgh, North (Mr. Fletcher) has made out an argument for the amendment. We were treated, perhaps, to an unveiling of the Conservative Party's plans for its next manifesto in the sense that there might be a division of the Scottish Development Agency into two sections: one, the old factories division, which used to exist, and the other the investment function which the hon. Gentleman suggested might best go into some new quango to be set up partly under private enterprise and partly State financed.

If such a body comes into existence what would be the attitude of the hon. Member for Edinburgh, North to parliamentary control? Does he think that this new mixed body, partly publicly and partly privately financed, would be subject in its day-to-day workings to parliamentary scrutiny, or would it be free to take its own decisions on how public money is to be spent?

I do not think that the hon. Gentleman addressed himself to that proposition and I should like to hear from him about it. The hon. Gentleman said that, if Parliament had more opportunity to scrutinise the activities of the Scottish Development Agency, it would be an improvement in itself. I think that he would have to tell us how it would be possible for Parliament to take control over the day-to-day workings of the Scottish Development Agency. Obviously Parliament would have a chance perhaps once a year, or even less, to discuss the investment policy of the SDA. As I see it, we can do that at the present through the Scottish Grand Committee discussions on Estimates.

My proposal in relation to amendment No. 10 is that this House is most unlikely to find the time to look at the way in which the Scottish Development Agency works. There is a further problem that the hon. Gentleman must examine. Over a period of years specialised agencies have been set up to take executive decisions and have been given criteria, statutory directives or financial targets by the House of Commons, on the basis that Parliament itself is unable to perform the work of executing the business.

If the hon. Gentleman does not accept that there should be these individual agencies does it not follow that he would require individual investment decisions to be taken not by agencies such as the SDA but by the Secretary of State for Scotland or indeed the Department of Industry? That would politicise the matter even further and would not, necessarily, be an improvement.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North

To put it simply and briefly, the danger is that we shall not know what the money allocated in this Bill is to be used for. There is a £500 million additional limit, some of it for inherited functions and some for investment. The amendment, quite simply, provides that when funds are being made available and cash limits are being increased a distinction is created between the two. The other point I was making concerned how such an investment operation might run in the future. Perhaps a BP-type operation, that is, owned half by the Government and half privately, would be better able to make investment decisions without the incidence of day-to-day political pressures under which the SDA must be operating at present.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

I did not wish to be too critical in discussing the terms of the hon. Gentleman's amendment. When someone tables an amendment it is worth while the House scrutinising it. There is an onus on those who propose amendments to persuade the House that the line which they are taking is correct. I was not sure about the line of argument being taken by the hon. Gentleman.

I understood that there was a fairly clear description of expenditure on the different operations of the Scottish Development Agency in its anual accounts. These accounts go further and show the individual holdings which have been acquired during the years, and give an indication of profits or losses. One of the arguments in favour of the Scottish Development Agency is that, when it has made a mistake, it has not tried to conceal it or to cover it up. It has reported it. One would expect the odd mistake to be covered up, but if an agency makes too many mistakes we should criticise it according to the standards which apply. It is a venture capital-offering institution. In the real commercial world mistakes will be made. The annual accounts will have the divisions which the hon. Member for Edinburgh, North suggests should be written into the Bill.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

The hon. Member may say that, but in the real world Parliament will have to authorise money in advance to the Scottish Development Agency, otherwise the Agency will have to trot back to the House every time it wants to make an acquisition. It would then have to say"Please may I spend this money in setting up this firm, or acquiring the shares of another?"That would be impossible.

The best that the House can do is to improve the machinery for scrutinising the activities of the SDA. There may be an argument for saying that a Select Committee on Scottish affairs should examine that possibility. On a United Kingdom basis perhaps a Department of Industry Committee could be set up to examine what happens to these specialist agencies.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North

I do not disagree with the hon. Member's final remarks. We are allocating £500 million tonight. Perhaps £300 million or £400 million of that should be spent on the routine functions of the SDA and the balance used for investment. To date the agency has spent less than £20 million on investment. Parliament should be involved in the advance allocation of money.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

The hon. Member is twisting the argument on its head. He says that, instead of restricting the activities of the Agency, the House should direct the Agency to spend more money on public investment. I go along with that argument, but it has come late in the evening. Perhaps on reflection, the hon. Member will not fully agree with what he has just said.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

I listened with some care to the amendment moved by the hon. Member for Edinburgh, North (Mr. Fletcher). I presume that he wishes to see that a proportion of the increased provision is devoted to investment. I am delighted that hon. Members are taking such an interest. Taken by itself, the proposition is commendable.

I cannot understand why, when every year we have an opportunity to consider the Supply Estimates and debate various White Papers, we need another opportunity to obtain expenditure information which has already been made available. I cannot see that there is any point in the amendment.

Deep down in his heart of hearts the hon. Member for Edinburgh, North does not like the SDA to have any industrial investment function. I have read with care the pamphlet prepared at the instance of the hon. Member and his hon. Friends on the future of the SDA. It does not encourage me to believe that there is much hope for the industrial investment side of the Agency if by some bad chance the hon. Member and his hon. Friends take over the government of the country.

Deep down Opposition Members do not like the SDA to invest. I have always been puzzled about that. I thought that the essence of the Conservative Party's philosophy was competition. I cannot understand why hon. Members complain when there is competition.

The hon. Member for Edinburgh, North complained about the Government's decision to abolish regional employment premiums. But in the Opposition's election manifesto they said that they would do that.

We want all the money that we can get for regional aid in Scotland. I am happy when we are able to do as my right hon. Friend the Secretary of State for Employment did the other day, and extend the youth opportunities programme and the short-term employment subsidies. Such measures should be welcomed. But our suggestion that there should be limits of about £800 million is opposed by the Conservatives. I cannot understand why the Conservative Party wants to restrict the limits in such a niggardly fashion.

9.15 p.m.

It seemed that the hon. Member for Edinburgh, North was suggesting that we should discuss the Agency's industrial investment case by case. That is what I understood, and I believe that that is the understanding of many of my hon. Friends. How can we foresee difficult situations? For example, only a short while ago, tribute was paid to the Government's

Division No. 93]AYES[9.17 p.m.
Adley. RobertCraig, Rt Hon W. (Belfast E)Hampson, Dr Keith
Aitken, JonathanCritchley, JulianHannam, John
Alison, MichaelCrouch, DavidHarrison, Col Sir Harwood (Eye)
Arnold, TomCrowder, F. P.Harvie Anderson, Rt Hon Miss
Atkins, Rt Hon H. (Spelthorne)Dean, Paul (N Somerset)Haselhurst, Alan
Atkinson, David (B'mouth, East)Dodsworth, GeoffreyHastings, Stephen
Baker, KennethDrayson, BurnabyHavers, Rt Hon Sir Michael
Banks, Robertdu Cann, Rt Hon EdwardHawkins, Paul
Beith, A. J.Durant, TonyHayhoe, Barney
Bell, RonaldDykes, HughHicks, Robert
Bendall, VivianEden, Rt Hon Sir JohnHiggins, Terence L.
Bennett, Sir Frederic (Torbay)Edwards, Nicholas (Pembroke)Hodgson, Robin
Benyon, W.Elliott, Sir WilliamHolland, Philip
Biffen, JohnEmery, PeterHordern, Peter
Biggs-Davison, JohnEyre, ReginaldHowe, Rt Hon Sir Geoffrey
Blaker, PeterFairbairn, NicholasHowell, David (Guildford)
Body, RichardFairgrieve, RussellHowells, Geraint (Cardigan)
Boscawen, Hon RobertFarr, JohnHunt, David (Wirral)
Bottomley, PeterFell, AnthonyHunt, John (Ravensbourne)
Bowden, A. (Brighton, Kemptown)Finsberg, GeoffreyHurd, Douglas
Boyson, Dr Rhodes (Brent)Fisher, Sir NigelHutchison, Michael Clark
Braine, Sir BernardFletcher, Alex (Edinburgh N)Irving, Charles (Cheltenham)
Brittan, LeonFookes, Miss JanetJames, David
Brocklebank-Fowler, C.Fowler, Norman (Sutton C'f'd)Jenkin, Rt Hon P. (Wanst'd&W'df'd)
Brooke, Hon PeterFox, MarcusJessel, Toby
Brotherton, MichaelFraser, Rt Hon H. (Stafford & St)Johnson Smith, G. (E Grinstead)
Brown, Sir Edward (Bath)Fry, PeterJohnston, Russell (Inverness)
Bruce-Gardyne, JohnGardner, Edward (S Fylde)Jones, Arthur (Daventry)
Bryan, Sir PaulGilmour, Rt Hon Sir Ian (Chesham)Jopling, Michael
Buchanan-Smith, AlickGilmour, Sir John (East Fife)Joseph, Rt Hon Sir Keith
Buck, AntonyGlyn, Dr AlanKaberry, Sir Donald
Budgen, NickGodber, Rt Hon JosephKershaw, Anthony
Bulmer, EsmondGoodhart, PhilipKilfedder, James
Burden, F. A.Goodhew, VictorKimball, Marcus
Butler, Adam (Bosworth)Goodlad, AlastairKing, Evelyn (South Dorset)
Chalker, Mrs LyndaGorst, JohnKing, Tom (Bridgwater)
Channon, PaulGow, Ian (Eastbourne)Knight, Mrs Jill
Churchill, W. S.Gower, Sir Raymond (Barry)Knox, David
Clark, Alan (Plymouth, Sutton)Grant, Anthony (Harrow C)Lamont, Norman
Clark, William (Croydon S)Gray, HamishLangford-Holt, Sir John
Clarke, Kenneth (Rushcliffe)Grieve, PercyLatham, Michael (Melton)
Clegg, WalterGriffiths, EldonLawrence, Ivan
Cockcroft, JohnGrimond, Rt Hon J.Lawson, Nigel
Cooke, Robert (Bristol W)Grist, IanLe Marchant, Spencer
Cope, JohnHall-Davis, A. G. F.Lester, Jim (Beeston)
Cormack, PatrickHamilton, Archibald (Epsom & Ewell)Lewis, Kenneth (Rutland)
Costain, A. P.Hamilton, Michael (Salisbury)Lloyd, Ian

attitude towards Smedley. Nobody foresaw those difficulties a few months ago. The Government and the Agency have to be able to act quickly. Sometimes it is necessary to act within days. It would not be sensible to have the Agency split up in the manner suggested by the amendment. The hon. Gentleman has gone further and suggested that we should proceed case by case. That makes no sense.

There is adequate opportunity for debate in the House on the Estimates. It is a matter for the hon. Gentleman's right hon. and hon. Friends to determine which subjects are debated, where they are debated and how they are debated. There is no purpose to be served in the House passing the amendment. I ask my right hon. and hon. Friends to oppose it.

Question put, That the amendment be made:—

The House divided: Ayes 257, Noes 282.

Loveridge, JohnPage, Rt Hon R. Graham (Crosby)Skeet, T. H. H.
Luce, RichardPage, Richard (Workington)Smith, Dudley (Warwick)
McAdden, Sir StephenPaisley, Rev IanSmith, Timothy John (Ashfield)
McCrindle, RobertParkinson, CecilSpence, John
Macfarlane, NeilPattie, GeoffreySpicer, Michael (S Worcester)
MacKay, Andrew (Stechford)Penhaligon, DavidSproat, lain
McNair-Wilson, M. (Newbury)Percival, IanStainton, Keith
McNair-Wilson, P. (New Forest)Peyton, Rt Hon JohnStanbrook, Ivor
Madel, DavidPink, R. BonnerSteen, Anthony (Wavertree)
Marshall, Michael (Arundel)Powell, Rt Hon J. EnochStewart, Ian (Hitchin)
Marten, NellPrentice, Rt Hon RegStokes, John
Mates, MichaelPrice, David (Eastleigh)Stradling Thomas, J.
Mather, CarolPrior, Rt Hon JamesTapsell, Peter
Maude, AngusPym, Rt Hon FrancisTaylor, R. (Croydon NW)
Mawby, RayRaison, TimothyTaylor, Teddy (Cathcart)
Maxwell-Hyslop, RobinRathbone, TimTebbit, Norman
Mayhew, PatrickRees, Peter (Dover & Deal)Temple-Morris, Peter
Meyer, Sir AnthonyRees-Davies, W. R.Thomas, Rt Hon P. (Hendon S)
Miller, Hal (Bromsgrove)Renton, Rt Hon Sir D. (Hunts)Townsend, Cyril D.
Mills, PeterRenton, Tim (Mid-Sussex)Trotter, Neville
Miscampbell, NormanRhodes James, R.van Straubenzee, W. R.
Mitchell, David (Basingstoke)Ridley, Hon NicholasVaughan, Dr Gerard
Moate, RogerRidsdale, JulianViggers, Peter
Molyneaux, JamesRifkind, MalcolmWaddington, David
Monro, HectorRoberts, Michael (Cardiff NW)Wainwright, Richard (Colne V)
Montgomery, FergusRoberts, Wyn (Conway)Wakeham, John
Moore, John (Croydon C)Rodgers, Sir John (Sevenoaks)Wall, Patrick
More, Jasper (Ludlow)Ross, Stephen (Isle of Wight)Walters, Dennis
Morgan, GeraintRoss, William (Londonderry)Wells, John
Morgan-Giles, Rear-AdmiralRost, Peter (SE Derbyshire)Whitelaw, Rt Hon William
Morris, Michael (Northampton S)Royle, Sir AnthonyWhitney, Raymond
Morrison, Hon Charles (Devizes)Sainsbury, TimWiggin, Jerry
Morrison, Hon Peter (Chester)Scott, NicholasWinterton, Nicholas
Mudd, DavidShaw, Giles (Pudsey)Wood, Rt Hon Richard
Neave, AireyShelton, William (Streatham)Young, Sir G. (Ealing, Acton)
Neubert, MichaelShepherd, ColinYounger, Hon George
Newton, TonyShersby, Michael
Onslow, CranleySilvester, FredTELLERS FOR THE AYES:
Oppenheim, Mrs SallySims, RogerMr. Anthony Berry and
Page, John (Harrow West)Sinclair, Sir GeorgeLord James Douglas-Hamilton.
NOES
Abse, LeoCohen, StanleyFletcher, L. R. (Ilkeston)
Allaun, FrankConcannon, Rt Hon JohnFletcher, Ted (Darlington)
Anderson, DonaldConlan, BernardFoot, Rt Hon Michael
Archer, Rt Hon PeterCook, Robin F. (Edin C)Ford, Ben
Armstrong, ErnestCorbett, RobinForrester, John
Ashley, JackCowans, HarryFowler, Gerald (The Wrekin)
Atkins, Ronald (Preston N)Cox, Thomas (Tooting)Fraser, John (Lambeth, N'w'd)
Atkinson, Norman (H'gey, Tott'ham)Craigen, Jim (Maryhill)Freeson, Rt Hon Reginald
Bagier, Gordon A. T.Crawford, DouglasGarrett, John (Norwich S)
Bain, Mrs MargaretCrawshaw, RichardGarrett, W. E. (Wallsend)
Barnett, Guy (Greenwich)Cronin, JohnGeorge, Bruce
Barnett, Rt Hon Joel (Heywood)Crowther, Stan (Rotherham)Gilbert, Rt Hon Dr John
Bates, AltCryer, BobGinsburg, David
Bean, R. E.Cunningham, Dr J. (Whiteh)Gould, Bryan
Benn, Rt Hon Anthony WedgwoodDavies, Bryan (Enfield N)Gourlay, Harry
Bennett, Andrew (Stockport N)Davies, Rt Hon DenzilGraham, Ted
Bid well, SydneyDavies, Ifor (Gower)Grant, George (Morpeth)
Bishop, Rt Hon EdwardDavis, Clinton (Hackney C)Grant, John (Islington C)
Blenkinsop, ArthurDeakins, EricGrocott, Bruce
Boardman, H.Dean, Joseph (Leeds West)Hamilton, James (Bothwell)
Booth, Rt Hon AlbertDell, Rt Hon EdmundHamilton, W. W. (Central Fife)
Boothroyd, Miss BettyDempsey, JamesHardy, Peter
Bottomley, Rt Hon ArthurDewar, DonaldHarrison, Rt Hon Walter
Boyden, James (Bish Auck)Doig, PeterHart, Rt Hon Judith
Bradley, TomDormand, J. D.Hattersley, Rt Hon Roy
Bray, Dr JeremyDouglas-Mann, BruceHayman, Mrs Helens
Brown, Hugh D. (Provan)Duffy, A. E. P.Healey, Rt Hon Denis
Brown, Robert C. (Newcastle W)Dunnett, JackHeller, Eric S.
Buchan, NormanEadie, AlexHenderson, Douglas
Buchanan, RichardEdge, GeoffHome Robertson, John
Callaghan, Rt Hon J. (Cardiff SE)Ellis, John (Brigg & Scun)Hooley, Frank
Callaghan, Jim (Middleton & P)English, MichaelHoram, John
Campbell, IanEnnals, Rt Hon DavidHowell, Rt Hon Denis (B'ham. Sm H)
Canavan, DennisEvans, Fred (Caerphilly)Hoyle, Doug (Nelson)
Cant, R. B.Evans, Gwynfor (Carmarthen)Huckfield, Les
Carmichael, NeilEvans, loan (Aberdare)Hughes, Rt Hon C. (Anglesey)
Carter, RayEvans, John (Newton)Hughes, Robert (Aberdeen N)
Carter-Jones, LewisEwing, Harry (Stirling)Hughes, Roy (Newport)
Cartwright, JohnFaulds, AndrewHunter, Adam
Castle, Rt Hon BarbaraFernyhough, Rt Hon E.Irving, Rt Hon S. (Dartford)
Clemitson, IvorFitt, Gerard (Belfast W)Jackson, Miss Margaret (Lincoln)
Cocks, Rt Hon Michael (Bristol S)Flannery, MartinJanner, Greville
Jay, Rt Hon DouglasMorris, Alfred (Wythenshawe)Spriggs, Leslie
Jeger, Mrs LenaMorris, Rt Hon Charles R.Stallard, A. W.
Jenkins, Hugh (Putney)Morris, Rt Hon J. (Aberavon)Stewart, Rt Hon Donald
John, BrynmorMorton, GeorgeStewart, Rt Hon M. (Fulham)
Johnson, James (Hull West)Moyle, Rt Hon RolandStoddart, David
Johnson, Walter (Derby S)Mulley, Rt Hon FrederickStott, Roger
Jones, Alec (Rhondda)Murray, Rt Hon Ronald KingStrang, Gavin
Jones, Barry (East Flint)Newens, StanleyStrauss, Rt Hon G. R.
Jones, Dan (Burnley)Noble, MikeSummerskill, Hon Dr Shirley
Judd, FrankOakes, GordonThomas, Dafydd (Merioneth)
Kaufman, Rt Hon GeraldOgden, EricThomas, Jeffrey (Abertillery)
Kerr, RussellO'Halloran, MichaelThomas, Mike (Newcastle E)
Kilroy-Silk, RobertOrbach, MauriceThomas, Ron (Bristol NW)
Kinnock, NeilOrme, Rt Hon StanleyThompson, George
Lambie, DavidOvenden, JohnThorne, Stan (Preston South)
Lamborn, HarryPark, GeorgeTierney, Sydney
Lamond, JamesParker, JohnTilley, John
Latham, Arthur (Paddington)Parry, RobertTomlinson, John
Lee, JohnPavitt, LaurieTomney, Frank
Lestor, Miss Joan (Eton & Slough)Perry, ErnestTorney, Tom
Lever, Rt Hon HaroldPhipps, Dr ColinUrwin, Rt Hon T. W.
Lewis, Ron (Carlisle)Price, C. (Lewisham W)Varley, Rt Hon Eric G.
Litterick, TomPrice, William (Rugby)Wainwright, Edwin (Dearne V)
Lofthouse, GeoffreyRadice, GilesWalker, Harold (Doncaster)
Lomas, KennethRees, Rt Hon Merlyn (Leeds S)Walker, Terry (Kingswood)
Luard, EvanReid, GeorgeWard, Michael
Lyon, Alexander (York)Richardson, Miss JoWatkins, David
Lyons, Edward (Bradford W)Roberts, Albert (Normanton)Watkinson, John
Mabon, Rt Hon Dr J. DicksonRoberts, Gwilym (Cannock)Weetch, Ken
McCartney, HughRobertson, George (Hamilton)Weitzman, David
McDonald, Dr OonaghRobinson, GeoffreyWellbeloved, James
McElhone, FrankRoderick, CaerwynWelsh, Andrew
McKay, Allen (Penistone)Rodgers, George (Chorley)White, Frank R. (Bury)
MacKenzie, Rt Hon GregorRodgers, Rt Hon William (Stockton)White, James (Pollok)
Maclennan, RobertRooker, J. W.Whitehead, Phillip
McMillan, Tom (Glasgow C)Roper, JohnWhitlock, William
McNamara, KevinRoss, Rt Hon W. (Kilmarnock)Wigley, Dafydd
Madden, MaxRyman, JohnWilley, Rt Hon Frederick
Magee, BryanSandelson, NevilleWilliams, Rt Hon Alan (Swansea W)
Mallalieu, J. P. W.Sedgemore, BrianWilliams, Alan Lee (Hornch'ch)
Marks, KennethSelby, HarryWilliams, Sir Thomas (Warrington)
Marshall, Dr Edmund (Goole)Sever, JohnWilson, Gordon (Dundee E)
Marshall, Jim (Leicester S)Shaw, Arnold (llford South)Wilson, Rt Hon Sir Harold (Huyton)
Mason, Rt Hon RoySheldon, Rt Hon RobertWilson, William (Coventry SE)
Maynard, Miss JoanShore, Rt Hon PeterWise, Mrs Audrey
Meacher, MichaelShort, Mrs Renée (Wolv NE)Woodall, Alec
Mellish, Rt Hon RobertSilkin, Rt Hon John (Deptford)Woof, Robert
Mikardo, IanSilkin, Rt Hon S. C. (Dulwich)Wrigglesworth, Ian
Millan, Rt Hon BruceSilverman, JuliusYoung, David (Bolton E)
Miller, Dr M. S. (E Kilbride)Skinner, Dennis
Mitchell, Austin (Grimsby)Smith, Rt Hon John (N Lanarkshire)TELLERS FOR THE NOES:
Molloy, WilliamSnape, PeterMr. James Tina and
Moon man, EricSpearing, NigelMrs. Ann Taylor.

Question accordingly negatived.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

I beg to move amendment No. 12, in page 2, line 25 at end add— (8) In section 8(1) (d) for the words ' otherwise than under section 3 above' there shall be substituted the words ' including under section 3 above ' ".

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

With this amendment we may discuss amendment No. 13, in page 2, line 25 at end add— (8) In section 8(1) there shall be added:' (e) considerations specified by the Secretary of State in respect of securities or other property transferred by the Secretary of State to the Board or its nominees under section 5 above '.".

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

Throughout the whole of the debate we have consistently tried to get an undertaking from the Government to give us more information on every part of the Bill. Tonight we give the Government one last chance to address their minds to these two amendments. As we made perfectly clear in Committee, these amendments cover matters where there is a fair conceptual argument about what should or should not be merged within the activities of the NEB. There should not only be the operating aspects of the NEB but it should also be made perfectly clear as to what should or should not be part of total borrowing. It is to that point that both the amendments are addressed.

I hope that we can consider these amendments quietly and briefly. We are trying to make progress because we recognise that there is other business in which hon. Members are interested. All we ask from the Government on both these amendments is an undertaking that they will, once more, look at the conceptual merging of the inherited companies within the new borrowing limits.

These are perfectly simple matters and I ask the Minister tonight to give us a little gleam of light. If he is willing to do that, we shall perhaps be willing to withdraw the amendment on the basis that we shall have further opportunity when the Bill comes back from another place. Meanwhile, I would not seek to urge my hon. Friends to press the amendment to a vote if we have a prompt response from the Minister tonight.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

I must ask my right hon. and hon. Friends to oppose both amendments. We have debated them in Committee. The hon. Member for Arundel (Mr. Marshall) knows the effect that they would have. In fact, amendment No. 12 misses the point because, if he wished to do so, my right hon. Friend could still give a guarantee and that would not count against the NEB's borrowing limits.

Division No. 94]AYES[9.34 p.m.
Abse, LeoConcannon, Rt Hon JohnFraser, John (Lambeth, N'w'd)
Allaun, FrankConlan, BernardFreeson, Rt Hon Reginald
Anderson, DonaldCook, Robin F. (Edin C)Garrett, John (Norwich S)
Archer, Rt Hon PeterCorbett, RobinGarrett, W. E. (Wallsend)
Armstrong, ErnestCowans, HarryGeorge, Bruce
Ashley, JackCox, Thomas (Tooting)Gilbert, Rt Hon Dr John
Ashton, JoeCraigen, Jim (Maryhill)Ginsburg, David
Atkins, Ronald (Preston N)Crawford, DouglasGould, Bryan
Atkinson, Norman (H'gey, Tott'ham)Crawshaw, RichardGourlay, Harry
Bagier, Gordon A. T.Cronin, JohnGraham, Ted
Bain, Mrs MargaretCrowther, Stan (Rotherham)Grant, George (Morpeth)
Barnett, Guy (Greenwich)Cryer, BobGrant, John (Islington C)
Barnett, Rt Hon Joel (Heywood)Cunningham, Dr J. (Whiteh)Grocott, Bruce
Bates, AltDavies, Bryan (Enfield N)Hamilton, James (Bothwell)
Bean, R. E.Davies, Rt Hon DenzilHamilton, W. W. (Central Fife)
Benn, Rt Hon Anthony WedgwoodDavies, Ifor (Gower)Hardy, Peter
Bennett, Andrew (Stockport N)Davis, Clinton (Hackney C)Harrison, Rt Hon Walter
Bidwell, SydneyDeakins, EricHart, Rt Hon Judith
Bishop, Rt Hon EdwardDell, Rt Hon EdmundHattersley, Rt Hon Roy
Blenkinsop, ArthurDempsey, JamesHayman, Mrs Helena
Boardman, H.Dewar, DonaldHealey, Rt Hon Denis
Booth, Rt Hon AlbertDoig, PeterHeffer, Eric S.
Boothroyd, Miss BettyDormand, J. D.Henderson, Douglas
Bottomley, Rt Hon ArthurDouglas-Mann, BruceHome Robertson, John
Boyden, James (Bish Auck)Duffy, A. E. P.Hooley, Frank
Bradley, TomDunnett, JackHoram, John
Bray, Dr JeremyEadie, AlexHowell, Rt Hon Denis (B'ham, Sm H)
Brown, Hugh D. (Provan)Edge, GeoffHoyle, Doug (Nelson)
Brown, Robert C. (Newcastle W)Ellis, John (Brigg & Scun)Huckfield, Les
Buchan, NormanEnglish, MichaelHughes, Rt Hon C. (Anglesey)
Buchanan, RichardEnnals, Rt Hon DavidHughes, Robert (Aberdeen N)
Callaghan, Rt Hon J. (Cardiff SE)Evans, Fred (Caerphilly)Hughes, Roy (Newport)
Callaghan, Jim (Middleton & P)Evans, Gwynfor (Carmarthen)Hunter, Adam
Campbell, IanEvans, loan (Aberdare)Irving, Rt Hon S. (Dartford)
Canavan, DennisEwing, Harry (Stirling)Jackson, Miss Margaret (Lincoln)
Cant, R. B.Faulds, AndrewJanner, Greville
Carmichael, NellFernyhough, Rt Hon E.Jay, Rt Hon Douglas
Carter, RayFitt, Gerard (Belfast W)Jeger, Mrs Lena
Carter-Jones, LewisFlannery, MartinJenkins, Hugh (Putney)
Cartwright, JohnFletcher, L. R. (Ilkeston)John, Brynmor
Castle, Rt Hon BarbaraFletcher, Ted (Darlington)Johnson, James (Hull West)
Clemitson, IvorFoot, Rt Hon MichaelJohnson, Walter (Derby S)
Cocks, Rt Hon Michael (Bristol S)Ford, BenJones, Alec (Rhondda)
Cohen, StanleyForrester, JohnJones, Barry (East Flint)
Coleman, DonaldFowler, Gerald (The Wrekin)Jones, Dan (Burnley)

On amendment No. 13, there is absolutely no reason why the transferred debts should themselves constitute a charge against the NEB's borrowing limit. The hon. Member for Arundel knows that. He knows their effect, which would be to diminish the freedom and investment powers of the NEB. Because of that, I would urge rejection of both the amendments.

Photo of Mr Michael Marshall Mr Michael Marshall , Arundel

I think that the Minister is yet again ignoring the argument that he himself concedes, which is that there is a capital debt here. However, we have said that we wish to make progress. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question put, That the Bill be now read the Third time.—[Mr. Kaufman.]

The House divided: Ayes 283, Noes 260.

Judd, FrankNewens, StanleyStott, Roger
Kaufman, Rt Hon GeraldNoble, MikeStrang, Gavin
Kerr, RussellOakes, GordonStrauss, Rt Hon G. R.
Kilroy-Silk, RobertOgden, EricSummerskill, Hon Dr Shirley
Kinnock, NellO'Halloran, MichaelTaylor, Mrs Ann (Bolton W)
Lambie, DavidOrbach, MauriceThomas, Dafydd (Merioneth)
Lamborn, HarryOrme, Rt Hon StanleyThomas, Jeffrey (Abertillery)
Lamond, JamesOvenden, JohnThomas, Mike (Newcastle E)
Latham, Arthur (Paddington)Park, GeorgeThomas, Ron (Bristol NW)
Lee, JohnParker, JohnThompson, George
Lestor, Miss Joan (Eton & Slough)Parry, RobertThorne, Stan (Preston South)
Lever, Rt Hon HaroldPavitt, LaurieTierney, Sydney
Lewis, Ron (Carlisle)Perry, ErnestTilley, John
Litterick, TomPhipps, Dr ColinTinn, James
Lofthouse, GeoffreyPrice, C. (Lewisham W)Tomlinson, John
Lomas, KennethPrice, William (Rugby)Tomney, Frank
Luard, EvanRadice, GilesTorney, Tom
Lyon, Alexander (York)Rees, Rt Hon Merlyn (Leeds S)Urwin, Rt Hon T. W.
Lyons, Edward (Bradford W)Reid, GeorgeVarley, Rt Hon Eric G.
Mabon, Rt Hon Dr J. DicksonRichardson, Miss JoWainwright, Edwin (Dearne V)
McCartney, HughRoberts, Albert (Normanton)Walker, Harold (Doncaster)
McDonald, Dr OonaghRoberts, Gwilym (Cannock)Walker, Terry (Kingswood)
McElhone, FrankRobertson, George (Hamilton)Ward, Michael
McKay, Allen (Penistone)Robinson, GeoffreyWatkins, David
MacKenzie, Rt Hon GregorRoderick, CaerwynWatkinson, John
Maclennan, RobertRodgers, George (Chorley)Weetch, Ken
McMillan, Tom (Glasgow C)Rodgers, Rt Hon William (Stockton)Weitzman, David
McNamara, KevinRooker, J. W.Wellbeloved, James
Madden, MaxRoper, JohnWelsh, Andrew
Magee, BryanRoss, Rt Hon W. (Kilmarnock)White, Frank R. (Bury)
Mallalieu, J. P. W.Ryman, JohnWhite, James (Pollok)
Marks, KennethSandelson, NevilleWhitehead, Phillip
Marshall, Dr Edmund (Goole)Sedgemore, BrianWhitlock, William
Marshall, Jim (Leicester S)Selby, HarryWigley, Dafydd
Mason, Rt Hon RoySever, JohnWilley, Rt Hon Frederick
Maynard, Miss JoanShaw, Arnold (llford South)Williams, Rt Hon Alan (Swansea W)
Meacher, MichaelSheldon, Rt Hon RobertWilliams, Alan Lee (Hornch'ch)
Mellish, Rt Hon RobertShore, Rt Hon PeterWilliams, Sir Thomas (Warrington)
Mikardo, IanShort, Mrs Renée (Wolv NE)Wilson, Gordon (Dundee E)
Millan, Rt Hon BruceSilkin, Rt Hon John (Deptford)Wilson, Rt Hon Sir Harold (Huyton)
Miller, Dr M. S. (E Kilbride)Silkin, Rt Hon S. C. (Dulwich)Wilson, William (Coventry SE)
Mitchell, Austin (Grimsby)Silverman, JuliusWise, Mrs Audrey
Molloy, WilliamSkinner, DennisWoodall, Alec
Moonman, EricSmith, Rt Hon John (N Lanarkshire)Woof, Robert
Morris, Rt Hon AlfredSnape, PeterWrigglesworth, Ian
Morris, Rt Hon Charles R.Spearing, NigelYoung, David (Bolton E)
Morris, Rt Hon J. (Aberavon)Spriggs, Leslie
Morton, GeorgeStallard, A. W.TELLERS FOR THE AYES:
Moyle, Rt Hon RolandStewart, Rt Hon Donald
Mulley, Rt Hon FrederickStewart, Rt Hon M. (Fulham)Mr. Joseph Dean and
Murray, Rt Hon Ronald KingStoddart, DavidMr. John Evans.
NOES
Adley. RobertBuchanan-Smith, AlickElliott, Sir William
Aitken, JonathanBuck, AntonyEmery, Peter
Alison, MichaelBudgen, NickEyre, Reginald
Arnold, TomBulmer, EsmondFairbairn, Nicholas
Atkins, Rt Hon H. (Spelthorne)Burden, F. A.Fairgrieve, Russell
Atkinson, David (B'mouth, East)Butler, Adam (Bosworth)Farr, John
Baker, KennethChalker, Mrs LyndaFell, Anthony
Banks, RobertChannon, PaulFinsberg, Geoffrey
Beith, A. J.Churchill, W. S.Fisher, Sir Nigel
Bell, RonaldClark, Alan (Plymouth, Sutton)Fletcher, Alex (Edinburgh N)
Bendall, VivianClark, William (Croydon S)Fookes, Miss Janet
Bennett, Sir Frederic (Torbay)Clarke, Kenneth (Rushcliffe)Fowler, Norman (Sutton C'f'd)
Benyon, W.Clegg, WalterFox, Marcus
Berry, Hon AnthonyCockcroft, JohnFraser, Rt Hon H. (Stafford & St)
Biffen, JohnCooke, Robert (Bristol W)Fry, Peter
Biggs-Davison, JohnCope, JohnGardiner, George (Reigate)
Blaker, PeterCormack, PatrickGardner, Edward (S Fylde)
Body, RichardCostain, A. P.Gilmour, Rt Hon Sir Ian (Chesham)
Boscawen, Hon RobertCraig, Rt Hon W. (Belfast E)Gilmour, Sir John (East Fife)
Bottomley, PeterCritchley, JulianGlyn, Dr Alan
Bowden, A. (Brighton, Kemptown)Crouch, DavidGodber, Rt Hon Joseph
Boyson, Dr Rhodes (Brent)Crowder, F. P.Goodhart, Philip
Bradford, Rev RobertDean, Paul (N Somerset)Goodhew, Victor
Braine, Sir BernardDodsworth, GeoffreyGoodlad, Alastair
Brittan, LeonDouglas-Hamilton, Lord JamesGorst, John
Brocklebank-Fowler, C.Drayson, BurnabyGow, Ian (Eastbourne)
Brooke, Hon Peterdu Cann, Rt Hon EdwardGower, Sir Raymond (Barry)
Brotherton, MichaelDurant, TonyGrant, Anthony (Harrow C)
Brown, Sir Edward (Bath)Dykes, HughGray, Hamish
Bruce-Gardyne, JohnEden, Rt Hon Sir JohnGrieve, Percy
Bryan, Sir PaulEdwards, Nicholas (Pembroke)Griffiths, Eldon
Grimond, Rt Hon J.Macfarlane, NeilRifkind, Malcolm
Grist, IanMac Kay, Andrew (Stechford)Roberts, Michael (Cardiff NW)
Hall-Davis, A. G. F.McNair-Wilson, M. (Newbury)Roberts, Wyn (Conway)
Hamilton, Archibald (Epsom & Ewell)McNair-Wilson, P. (New Forest)Rodgers, Sir John (Sevenoaks)
Hamilton, Michael (Salisbury)Madel, DavidRoss, Stephen (Isle of Wight)
Hampson, Dr KeithMarshall, Michael (Arundel)Ross, William (Londonderry)
Hannam, JohnMarten, NeilRost, Peter (SE Derbyshire)
Harrison, Col Sir Harwood (Eye)Mates, MichaelRoyle, Sir Anthony
Harvie Anderson, Rt Hon MissMaude, AngusSainsbury, Tim
Haselhurst, AlanMawby, RaySt. John-Stevas, Norman
Hastings, StephenMaxwell-Hyslop, RobinScott, Nicholas
Havers, Rt Hon Sir MichaelMayhew, PatrickShaw, Giles (Pudsey)
Hawkins, PaulMeyer, Sir AnthonyShelton, William (Streatham)
Hayhoe, BarneyMiller, Hal (Bromsgrove)Shepherd, Colin
Hicks, RobertMills, PeterShersby, Michael
Higgins, Terence L.Miscampbell, NormanSilvester, Fred
Hodgson, RobinMitchell, David (Basingstoke)Sims, Roger
Holland, PhilipMoate, RogerSinclair, Sir George
Hordern, PeterMolyneaux, JamesSkeet, T. H. H.
Howe, Rt Hon Sir GeoffreyMonro, HectorSmith, Dudley (Warwick)
Howell, David (Guildford)Montgomery, FergusSmith, Timothy John (Ashfield)
Howells, Geraint (Cardigan)Moore, John (Croydon C)Spence, John
Hunt, David (Wirral)More, Jasper (Ludlow)Spicer, Michael (S Worcester)
Hunt, John (Ravensbourne)Morgan, GeraintSproat, lain
Hurd, DouglasMorgan-Giles, Rear-AdmiralStainton, Keith
Hutchison, Michael ClarkMorris, Michael (Northampton S)Stanbrook, Ivor
Irving, Charles (Cheltenham)Morrison, Hon Charles (Devizes)Steen, Anthony (Wavertree)
James, DavidMorrison, Hon Peter (Chester)Stewart, Ian (Hitchin)
Jenkin, Rt Hon P. (Wanst' d&W' dl'd)Mudd, DavidStokes, John
Jessel, TobyNeave, AireyStradling Thomas, J.
Johnson Smith, G. (E Grinstead)Neubert, MichaelTapsell, Peter
Johnston, Russell (Inverness)Newton, TonyTaylor, R. (Croydon NW)
Jones, Arthur (Daventry)Onslow, CranleyTaylor, Teddy (Cathcart)
Jopling, MichaelOppenheim, Mrs SallyTebbit, Norman
Joseph, Rt Hon Sir KeithPage, John (Harrow West)Temple-Morris, Peter
Kaberry, Sir DonaldPage, Rt Hon R. Graham (Crosby)Thomas, Rt Hon P. (Hendon S)
Kershaw, AnthonyPage, Richard (Workington)Townsend, Cyril D.
Kilfedder, JamesPaisley, Rev IanTrotter, Neville
Kimball, MarcusParkinson, Cecilvan Straubenzee, W. R.
King, Evelyn (South Dorset)Pattie, GeoffreyVaughan, Dr Gerard
King, Tom (Bridgwater)Penhaligon, DavidViggers, Peter
Knight, Mrs JillPercival, IanWaddington David
Knox, DavidPeyton, Rt Hon JohnWainwright, Richard (Colne V)
Lamont, NormanPink, R. BonnerWakeham, John
Langford-Holt, Sir JohnPowell, Rt Hon J. EnochWall, Patrick
Latham, Michael (Mellon)Prentice, Rt Hon RegWalters, Dennis
Lawrence, IvanPrice, David (Eastleigh)Wells, John
Lawson, NigelPrior, Rt Hon JamesWhitelaw, Rt Hon William
Le Marchant, SpencerPym, Rt Hon FrancisWhitney, Raymond
Lester, Jim (Beeston)Raison, TimothyWiggin, Jerry
Lewis, Kenneth (Rutland)Rathbone, TimWinterton, Nicholas
Lloyd, IanRees, Peter (Dover & Deal)Wood, Rt Hon Richard
Loveridge, JohnRees-Davies, W. R.Younger, Hon George
Luce, RichardRenton, Rt Hon Sir D. (Hunts)
McAdden, Sir StephenRenton, Tim (Mid-Sussex)TELLERS FOR THE NOES:
McCrindle, RobertRidley, Hon NicholasSir George Young and
McCusker, H.Ridsdale, JulianMr. Carol Mather.

Question accordingly agreed to.

Bill read the Third time and passed.

9.46 p.m.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Is it the wish of the House that the two sets of regulations on the Representation of the People be taken together? That is agreed.

Before these regulations are moved. I draw the attention of the House to the fact that they make detailed provision for the conduct of elections to the European Assembly. They do not deal with the principle of European Assembly elections or with the voting system to be used. Those subjects were dealt with in the European Assembly Elections Act 1978. They also do not deal with the date of the election, 7 June. That is the subject of the European Assembly Elections (Day of Election) Order 1979. Accordingly, these three matters fall outside the scope of tonight's debate.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

On a point of order, Mr. Deputy Speaker. Are the regulations being debated together or separately?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Before I gave the ruling I asked whether it was the wish of the House that the regulations should be taken together. That was agreed without dissension. I hope that the hon. Member accepts that.

Photo of Mr William Ross Mr William Ross , County Londonderry

On a point of order, Mr. Deputy Speaker. You will be aware that the Representation of the People regulations that we are discussing this evening were superseded by a new draft that was published or agreed on 6 March. However, the minutes of the meeting of the Joint Committee on Statutory Instruments, which decided that the regulations had to be reprinted, are not available in the Vote Office. How on earth can we go ahead with the debate when we do not know why it was decided that they had to be reprinted?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I am advised that had the Committee found that there were any objections, there would have been a rubric published to that effect. I understand that the details are basically the same and that the Committee found no fault with this substituted instrument.

Photo of Mr Enoch Powell Mr Enoch Powell , South Down

Further to that point of order, Mr. Deputy Speaker. I note what you have just told the House. Nevertheless, is it not unusual and undesirable that the House should take an instrument that has been the subject of consideration by a Committee when the report of that Committee is not available to Members? Of course we accept your assurance that the Committee has not reported adversely, but would it not be better for hon. Members to be able to satisfy themselves that such is the case by seeing the report in the Vote Office?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I understand that the adverse report relates to the previous instrument This is a matter for debate, not for order. The right hon. Member will find that this matter is in order, and therefore it is debatable now.

Photo of Mr Gerry Fitt Mr Gerry Fitt , Belfast West

On a different point of order. Mr. Deputy Speaker. You said that there was no essential differences between the two sets of regulations on the Order Paper tonight. I believe that there is a great deal of difference. One is for the first-past-the-post system of election and the other for the proportional representation system. The Government went out of their way to ensure a different type of election in Northern Ireland; therefore it is very confusion to debate the two systems of election together.

Photo of Mr Anthony Royle Mr Anthony Royle , Richmond Upon Thames Richmond

Further to that point of order, Mr. Deputy Speaker. Surely the hon. Member for Belfast, West (Mr. Fitt) is not correct. You put the point about the two sets of regulations being taken together and the House agreed to that suggestion without any dissent. The matter was then raised by the hon. Member for Antrim, North (Rev. Ian Paisley) and you pointed out, quite rightly, that the House had accepted that the two should be taken together. Therefore, surely the point of the hon. Member for Belfast, West cannot be allowed.

Photo of Mr Douglas Jay Mr Douglas Jay , Wandsworth Battersea North

Further to the earlier point of order, Mr. Deputy Speaker. I understand from the exchanges so far that there is some doubt whether the document before us is the operative document that we are discussing tonight. You said, Mr. Deputy Speaker, that there was no reason to believe there was any difference between the two documents, but surely we should not be asked to discuss a document merely on the assumption that it is the correct one. Surely we should have the opportunity to satisfy ourselves by examining the two documents to see whether they are identical and whether we are debating the documents that we should be debating. Therefore, is it not desirable to allow time for Members to satisfy themselves on this point?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The argument put forward by the right hon. Member for Battersea, North (Mr. Jay) is not one for the Chair.

Photo of Mr David Stoddart Mr David Stoddart , Swindon

Further to that point of order, Mr. Deputy Speaker. It is most important to ensure that we have the proper documentation before us. I recall that when I served the Government as a Whip many objections were put forward—quite correctly—by the Opposition, who did their duty in seeing that nothing got through the House unless they knew what they were voting about. It seems that we should follow precedent. I remember precedents when the Leader of the House, who is a most reasonable and understanding man and a great democrat, who always wishes to ensure that the House discusses and votes on matters in a proper manner, with all the correct information, agreed to withdraw business from the Floor of the House so that Members could have the correct documentation properly printed. He thus ensured that we knew exactly what we were doing. This, in turn, meant good and plausible legislation.

Photo of Mr John Lee Mr John Lee , Birmingham Handsworth

Further to that point of order, Mr. Deputy Speaker, would not one way of resolving the problem be for you to be supplied with copies of the two documents, so that you would be able to read them out one after the other? We would then be able to compare them to find out whether there is a difference. It is not satisfactory to have an element of doubt. Even in relation to the slovenly standards that we normally apply to so-called European legislation, we cannot allow this slipshod way of conducting Government business.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The only way in which the House can deal with the matter is during the course of the debate. If the House does not approve of the regulations, it can take the appropriate action.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

On a point of order, Mr. Deputy Speaker. The two draft instruments before us have printed at the top: Supersedes draft published on 31 January 1979 ". From what you said earlier, Mr. Deputy Speaker, I understand that the drafts published on 31 January have gone before the Joint Committee on Statutory Instruments and that the Committee found no need to draw the attention of the House to any specific feature. Therefore, the four documents now in the Vote Office—including the two new ones—with the supersession printed at the top have not been before the Committee. Therefore, the Committee has not had the opportunity to examine any changes that there might have been. In view of the fact that there has been a second edition, there must have been some change.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

If we pursue this any further, the matter will become more complicated. I understand that the documents have been before the Committee. If they had not, that fact would have been printed on the Order Paper.

Photo of Mr Peter Mills Mr Peter Mills , Devon West

On a point of order, Mr. Deputy Speaker. Would it not be in order for the Home Secretary to explain the position? If the debate gets under way and there are snags or differences, he can explain them to us. Surely it is better to proceed with the debate.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

On a point of order, Mr. Deputy Speaker. As the two documents are to be taken together, does that mean that there will be one and a half hours only for the debate?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

That is so. However, there could be two votes if the House so desired—one on each instrument.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

Further to that point of order, Mr. Deputy Speaker. I take it from your ruling that there will be one and a half hours only of debate for both sets of regulations. That means that the regulations for Northern Ireland, which deal with a system of election different from that for the rest of the United Kingdom, will not be properly debated.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I pointed out this matter to the House at the beginning. The House agreed with no dissenting voice that the two sets of regulations should be taken together. I repeat that at the end of the debate, at half-past eleven, it is in order and correct that there should be two votes, one on each instrument.

Photo of Mr Jock Stallard Mr Jock Stallard , Camden St Pancras North

On a point of order, Mr. Deputy Speaker. I seek your guidance about the confusion that has arisen, certainly in my mind. You will recall that the motion on the recent debate about increased representation at Westminster for Northern Ireland was put down in the name of the Secretary of State for Northern Ireland, but neither the right hon. Gentleman nor the Home Secretary appeared during that debate.

One of the documents before the House is in the name of the Home Secretary and the other is in the name of the Secretary of State for Northern Ireland. If we are to take them together, may I ask where the Secretary of State for Northern Ireland is? Who is to deal with the Northern Ireland regulations?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The hon. Gentleman has been in the House for a long time. He knows that that was not a point of order and was certainly not a matter for the Chair.

Photo of Mr David Stoddart Mr David Stoddart , Swindon

On a point of order, Mr. Deputy Speaker. Many hon. Members are confused about this matter and the points of order have not clarified the position as I would wish. Is there a possibility that we could send for the Lord President to come to the House to explain the situation to us? How can we resolve the position?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

About 12 or 13 minutes of the precious time allowed for the debate have already been wasted on points of order. I suggest that we should now proceed.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. Is this the same point of order? I must warn the House that we are spending a lot of

Division No. 95]AYES[10.5 p.m.
Bell, RonaldTELLERS FOR THE AYES:
Fitt, Gerard (Belfast W)Mr. John Lee and
Paisley, Rev IanMr. David Stoddart.

time on points of order and we have only one and a half hours after 10 o'clock for the debate.

Photo of Mr James Kilfedder Mr James Kilfedder , North Down

I came into the Chamber only seconds after you, Mr. Deputy Speaker, had put to the House that the two documents should be taken together. I came in on the assumption that they were to be taken separately, with one and a half hours for each.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I am sure that the hon. Gentleman is very good at assuming, but on this occasion his assumption came too late.

Photo of Mr Max Madden Mr Max Madden , Sowerby

On a point of order, Mr. Deputy Speaker. You said that we have been considering these matters for nearly 15 minutes. It is self-evident that there is considerable uncertainty and unhappiness about the availability of papers and much uncertainty about what consideration has been given to the matters that are the subject of the orders. A request has been made for the Lord President to come here to give hon. Members clarification. My right hon. Friend will clearly not get here in time to be able to give that information to hon. Members. In view of the uncertainty, would you, Mr. Deputy Speaker, be prepared to accept a motion for the Adjournment of the House so that we may proceed with this business on another day?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I am sorry that the hon. Gentleman thinks that there is unhappiness. I hope that he does not want to make the Chair unhappy. I think that we should get on with the debate.

Photo of Mr Ronald Thomas Mr Ronald Thomas , Bristol North West

On a point of order, Mr. Deputy Speaker. I think that you—

Photo of Mr Gerry Fitt Mr Gerry Fitt , Belfast West

I beg to move, That Strangers do withdraw.

Notice being taken that Strangers were present, Mr. DEPUTY SPEAKER, pursuant to Standing Order No. 115 (Withdrawal of Strangers from House), put forthwith the Question, That Strangers do withdraw:—

The House divided: Ayes 3, Noes 254.

NOES
Adley. RobertFletcher, Alex (Edinburgh N)Newens, Stanley
Alison, MichaelFletcher, Ted (Darlington)Noble, Mike
Allaun, FrankFookes, Miss JanetOakes, Gordon
Anderson, DonaldFord, BenOgden, Eric
Archer, Rt Hon PeterForrester, JohnO'Halloran, Michael
Armstrong, ErnestFreeson, Rt Hon ReginaldOppenheim, Mrs Sally
Arnold, TomGeorge, BrucePage, John (Harrow West)
Ashton, JoeGoodhart, PhilipPark, George
Atkins, Rt Hon H. (Spelthorne)Gould, BryanParkinson, Cecil
Atkins, Ronald (Preston N)Gower, Sir Raymond (Barry)Parry, Robert
Atkinson, Norman (H'gey, Tott'ham)Grant, George (Morpeth)Pattie, Geoffrey
Bagier, Gordon A. T.Grant, John (Islington C)Penhaligon, David
Banks, RobertGray, HamishPowell, Rt Hon J. Enoch
Barnett, Guy (Greenwich)Hamilton, James (Bothwell)Price, C. (Lewisham W)
Bates, AlfHardy, PeterPrice, William (Rugby)
Beith, A. J.Harrison, Rt Hon WalterPym, Rt Hon Francis
Bendall, VivianHaselhurst, AlanRathbone, Tim
Berry, Hon AnthonyHavers, Rt Hon Sir MichaelRees, Rt Hon Merlyn (Leeds S)
Bidwell, SydneyHome Robertson, JohnReid, George
Bishop, Rt Hon EdwardHoram, JohnRenton, Rt Hon Sir D. (Hunts)
Boardman, H.Howell, David (Guildford)Renton, Tim (Mid-Sussex)
Body, RichardHowell, Rt Hon Denis (B'ham Sm H)Rhodes James, R.
Booth, Rt Hon AlbertHowells, Geraint (Cardigan)Richardson, Miss Jo
Boothroyd, Miss BettyHughes, Roy (Newport)Roberts, Gwilym (Cannock)
Bradford, Rev RobertHunter, AdamRobertson, George (Hamilton)
Braine, Sir BernardHurd, DouglasRobinson, Geoffrey
Bray, Dr JeremyIrving, Rt Hon S. (Dartford)Rodgers, George (Chorley)
Brittan, LeonJames, DavidRodgers, Rt Hon William (Stockton)
Brooke, Hon PeterJanner, GrevilleRooker, J. W.
Brotherton, MichaelJay, Rt Hon DouglasRoper, John
Brown, Hugh D. (Provan)Jeger, Mrs LenaRoss, William (Londonderry)
Brown, Robert C. (Newcastle W)Jenkins, Hugh (Putney)Royle, Sir Anthony
Buchan, NormanJohn, BrynmorSt. John-Stevas, Norman
Buchanan, RichardJohnson, James (Hull West)Sandelson, Neville
Buck, AntonyJohnson, Walter (Derby S)Sedgemore, Brian
Callaghan, Jim (Middleton & P)Johnston, Russell (Inverness)Selby, Harry
Cant, R. B.Jones, Arthur (Daventry)Sever, John
Carlisle, MarkJones, Barry (East Flint)Shepherd, Colin
Carter, RayJones, Dan (Burnley)Shersby, Michael
Cartwright, JohnJudd, FrankSilkin, Rt Hon John (Deptford)
Castle, Rt Hon BarbaraKaufman, Rt Hon GeraldSilkin, Rt Hon S. C. (Dulwich)
Clark, Alan (Plymouth, Sutton)Kerr, RussellSkeet, T. H. H.
Clark, William (Croydon S)Kilfedder, JamesSkinner, Dennis
Clarke, Kenneth (Rushcliffe)Kimball, MarcusSmith, Rt Hon John (N Lanarkshire)
Clemitson, IvorKing, Tom (Bridgwater)Snape, Peter
Cockcroft, JohnKnight, Mrs JillSpriggs, Leslie
Cocks, Rt Hon Michael (Bristol S)Knox, DavidStallard, A. W.
Cohen, StanleyLamborn, HarryStanbrook, Ivor
Concannon, Rt Hon JohnLamond, JamesSteel, Rt Hon David
Conlan, BernardLamont, NormanSteen, Anthony (Wavertree)
Cook, Robin F. (Edin C)Latham, Arthur (Paddington)Stewart, Rt Hon M. (Fulham)
Cormack, PatrickLawrence, IvanStradling Thomas, J.
Cowans, HarryLester, Jim (Beeston)Strang, Gavin
Cox, Thomas (Tooting)Lestor, Miss Joan (Eton & Slough)Strauss, Rt Hon G. R.
Craigen, Jim (Maryhill)Lever, Rt Hon HaroldTaylor, Mrs Ann (Bolton W)
Crawford, DouglasLewis, Ron (Carlisle)Temple-Morris, Peter
Cronin, JohnMcCartney, HughThomas, Ron (Bristol NW)
Cryer, BobMcCusker, H.Tierney, Sydney
Cunningham, Dr J. (Whiteh)McKay, Allen (Penistone)Tinn, James
Davis, Clinton (Hackney C)MacKenzie, Rt Hon GregorTomlinson, John
Dean, Joseph (Leeds West)Maclennan, RobertTorney, Tom
Dell, Rt Hon EdmundMcMillan, Tom (Glasgow C)Urwin, Rt Hon T. W.
Dempsey, JamesMcNair-Wilson, M. (Newbury)Varley, Rt Hon Eric G.
Dewar, DonaldMcNamara, KevinWaddington, David
Dormand, J. D.Madden, MaxWainwright, Edwin (Dearne V)
Douglas-Hamilton, Lord JamesMagee, BryanWainwright, Richard (Colne V)
Douglas-Mann, BruceMarks, KennethWalker, Terry (Kingswood)
Duffy, A. E. P.Marshall, Dr Edmund (Goole)Wall, Patrick
Dunnett, JackMarshall, Michael (Arundel)Ward, Michael
Durant, TonyMaynard, Miss JoanWatkins, David
Dykes, HughMellish, Rt Hon RobertWatkinson, John
Eadie, AlexMeyer, Sir AnthonyWells, John
Ellis, John (Brigg & Scun)Mikardo, IanWhite, Frank R. (Bury)
English, MichaelMills, PeterWhitehead, Phillip
Evans, Fred (Caerphilly)Mitchell, Austin (Grimsby)Whitlock, William
Evans, Ioan (Aberdare)Moate, RogerWilliams, Rt Hon Alan (Swansea W)
Evans, John (Newton)Molyneaux, JamesWilliams, Alan Lee (Hornch'ch)
Eyre, ReginaldMorgan, GeraintWilson, Rt Hon Sir Harold (Huyton)
Fairbairn, NicholasMorgan-Giles, Rear-AdmiralWilson, William (Coventry SE)
Fairgrieve, RussellMorris, Rt Hon AlfredWise, Mrs Audrey
Farr, JohnMorris, Rt Hon Charles R.
Faulds, AndrewMoyle, Rt Hon RolandWoodall, Alec
Fernyhough, Rt Hon E.Mulley, Rt Hon FrederickWoof, Robert
Flannery, MartinNeave, AireyWrigglesworth, Ian
Young, David (Bolton E)TELLERS FOR THE NOES:
Young, Sir G. (Ealing, Acton)Mr. Ted Graham and
Younger, Hon GeorgeMr. Donald Colman.

Question accordingly negatived.

Photo of Mr Ronald Thomas Mr Ronald Thomas , Bristol North West

On a point of order, Mr. Deputy Speaker. Before we had that important vote there was a good deal of confusion in the House concerning these documents. You said that you hoped that the debate itself would inject some clarity into the situation. We now have less than one hour in which to bring about clarity. In any case, I do not think that there is any precedent in"Erskine May"where debates in this place produce that kind of clarity. I therefore appeal to you Mr. Deputy Speaker: I think that it would be indefensible if we cast our votes this evening on the basis of documents that do not seem to apply to the debate, or which we have not even seen.

I ask you, at the very least, to ask the Leader of the House to make a statement. In the meantime, as has happened on a couple of occasions recently, we could adjourn the House until the Leader of the House is available to make that statement.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. That is an old and familiar point, which is not a point of order. If the hon. Gentleman does not like the documents, he must vote against them.

Photo of Mr John Ellis Mr John Ellis , Brigg and Scunthorpe

On a point of order, Mr. Deputy Speaker. I have not raised a point of order so far on what happened before the Division. I seek to raise a different point of order. Two hon. Gentleman have already raised points of order on the question whether the documents were taken together or separately. I believe that you, Mr. Deputy Speaker, quite correctly informed the House, and the House so agreed that they were too late. They had not realised that I agree, but we now have a restricted time for debate—one and a half hours—and the moments are ticking by. I did not raise the point of order before the Division, but there are some hon. Gentlemen who wish to speak in favour of this—although I do not understand why they wish to do so—and they will be restricted during this one and a half hours.

I think that we should adjourn the House so that we can clarify both points that have been raised, whether they are true in substance or not. Nobody can restore the time that has been taken in the Division. The result is that the debate has been curtailed. I think that we should consider having the debate on another occasion, when we can discuss the matter for the whole one and a half hours, so that hon. Members who have missed the boat will have another chance.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The hon. Gentleman has himself said firmly and clearly that time is moving on. I endorse that.

10.18 p.m.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I beg to move, That the draft European Assembly Elections Regulations 1979, which were laid before this House on 6 March, be approved. I hope that the House will also approve the Northern Ireland Regulations.

The two sets of regulations which are before this House this evening provide for the detailed conduct of the first elections of United Kingdom representatives to the European Assembly. The regulations relating to Great Britain provide for the election by the simple majority, or first-past-the-post system, of 78 representatives from England, Wales and Scotland. The Northern Ireland regulations provide for the conduct of the election of three representatives by the single transferable vote system of proportional representation in the one constituency of Northern Ireland.

The decision to adopt these methods of election was taken by this House during debate and discussion on the European Assembly Elections Act, which received Royal Assent in May last year. Schedule 1(2) to the Act gave the Secretary of State power to draw up regulations for the detailed conduct of the elections based on the existing statutes governing parliamentary elections. Following discussion in Committee the Government agreed that the regulations should be subject to the affirmative resolution procedure of both Houses of Parliament, and that for the purposes of consultation drafts of the regulations should be published in White Papers. They were duly published in August last year—one by myself and my right hon. Friend the Secretary of State for Scotland, the other by my right hon. Friend the Secretary of State for Northern Ireland.

Copies of the White Papers were sent to all those concerned with the organisation of elections, including the representatives of returning officers, the local authority associations, the broadcasting organisations, and the political parties. The Government are grateful for the full and informed response that resulted. Although we have not been persuaded to depart from some of the most substantive proposals—on the level of the deposit, for example—a number of improvements to both sets of regulations have been made We are grateful to all those who participated in the consultations.

Following consideration of all the comments and technical suggestions the Government laid fresh drafts before the House in January this year. As is usual, the drafts were considered by the Joint Committee on Statutory Instruments which brought to our attention an omission from both sets of regulations regarding the declaration of secrecy to be made by the officers charged with verifying the total of ballot papers at the close of poll on Thursday before they are sealed again for the count some days later. In the light of their comments we withdrew the first sets of regulations and laid new drafts on 6 March. The Joint Committee, acting with speed, has approved the new drafts. We are indebted to it.

Before I outline to the House some of the detail of the regulations I should like to review briefly the other necessary preliminaries to the holding of the elections on 7 June.

The Parliamentary Boundary Commissions made the final reports at the end of 1978 on the composition of the constituencies in Great Britain. Northern Ireland forms a single constituency. The Orders in Council to give effect to the Great Britain constituency boundaries were laid before Parliament in draft in December and were approved. The political parties are now far advanced with their procedure for the selection of candidates for the constituencies.

I have also made an order, as I am required to do by the European Assembly Elections Act, fixing 7 June, the first day of the period determined by the European Council, as the date of the election of the representatives from the United Kingdom. I have also made an order appointing returning officers for the constituencies from those who conduct parliamentary elections in England and Wales. In making the latter order I took careful note of all the representations that were made to me. A similar order has been made by the Secretary of State for Scotland.

Thus, we are now at the final stage of preparations for these first direct elections.

Photo of Mr Max Madden Mr Max Madden , Sowerby

In view of the speculation in some quarters about the effect of a general election coinciding with elections to the European Assembly, what legislation will be needed to secure such a joint election? What representations has my right hon. Friend received from the relevant authorities about the difficulties which such an event would create?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I shall deal with that matter shortly. I have received no representations on this matter.

It is the job of the House to make the final decision and to complete the parliamentary procedure necessary before the people can elect their representatives.

I turn to the content of the regulations. The Government made clear in our White Paper on direct elections, published in 1977, that, whatever system or systems of election was chosen by Parliament, the actual conduct of the election should be closely related to the conduct of a parliamentary election. Thus the regulations are set out in a form which shows how the existing parliamentary statutes have been adapted. This was the practice followed in the orders regulating the conduct of the EEC referendum in 1975 and of the recent referendum on devolution.

This is also consistent with the general approach that the House adopted to the principal features of the election when considering the European Assembly Elections Act. As the House will recall, the Act provides that the qualification for holding the office of a representative to the Assembly will be broadly similar to that of being a member of this House. The Act also provides that the franchise is broadly the same. In these regulations we follow through this approach.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch and Lymington

Is the right hon. Gentleman aware that stemming from the EEC referendum and the Act there is much ill feeling among many British citizens who are working not in the United Kingdom but elsewhere in the EEC who have been deprived of a vote? Between now and the next EEC election in a few years' time, will the right hon. Gentleman and his colleagues within the EEC get together to ascertain whether some satisfactory solution may be found to enable those people to vote in a European election?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

The House took the decision to use United Kingdom registers. The registers will include those who are in residence in September, the register becoming available the following February. It is for the Speaker's Conference, or some other such body, to make a change to enable those not living in the United Kingdom to have the right to vote. It was the decision of the House to use United Kingdom registers. In my view there would have to be a Speaker's Conference before we could make a profound change in the way that we have carried out elections since the reforming measure of 1832.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness

Will the right hon. Gentleman make it clear that the question aked by the hon. Member for Christchurch and Lymington (Mr. Adley) casts an untrue reflection on the institutions of the Community? The hon. Gentleman complains that there are British people living abroad who do not have the right to vote. That is nothing to do with the Community's organisation but is entirely to do with the Government's organisation.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

The decision was taken not by the Government but by Parliament. All those who played a part in the debates in this place will recall the decision being taken.

For the elector the regulations for the conduct of the elections in Great Britain provide that voting for the elections will follow a pattern precisely similar to that of a parliamentary election. The elector will receive official notification of the election on a poll card, which will be almost identical to the cards used at parliamentary or local government elections. The elector will generally vote in the same polling station as for parliamentary elections. The procedure in the polling station will be the same, and he or she will mark the same type of ballot paper.

The elector in Northern Ireland will follow the procedure of the single transferable vote election with which he is familiar in local elections.

I now deal with the query of my hon. Friend the Member for Sowerby (Mr. Madden), who asked whether there could be a general election and elections to the European Assembly on the same day. I say nothing about the desirability of such a decision, as that is not for me. I confine myself to answering my hon. Friend and dealing with the problems that would arise and the legal position if such a decision were taken.

There is nothing in the present law that says that one cannot hold an election to one body on the same day as an election to another. Rightly, the law is specific about election procedures. All the procedures have to be gone through if the election is to be valid. Thus, under the present law two elections could be held on the same day, simultaneously but separately. There would be two polling stations, possibly in the same room if it were big enough to accommodate them. There would be two sets of staff, two sets of ballot boxes and ballot papers, and separate election expenses returns. However, there is enough equipment only for the 50,000 polling stations that are used to handle one election at a time. Therefore, there would be practical difficulties in making such arrangements.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I ask my hon. Friends to allow me to finsh. This matter is like the Schleswig-Holstein question; only two people understand it—two people in the office—and myself. All the others who have commented on it are wrong.

The alternative would be to streamline the procedure so that the same ballot box at each polling station could be used for both elections. I am assured that in most polling stations there is plenty of spare capacity in the ballot boxes that are used. I am assured that the same staff could be used to handle both elections and that the same official stamping instruments and other equipment could be used. It is not a radical proposal. We already have combined parish and district elections. In those elections different coloured ballot papers are often used and the ballot papers are sorted before they are counted. There is general agreement that that procedure works smoothly.

As I have said, we would not be able to use a streamlined procedure under the present electoral laws. A short Bill would have to be brought before the House at the appropriate moment. There would be no problem if the Prime Minister decided not to go to October or November. However, that is not a matter for me.

Several Hon. Members:

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Photo of Mr George Thomas Mr George Thomas , Cardiff West

Will the Minister indicate to which hon. Member he is giving way?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I will give way to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker).

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I want to ask my right hon. Friend about something which concerns some of us in some parts of the country where, because of tradition, political poll cards are issued at elections, with the polling stations on them. I have to tell my right hon. Friend that some of these political poll cards have already been printed, with the polling stations on them. Will he take cognisance of the fact that any changing of polling stations would cause chaos for both the Labour Party and the Tory Party, as in Birmingham it is traditional for the Labour Party and the Tory Party to issue political poll cards?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

What people have decided to do in those areas is not a matter for me. I am only responsible for the official poll cards. It is not for me to decide whether unofficial poll cards are legal.

Photo of Mr Alan Clark Mr Alan Clark , Plymouth, Sutton

The question from the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and the Home Secretary's answer confirm the analogy with the Schleswig-Holstein question. The Home Secretary did not point out that the answer given by the Foreign Secretary at the time was: There are only three men who have ever understood it. One was Prince Albert, who is dead, the second was a German professor, who became mad, and I am the third, and I have forgotten all about it.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I have to tell the hon. Gentleman that I remember it, and whether the hon. Gentleman is mad or dead is a matter on which he must make up his own mind.

Photo of Mr Ronald Thomas Mr Ronald Thomas , Bristol North West

Will my right hon. Friend consider very carefully the advice that he has been given in terms of what he described as capacity? It is one thing to talk about the voting throughout the day. It is another thing to bear in mind what happens between 8 pm and 9 pm, or between 9 pm and 10 pm. In my experience, polling booths have been absolutely packed at those times. If we had to issue two voting slips, and people were voting twice, this would cause even more delay. I suggest to my right hon. Friend that the only reason why this idea is being pushed is the knowledge that if the British people are asked to vote on 7 June simply in the direct elections there will be a derisory turn-out—and I shall be glad if that is so.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I can assure my hon. Friend—it is my job to be ready for whatever might happen—that I do not think that there will be a problem on that, either. But we are just guessing here about the future.

Photo of Mr James Kilfedder Mr James Kilfedder , North Down

Will the Home Secretary accept from me that the people of Northern Ireland would object most strongly to the holding of the EEC election and the Westminster election on the same day? There would be total confusion, because in Northern Ireland there would be proportional representation for one election and the first-past-the-post system for the other election. People would not know which way they should vote.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

When I was in Northern Ireland I noticed that there was a very high turnout in very complicated elections, because the Northern Irish people feel very strongly about their politics. We shall have to wait and see. This is purely guesswork as to what might happen.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness

If the Government intend to have these two elections on the same day, what length of notice would they regard as appropriate?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

The Government have made no such decision at all. In my diary I am talking about 5 November, but I do not decide when it should happen.

Photo of Mr Gerry Fitt Mr Gerry Fitt , Belfast West

My right hon. Friend has already said that it would be possible to use one ballot box for the two ballot papers. One of those ballot papers would be marked"X ", on the first-past-the-post system and the other would be marked on the PR system. On page 33 of the Draft European Assembly Elections (Northern Ireland) Regulations 1979 there are candidates called Harry Lime, Peter Plum, Sterling Silver and Gentian Violet. Does my right hon. Friend not believe that that in itself would cause considerable confusion in Northern Ireland? Where in the name of God would one get a man called Peter Plum in Enniskillen?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

These are hypothetical questions that my hon Friend is asking.

The returning officers in Great Britain have been chosen from those responsible for parliamentary elections. The returning officer's duties will be undertaken by an acting returning officer, normally the chief executive or other official of one of the large authorities within the constituency. The returning officer will depend on the staff from areas in the other constituencies.

The returning officer and his staff will have similar responsibilities and they will, as they say,"umpire"the election, using much the same rules as apply in parliamentary elections. Broadly speaking, there will be the same offences and the same punishments.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Before the hon. Gentleman interrupts, may I tell the House that all these interruptions will mean that someone who could have been called will not be called?

Photo of Mr John Lee Mr John Lee , Birmingham Handsworth

Will my right hon. Friend deal with the question of expenses? There has often been a problem of determining when an election begins—as he knows from paragraph 710 of the fifteenth volume of Halsbury. Bearing in mind that the election date has already been determined, it is my submission that all expenses incidental to elections are accountable, as it were, from now on.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

All I can say to my hon. Friend is that he should try that in the courts and then no doubt he would not be here in the evenings to ask me the question.

For the candidates and the political parties, there will be the same entitlements as regards free postage and the use of meeting halls as available under the legislation governing parliamentary elections. There are, however, a number of differences between the conduct of these elections and the conduct of parliamentary elections and I shall draw the attention of the House to a number of these.

The first set of differences relates to the size of the constituencies. We know that there are 81 seats for this country. There was considerable debates as to how 81 seats should be allocated, but what it means is that the European constituencies are a good deal larger than those that we in this House normally represent. [Interruption]. I put that in because I thought that there were some people who, by the noise they are making, did not know it.

Therefore, we needed to fix a higher overall maximum for election expenses. The regulations provide that each candidate should be able to spend the basic sum of £5,000, plus a variable figure of 2p per elector. At parliamentary elections the related figures are a basic of £1,750, plus 2p per election in a county constituency and 1½p per elector in a borough constituency.

This means that the average amount per elector for European Assembly candidates will be slightly less than the level fixed for parliamentary candidates in the Representation of the People Act last year. In my view this is justifiable and realistic, given the economies of scale.

With regard to deposits, we recognise that the larger constituency, and thus a larger electorate and greater access to free postage facilities, necessitate a higher level of deposit from each candidate. There has been a great deal of discussion about this. There has been a related debate about the level of parliamentary deposit which has been fixed at £150 since 1918, as everyone knows.

These matters are clearly related and our aim was to find a level for the European Assembly election which was not so high that it appeared to prejudice an increase in the level of parliamentary deposit. There is no consensus of view on this and I think that we are right to abide by the figure of £600 in our draft, which is a reasonable compromise between the extremes that have been pressed upon us.

In the election in Great Britain the deposit will be returnable on a candidate achieving 12½ per cent. of the valid votes cast, and in Northern Ireland it will be returnable on a candidate achieving one quarter of the electoral quota at any stage in the count.

Photo of Mr Phillip Whitehead Mr Phillip Whitehead , Derby North

May I bring my right hon. Friend back to the point raised by my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee)? It is not good enough to shrug it aside by saying it can be tried in the courts. Is a meeting held over the next month or so, addressed by someone announced as a candidate for the European Parliament, accountable as an election address?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

No doubt my hon. Friend has been chosen as a candidate for a Westminster—

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

If meetings are held, and are addressed by European candidates, in my view—but it would have to be checked—it would count as election expenses. Certainly, as has happened to me during the past nine elections, once the Writ has been moved it changes a person from being a"prospective candidate"into a"candidate ".

A number of views—

Photo of Mr David Steel Mr David Steel Leader of the Liberal Party

This is a complicated matter, and I am sorry that we have so little time to deal with it. The Home Secretary quickly slid past the question of the free post. I ask him to reflect on that. There will be 500,000 electors on average in each constituency. Is it seriously suggested that the only system that we can use is addressing individual envelopes, as required under the existing Post Office regulations for parliamentary elections? Could we not simplify the process by allowing the Post Office to distribute the election literature, as it does the commercial literature and as was done in the European referendum?

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

That has obviously been considered. But it would need a change in the law. My view on behalf of the Government is that in this respect we should stick to the rules that we use in this country for the Westminster elections. If there is to be any change, it is the sort of thing that would have to be considered by Mr. Speaker's Conference.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

I hope that my hon. Friend will allow me to proceed. Returning officers and others look to the House for guidance, and at this pitch we shall not get the information on the record

Photo of Mr Jock Stallard Mr Jock Stallard , Camden St Pancras North

I am sorry to press my right hon. Friend, but it is an important point. It is not good enough to equate the European elections with the situation as it applies in the Parliamentary elections. One big difference is that we already know the date for the European elections. Many of us would say that as from now the European election campaign has started. Therefore, this is a different game. Most candidates for the general election have, as yet, not been chosen, and we do not know the date. Therefore, there is a different set of circumstances that cannot be brushed aside in far too hurried a debate tonight.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

It would be a matter for the courts—[HON. MEMBERS:"Oh."]—Of course, it would, as it has been in Westminster elections over the years. If a man or woman declares himself or herself a candidate, and runs meetings in furtherance of that, in my view he or she stands every chance of having those expenses counted as election expenses.

Photo of Ian Paisley Ian Paisley Leader of the Democratic Unionist Party

The total electorate in Northern Ireland at this election is almost 1 million. Surely the statement made by the Leader of the Liberal Party is one that is worthy of consideration especially when election literature has to go to 1 million voters. Surely some arrangement should be made whereby these envelopes should not have to be personally addressed by the individual candidates.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

The decision that we took was to use the system that we use for the Westminster elections. Any change would be a profound one, and we would have to consider whether it would wash over on to Westminster elections. Putting a leaflet through the door is a much easier exercise than is party workers looking at a register, which all of us know is vital to an election. At some time, the House will have to make up its mind on that. But, for the moment, I am sticking to the rules that we in this House have followed over the years.

There were varying views about the number of signatures. I understand that the Liberal Party favoured a nomination form of 500 electors instead of a monetary deposit. The Conservative Party favoured a requirement for a number of supporters from every parliamentary constituency in the Euro-constituency. We considered these—

Photo of Mr Ronald Thomas Mr Ronald Thomas , Bristol North West

On a point of order, Mr. Speaker. May I seek your guidance? It seems to me that prospective candidates standing in the European elections from all parties are, from now, threatened with the possibility of legal action, because they do not know when they can begin making proper disbursements of the amounts of money that they have been allocated. I think that this is a serious matter, which demands a thorough debate. It cannot be left in the ambivalent way that the Secretary of State has left it.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

We could have had half an hour at the beginning of the debate to discuss this most important issue. If a man is a prospective candidate, in my view there is no problem. If he is a candidate, has declared himself as such, and is soliciting votes, he has declared himself in a way that the expenditure counts against the election.

Photo of Mr Martin Flannery Mr Martin Flannery , Sheffield, Hillsborough

On a point of order, Mr. Speaker. The reason why so many questions and points of order are being raised is that right hon. and hon. Members on both sides of the House are aware of the confusion here and of the quite insufficient time allocated to a discussion of this very important topic. It seems to me that this debate ought to be adjourned and that we should be given an opportunity to discuss the matter fully on another occasion. It is much too important to try to do it all now.

Several Hon. Members:

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Photo of Mr George Thomas Mr George Thomas , Cardiff West

Before I take any other point of order, I must remind the House that the Home Secretary is nearing the end of his speech. The debate has continued.

Photo of Mr Max Madden Mr Max Madden , Sowerby

On a further point of order, Mr. Speaker. This debate should have started at 9.48 pm. As you know, before you took the Chair there were a number of points of order. The Home Secretary has drawn attention to very serious matters, and I think that it would be only fair to him to have the opportunity to return to the House after seeking guidance on these most important matters. Are you prepared to accept a motion from me to report Progress and so enable these matters to be discussed more fully at a later date?

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I am not accepting such a motion. The debate is under way.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

Further to that point of order, Mr. Speaker. These draft regulations have been about for three months. They have been discussed by all the political parties. I am extremely familiar with them. My hon. Friend the Member for Sowerby is quite entitled to play games, but he is not entitled to say that we do not understand the regulations. They are quite clear to all the political parties.

Photo of Mr David Stoddart Mr David Stoddart , Swindon

On a point of order, Mr. Speaker. I regret very much that the Home Secretary should accuse hon. Members who have been raising legitimate points of order of"playing games ". I hope that he will reconsider that.

Photo of Mr David Stoddart Mr David Stoddart , Swindon

My point of order is, in my view, a very important one. We need to have clarification of it because of the treatment of certain of our citizens, namely, people who have agreed to be named as candidates for the European Assembly. The Home Secretary has made certain statements that will cause confusion. In the first place—

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Will the hon. Member give me a point of order on which I can rule? The fact that he disagrees with the Home Secretary is not one on which I can rule.

Photo of Mr David Stoddart Mr David Stoddart , Swindon

Is it in order for the Home Secretary to give information that may be misleading to candidates for the European Assembly elections and that may cause them difficulty, expense, and perhaps even imprisonment?

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. The Home Secretary takes responsibility for his own statements.

Photo of Mr Merlyn Rees Mr Merlyn Rees , Leeds South

It is exactly the same for someone who is a candidate for the Westminster Parliament.

The other important set of differences concerns the counting of votes. Article 9(2) of the decision of the European Communities on direct elections provides that the counting shall not begin in each member State until the close of poll in the last member State to vote during the period 7–10 June determined by the European Council. That means that while we shall be closing our polls at 10 pm on Thursday evening 7 June, we shall not be in a position to begin the count proper until the following Sunday evening. The exact timing of this has yet to be determined in most areas of the United Kingdom. I understand, however, that a definite decision has been reached in Northern Ireland not to start the count until Monday.

In other areas the first results from constituencies should be known late on Sunday evening. In order to ensure that there is no risk of malpractice when there is such an interval between the close of poll and the count, there will be a separate verification stage taking place in all constituencies on the evening of the poll. At that stage the number of ballot papers will be checked against the ballot paper accounts. They will then be sent for counting to the constituency returning officer.

To summarise, I believe that with the exception of the special arrangements which I have just outlined these regulations are well precedented. They apply to the novel constitutional feature of direct elections to the European Assembly systems of election which are well tried and well known. They complete the long and often difficult parliamentary procedure preparatory to the election. It is now for the House to decide, and to give the final approval necessary for the administrative machinery and organisation to be set fully in motion. I believe that both these sets of regulations fully deserve the support of this House.

10.52 p.m.

Photo of Mr David Howell Mr David Howell , Guildford

The House will be grateful to the Home Secretary for setting out the details of these regulations amongst a certain amount of interruption. We should also be grateful to the Joint Committee on Statutory Instruments for pointing out the need for declaration of secrecy for the verifying officers. That alone emphasises that we are on unfamiliar electoral ground.

My right hon. and hon. Friends have made clear all along that we want the election to take place on 7 June, so we are bound to urge the House to agree to these regulations. But we do not agree with everything in the regulations, and, as we have made clear in the past, we do not agree with the different procedures that have been adopted for Northern Ireland. As my hon. Friend the Member for Abingdon (Mr. Neave) has made clear on many occasions, that is unsatisfactory.

In consultations with the political parties we raised certain matters that have not been covered in the regulations. First, there is the deposit. Our anxiety is to deter frivolous candidates. That must be the concern of all who want to see the elections conducted in an orderly way. We cannot understand why the existing deposit was not simply multiplied by the minimum number of Westminster constituencies in any one of these Euro-constituencies. That would have come to £900. In October my right hon. Friend the chairman of the Conservative Party put forward that suggestion. We heard nothing more, and the Government have thrown up £600, which seems to have been plucked out of the air. The logical approach, pending a longer-term review under your chairmanship, Mr. Speaker, would be to multiply £150 by six.

The other deterrent to frivolous candidates that we hoped to see related to the question of signatories on nomination papers. The regulations require 30 signatories from anywhere in the Euro-constituency. We think that there should be 10 signatories from each Westminster seat, as this would be a more serious obstacle. There is a considerable sum of free postage available to every candidate—more than £35,000 in total—and we need to make sure that frivolity among people seeking to put themselves forward as candidates is deterred. I am not sure that the regulations entirely meet our fears on this point.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness

Why do the Conservatives believe that it is better to raise objections to frivolous candidates on a monetary basis, rather than a signatory basis?

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Because they have a philosophy of money.

Photo of Mr David Howell Mr David Howell , Guildford

The hon. Member for Inverness (Mr. Johnston) will have heard me rest it on both bases. Either way we want to try to ensure that these regulations provide for orderly elections. The two measures we proposed—which regrettably have not been accepted—would have helped in that respect.

I particularly wish to draw the attention of the House to the timetable that is set out in the draft regulations for England and Wales and Scotland on page 15, where there is a long column of explanations for the dates for the publication of notice of election, delivery of nomination papers, and so on. Since we know that the date of the election is 7 June, would it not be eas