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Tag: 1986

  • David Evennett – 1986 Speech on Crayford School

    Below is the text of the speech made by David Evennett, the then Conservative MP for Erith and Crayford, in the House of Commons on 14 March 1986.

    I am grateful for this opportunity to discuss the future of the special support unit at Crayford school.

    The past year has been extremely difficult in education. All the bad news has hit the headlines and the recent teachers’ dispute has caused problems for schools, parents and, most important of all, children. We must be concerned primarily with children, as education is about their future, their training for life and their ability to cope with the world of tomorrow. It is intended to help them to play their full part in society as decent citizens.

    The Government have achieved much in education and are attempting much more. They have my full support. Without doubt, considerable progress has been made and I am pleased to be able to report a real success in education today—the special support unit at Crayford school. The school is in the southern part of my constituency, in the London borough of Bexley, which is the local education authority. It is a small school with about 560 pupils on its roll, all of whom are accommodated on one site. The school has had several difficulties recently, but they have been overcome by the combined efforts of the acting head, Miss Woollett, dedicated staff and a supportive parents association.

    The school is an integral part of the local community and commands the wide respect of local citizens. With that local backing, the support of the governors and of the local education authority, the staff, who are extremely talented and highly motivated, have become pioneers in special education, with the establishment of a special unit. They are to be congratulated, as I am sure my hon. Friend the Minister agrees.

    The Education Act 1981 paved the way for the integration, as far as is reasonable and practicable, of children with special educational needs and children without such needs. Opening the Second Reading debate on the Education Bill on 2 February 1981, my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), who was then the Secretary of State for Education and Science, said:

    “We have constantly stressed that we wish to see the largest possible number of children with special needs educated in ordinary schools … However, our aim is not simply integration for its own sake. It is the provision of appropriate education for individuals. For many children I believe that this can and should be done in ordinary schools.” —[Official Report, 2 February 1981; Vol. 998, c. 30.]

    Long before the 1981 Act, Crayford school possessed a special unit for children with impaired hearing to ease their path into mainstream classes.

    Today, there are three special units at the school—the unit for hearing-impaired pupils, the support group and the special needs centre. The special needs centre provides an in-school service, while the other two units are boroughwide.

    The unit for hearing-impaired pupils was established in 1972 as a resource for secondary age pupils from all parts of the Bexley local education authority area. The facilities cover the range of hearing impairment from moderate to profound hearing loss. Since its formation, the unit has endeavoured to achieve the maximum integration for each pupil in social and academic areas, and many pupils spend ​ almost all their time in mainstream classes. The unit has two full-time members of staff and 13 pupils, although it can cater for a maximum of 16 pupils. Each child in the unit has an individually tuned radio hearing aid which picks up and amplifies the teacher’s voice via a radio microphone which the teacher wears around his neck. During my visits to the school I have seen the equipment in use; it was interesting to note the ease with which all members of staff wear the microphones and the fact that the system operates without comment from the other children.

    At Crayford school, the use of radio equipment is part of everyday life. To children with hearing loss, school and much else in the world often seems hostile. In addition, their need for some special education provision often means that the school which they attend is not in the immediate area in which they live. For those reasons, it is important that they feel comfortable at school and that they are part of the school. The attitude of the staff and pupils at Crayford school ensures that the pupils in the unit for the hearing-impaired are not set apart, but belong to the school community in the widest sense.

    The other boroughwide facility at the school is the support group, which was established in September 1984 to cater for secondary school pupils who are experiencing social, emotional and behavioural problems, and who have been statemented under the Education Act 1981. That unit is staffed by two full-time teachers and can deal with up to 10 pupils. The unit aims for the maximum social and academic integration and attempts to return all pupils to mainstream classes within a year. Pupils in the unit follow the school curriculum. Rules must be obeyed and good behaviour is rewarded. Incentives are also offered to encourage pupils to want to return to mainstream classes. Here, encouragement is the key.

    The third unit at Crayford school is the special needs centre, which is a school-based facility for pupils with learning difficulties. One full-time member of staff co-ordinates the work of the centre and specialist subject teachers provide individual support in mainstream lessons.

    Teachers have received much bad publicity of late, a great deal of which is completely undeserved. My hon. Friend the Minister will agree that most teachers are dedicated and hard-working professionals. At Crayford school, that is the case in the special unit and in the school in general. I have received many letters from parents praising the school, and especially the staff. The results from the children speak for themselves.

    The heads of the three units all have the status of heads of department. From the point of view of sensible organisation, the three units have been placed together to allow the all-important co-operation between teachers which is so evident in the school. Teachers from the special units teach some mainstream classes, and last year the interchange was widened by a rearrangement of the school timetable to allow some mainstream teachers to take groups of special needs children for some subjects, such as physical education and art.

    The staff at Crayford school have been willing to be pioneers and to look to the future. Those teaching mainstream classes have been happy and willing to have other members of staff in their classes to give additional help to children from those units. Extra resources have also been available to class teachers and, in addition, the presence of a special unit teacher in the classroom has often been of benefit to the other non-unit pupils.

    In any debate on education, as I am sure my hon. Friend the Minister will agree, the children are of paramount importance. We must never overlook the welfare or understate the needs of children. At Crayford school, the pupils are all-important, and in my visits to the school I have been impressed by their behaviour and attitudes. I have been particularly impressed by the attitude of the staff and other pupils towards the children in the special units and can say without fear of contradiction that the pupils in those units are full members of the school in every sense. It is essential for the success of the units that the pupils are made to feel so. They wear school uniform; they register with the rest of their form each morning; they attend morning assembly. They play a full and active part in the life of the school, and that is important to their integration or reintegration into the main stream.

    Teachers, parents and pupils have all commented that the size of the school is one of the main reasons why the special units have been integrated so successfully. I am a product of a good grammar school; I was fortunate to attend Buckhurst Hill county high school for boys, which had a school roll of around 600. The head and senior staff knew all the boys by sight, and the vast majority by name. Such a size of school was friendly and manageable, and allowed the individual child to feel part of the school community. That is how I believe the children of Crayford school feel.

    I regret the trend in the 1970s towards larger schools with rolls of 1,500 or more. In such institutions, despite great efforts, I am sure, by the head, staff and pupils, the community spirit is often lost. Individuals feel lost and the head and deputy heads have difficulty knowing their pupils. I do not wish to be partisan, but I feel that that is the heritage of the Social Democrat-led Labour Government of the 1970s, who allowed education to decline so much. I would welcome a trend away from larger schools towards smaller schools, especially when, as in this debate, we are talking about special needs provision.

    Children with special needs already have difficulties not experienced by others, and integrating them effectively in vast and impersonal schools is not possible or practical. They tend to be isolated in special units, which is as unfair as the old separate special schools. Not only is it unfair, but it is unwise, and harmful to their educational and personal development.

    The present size of Crayford school enables pupils with special needs to be effectively monitored and integrated for the majority of their time in school—in most cases, for over 70 per cent. of the school day. The provision of the support units is almost unique, as there are few similar units in the country. A recent report in The Times Educational Supplement said:

    “few schools can yet have had the same experience or success at integrating children with special needs as Crayford, an 11–16 school in the outer London Borough of Bexley”.

    Integrating special needs pupils is not simply about putting them into an ordinary school. The National Foundation for Educational Research report, entitled “Educating Pupils with Special Needs in the Ordinary School”, published in 1981, set out the criteria that it believed would ensure successful integration. They are, first, the understanding and commitment of the head teacher; secondly, the prior existence of some sort of special facility; thirdly, mainstream staff with positive attitudes and the ability to deal with special needs pupils; ​ fourthly, close liaison with external agencies, such as social services; fifthly, suitable accommodation for full integration to foster the sense of belonging; and, sixthly, the integration of both mainstream and special unit teaching staff.

    Not only are those criteria met by Crayford school; it could almost be the model upon which the criteria are based. The attitude of all at Crayford school is one of care, compassion, co-operation and integration. Such rapport has been built up over the past few years and cannot be transported elsewhere easily or built up overnight.

    I have to report that the future of the special unit at Crayford school is in jeopardy. As my hon. Friend the Under-Secretary is aware, Crayford school is currently under threat of closure. The proposals of the local education authority to cease to maintain Crayford school are now with my right hon. Friend the Secretary of State for Education and Science for his consideration.

    My hon. Friend the Under-Secretary has recently met a delegation from the school in his ministerial capacity. I realise that, as he is replying today in that same capacity, he is unable to comment on the closure proposals at this stage. However, I hope that he will take my comments on board and convey them to my right hon. Friend the Secretary of State.

    I feel that I must make clear my total opposition to the closure of Crayford school. I appreciate that the school rolls are falling and that, as a consequence, education authorities must look for savings, but I believe that savings can be achieved in alternative ways which will be more satisfactory on educational grounds.

    Crayford school is part of the local community. It is the only local secondary school for the children in Crayford and its closure would mean long journeys to schools outside the area for the vast majority of mainstream local children. In addition, the rolls in that area are not falling as rapidly as in other parts of the borough; indeed, a great deal of house building is taking place in the area which will ultimately place a greater demand on the local schools.

    The closure of the only local secondary school would be a bitter blow to the community, not only from the practical aspects which I have mentioned, such as the travelling which would be involved for local children to get to school, but from the social aspect. Children travelling to schools away from the area in which they live tend to have two groups of friends—those at school and those near home. That fact, together with the sensible attitude of parents that children who have to travel to school outside their local area may often have to go straight home after school in winter, weakens the community spirit of the school. We heard a debate earlier this afternoon on neighbourhood watch and crime rates in this country. In any event, the closure of Crayford school would be a severe blow.

    The closure has a wider impact. It affects not just local children but those in the special units. For them, the impact on the local community is not so important because many of those children have to travel, regrettable though that may be. But the effect of closure on their education is vital. The closure proposals include a statement that the unit for the hearing-impaired will transfer to Bexleyheath school. That school has a public intake of 10 forms of entry and a capacity of over 1,800 pupils. That is also where it is envisaged that a large percentage of Crayford school ​ pupils would go. The support group would be transferred to alternative suitable provision in consultation with parents.

    As I have already said, the effectiveness of the special unit at Crayford school is a result of their total integration with the rest of the school. The units are part of the school and cannot be looked at in isolation. The pupils are in the mainstream classes for the bulk of their time in school, which means that transferring the units elsewhere, even if kept together, would not be enough. It is the positive contribution that mainstream staff make at Crayford school which makes the units so successful. I do not believe that that success will continue if the special units are moved elsewhere.

    For the staff of the unit to build up the same relationship with a new group of mainstream staff would take time, during which the education of those in the units would undoubtedly suffer. The position will be even more difficult if the units are moved from a close-knit school of less than 600 pupils to a vast school of over 1,800.

    For the children in the unit for the hearing-impaired and the support group, closure, and the disruption it would cause, would place their educational prospects seriously at risk. For many, yet another move of school would be necessary, and for some the third or fourth move in their secondary education. Pupils with hearing impairment would undoubtedly suffer the most.

    In view of the time, I realise that I cannot say all that I would like to say about the school and the units in this short debate. I must draw my comments to a close. I hope that my hon. Friend and neighbour, the Under-Secretary, appreciates, after my few brief words, the tremendous work that has been done, and is being done, by the special units at Crayford school and their importance to the children with special educational needs. All that good work is under threat. The future of the units is bleak, because they are under sentence of death under the borough’s proposals. So much good work has been done and so much has been achieved, yet the future is so uncertain.

    Without doubt, the subject of this debate is a success story and all involved in this important work must be complimented. What will happen if Crayford school closes and the units are disbanded or moved elsewhere? How will the children fare in a much larger and perhaps less friendly environment? The safeguarding of the future of the special units is another reason why Crayford school should be retained.

    Crayford school is an outstanding example of good practice with respect to special needs integration, with special needs pupils fully provided for while integrated as far as possible into mainstream classes. To lose the units, which are so effective, would be educationally detrimental to many pupils. I hope that these points will be taken into consideration by my right hon. Friend the Secretary of State when he looks at the proposals for Crayford school. I urge him to give full consideration to the educational arguments and hear my plea for a future for Crayford school and its special units, which are so important, effective and valuable.

  • Gary Waller – 1986 Speech on Transport in West Yorkshire

    Below is the text of the speech made by Gary Waller, the then Conservative MP for Keighley, in the House of Commons on 13 March 1986.

    My hon. Friend the Minister of State may not be as glad as I am to be here at 4 o’clock in the norning. Nevertheless, we much appreciate the contribution he makes in the office that he fills. I am also pleased that the hon. Member for West Bromwich, East (Mr. Snape) is here. He demonstrates every day, in Committee and when he contributes to transport debates, that it is possible to adopt an aggressive yet light-hearted tone across the Dispatch Boxes. We welcome the fact that he has stayed up until this late hour to join in this important debate about transport in west Yorkshire.

    I think that it is fair to say that, among the factors which encourage the development of industry and commerce in particular areas, there is good evidence that transport links figure very near the top. I want to deal, in particular, with the western part of the county of west Yorkshire, which not only suffers from higher than average unemployment but has relatively poor road and rail communications. In the eastern part of west Yorkshire, Leeds and Wakefield have first-class rail links to London by the east coast main line and also first-class road links by the M1 motorway to the south of the country. However, places such as Bradford, Halifax and Huddersfield come some way behind.

    Leeds has attracted many new jobs in commerce and the services sector, but Bradford and its environs are still trying to recover from the shake-out in textile jobs which has taken place under successive Governments over many years and has reached a plateau only during the past 12 months or so. My constituency is defying the doom and gloom merchants and many firms are now more optimistic, although it remains to be seen whether that will turn into real jobs. Keighley is particularly poorly served by transport. Whether those jobs will come depends a great deal on the realisation of our transport needs.

    Among the most important developments is the electrification of the east coast main line. Its completion to Doncaster and Leeds is eagerly awaited by the many people who use the train regularly, including me, and by those who suffer from the delays caused by the many failures of the current diesel units. The fact that British Rail received substantial compensation from the manufacturer is little comfort to those who are inconvenienced. The Government made the right decision in giving the go-ahead for this important and significant scheme. The increased reliability which the new Electra locomotives will bring is eagerly awaited also.

    We are pleased that my hon. Friend the Minister will visit Bradford soon. Many people in Bradford are naturally unhappy about the link between the city and the rest of the inter-city network, especially the route between Bradford and Leeds. I understand that the existing dated rolling stock which is operated by the passenger transport executive is being replaced by the new Pacer train. That development is badly needed.

    Many people in Bradford regard electrification of the route between Leeds and Bradford as essential to Bradford’s regeneration. I must admit that, unlike some hon. Members, I do not believe that this argument necessarily stands up to rigorous examination. Decisions made by the great railway builders of the last century ​ inevitably cause the journey time from Wakefield to Bradford to be long, especially if the train has to stop at Leeds on the way. British Rail claims that a stop at Leeds between Wakefield and Bradford has been forced on it by commercial considerations. It has already ceased to run trains via the Wortley curve directly to Bradford.

    The time factor has in the past deterred passengers from travelling through to Bradford by train even when no change of train was required during off-peak periods. This factor will continue to apply whether or not electrification comes.

    At the end of the day, whether a service is viable depends not on electrification but on whether sufficient passengers use it. I know that there is criticism of British Rail for making the service so unattractive that passengers are driven away, but I do not think that it is all the fault of British Rail that the number of passengers using the inter-city service during off-peak periods declined to such a low level that services were discontinued.

    There has never been any suggestion that, if electrification were continued through from Leeds to Bradford, British Rail would again start running through trains during off-peak periods. It is hard to see what advantage electrification can bring to make the service more attractive. On that basis, it is reasonable to assume that the electrified inter-city services would continue through to Bradford only during peak periods. British Rail has already said that it intends to continue inter-city services to Bradford during peak periods following electrification of the east coast main line, with a change of traction at Leeds during the time currently allowed for the stop there.

    Therefore, the only advantage that I can see that electrification would provide is a kind of guarantee that British Rail would be more likely—it is certainly not a cast-iron guarantee—to fulfil its pledge to continue inter-city services to Bradford than it would if a change of traction were necessary.

    I believe that better ways can be found of spending the several millions of pounds—various figures, ranging from £5 million to £10 million, have been cited—that such a guarantee would cost. The question of the Wortley curve is separate and not directly related to electrification. It is connected with the question whether it is commercially viable to run trains through to Bradford which do not call at Leeds. It looks as if the courts will have to decide whether British Rail was justified in closing that stretch of line to passengers without submitting the issue to a Transport Users Consultative Committee inquiry and final decision by the Secretary of State.

    We live in an age of convenience, but I do not understand how electrification can make things more convenient unless one were willing not only to spend the £4 million, £5 million or £10 million needed to electrify the link, but also to maintain a continuing subsidy each year for uneconomic trains.

    Some Bradfordians have admitted that electrification would not make economic sense but would have a psychological effect. British Rail is required to achieve a 5 per cent. return on its inter-city services by 1988. I am not sure where a subsidy would come from. Even if Bradford council was initially willing for the ratepayers to meet the cost, it could hardly give a guarantee to continue doing that indefinitely. No doubt one would come to a different conclusion if it seemed that electrification could bring any genuine benefits to Bradford. I find it difficult to argue that there should be any exception from the ​ requirement that the inter-city service should be ineligible for public service obligation grant from April 1988, bearing in mind that this additional investment would incur additional costs if BR were to try to justify it by running through trains outside peak periods.

    I should like to make some relatively brief comments about local rail lines as these are not the responsibility of BR or of my hon. Friend the Minister of State, Department of Transport but of the local PTE. The reason for that is not because they are unimportant; indeed, the contrary is the case.

    Many commuters, shoppers, school pupils and tourists depend on the local rail lines between the major conurbations of Leeds and Bradford and the towns of Shipley, Bingley, Keighley and Skipton in Airedale and the smaller communities on the way to Ilkley in Wharfedale. In recent months there have been many complaints about the quality of the service. I would like to pay a tribute to the Wharfedale rail users group whose professionalism has impressed the professionals and whose suggestions have resulted in the improved scheduling of trains. The Ilkley line is popular with travellers but its viability is not enhanced by the way that section 20 agreements between the PTE and BR require the whole of the track costs to be borne by the former because the line is not part of the BR network.

    The details of section 20 agreements are being re-examined and I hope that some benefits will result. In the meantime, I believe that the PTE should operate its fare structure on a more commercial basis. The local railway provides a fast alternative to the congested roads for which many people would willingly pay a realistic fare if that helped to retain the service. People need the service to be reliable and seats to be available. Lately, both timing and the number of coaches available have fallen well below acceptable levels. I hope that things will improve in future.

    I have some good news for my hon. Friend the Minister of State about the likely effects of the Transport Bill for which he was responsible. I do not know whether my hon. Friend has seen a letter from County Councillor John Tweddle, who is the Conservative spokesman on transport on the county council. In the letter Mr. Tweddle refers to

    “The latest information on the charges which the Transport Act 1985 is bringing about to bus services in West Yorkshire.”

    He states:

    “The west Yorkshire Passenger Transport Executive have just informed Councillors that commercial network mileage has been increased from 55 per cent. previously assessed to 75 per cent. of the current mileage. This improvement is to be achieved as a result of better service planning, faster journey times and improved staff productivity following the new cooperation from the Trade Unions. National Bus Company Subsidiaries operating in west Yorkshire, have not yet told of the extent of the commercial network that they intend to register”.

    Nevertheless, the sort of improvement in the commercial network mileage, together with the cost savings on the rest of the network due to tendering, is obviously going to save passengers and ratepayers a substantial amount in the future.

    Mr. Tweddle concludes his letter by writing:

    “The claim of the white paper and in debate now looks set to be achieved scorning the mis-information and scare-mongering of opponents to the Transport Bill.”

    That is encouraging news indeed.

    Mr. Peter Snape (West Bromwich, East)

    Did the hon. Gentleman say that the spokesman of the Conservative group was County Councillor Tweddle, or was that the content of the letter from which he quoted?

    Mr. Waller

    County Councillor Tweddle is a man for whom I have the highest regard. I always found what he has to say about transport, in which he is a specialist, of extremely high quality. The hon. Gentleman will probably see more of Mr. Tweddle in future. He has already been a parliamentary candidate, and is undoubtedly destined for even higher things than the outgoing metropolitan county council.

    One of the more obvious benefits of the abolition of the metropolitan county councils was the opportunity it gave the districts to take responsibility for highways. There is a good case for some services still to be provided on a countywide basis, for example research, and work on major strategic traffic management schemes. Nevertheless, I am surprised that some district councils in west Yorkshire are effectively throwing away the opportunities that they were handed by reorganisation by continuing to join together on a countywide basis to operate highway functions voluntarily.

    I am glad that Bradford has opted out of that retrograde scheme, and I believe that it will benefit in future by so doing. If the old county borough was capable of running its highways, the much larger metropolitan district with a population as large as some counties should certainly be able to do so effectively.

    One of the most important trunk road schemes in the offing is the Kirkhamgate-Dishforth scheme. The need for a strategic link between the M1 and M62 south of Leeds, and north Yorkshire and the north-east remains.

    Much national and local traffic must use a variety of roads which are unsuited to the flows that they must carry. There was a good case for a route to the west of Leeds which would have benefited Bradford and provided an alternative to the dangerous route north from those cities to Harrogate and Ripon. But we did not get the cake with the icing, and because the inspector did not recommend the construction of the entirely new section south and east of Leeds either, we have got only half of the alternative rather plain cake.

    Now new alternatives are to be examined, and that process should be carried out quickly. The problem exists today and we cannot wait many more years for it to be properly resolved, even if the necessary improvements on the A1 are to go ahead.

    I welcome the fact that active consideration is being given to the construction of an eight or nine mile link between the M1 near Wakefield, possibly between junctions 39 and 40, and the M62 at junction 25 near Brighouse. I have been pressing for that scheme for many years. Two or three years ago I was told by officials in the Department that it was a non-starter, but I am pleased that it is now considered that it may pay its way.

    The scheme would bring considerable benefits to the western districts of west Yorkshire. It would provide a faster, more convenient route between the M1 and Huddersfield, Halifax and Bradford, would cut several miles off the journey between the M1 and the M62 to the west, and would relieve the A638 through Heckmondwike and Cleckheaton—towns which I had the honour to represent before the last general election but which I no ​ longer represent. The traffic in those towns was considered sufficiently bad to merit the construction of relief roads which have now been deleted.

    This new route would also relieve the A644 through Mirfield and traffic would be able to use an alternative to the unsuitable, and in parts narrow, A637. It would enable the largest proportion of traffic linking between the M62 and M606 at the Chain Bar roundabout to do so without having to negotiate that roundabout—it is about half a mile around that large circuit. The Calder Valley link would have environmental, safety and economic benefits which would justify its early approval and construction. I hope the results of the analysis will prove favourable.

    For my constituents the Airedale route is of great significance. It is a vital route for the future prosperity of the Aire valley towns, especially Keighley. When the route is complete it will mean that there will be a fast link between Keighley and the motorway network. At present in peak times it can easily take an hour to cover 15 miles. It is possible to get from south Bradford to Manchester more quickly than it is possible to reach the north-western parts of the district. That route, which has been on the stocks not just for years but decades, is essential.

    The final obstacles to the construction of the Kildwick to Beechcliffe section—the most westerly part of the route—have now been cleared and I hope that construction will start this summer. There has been a recent announcement about the Victoria Park-Keighley-Crossflats section. That will mean the loss of about 13 per cent. of the Victoria Park at Keighley, but I do not think, as some fear, that the annual gala and show at Keighley, which are important events for the town, will be threatened too much.

    The Crossflatts-to-Cottingley Bar section extending to the east of Bingley will go ahead eventually. There is a question about what will happen between Cottingley Bar and the Shipley eastern bypass. This will link with the Bradford central spine road and the motorway system. I have serious doubts about the consultative process which was carried out some time ago. I do not think that adequate opportunity was given for the people living outside the immediate area to express their views as there would have been under a statutory inquiry. I carried out a survey of Keighley firms which clearly showed that the overwhelming majority regarded the route as important and thought that it was essential that there should be a new route skirting Saltaire and Shipley. Those questioned did not think that any alternative would prevent traffic jams.

    An alternative to the new route would probably rely on traffic management and perhaps on one or two short new sections, but all this would only create an almighty snarl-up which would strangle Saltaire—an outcome which those who wish to protect Saltaire fear. The anticipated traffic figures which I have been given by the Department of Transport do not add up. Even an incomplete Airedale route would draw traffic away from routes such as the A629-A644 through Denholme and Queensbury and the B6144 across the moors. I feel that there could be a botch-up and I am waiting anxiously for the announcement, due this summer, of the outcome of inquiries into alternatives. I note that I am supported in my view by Bradford council and the West Yorkshire metropolitan council. It is a sensitive matter.

    Among the villages which have waited long—I will not say patiently—for a bypass, Addingham, on the borders of my constituency, features prominently. At long ​ last, the detailed route has been announced. I believe it has the support of the overwhelming majority of the village residents who wish to see the bypass constructed as soon as possible.

    Obviously, the objectors have every right to have their say, but I hope that their number will be few and that the statutory procedures will be carried through as speedily as possible. The road winds through the village in an attractive way that is suited more to the horse and cart than to today’s juggernaut. The completion of the bypass, which will be partly hidden in a cutting will bring blessed relief to the villagers, who often have to jump for their lives, and have been kept awake at night by the rumble of heavy traffic.

    The Leeds-Bradford airport has a catchment area twice the size of that for Newcastle or the east midlands, but has only about half the throughput of those two airports. It has great potential. For instance, it could carry a great deal of postal business, some of which used to be diverted through Speke airport at Liverpool. Last year, the operational income of Leeds-Bradford airport increased by 24 per cent., mainly as a result of increased business.

    There was a 10 per cent. increase in air freight, and a 14 per cent. increase in passenger trade. However, it has had to turn away much business in the past two years because of the ban on take-offs and landings after 10 pm. The question whether there should be take-offs and landings after that time is a sensitive issue, and I do not want to come down on one side or the other, but it is fair to investigate the matter, bearing in mind that most of the present generation of quiet aircraft were not in existence when the public inquiry took place in 1979.

    I hope that I shall be forgiven for reverting briefly to the subject of rail. This is not a part of the British Rail or PTE network, but the Keighley and Worth Valley Railway. I take a particular pride in that scheme, as did my predecessor as Member for Keighley, Mr. Bob Cryer. The railway is run in a very professional way, although it depends on volunteers and fare-paying passengers, and the subscriptions of members of the preservation society among whom I am proud to be counted. The figures that have just reached me show that in 1985, 148,500 miles were covered by locomotives on the railway, a large proportion of them under steam. Not only do people come from far and wide to work on the railway, or travel on it as tourists, but some use it as a commuter service from Oxenhope and the famous village of Howarth down into Keighley and on into Bradford and Leeds. The railway is more expensive to run than an ordinary railway because it is a steam railway. Over £40,000 per annum has to be spent on coal alone.

    I am glad that in the past couple of days, a pie-in-the-sky scheme to build a tramway and transport museum on the other side of Bradford seems to have run into the buffers. It was an over-ambitious scheme on which the West Yorkshire metropolitan council has already spent some money. It was never a realistic scheme, and my view is that it would have confronted head-on the voluntary efforts of people on the Keighley and Worth Valley Railway. I had appealed for somebody to say no to the scheme, which would have eaten up a great deal of ratepayers’ money, when they are already suffering from increased rates.

    I have taken my hon. Friend the Minister and the many other hon. Members in the House at this time on a tour of the transport facilities in at least part of the county of west ​ Yorkshire. I hope that I have shown that transport is vital to the future of the county. During the next few years, it will be even more vital for the system to improve.

  • Roger King – 1986 Speech on British Leyland

    Below is the text of the speech made by Roger King, the then Conservative MP for Birmingham Northfield, in the House of Commons on 13 March 1986.

    Many of the headlines in recent weeks have been about the problems facing the British Leyland operation in Britain and the allied factories and businesses which predominate throughout the country. My purpose tonight is to raise points that are worthy of close consideration because they affect the future prospects of that group of companies.

    I wish, first, to examine the BL board, the body which has been charged with overseeing the development of a British-owned motor industry which fell on hard times because of many and varied problems in the late 1950s, through the 1960s and into the 1970s. Those problems stemmed from poor management control, hasty reorganisation, poor industrial relations and a failure to invest in the right product line. Above all, although its products were technically reasonable, they left a lot to be desired in terms of quality. The constant problem of under-investment left us prey to the world car industry, especially the Japanese, and the western European industry developed its industry during the same time with the aid of investment and new factories after the war.

    The BL board has tended to remain somewhat distant from the day-to-day operations of its subsidiaries. It has allowed sector managers to get on with what they know best—running a business. We understand that there is to be a change in organisation. It was recently announced that Mr. Graham Day of British Shipbuilders will take over what may be left of BL in the middle of this year. Those of us who have been privileged to meet some of the BL executives, especially Mr. Ray Horrocks, question the wisdom of changing the leadership of the board at such a difficult time. Mr. Horrocks has been primarily responsible for the development of the car side of the business.

    Under his directorship, Jaguar has been successfully privatised and Austin Rover has been developed from chronic financial difficulty, poor product range and awful industrial relations to acceptable financial efficiency, exemplary productivity and a very good product range.

    In 1980 the car side turned in a £250 million loss. In the first six months of 1985 a small profit of some £600,000 was registered. It is too early to get information for the whole year, but it seems that the company has done a great deal better than hitherto. The present problem is a growing lack of confidence in development of the business. Rumours about a tie-up with Ford or any other company has had a dramatic effect on the company’s status in the market. The car business relies on customer confidence throughout the world. Although Austin Rover has only 4 per cent. of the European market, it is able to break even, whereas Renault, with two and a half times Austin Rover’s market share, turns in a loss of about £1 billion a year.

    The market has been improved step by step by improving customer confidence in the company’s ability to supply the right vehicles of the right quality when they are wanted. That market has been created step by step as a result of improving customer confidence in the business by supplying the right sort of vehicles, at the right quality when they are wanted by the customer. The relationship between manufacturer and customer has been built up ​ painstakingly over the years, gaining the sort of confidence necessary to develop the market for that range of car products.

    It does not take much to reduce that confidence, with a noticeable effect on the market. Commentators would not dispute the fact that since the beginning of talks about a possible Austin Rover group sell-off to Ford, or to any other company, its market share in this country dropped by about 2 per cent. in the first two months of this year. The winter months are critical for the business, and sales are hard to get. The compounded problem of lack of confidence in the business has a knock-on effect. The problems do not stem simply from reaction in the home or indeed the European market. There have been problems further overseas.

    Mr. John Smith (Monklands, East)

    Why does the hon. Gentleman not come straight out with it and say that the major problem facing the Austin Rover group is the Government’s policy to encourage discussions with Ford? Why does he not have the courage to criticise the Government for what they are doing to Austin Rover?

    Mr. King

    I do not know whether I am grateful for that intervention. I suggest that the hon. Gentleman waits for a few moments, and I shall have some constructive comments to make on that issue.

    The problems of Austin Rover in moving into profitability stem from its lack of across-the-range models. It is strong in the small and medium-car sector, but not in the big executive cars, which in car parlance mean big profits.

    The forthcoming development with Honda of Japan of the Rover 800 series should go a long way to improve the market position and profitability of the business, nowhere more so than in the United States. There are great hopes for a high level of product acceptability. Customer acceptance at car clinics has been almost uniquely high in relation to the product on offer. It is clear that the Americans, based primarily on their knowledge of Jaguar and their growing acceptance of that company’s products, are ready to buy a British executive-type car and willing to pay a premium price for it.

    The structure set up there by the president of Austin Rover America, Mr. Raymond Ketchledge, is such that sales of many cars should be obtained shortly. I understand that the cars that will be available for the United States will be only 50 per cent. of what the American president of the company said he could sell and would want. The primary concern of manufacturers is to ensure that all the cars that go to the United States, although not the number required, are fit for sale in that market, and of the high quality which that market rightly demands. I am certain that the factories can produce them.

    All this solid, good work will improve the fortunes of the company. There is no doubt that American dealers are increasingly concerned, after rejecting Ford or General Motors dealerships, or any sort of dealership, because they do not want that particular product, that they might be dealing with a company partly owned by Ford or some other multinational, which they would find highly unacceptable. Some of the new dealers in America are hesitant to sign on the dotted line and draw up an agreement with Austin Rover until they are satisfied beyond all shadow of doubt that they are dealing with Austin Rover and not a derivative of a multinational.

    Unfortunately, the rumours continue. Although we understand that no talks are envisaged with Ford, this week’s Autocar has a headline in its business section, “Ford ready to reopen Austin Rover negotiations.” Bob Lutz, the chairman of Ford Europe, said that his company was still interested in owning the company and was keen to continue negotiations. Mr. Lutz is clever, because he has decided that all he must do is to say that he is interested in purchasing part or all of Austin Rover and he can suddenly knock 2 per cent. off its home market share. He can shake customer confidence in Europe and the rest of the world as a result. It is hardly coincidental that Ford seems to be doing a little better in the market after its recent outbursts about being interested in getting its hands on Austin Rover.

    We must have a clear understanding of the ownership of the business and whether it will be sold to or merged with another company. For the sake of the market place, sales and jobs, such rumours must not be allowed to continue. In the midlands we look with growing horror at the hesitancy and lack of confidence of the company. We hope that, at least in the medium term, the company will be allowed to develop as it is now, seeking to collaborate with overseas manufacturers, as it is doing with Honda, Volkswagen and Peugeot, to continue producing products which are increasingly accepted, not just in the United Kingdom, but in Europe and the rest of the world.

    Production at the Austin Rover plants is increasing. In 1985 about 476,000 cars and car-van derivatives were produced. Although most commentators would say that that is below the level at which the company would generate enough income finance investment, it is getting close to that level. This year, two major events should help the company to achieve production of about 550,000 units. I have already mentioned the introduction of the Rover 800 series. The other event is the joint venture with Honda to produce the Honda Ballade car on the same assembly lines at Longbridge in my constituency as the Rover 200 series. The production figures for that model are modest, but an additional 10,000 cars a year would be extremely useful, bearing in mind the fact that one need only produce them, put Honda badges on the front and let Honda sell them in the European market. Gradually, production will exceed the all-important barrier of 500,000. I hope that it will continue to increase and improve the viability of the business.

    Harold Musgrove and his team have worked extremely hard. Indeed, when the story of Austin Rover is written, it will include accounts of sacrifices by employees. I have heard that employees’ marriages have gone adrift as a result of the work that people have done to turn the business round. When that account is written, it will be considered a success story. Of course the Government invested a large sum in the business, but it is equally true that they receive a great deal in return through income tax paid by the workers at Austin Rover and components suppliers and through company taxation.

    A primary tenet of Conservative thinking is that one must speculate to accumulate. The time is rapidly approaching when Austin Rover will be able to accumulate the income necessary to provide for new models, and for the new investment which is essential for its continued well being. Again, this would not necessarily be done by Austin Rover on its own, because that is not the way in which a car company of the standing and size of Austin Rover would develop today. It would be done in ​ conjunction with other operators and manufacturers throughout the world, buying the best of the bits from elsewhere, producing them perhaps under licence here in its own factories, collaborating with other manufacturers in the market place, sharing its manufacturing facilities, but selling its cars through individual sales outlets.

    This is what Austin Rover will do with its Rover 800 in Australia, where it will be produced on Honda’s assembly lines, and the Honda Ballade and the Legend, Honda’s version of the 800 series, will be produced on United Kingdom assembly lines for distribution throughout Europe.

    This is the way forward. It is an extremely sensible way. It is one that the company should be left to pursue on its own, so that it can develop its own future, not just in the market place, but with its own work force as well, members of which look with envy on the opportunities given to their Jaguar brethren who invested in their own business and have seen their investment grow quite staggeringly over the past four years. From those to whom I have spoken, I am certain that they would relish the opportunity in two or three years’ time to take part in the ownership of the business, working together as owners and part-shareholders towards its continuing prosperity.

    Mr. Ray Horrocks told one of our Back-Bench organisations the other night that he considered this a distinct possibility, that the business could be viable, working in conjunction with others, for privatisation, so as to allow the employees a share of the business. Again the question must be posed: will the market continue to have confidence in the development of that business; confidence, alas, which has been badly shaken over the past few weeks? For that the company is already paying a very heavy price. Only a firm commitment by the Government that they will continue to allow the business to develop on its own, using the management that it possesses to make the right and appropriate decisions for the various markets of the world, will allow that confidence to be restored totally so that the company can recover the market share that it has unfortunately lost in the past few weeks.

    The bid by General Motors for another portion of the business—the Leyland Truck, Land Rover and Freight Rover organisation—has equally dominated the media recently. Bedford, General Motors’ truck subsidiary, is as British as British can be, having been here for some 45 years or so, producing trucks. The British Army rides in its trucks now, just as Montgomery rode to El Alamein, so there is no question but that that company is a British business.

    Unfortunately, although General Motors has invested large sums of money in this country, these days one has to invest very large sums of money indeed to maintain a market share. General Motors’ investment in Europe has largely come to be concentrated in countries like Spain and Germany, where more cars are produced than are produced in this country.

    Although General Motors has, therefore, invested money in this country, it has not been enough to stem the rising tide of imports from other General Motors factories. One looks still with concern at the low British content of those Vauxhall cars that are made in this country. It is a job to justify 50 per cent. United Kingdom content in those products, even if one takes into account such things as heating and light and power in the factories that are ​ producing them. The result of this investment policy is that Bedford has been unable to invest in a new, modern range of trucks and its market share in this country—where once upon a time it was the dominant truck manufacturer—has dwindled to no more than about 11 per cent. One can compare this with Leyland Truck, which has had an enormous amount invested in it and which last month reached 16·4 per cent. of the United Kingdom market.

    Leyland Truck faces problems. It would be no good ignoring the fact that the truck market is oversaturated within western Europe, with some 40 per cent. over-capacity. Some rationalisation would be sensible, and to everyone’s advantage. General Motors’ approaches to Leyland Truck are sensible and make a great deal of commercial sense. The management of Leyland Truck, and possibly even the work force, but certainly the dealers who handle the vehicles, would welcome a relationship so that the two combined organisations could well command about 25 per cent. of the United Kingdom market, which would turn that business, concentrating as it would, presumably, on the Leyland Truck factory in Lancashire, into one that was rather profitable, and certainly would act as a great stepping stone to re-establishing the British truck industry in European and world markets.

    It has been said by many people that General Motors is interested in Land Rover and Freight Rover because if it were to purchase Leyland Truck it would find itself in some difficulty about what to do with its vacated Dunstable assembly lines, which would obviously come to pass, because rationalisation is the name of the game and production capacity would probably have to come out from there.

    It is not necessary to expand Land Rover output at Dunstable or to move the Freight Rover van factory from Washwood Heath to Dunstable to make up any shortfall. General Motors could start assembling some of the 50,000 Vauxhall Novas that are brought in from Spain every year, or, indeed, improve its United Kingdom production levels of Cavalier and Senator cars which currently come from its Belgian and German factories. There is plenty of opportunity for that company to step up its investment in car production. I suggest that it turns its attentions to finding work for the vacant factory space in Dunstable, if Bedford trucks are to be made in Leyland in Lancashire. The company should look closely at expanding car output there.

    In negotiations with people such as Bob Price, the head of General Motors, one is aware of an affable and knowledgeable person who I feel sure is open to firm suggestions from the Government as to how this matter can be resolved to the satisfaction of all. If the Government were to talk meaningfully with Mr. Price and his colleagues, a satisfactory outcome for the present purchase of parts of BL could be arrived at.

    I do not go along with the view that General Motors has much to offer Land Rover or Freight Rover. A massive amount of investment has been made by the BL board over the past 10 years in Land Rover production at the Solihull plant. Brand new factory space was built in the late 1970s and as a result of the closure of eight or nine satellite factories and the bringing together under one area at the Lode lane factory in Solihull, Land Rover production is now completely in house on one site and ready to exploit that advantage with better productivity and lower manufacturing costs.

    Perhaps it is a bit early at this stage to reach any conclusion as to how Land Rover will develop until it has had a chance to produce vehicles for two or three years on its total site complex and we can see the sort of financial progress that the business is making. Certainly there are grounds for great optimism, after a year or so of setbacks, when the company faced real problems in overseas markets, particularly in Africa, where it was battling with the strong problems of a petro currency in Britain, which affected all exporters. That is now not quite such a disadvantage because of the falling price of oil, which has once again put manufacturing back to the forefront of our exporting achievements.

    The opportunities for Land Rover, and for most of our motor industry now to get to grips with the export market, are unparalleled. The concern that we express is that we should now let those companies develop, given the challenge and the opportunities that they have, before we decide whether we want to sell them to some overseas buyer from America or anywhere else, or whether we should sell them to the employees. That would be the most sensible policy to pursue. I do not doubt that the privatisation of Land Rover, along the lines of Jaguar, could be a realistic proposal within the next two years or so, given the potential of that product and its potential in America.

    Many people criticised the company for not having exploited its American potential before, but the history of Land Rover is such that it hoped it could exploit the American market. During the 1970s, British Leyland’s main concern was to encourage car production for export, principally to the United States market, to tackle the problems of Jaguar. In those days the Triumph sports car, the MGB sports car and so on were exported to America and all the resources were used up on those product lines to ensure those cars reached the American market and there was nothing left for the fairly small number of Range Rovers which had been earmarked for that market. Therefore, by default Land Rover was never able to exploit that market.

    One of the results of Land Rover’s semi-independence to operate within the British Leyland organisation is that it has been working hard to get the Range Rover accepted in the American market. It is not just a matter of offering a vehicle to that market; it has to reach and maintain the federal emission standards, the standards of construction and so on, all of which take a considerable time to achieve.

    Most people would suggest that the best way to go forward is by the use of specialised dealerships which are being set up in America. The Range Rover is a particularly expensive and exclusive vehicle, with a specialist attraction. Whether it will ever find a sensible position in the market and be sold alongside Cadillacs or Chevrolets is open to a wide degree of discussion.

    However, taking the advice of Porsche, which was not slow to exploit the American market, the correct way to exploit the market is to seek out specialist dealers—a handful in American terms, some 40 to 60 dealers—to major on the product concerned in a big way. That is what Jaguar is doing at the moment. Having the right investment, the right marketing factor and the right sales expertise is the way to exploit the American market. It should not be done by saturation coverage, which a tie-up with a multinational may or may not provide. Range Rovers are an exclusive British product and need to be marketed in that way. That is the ​ way that Porsche, Mercedes, BMW, Jaguar and Rolls-Royce are seeking to exploit the American market. I think that that is the way that Land Rover ought to develop, given the opportunity so to do.

    I shall deal with the problems of Freight Rover. We hear a great deal about the problems of inner city factories and the problems of holding and maintaining work within the inner city area. The Government have invested considerable sums of money, and continue to invest such money, to find work within the inner city areas not only for our young people, but for all sections of the community. An inner city factory is like a gem. It needs to be looked after and kept. It is a priceless asset. Freight Rover is such a factory in Birmingham, at Washwood Heath. It provides about 1,800 jobs for the community. Not all the workers emanate from the inner city area, but a considerable number of them do.

    Freight Rover shares a factory with Austin Rover and produces the Sherpa range of light vans. It has achieved a significant place in the market, with growth of about 2·4 per cent. in a very competitive market over the past 12 months. It is a financially profitable organisation and its work force has maintained a level of productivity and dispute-free performance second to none. The workers have made particular sacrifices, as they recognise that Freight Rover is the only job they have and probably the only job they will keep, if at all possible, because of the dearth of opportunities elsewhere within the area. Therefore, we attach great importance to the maintenance of Freight Rover within the area. It is not just the provision o jobs, but the product itself. The years of development stand the test in the market place. It is a product which is wanted and which is finding growing acceptance, not just in the United Kingdom, but in the European markets.

    It is not a push button, robotic factory. The vans produced are bespoke vans—built to the specifications of customers, such as the Post Office, British Telecom, the civil defence organisations and the Army. Those organisations buy a van with umpteen additions, with special brackets, special hinges, and all the rest.

    I worked in the van factory with Morris Commercial before it moved to Freight Rover. A standard van used to be taken from the assembly line to a special building. Holes were drilled in the van to take special brackets and fitments and extra doors. The vehicle was then sold. The trouble is that every time a hole is drilled in a vehicle once it has left the assembly line, a rust point is made. That cannot be stopped.

    The advantage of fitting the bits and pieces on the assembly line and rustproofing the whole van—Freight Rover pioneered a brand new rustproofing process, which has been copied by many other commercial vehicle producers—is that the vehicle will maintain a six or seven-year rustproof period. That is extremely desirable and acceptable to the customer and gives the company a niche in the market place which other more robotic-oriented manufacturers of vans cannot provide. Robots cannot be taught to fit a little bracket here or there—it must be done more or less by hand. That is not to say that the company is lacking in technology. It has what it describes as “islands of technology”, where robots are used for the basic welding of sub-components, body sides, and so on. The labour content is somewhat higher than in comparable factories because of the product that the company seeks to provide.

    There is no doubt that if General Motors were to become involved in the business it would look carefully at Freight Rover. It has told me that it very much likes the prospect of having the opportunity of selling the 3½ tonne Sherpa van, which is only two and a half years old and would fill a gap in the market for its Bedford range. However, one cannot foresee the possibility of GM making those vehicles at Washwood Heath. It makes no sense to GM to share a corner of one of Austin Rover’s factories, producing vehicles in conditions which are not ideal. The factory space is cramped. One will not find any plush carpets, potted palms and twinkling fountains at Freight Rover. One will find a fairly compact factory in which every square metre of space is used. That is how it should be in a successful factory. The empty space of tiled floors is not a recipe for success. One looks to see how well organised and compact a factory is. Freight Rover is certainly that.

    General Motors’ ownership of Freight Rover must have grave consequences. General Motors has not been able to spell out its exact future for the business, saying only that the workers there may be deployed to Land Rover production at some stage. GM has not been able to assure us categorically that jobs at Freight Rover will be maintained.

    What is the possibility of a management buy-out of Land Rover and Freight Rover? We have been assured that the merchant bank Schroder Venture, has come forward with the capital. It is confident that the business, according to market and sales consultants, can and will be a viable alternative. We have been assured that it can proceed on its own, funding its own resources with the possible introduction, within two years, of extra capital through partial employee participation and in the sale of shares to raise £50 million.

    The bank is confident that the business can find the funding necessary to produce new models. There is a question mark over this because Freight Rover has new models which have been developed in the past three or four years. Even GM concedes that there is no immediate intention of providing new models. Of course all companies have to develop their existing product range and refine it ever further, and Land Rover is no exception. It is certain from the statements by Schroder Venture and the management buy-out team that they can find the resources to develop the new models. Freight Rover needs £80 million to develop a new van range for its introduction in 1990–91.

    That might be a large sum, but we must remember that it will be spread over a five-year period. That sum of £80 million will last in product terms for more than 20 years. Unlike the car business, where the vehicles must be updated every four or five years, a van will stay in production for something like a quarter of a century. Indeed, the existing Sherpa van is a derivative of a product that first saw the light of day in 1958 and, far from being unacceptable in the market place last year, the Sherpa had a higher market share than it has enjoyed in recent times.

    The van market, therefore, does not change in quite the same way as the car market. The expenditure of £80 million for a product which will have a life of some 20–25 years is, I would submit, a sensible business arrangement and a sound investment.

    One must express concern, if one carefully examines the consequences of a GM buy-out, for the future ​ opportunities for Austin Rover dealers who depend on a freight van and Land Rover products to supplement their car sales. The loss of a van range and the badging of it as a General Motors-Bedford van, as it might possibly be called, is one which would be difficult for the dealers to accept. That would reduce their profitability and open up the market again to a Japanese derivative, which would come in to take up the gap in the market place left by the Sherpa van. We are not in the business of encouraging any further Japanese imports into this country when we have our own, acceptable United Kingdom-produced products.

    The future for the business as it stands is extremely good. The prospects are better now than they have been. General Motors’ involvement in Leyland Truck can only be commercially sound and is welcomed generally by all those involved in the business. I would submit that GM probably needs Leyland Truck as much as Leyland Truck needs the additional market and financial investment of GM. However, when one considers Freight Rover and Land Rover, it is hard to see on balance what benefits GM can bring to those organisations. It is true that they have the investment muscle but, alas, their history in this country is such that that investment muscle has not been used in the way that it ought to have been to create the jobs and products within this country.

    Although GM has invested quite a substantial sum, an awful lot has not been done by that concern. That leads one to have grave doubts about its commitment to Land Rover and Freight Rover in the future. The management buy-out scheme is ready and able to take on the challenge and I believe that it should be backed. A work force in the west midlands of some 10,000 people is employed at Land Rover and Freight Rover. It has worked incredibly hard over the past three or four years to turn these businesses round. There is not one family in Birmingham that has not been touched by unemployment, rationalisation and change. Land Rover is the only major product range that the city has to manufacture and sell and we are rightly proud of it. When we look at our colleagues at Jaguar and see the results of their work, we consider that the work that we have put in as a city, an area and as a region in turning these businesses round means that we deserve the right to participate in their future as they develop.

    This Government, above all others, have concentrated on the opportunities of creating a property-owning democracy by selling council houses and, good gracious, we have sold a lot in Birmingham, Solihull and elsewhere. We should extend that property owning democracy into a business-owning democracy. The thousands of workers at Land Rover and Freight Rover—and eventually at Austin Rover—should be given the opportunity of taking their place in the sun alongside their colleagues at Jaguar and so belonging to, and owning a part of, the company, working for its viability and its future. That is an opportunity that we should not pass by.

  • John Butcher – 1986 Speech on European Industrial Policy

    Below is the text of the speech made by John Butcher, the then Parliamentary Under-Secretary of State for Trade and Industry, in the House of Commons on 13 March 1986.

    I thank my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) for bringing this subject to the attention of the House. Many of my colleagues have observed his healthy fixation with this matter. He is motivated purely by a desire to help Europe produce a truly common market against which our industrial companies can make their marketing plans and, we hope, go on to achieve success on a world scale having taken advantage of that large and burgeoning market.

    My hon. Friend has asked two key questions—does Europe face an industrial problem and, if so, what can Governments do to tackle it, acting together in the European Community? In other words, do we need a European industrial policy and, if so, what sort of policy should it be?

    I entirely agree with my hon. Friend that there is a problem—a problem for Europe as a whole as well as for us in Britain. It is a problem of competitiveness: the global competitiveness of some sectors of European industry. It is manifest in the painful process of adjustment that has been necessary in our industrial structures, which is not yet complete. It is manifest equally in Europe’s relative weakness compared to the United States and Japan. Success is crucial in the new technologies if we are to create the wealth and jobs that our societies need.

    The symptoms are well known. The European Community’s share of export markets in some fast-growing sectors has declined. Between 1973 and 1983, for example, the European Commission has estimated that the Community’s share of export markets in electrical and electronic products declined by just under 2 per cent., while the United States and Japanese shares in the same sectors increased.

    Import penetration in similar sectors has increased faster in the Community market than in the markets of its major competitors. In information technology and electronics, for example, it has been estimated that penetration rates between 1973 and 1982 rose from 10 per cent. to 17 per cent. in the EEC; from around 6 per cent. to around 10 per cent. in the United States; and from around 4 per cent. to around 5 per cent. in Japan. Europe has been less successful than either the United States or Japan in creating new jobs. Since 1972, an additional 19 million jobs have been created in the United States and 5 million in Japan. In Europe as a whole, with a much larger overall population, employment levels have remained virtually static.

    What, then, can Governments usefully do to strengthen Europe’s industrial capability? Two strategies are sometimes suggested which would clearly not help—indeed, they would make matters worse. One is a strategy ​ of generalised protection: Fortress Europe. The other is a strategy of generalised state subsidy and state intervention. Both would be costly to consumers and taxpayers. Both would be anti-competitive, distort the market and blunt the edge of the primary stimulus to commercial success. For these reasons, neither strategy would ultimately work.

    As I see it, an effective European industrial policy must have three basic objectives. First, it must open up the internal Community market, making a reality of the single, integrated market envisaged in the treaty of Rome. It must improve the climate for enterprise in Europe, not least by tackling regulatory burdens on business. It must encourage closer market-led collaboration between European businesses, above all in advanced technology.

    The first of those objectives is fundamental. The sheer size of their home markets and the economies of scale that they afford offer American and Japanese industry a major competitive advantage. The creation of a similarly integrated domestic market for European business is perhaps the most important single step we can take to strengthen Europe’s industrial performance.

    The goal is a genuine European market of 320 million customers, matching the 230 million customers in the domestic market of the United States and the 120 million in the domestic market of Japan. The European Community has been working towards this goal for nearly 30 years. It still eludes us. True, tariff barriers and quotas have been effectively eliminated in intra-Community trade. But the free movement of goods throughout the Community is still obstructed by “non-tariff’ barriers, such as frontier formalities and differing national product standards.

    Similarly, the growth of a free and competitive market for services, particularly in sectors such as financial services and transport, which provide essential service infrastructure for manufacturing, is blocked by a range of restrictions in many member states. The efficient functioning of the European market as a whole is distorted by the protective use of public purchasing and other public sector aids. There is a new determination in Europe to tackle these problems.

    Last June, the European Council at Milan endorsed the broad thrust of an important White Paper from the Commission that set out a detailed plan for action required to complete the internal Community market by 1992.
    Mr. Speaker, it may be because of the early hour, but it is interesting to note that in the copy of my speech, the word “internal” looks disconcertingly like the word “infernal”. It may be something to do with the typewriter.

    The United Kingdom and the Netherlands, as the two countries occupying the Community presidency this year, have produced jointly the action programme targeting more than 100 issues for decision by the end of 1986. It will be a central aim of our presidency, in the second half of the year, to maintain maximum impetus behind that programme.

    A second aim of European industrial policy should be to improve the framework within which industry operates. That is partly a matter of action at national level on a wide variety of fronts. We in Britain are increasingly aware of the need to promote more positive attitudes to industry and to wealth creation; to make our education system more responsive to industrial needs; and to cut the burden of regulation on business. They are priority concerns for many of our Community partners, too.

    The third objective that I identified was to promote European business collaboration in advanced technology. In telecommunications, for example, about 15 European companies are competing for a share of the European market—as compared with the four or five giant American firms which dominate the United States market. The pattern is much the same in other growth sectors. Collaboration within an increasingly integrated European market is inevitable if a competitive European presence in those sectors is to survive.

    Collaboration in research and development—spreading risks, spreading costs and exploiting the strength of pooled resources—is one major way forward. The Community has developed some important support schemes to encourage collaborative R and D at the so-called ”pre-competitive” stage. The ESPRIT programme, for example, which is focused on information technology and complementing our Alvey programme, is starting to gather pace. We have the BRITIE programme for industrial technology, and RACE for broad-band communications.

    Such programmes reflect a welcome shift of emphasis in Community-funded research. They are directly relevant to industrial needs. They use Community money—public money—to stimulate spending by business. In discussions which are starting in Brussels on a new framework programme for Community R and D in the five years 1987–91 we are determined to encourage this trend towards market-oriented, cost-effective effort.

    But action at Community level is not the end of the story. Industrial collaboration in Europe can often usefully extend beyond the 12 member states. The aim must be to develop specific products or services which will be competitive on world markets. Both those elements are central to the EUREKA initiative. EUREKA is giving major impetus to European collaboration in new technology. Eighteen European countries are involved. More than 20 collaborative projects are already at an advanced stage, and British firms are participating in six of them. They are actively pursuing proposals in many other areas. We are currently hosting and chairing the EUREKA discussions. It is fair to say that our thinking has made a major contribution to the shape of the initiative, following its successful launch by President Mitterrand last year.

    EUREKA is not, and could not sensibly become, a new financing mechanism. Finance for EUREKA projects is a matter for the participating firms, with support where appropriate from their national Governments under national schemes. I should add in this connection that British firms participating in worthwhile EUREKA projects can qualify for assistance under our existing R and D support schemes.

    EUREKA offers two important advantages to industry. First, it will wire British and other European firms into a Europe-wide network for the exchange of information on new collaborative proposals and opportunities. Secondly, and even more important, it will provide a framework in which business and Governments can identify, and put new momentum behind, concrete action in the Community and elsewhere, to open the European market for the benefit of the projects concerned. There could be action, for example, to generate new European technical standards or to liberalise public sector purchasing.

    I have outlined what, as we see it, is a co-ordinated European industrial policy and what it can sensibly seek to achieve. I hope that my hon. Friend agrees that no ​ industrial policy vacuum in Europe is crying out to be filled. The reality, rather, is that the Community as a whole is already acting in the areas I have described to strengthen Europe’s industrial base. Progress in those areas is essential for the health and competitiveness of industry in Britain and in other member states. We are throwing our full weight behind the initiatives in hand.

    I thank my hon. Friend the Member for Clwyd, North-West for bringing this matter to the attention of the House. I noted his endorsement of the need for what he called a Minister responsible for co-ordinating procurement and industrial policies generally, and his suggestion that full weight be given to the European alternative. No doubt those words, which are now on the record, will be noted in the appropriate quarter. In the interests of the hon. Member for Burnley (Mr. Pike), who, with great professionalism, has decided to launch his debate at 7.34 am, and those of my hon. Friend the Under-Secretary of State for Health and Social Security, the best thing that I can do now is to thank my hon. Friend once again and to wish you, Mr. Speaker, a very good morning.

  • Anthony Meyer – 1986 Speech on European Industrial Policy

    Below is the text of the speech made by Anthony Meyer, the then Conservative MP for Clwyd North West, in the House of Commons on 13 March 1986.

    The subject I want to raise is the need for greater industrial co-operation in Europe. By Europe, I do not specifically and solely mean the European community, and when I talk of industrial co-operation I am not solely referring to ordinary industry; I wish to include the defence industries.

    It is a subject to which I propose to return on future occasions because I believe that, if we can inaugurate more far-reaching and more constructive co-operation between the European countries in this field, we can go some way towards tackling the unemployment problem, which must be a matter of concern to every one of us.

    Across the European Community, unemployment in the 12 member states is more than 14 million. While much of this unemployment may appear to be structural and as a result of technological change, and some of it may appear to be the result of temporary economic conditions, the fact is that, during the period that this is happening in the European Community, in the United States there has been a startling success in the creation of fresh employment so that unemployment levels in the United States remain at an acceptable level; and in what are undoubtedly our most dangerous competitors, that is to say, the industrialised countries of the Pacific basin, unemployment is at a very low level.

    The inference is clear, that Europe is not taking advantage of the assets it possesses in order to strengthen its industrial base and to reduce its unemployment. It is, of course, generally known that the European Community is a long way from being even the common market, which is the most basic of its aims, further still from being any kind of an economic unit which would enable the member states composing it to take full advantage of it as a means of securing employment.

    One of the points I will be urging on the Government is that they should live up to their own professions in this matter and that they really should give overriding priority to the completion of the internal market by sweeping away the barriers to trade, and particularly to trade in invisibles, which still exist.
    Generally when Members of Parliament say that they conjure up a vision of obstructive Italian frontier officials, French customs arrangements at Poitiers for the import of Japanese goods and German obstructionism in the market of insurance. But there is a very large beam in our own eyes in the habits and mentalities of HM Customs and Excise which regards itself in many respects as being almost above the law. Anyone who has attempted to import anything through any of our ports will not, I think, rush to the conclusion that our customs is much more attractive in these matters than those of other countries.

    I do not think that Customs is coming under a great deal of pressure from the Government to be any more easy going in these matters. Of course, we bring forward the arguments about the needs to control drugs and to control rabies, and both are perfectly valid arguments. None the less, it is difficult to avoid the suspicion that these are being used in many cases as a pretext for slowing up the inflow of goods. What is sauce for the goose has to be sauce for the gander, and if we want our goods to flow freely into Europe we must allow European goods to flow ​ equally freely into us. The Channel Tunnel will be a step in the right direction, provided that other obstacles are not put in the way of the operation of this tunnel.

    However, that is not my main point. Sweeping away obstacles to internal trade will undoubtedly assist in the development of a single market. A single market of 273 million customers must be a very powerful home base for any industry. But there is rather more to what I want to say than that. We have witnessed over a very long time span—in Britain’s case probably since about 1870—the gradual and seemingly inexorable loss of industrial supremacy.

    In the 19th century the United Kingdom was the workshop of the world. Anybody abroad would buy almost anything that was made in Britain, precisely because it was made in Britain. That position has been eroded over the years. Two world wars have wrought their toll. We have gradually seen what were once undisputed British industrial supremacies disappear down the plug hole. What happened to the great British motor cycle industry which at one stage was almost the sole motor cycle industry in the world? Little by little we have seen such industries disappear.

    We are at a particularly dramatic moment in this process of disappearance, with the future of British Leyland very much on our minds. I do not intend to say very much about British Leyland, because there has been a debate on that subject. However, when it became apparent that British Leyland would have great difficulty in surviving as a mass car producer because it is very much smaller that any of its competitors two possibilities opened up for it. One was that it should be taken over by General Motors. The other possibility—the one that is being very much trumpeted by my hon. Friends with constituencies in the Midlands and by the Opposition—was that there should be a purely British rescue operation. Neither of these possibilities meets the bill. I accept that the American takeover makes some kind of economic sense, but an American takeover would represent a very large step towards the abandonment of a true, native-based industry. The British solution would lead us back, I fear, to the time when British Leyland was a permanent pensioner of the British state.

    It is probably too late now for the third and, to my mind, the right alternative. Before we ever got to where we are, there ought to have been in existence the possibility of a partnership between British Leyland and one of the European manufacturers. It need not necessarily have been one of the EEC manufacturers. It could have been Volvo. That would have complemented BL’s capacities in such a way as to produce a viable firm that would have been multi-centred and whose ownership would have been basically European. If British Leyland had joined up with one of the German or Italian manufacturers, it might have contained a very large American element. I am not arguing in favour of a policy that would try to shut out the Americans. However, I am arguing that we should seek to have a policy that includes, wherever appropriate, a very substantial European element.

    The same set of arguments apply to Westland. My right hon. Friend the Member for Henley (Mr. Heseltine) made a valiant and ultimately unsuccessful effort to mount a European rescue effort for Westland. Once again it was too late, not due to any culpability of Her Majesty’s Government but largely because such “rescue” as loomed ​ up over the horizon from Europe looked more like an attempt by the European manufacturers to snuff out Westland as a possible competitor. The faults are not on our side alone. But when we add them all together we get a failure both by Her Majesty’s Government and by the Governments of the European countries to make any use of the Community as an institution to exert its influence as a powerful trading bloc to sustain its own industry.

    The argument will present itself in another particularly acute form over the future of the European airbus family of aircraft. I am sorry that my hon. Friend the Member for the City of Chester (Mr. P. Morrison) is not answering the debate, because he has a particular interest in the project. The airbus has been a tremendous success technically. Of course, it is far too soon to prophesy whether the Government, or those who put their money into the project, will make a profit.

    We have the siren voice of that once sensible publication, The Economist, urging strongly that the British aircraft industry should surrender without a fight to the Americans and that we should allow all major civil aircraft to be built in the United States, leaving it to Boeing and McDonnell-Douglas to fight it out between them. That is a craven act of folly when the possibility exists of maintaining a capacity in Europe to produce not just an aircraft but a whole family of aircraft capable of meeting the demands of the world market at almost every level. I earnestly pray that the Government will listen not to The Economist but to those Ministers, of whom I am sure my hon. Friend is one, who will urge the vital importance of maintaining a capacity for the construction of civil aircraft in Europe. Here at least is one industry in which we for the moment are not faced with knock-out competition from the Pacific basin and where we should be unwise in the extreme to surrender all our advantage.

    That leads me to public procurement, which involves not only Governments but also governmental agencies. One sometimes has the impression that European airlines in all too many cases deliberately operate a “buy American” policy. If the airlines operated a European preference when they make purchases of civil aircraft, that might in itself suffice to sustain a European civil aircraft manufacturing capacity.

    The record on public procurement is frighteningly dismal. In 1982, the last year for which figures are available, in all its public purchasing the United Kingdom spent no less than 98·3 per cent. of Government cash on equipment made within our own borders. That left 1·7 per cent. with which to encourage joint ventures overseas. Though a dismal record, it is better than the Germans, who left not 1·7 but 0·3 per cent. for joint ventures; or the French, who left the enormous total of 0·09 per cent., or the Italians, who left nil per cent. of public expenditure to be spent outside their own borders.

    This reflects the enormous public political pressure in favour of a buy native policy, and one need sit in this House for only a few hours to hear it, and understandable it is. Obviously, every hon. Member will urge as strongly as possible the arguments in favour of spending public money in his constituency. I remember fighting hard for the retention, for example, of steel-making at Shotton. From a constituency point of view, that was an unanswerable case. Nevertheless, there was a national case which required that steel-making capacity should be ​ concentrated in those areas where there was a natural case for having steel-making, and Shotton was not one of them. I was, rightly, overruled in that instance.

    When we talk about the car, helicopter or machine tool industries, two sets of arguments operate at a political level. There is a powerful economic argument which says, “Let us go for the most immediately profitable solution which will bring the best return to the shareholders and give the workers in the industry the best guarantee of maintaining their jobs.” That argument often operates in favour of an American, Japanese or even an Arab takeover.

    The other argument, deployed by Back Benchers on both sides of the House, says, “The best way to do it is to use public money to maintain a buy British policy, a subsidy, a purely British solution.” There will always be those who will argue for a national solution for whatever industry comes into the public domain of discussion.

    What never operates is pressure to say, “Let us look for a solution which takes advantage of our membership of the European Community” or, at a lower level, “which takes advantage of our proximity to Europe—be it Switzerland or Sweden—which will enable us to construct an alternative future for this industry or firm and which may, in the short run, not offer the same advantages to the shareholders.”

    It may not even offer the same security of employment to its workers, but it may offer long-term possibilities for industry and for the future of employment in Britain. That may not be available through a purely British solution entailing a permanent subsidy, or through an American solution involving a total takeover, with the risk that, when the chill winds blow, the Americans will close down their out-stations, as it were, and concentrate production at home—after all, they are subject to the same pressures—to safeguard jobs in their country.

    There are no democratic pressures on the Government to exploit to the full our membership of the European Community to ensure the prosperity of British firms and safeguard British jobs. The pressures are all against such solutions. It is for the Government to see matters as a whole and to make the maximum use of our membership of the Community to achieve our objectives.

    There should be much faster progress of the consolidation of the internal market. A substantial step forward could be achieved by stabilising the exchange rate through the exchange rate mechanism of the European monetary system. All of these matters are major policy decisions which can be achieved only in concert with our European allies. I know how difficult that is until we have a much improved decision-making process in the EC, which means moving away from the veto, but I shall not go into that.

    There should be a Minister responsible for coordinating procurement and industrial policies to ensure that, whenever a controversial decision comes up, full weight is given to the European alternative. Several Departments are involved in that. The Department of Trade and Industry is one and the Ministry of Defence is another. Perhaps I should have enlarged on what is happening in the arms industry. Each country, by drawing a narrow specification of its requirements, has made it virtually impossible to achieve European co-operation. The result is that, one after another, we are equipping ourselves with expensive weapons which are unsuitable ​ for use by our allies. This is a NATO matter—the NATO group in Europe is not maximising the opportunities. The Department of Transport has a critical role to play, and the Treasury is also involved in matters such as I have mentioned.

    If, in Cabinet, there was a Minister who could say, “Wait a minute. There may be a better but not so immediately attractive European alternative” we could achieve much more in the Community and in the European part of NATO to sustain jobs and preserve industries which otherwise face a pretty grim future.

  • Peter Pike – 1986 Speech on Hospital and Ambulance Services

    Below is the text of the speech made by Peter Pike, the then Labour MP for Burnley, in the House of Commons on 13 March 1986.

    I intend to change slightly the content of my speech because of the time of the morning; I wish to give the Minister an opportunity to reply to the debate. Although I had intended to refer in some detail to other parts, I shall restrict my comments to my own constituency and to my own area of the Burnley, Pendle and Rossendale district health authority; concentrating on the problems of hospital closures and reductions in the ambulance service caused by Health Service cuts in that area. This, of course, does not mean that I have failed to recognise that these problems affect the whole country, as all parts have been forced to cut services because of Government restrictions of the finance available for the Health Service.

    In my own constituency it was recently announced that two hospitals are to close, Marsden hospital and Bank Hall hospital. It was originally envisaged that the role of both these hospitals would change because of developments taking place at Burnley general hospital. When the 10-year plan for the district health authority was introduced, I welcomed the developments that were taking place at Burnley general hospital and never for one moment imagined that the two hospitals which are due to close would keep their current format.

    Having said that, however, until it can be shown that in the area that I represent and in the country as a whole we have eliminated the long lists of people waiting for medical and surgical treatment, and have provided all the necessary geriatric accommodation, I cannot support the closure of a single hospital, and I think that the step that we are taking is a retrograde one. This is especially so in an area like mine, based on the two traditional industries of coalmining, now completely gone, and textiles, both of which give rise to health problems for those working in them, particularly chest problems. Many have underestimated the effect of cotton dust in the air and of the artificially damp atmosphere that was created for the benefit of the cotton rather than that of the people working in the industry. So we have many people with chest problems, and a corresponding need for accommodation and facilities to deal with them. In addition, areas such as north-east Lancashire and Burnley, in particular, have a growing number of elderly people; we certainly need much more geriatric accommodation.

    A big campaign is already being mounted by the borough council, the Labour party and the trades council, to fight to save the hospitals and to provide the Health Service facilities that we believe the people of our towns are entitled to. We shall be supporting the prospective candidates in Pendle, Sylvia Renilson, and in Rossendale, Janet Anderson, and the many people who are fighting to preserve the hospitals due for closure, and opposing the cut-backs in the hospital services in their areas. Indeed, the Pendle borough council, which has no overall political control—Labour controls the largest party but does not have overall control—is mounting a massive campaign with all-party support to save the Hartley hospital. When I am arguing for the two hospitals in Burnley—Marsden and Bank Hall—I am not arguing for them at the expense of either Pendle or Rossendale. I would not wish to see Marsden or Bank Hall saved at the cost of losing one in Pendle or Rossendale.

    The Minister should look at the medical report of the district medical officer, Dr. Grime, which shows clearly that there is a great demand for more resources for the Health Service, rather than less, in north-east Lancashire in the Burnley, Pendle and Rossendale health authority.

    The closures are clearly being made to save money—£1·5 million. But when I returned to my constituency yesterday, I was informed that at the meeting of the district health authority, held only the previous night, cuts of a further £1 million had been requested and further drastic action had to be considered.

    It must be said that even moderate people on that committee—Mr. Ashworth, who is a registrar at the county court—were talking of allowing the Government to call in the commissioners to do the dirty work because enough was enough and further cuts could not be countenanced.

    Even Muriel Jobling, the chairman of the district health authority, because she has tried to resist some of the proposals—and I do not know her political party—and has not toed the Government line, has had it suggested to her by the chairman of the regional health authority that she might say that she did not want to seek another term as chairman of the district health authority. She did not choose to do that and so she has been told that she is not being reappointed. Yet she has fought to try to preserve the Health Service for the community. The protest of people from all political parties and all parts of the Burnley, Pendle and Rossendale district health authority has shown the amazed outrage at the decision that she should not be reappointed.
    The second aspect of the debate is the restriction of ambulance services and the cutting of that service within Lancashire. That is causing people throughout Lancashire grave concern. Indeed the Burnley Express and News and in particular the Lancashire Evening Telegraph have run a big campaign attacking the new proposals and policy changes that were introduced on 6 January when a quota system was introduced to try to avoid an overspend.

    A letter from the Lancashire family practitioner committee dated 4 February to the regional general manager of the North-Western regional health authority said that it had considered a report at its committee meeting on 29 January on the current situation in the Lancashire ambulance service. The letter went on to express the concern of general practitioners at the effects of the introduction on 6 January, without prior notice, of a quota system for outpatients as a result of an anticipated overspend of £250,000 in the current financial year by the Preston health authority, the managing body for ambulances for the seven Lancashire districts. Preston health authority has, on a number of occasions, sought additional resources from the regional health authority to offset the continued effects of repeated efficiency savings and cost improvement programmes. The Lancashire family practitioner committee registered its gravest concern at the present situation and rejected completely the interim solutions which had been introduced. It called on the regional health authority to provide further resources to cover the projected overspending until the results of the review of Lancashire ambulance services, which has been commissioned by the regional health authority, are available. Similar views have been expressed by Burnley, Pendle and Rossendale community health council. It wrote to Preston district health authority on 11 February and sent a copy to the hon. Members ​ representing the three constituencies within its area. It expressed concern at the authority’s failure to consult the community health council regarding what it viewed as a “substantial variation in service” and concern at the distress caused to patients by this action. The letter said:

    “my members are amazed to have read a statement in the press from yourself and officers that as a consequence of reducing the workload in regard to transporting out-patients to hospital by some 35 per cent., some inconvenience will be caused to patients.”

    That view was being expressed to the chairman of the Preston district health authority.

    The letter attaches a schedule of cases where seriously ill patients have failed to keep their out-patient appointments. It is a long list and it is being added to all the time. It gives an example of a 43-year-old lady who was thought by her general practitioner to have suffered a stroke. She was refused an ambulance by control staff because the daily quota had been reached, despite the fact that she needed to attend the hospital x-ray department for a brain scan. It was eventually discovered that the lady had a brain tumour. I can give many examples, but time is short. It is a nonsense to run an ambulance service on a quota system which says that if the quota is used up during the first three days of the week no ambulances will be available on the next two days. As I have said, I have a long list and if the Minister wishes to look at it I will provide him with a copy.

    The change has also resulted in wasting the time of professional Health Service personnel, particularly physiotherapists. It has increased the work load for hospital administrators, who are now continually having to change patients’ appointments because the quota system means that patients cannot attend on the date or time for which the appointment was originally made. Disruption has been caused to the work of outpatient clinics.

    Ambulance men allege that the time and capacity of ambulances has been wasted because they do not always carry a full load and additional spaces have been available. There was a manpower shortage in 1984 and at that time transport was hired and hospital car volunteer drivers were used, mainly for day care cases, at a cost of £300,000.

    Finally, because I want to allow time for the Minister to reply, I want to deal with the important aspect of people who have had their training blocked and are not being allowed to do emergency work or anything else, or complete their training in the ambulance service. That is a matter of great concern. As I understand it, the reason for that is to save money. Once people are fully trained they will have to be paid slightly more. I know that the National Union of Public Employees is taking legal advice on that and is fighting on behalf of its members and is trying to ensure that they are able to provide the services necessary for running outpatient and emergency services.

    It has to be said that emergency services have now been so cut to the bone that in times of major emergency, or two incidents happening at the same time during certain stages of the night, ambulances would not be able to provide the much-needed service to the people of North-east Lancashire. These issues, at this early hour of the morning, are crucial to the people of north-east Lancashire, Burnley and Lancashire as a whole. I believe that the cases I have illustrated are examples of what is going on, not only in my part of the country but throughout the length and breadth of this country because of the cuts being imposed by the Government.

  • Jeremy Corbyn – 1986 Speech on NHS Pay

    Below is the text of the speech made by Jeremy Corbyn, the Labour MP for Islington North, in the House of Commons on 13 March 1986.

    It is interesting that today we are having a number of debates on the National Health Service. That reflects the great public disquiet about its administration and the appallingly low levels of pay. I wish to draw attention to that issue.

    First, I say with pride, not by way of apology, that I am sponsored by the National Union of Public Employees, and it is right and proper that that should be on the record. I was formerly a full-time official of that union, working in the NHS, and at one stage I was a member of an area health authority, so I have some experience of NHS matters.

    There is grave disquiet within the NHS about the way in which staff are treated. During the past five years NHS workers have suffered from the threat of privatisation, which essentially means that many ancillary staff are being asked to offer their job on an annual or biennial basis to the lowest bidder, as a series of contract cleaning and catering companies line up to take the pickings from the NHS. That has resulted in job losses and a reduction in the real wage levels of many workers, and has created a climate of fear and intimidation. I hope that the Minister will try to understand what it is like to be a hospital cleaner, knowing that one’s job is with a contract cleaning company, whose bid the following year may not be successful, and that a new contractor may pay even lower wages or not offer one a job. A series of hired hands are moved from one contract cleaning company to another.

    Other groups and grades feel equally worried. It started with cleaners, moved to catering staff, and may move to building staff, the various maintenance and gardening grades and right up the scale. The NHS has a major function to play, and we could and should be proud of it. It is no way to treat employees every year to offer their jobs for sale to contractors. If it can be done for cleaners and catering grades, clearly it can be done for many other grades. A number of technical and professional grades already feel the cold wind of privatisation.

    Late last year, as in the previous year, the Department of Health and Social Security produced a glossy book called:

    “The Health Service in England”.

    It is designed to make us believe that the NHS is doing particularly well. Table 19 on page 43 deals with Health Service employed staff by main staff group for England, and shows that nursing and midwifery staff increased from 351,000 to 397,000—an increase of 13·2 per cent.—and lists other grades showing increases in staffing levels.

    I am particularly interested in the treatment of ancillary staff. Their numbers have decreased from 172,200 to 152,200, which is an 11·6 per cent. reduction over six years. That reduction appears to be continuing. The ancillary grades are not only the lowest paid in the National Health Service but are suffering the largest number of job losses.

    On page 46, appendix C shows Health Service expenditure on staffing, goods and services broken down into salaries and wages and supply and maintenance. Within the section on salaries and wages is shown the proportion of total wage expenditure that goes on nurses ​ and midwives—44·5 per cent.—and on ancillary staff—15·3 per cent.—medical and dental 13·7 per cent. and so on. However at the end as a tiny footnote there is “Chairmen’s remuneration 0·03 per cent.” There are not many chairmen in the health authorities, but together they managed to collect £1·7 million in chairmen’s remuneration. When one compares that with the average wages of an ancillary worker one begins to understand the issues I am concerned with. At one end of the scale in the National Health Service we have the doctors’ remuneration at £21,000 a year. However, they are in dispute, as consultants get far more than that. There is also the absolute scandal and disgrace of the ludicrous merit award system, which operates for consultants. Essentially, consultants nominate each other for merit awards, it is done in secret, and the public pick up the bill without having any say in the levels of merits awards that are made to those people. I believe that the last figure quoted was something like £20 million being handed out to themselves in merit awards.

    I am not saying that the doctors, consultants or surgeons do not do a valuable job. One could not run a health service without them. However, I am sure that most of those people would agree, that neither can one run a health service without cleaners, caterers and portering staff. It is a team approach that is adopted in the hospitals and I wish that the Government would understand that with regard to pay. My hon. Friend the Member for Wrexham (Dr. Marek) spoke in the previous debate about job losses and cuts within the National Health Service. He mentioned the temporary closure of St. Thomas’s hospital and the threat to Westminster hospital. Yesterday there was an announcement in a local paper of job losses at St. Nicholas’s hospital in south-east London.

    The closure of the Dreadnought seamen’s hospital resulted in yesterday’s strike of cross-channel operators because they are not prepared to see their hospital close. That is the degree of the frustration and anger that exists among the supporters of the National Health Service, never mind those who are within the Health Service.

    I wish to put specific questions to the Government regarding pay. The pay for nurses and midwives has been in the public eye recently and is a matter of public concern. The cause of the concern is the pay gap between nurses and other grades and the way the award was funded. Health Service workers are not prepared to go on being told that they can agree a pay level—an agreed national level—through negotiations and then be told by the Government that the Government are not prepared to pay that award in its entirety, instead passing part of the cost of the award over to the local district health authority.

    That is specifically intended to create an atmosphere wherein, if the health workers accept lower wage rates, there will be more money spent on patient care. We know that this is not the case. It is a cynical manipulation of the way that negotiations should be conducted within the National Health Service.
    I wish to quote from the evidence submitted by my union, the National Union of Public Employees, in its pay review body document 1986 for nurses, midwives, and health visitors.

    “There is still a large pay gap. When we compare current pay levels with the levels established in 1974 by Halsbury and in 1980 by Clegg, and take into account movements in prices and ​ earnings since those dates, we find that a large pay gap amounting to nearly 20% of current salaries exists. It is important to emphasise that the comparison with pay levels set by Halsbury and Clegg is not intended to be purely mechanical. Our point is that on each occasion when an independent review has taken place of nurses’ pay in relation to the pay of comparable outside occupations, a substantial increase in nurses’ pay has been recommended to bring it into line. We believe that this is strong evidence that a similar independent study carried out today, making similar comparisons, would establish that a substantial increase is needed across the board in order to restore fair pay for nurses. In short, a big gap remains, and a substantial across the board increase is needed to fill it.”

    Later in the evidence of the staff side to the nurses and midwives Whitley council, it says:

    “The Review Body must now be aware of the grave concern and anger within the profession which was caused by the Government’s decisions relating to the funding and staging of the 1985 award, although the tone of the Government’s written evidence gave some indication of the cynical and intransigent view it held with regard to funding the award of an independent Review Body. It will be recalled that having acknowledged that the paybill for nurses and PAMs in 1983–84 was some 36 per cent. of health authorities’ total costs, the Government subsequently stated that pay costs in excess of those allowed for in the public expenditure programme would not be funded.

    The Government’s written evidence concluded that ‘the higher pay settlements turn out to be, the less service development will be possible overall’ (para C10). On its own admission this position represented a significant departure from previous years when the level of financial provision has been reviewed in the light of Review Body recommendations and the Government’s decisions on them”.

    On nurses’ pay and prices, it goes on to say:

    “the current (April 1985) value of the Staff Nurses’ pay remains significantly below its real 1975 value. By April, 1986, even with the second, delayed, stage of the 1985 award taken into account (February 1986), the increase in Staff Nurses’ pay since 1975 will have been insufficient to accommodate the effect of inflation, let alone facilitate the rise in living standards which has been the experience of the majority of employees over the period.”

    That is the cry of health workers over the past 15 years or longer at the way that they have continually been left behind other grades, industries and professions.

    It is not only the nurses and the ancillary grades that are concerned, but the doctors, who have seen over the years their 1981 review body decision reduced from 9 per cent. to 6 per cent. and in 1984 and 1985 the fourth and fifth rejections of pay review body recommendations. There is anger across the Health Service about pay levels.

    Ancillary workers in the Health Service have suffered the largest cut and received the lowest pay, and are very much at the bottom of the pile in the hospital, but no hospital could operate without catering workers, cleaners and porters, all those who do the dirty, filthy unclean jobs that nobody else wants to do. They deserve a substantial increase in their basic levels of pay. There is no reason why people have to live on the poverty wages that they are getting.
    I have before me the payslip of a woman in my constituency, Mrs. Gertie Turner, who is employed at the Whittington hospital at Archway. For 23 years and three months she has worked in the Health Service. Until 1977 she worked in the laundry as a press hand, until that department was closed, and since then, she has worked in the linen room. She has the important job of ensuring that the linen is distributed and is available for all the beds, as patients come and go. She has to ensure that the linen is there on time.

    I am sure that every hon. Member will agree that such people are the backbone of the Health Service. Mrs. Turner’s basic pay is £80.10. She gets a bonus of £17.06 ​ and a London weighting of £13.50. Her weekly pay and allowances total £110.66. After stoppages, she takes home £67.34 for a full week’s hard, responsible service. This is a disgraceful figure for somebody who has put in so much work for the Health Service in such a responsible way.
    I turn to the claim that has been put forward on behalf of Gertie Turner and thousands of other people like her in the National Health Service. The 1986 trade union claim for ancillary staff council employees includes:

    “1. A substantial flat rate wage increase, as a major step towards the target of two thirds of national average earnings.
    2. A revision of the grading structure on equal value principles.
    3. A substantial increase in shift and related payments.
    4. A reduction in the working week to 35 hours.
    5. An increase in annual leave and a change in the calculation of leave from a retrospective to a current basis.
    6. A change in the public holidays agreement to provide entitlement for part-time workers whose work on fixed days currently excludes them from most public holidays.
    7. The right of access to arbitration.”

    When I talk about poverty levels of wages and poverty pay in the National Health Service, there is plenty of evidence to support what I am saying. The TUC definition of low pay, two thirds of average male earnings, is £109.06 in 1985 and 117.78 in the current year. The Low Pay Unit has slightly different figures of £115.20 and £124.41. The Council of Europe’s decency threshold, 68 per cent. of the average of men and women, shows a figure of £116.28 and £125.58. The supplementary benefit levels for a family with two children would be £123.61. By all those criteria, people like Gertie Turner are well within the current poverty pay levels.

    I quote next from the document which was put forward by all the trade unions on the ancillary staffs council, trade union side, at page 7:

    “In April 1985 the difference between the average weekly earnings of male NHS ancillary workers and male manual workers throughout the economy was £40.10. The gap with average male earnings was nearly £70 per week. The equivalent earnings gap for women was £96.84 Ten years ago, the earnings gap with male manual workers was £4.90. Nearly 50 per cent. of male ancillary staff earn as little as the lowest 10 per cent. of all manual workers throughout the economy.”.

    The booklet goes on to demonstrate that the problem is even more serious for women full-time ancillary staff. Despite equal pay legislation over the years, it is quite clear to me that women workers in the National Health Service get significantly less on average than their male counterparts.

    When a comparison is made of the earnings of female and male full-time ancillary staff as a proportion of all male manual earnings between 1970 and 1985, it is found that there are certain high points. There was a high point in 1971 when women earned 55 per cent. of the male average and men earned just under 90 per cent. There were then the low points which led to the 1973 dispute. After that there was the award which took men to 90 per cent. and women to just under 70 per cent. of earnings. Then there was the low point which led to the 1979 industrial dispute. Following that there was the Clegg award that took women up to about 65 per cent. and men up to about 85 per cent.

    The current position, from graphs provided not by trade union sources but by the Government’s new earnings survey, is that at present NHS women workers are well below 60 per cent. of male manual earnings and men are just under 80 per cent. of that figure.

    Frequently employees in the National Health Service have had their wages compared with those in local government. The gap now exists on every grade between workers in the local authorities who are not overpaid by any means. Under the local authority manual workers’ agreement a cook would get £92.40 a week. A National Health Service ancillary cook on grade 6 would get £82.92 a week. At the other end of the scale, a local authority dining room assistant or kitchen assistant—that would be somebody working in the school meals service or in a municipal canteen—would get £83.20 a week. A NHS ancillary worker—canteen, grade 1, domestic—would get £72.53 a week.

    Therefore, NHS workers are not happy The Government must tell us what their policy is towards low paid workers in the NHS. And what is their policy on pay generally in the NHS? When the awards are agreed this year for all grades in the NHS, will the Parliamentary Under-Secretary of State undertake that those pay awards will be paid for out of national funds and not by local health authorities being forced either to lay off staff, close hospitals, close wards temporarily, or to lock up wards to subsidise the Government’s expenditure in other areas? Will the Government give an undertaking that no longer will health workers, who maintain the health of this nation and who work so hard, for so long and for so little, have to suffer the indignity of poverty wages? I find it ironic that so many Department of Health and Social Security employers are forced at the end of each week to go to another arm of the DHSS to register for the various benefits to which they are entitled because of the poverty wages that they are given in the first place by their main employer, the DHSS.

  • John Major – 1986 Speech on Elderly Persons in Rest Homes

    Below is the text of the speech made by John Major, the then Parliamentary Under-Secretary of State for Health and Social Security, in the House of Commons on 12 March 1986.

    I have listened with care and interest to the wide-ranging speech of my hon. Friend the Member for Southampton, Itchen (Mr. Chope). In the time available I shall respond to as many of his points as possible. I welcome the opportunity ​ to debate this important issue, and understand and sympathise with many of the concerns that he has expressed. It is characteristic of his assiduity on behalf of his constituents that he has pursued this matter extremely vigorously over recent months. I have no objection to that, although I have frequently been on the sharp end of his activities, because few topics are more pressing to those concerned with social welfare than the provision of care for our growing numbers of elderly, especially very elderly, people. There will be an increasing number of them in society year upon year for as far ahead as we can see.

    First, I wish to look at the background to the present circumstances since it is important that it is properly understood. There have been radical changes in the past few years, which have transformed the whole character and scale of the provision of help for the elderly. Historically, many people who could no longer cope on their own have gone into local authority homes, or local authorities have sponsored them in private or voluntary homes. Many others have been cared for in the long-stay geriatric wards of our National Health Service hospitals.

    The new and welcome feature of the 1980s has been the substantial opening up of the private and voluntary sectors to many more people, who have been able to exercise choices previously open only to those with substantial private resources. That has occurred because of the substantial availability of high rates of supplementary benefit, which has become a major source of funding, enabling many people to be cared for in the private sector. The figures show beyond dispute the rapidity of this change. In 1978 supplementary benefit helped 7,000 people to pay their fees in residential care and nursing homes.

    By 1984 the estimated figure was not 7,000 but 42,000, a sixfold increase in as many years. Expenditure too has risen sharply. The figures have been often quoted but they bear repeating. In 1978 expenditure in this area was £6 million. By 1983 it had soared to just over £100 million and the estimated figure for 1984 was £190 million. It will undoubtedly be higher in 1985.
    In most ways, that growth has been beneficial. But the system was open to exploitation and abuse; and it had other features which have caused widespread concern. In the longer term, we would very much like to find a way of restoring a greater measure of responsiveness to individual need. My hon. Friend dealt particularly with that point.

    More immediately, I must reiterate what I have said. We simply could not have allowed the growth that was continuing prior to April 1985 to continue uncontrolled, in the interests both of the taxpayer and of the elderly residents themselves. My hon. Friend will know that the numbers of elderly in the population are increasing, and they must be cared for. We entirely accept that and are anxious to seek the best ways of caring for them in their interests and those of the taxpayer. Therefore, it is right that we should make a comprehensive attempt to address this issue, not simply fudge it by paying ever-increasing amounts of benefits, as some people have urged on us. We need to take a comprehensive look at residential care and that is what we are seeking to do in a number of surveys that we have undertaken.

    As a first step, in April last year we introduced a new structure for the payment of supplementary benefit to people in homes. Our aim was to regain control of expenditure and to relate benefit levels to the type of care ​ and the cost of care provided. The system of limits that we introduced was intended to allow reasonable charges to be met on the basis of the registration categories set out in the 1984 Act. The limits were set by reference to the best information that was available to us and for residential care homes they initially ranged from £110 to £170. I should mention that the limit for Southampton before April 1985 was £110, the same amount as the limit we set for the elderly under the new structure that we introduced in April.

    My hon. Friend asked about the position of people who were already in residential care homes when the changes were made. We have provided, as he acknowledged, extensive protection arrangements for people in homes who were in receipt of benefit when the changes were made and who would otherwise have been adversely affected. Those over pension age will continue to get their existing benefit for life or until payment under the new rules becomes more favourable for them. The new limits will normally apply to those who were in homes but not claiming benefit before April 1985. However, as my hon. Friend acknowledged, in cases of exceptional hardship the Secretary of State has discretionary power to treat certain long-standing residents in a similar way to transitionally protected claimants.

    My hon. Friend asked particularly about the vexed question of topping up payments, which he believes is being misunderstood, and I believe that he is correct. He asked me to spell out the position. I assume that he was referring to payments made by relatives or charities to meet the difference between the supplementary benefit payable and the homes’ charges. Such payments are not —I repeat not — taken into account when benefit is assessed. The guidance in the S manual advises local offices to

    “disregard payments from charities, friends or relatives specifically intended to meet the balance of the charge to the extent that they are used for that purpose”.

    That is entirely clear, and I hope that none of our local offices will misunderstand it.

    But we recognised that this was the first step. When the measures were introduced, we promised a full programme of monitoring and research. We did so partly because we had an early sense of some of the difficulties to which my hon. Friend drew our attention this evening. One result of the initial feedback was an increase in the limits in November 1985. The residential care home limits were increased by £10, giving a range from £120 to £180. The limits for nursing homes, which are higher because of the more intensive care provided, were also increased by just more than £30 a week. Those substantial increases show our willingness to listen and to take action when we believe it to be necessary.

    As my hon. Friend may know, we are in the process of reviewing all the residential care and nursing home limits. I listened with special care to what he said about the difficulties and problems faced by residential care home owners and residents in his constituency. We shall consider carefully the comments that he and other hon. Members have made during the review.

    As an integral part of the review, we have commissioned a firm of independent management consultants, Ernst and Whinney, to undertake a wide-ranging inquiry into the costs incurred by homes of all sorts. The review will also draw on our monitoring of the arrangements since they were introduced last year, ​ information from our local offices and representations from interested organisations and individuals. Any changes shown to be necessary following that review will be introduced in July this year at the time of the general benefit uprating. Although there is a tendency to think of £120 as the limit for the elderly, assuming that a home is registered to care for them., a range of higher limits is available to residents in residential care homes that stretches between £120 a week and £180 a week.

    As to the longer-term future, most people would agree that there are inherent difficulties in the present system of public funding in this area. The present duality, with local authorities and supplementary benefit as major purchasers and providers of care, has caused problems administratively and, in some cases, for the people whom the system is supposed to help. Our aim is to draw together the two disparate strands so that when someone needs care, it can be provided simply and at a reasonable cost to public funds.

    The first step towards that was made with the joint central and local government working party, which was set up in late 1984 by my right hon. Friends the Secretaries of State for Social Services, for Scotland and for Wales. The working party examined the scope for improving collaboration between the Department and local authorities over financial support for residents of private and voluntary residential care homes.

    In its report, issued last year, the working party made two major recommendations. The first deals with an issue which I know worries my hon. Friend—the assessment of supplementary benefit claimants’ need for care. I recall clearly the remarks of Mrs. Armstrong and the consultant geriatrician when we met in Southampton about a month ago. The working party recommended that we should explore the feasibility of extending local authorities’ existing multi-disciplinary assessments to anyone in residential care claiming benefit and of local authorities advising DHSS offices on appropriate payments. We have agreed with the local authority associations that we should carry out pilot studies to test the proposals. They will take the form of a dry run and will not affect anyone’s benefit. The pilot studies will be conducted by the social policy research unit at York university. The aim will be to explore how the arrangements would work in practice and to identify any new problems and, I trust, their solutions.

    The second recommendation was that we should seek long-term solutions to the problems created by the existing parallel systems of support. We have also accepted this recommendation. We and the local authority associations have agreed to set up a further joint working party to consider ways of harmonising financial support for people in residential care homes. The first meeting of this working party will be held at the end of this month and it is expected to complete its work within a year.

    As I hope my hon. Friend will agree, we therefore have a substantial programme in hand for reviewing the financial arrangements for people in residential care homes and the problems that he mentioned. In the short term, we are reviewing the current supplementary benefit limits, and in the longer term we have the pilot studies on the assessment of supplementary benefit claimants’ care needs and the joint central/local government working party.

    A related issue is the dual registration of homes. A home registered with the local authority as a residential care home may also be registered as a nursing home with ​ the district health authority. We call this dual registration. Indeed, the home has to be so registered if it is providing nursing care of the kind proper to a nursing home. Residential care homes themselves are classified for registration purposes according to the main categories of dependent people, such as physically disabled or mentally disordered people, or elderly people, without attendant, exceptional disability. As I mentioned earlier, different rates of supplementary benefit apply to people in those categories, providing that they are registered in homes that are properly registered to care for them.

    I hope that from all this my hon. Friend will see that we are very carefully considering the financial arrangements for residents in registered rest homes for the ​ elderly. I emphasise that a home can be registered for more than one category, and this is being made clear to local authorities, as the registration authorities, in a circular that is about to be issued, a copy of which I shall put in the Library. A home may therefore be classified to take physically disabled as well as elderly people. I hope that what I have been able to say in the few minutes at my disposal this evening will be of some assurance to my hon. Friend, to the many people who are running residential care homes and, above all, to the many residents of such homes, who may have had some uncertainty about the present arrangements.

  • Christopher Chope – 1986 Speech on Elderly Persons in Rest Homes

    Below is the text of the speech made by Christopher Chope, the then Conservative MP for Southampton Itchen, in the House of Commons on 12 March 1986.

    I am grateful for the opportunity to have a debate about the financial arrangements for people in registered rest homes for the elderly. I know that I am not alone among hon. Members in being concerned about the matter. My hon. Friend the Member for New Forest (Mr. McNair-Wilson) wishes me to associate his name with some of the concerns which I want to express.

    I appreciate the keen interest which my hon. Friend the Minister has taken in the subject since taking over responsibility for it. May I thank him in particular for the way in which he has listened to the representations of my constituents? In January he visited Southampton and, after meeting several residents at the Brookvale care home, he had a discussion with other rest home owners, a consultant geriatrician, general practitioners and nurses about the problems of residential care for the elderly. Later the same day he opened a new rest home which I am pleased to tell him is prospering, although it is charging fees greater than those who are on supplementary benefit can afford. More recently, my hon. Friend had a follow-up meeting lasting about an hour with two registered rest home owners in Southampton. If he paid the same attention to every constituency, I do not think he would have time to do anything else. I am most grateful for his concern.

    The Conservative Government have an excellent record in extending care in the community, and the expanding national network of residential and nursing homes in the private sector is testament to this. The passing of legislation to improve the standards of care in these homes has ensured that those who look forward to spending the later years of their life in residential care can do so with confidence. The national picture is fully reflected in Southampton and Hampshire. In Southampton, the success of the programme of extending care in the community is such that, despite increasing numbers of elderly, and particularly frail elderly, there are now fewer on the waiting list for long-stay hospital care. My hon. Friend will know, however, that one does not seek a debate on the Adjournment merely to praise the Government but to draw attention to particular problems.

    The first problem to which I draw attention is the position of those who were in receipt of supplementary benefit in respect of their rest homes charges at 28 April 1985. When my right hon. Friend the Secretary of State first proposed a new structure of national limits for the residential care and nursing home sector on 29 November 1984, he said,

    “These new limits will be designed to reflect the varying cost of providing different types of care. There is no question, however, of elderly, handicapped or disabled people being moved out of their existing accommodation, and their position will be protected.” — [Official Report, 29 November 1984; Vol. 68, c. 1098–99.]

    In circular LASSL 86(1), issued on 14 January 1986, there is confirmation that the level of charges being met in a person’s supplementary benefit before 29 April 1985 will be maintained indefinitely where the person is over pensionable age. I welcome that, but it does not meet the problem of rising costs and charges. Most residential rest ​ homes have had to increase their charges since April 1985 or, if they have not already done so, will soon have to.

    Who is to pay the increased charges? The DHSS will not if the charges are already above £120. By definition, the residents do not have the means to pay the extra and even if they did this would be offset against their supplementary entitlement. I know of several proprietors of rest homes in Southampton who will have to take a crunch decision soon — next month is the crunch time—about whether to waive increased charges for the residents in the category I have described or ask those residents to leave. Surely if my right hon. Friend is to be consistent with his pledge to “protect the position” of such residents, he should be willing to allow increased supplementary benefit in line with the retail prices index. He should not rely upon the charity of the home owners, and should remember that because the residents do not enjoy security of tenure both they and their relatives are extremely worried about what may happen.

    The second problem to which I draw attention is the position of those who were resident in rest homes at 28 April 1985 but who were paying privately and whose means subsequently fall to such a level as to cause them to qualify for supplementary benefit. Many of those who enter residential care use the capital released from the sale of their homes to meet the costs, but even £30,000 from the sale of a house pays for only three or four years in a rest home at £150 per week. These people expected that, once their capital was depleted, they would be in the same position as anyone else who qualified for supplementary benefit. Surely the pledge given by my right hon. Friend to which I have referred should extend unequivocally to these residents as well.

    In this context I welcome the contents of paragraph 5 of the circular of 14 January, which states:

    “For those claiming supplementary benefit after 29 April 1985 the new system of national limits applied straight away. But Ministers have decided to introduce a new provision to help some long standing residents in residential care homes who did not claim supplementary benefit until after 29 April 1985…Where application of the new limits could produce exceptional hardship the Secretary of State has the discretionary power to extend to an individual the benefit of transitional protection so that he could receive the same rate of benefit as he would have received had he claimed before 29 April”.

    I hope that much greater publicity will be given to this very welcome concession by the Government, because I know that the problem has been a cause of concern to many. I have met many residents and their relatives who are still concerned, however, about what will happen when the money runs out. I doubt that the discretionary power will allay all their worries and concerns. I find it hard to contemplate a situation in which my right hon. Friend would choose not to exercise his discretion to extend transitional protection. If I am right in that, why cannot he go the whole way and guarantee that, in the situation that I have described, the transitional protection will be extended?

    The third problem on which I seek my hon. Friend’s comments is the rigidity of the limit of £120 a week on supplementary benefit payments for residents in residential rest homes for the elderly. In most homes in Southampton this limit is well below the fees charged to those who pay privately. I imagine that £120 a week is probably too much for a pensioner who is up and about and fully in command of his faculties and who does not qualify ​ for attendance allowance. Such a person should not, perhaps, even be in a residential rest home—at any rate, not at the expense of the taxpayer.

    However, at the other end of the scale there may be a nonagenarian who qualifies for the full attendance allowance, who is very frail and who is incontinent. For such a person, living in a centrally heated, single room with full board, 24-hour care and free laundry, £17 a day is a bargain. It is clearly far below the reasonable cost. One needs only to consider the cost of care in a long-stay hospital. It is £48 a day. Therefore, £17 a day is very much on the low side where a very considerable degree of care is required.

    I do not underestimate the problems involved in having separate levels of supplementary benefit entitlement, depending on the extent of the infirmity and the degree of care being provided. But the present system, particularly now that the attendance allowance payments are taken into account and set off against supplementary benefit, discriminates against the very people that we should be most eager to help. My hon. Friend saw some such people on the occasion of his visit to the Brookvale care home in Southampton.

    The fourth problem is the one of topping-up payments. If a person is below pensionable age and a home’s charges exceed the supplementary benefit limit a local authority is able to top up the balance above supplementary benefit. The same principle does not apply, however, to a person who is a pensioner. I am sure that many local authorities would much prefer to top up a payment rather than have to provide home help services and meals on wheels. A district health authority might also be willing to make a topping up payment because it thereby saves on district nursing services. In Southampton, in the light of a recent decision to remove payments for incontinent aids, it would mean a saving of between £40 and £50 per resident per month if a person moved into a residential rest home.

    There is also a problem about topping-up payments by relatives. I hope that in his reply this evening my hon. Friend will spell out clearly what those rules are. I have spoken to the officials in the supplementary benefit office in Southampton. They are in a state of confusion. The result is that some of the decisions that have been handed down seem to be wrong. I understand that under the regulations it is possible for relatives to top up payments, but I do not believe that that is the general understanding. I look forward to hearing what my hon. Friend has to say about that problem.

    The fifth problem concerns the inflexible arrangements which apply to the categorisation of residents. A nursing home resident can receive between £170 and £230 per week from supplementary benefit, yet I have had constituency cases of individuals who would clearly qualify for nursing home provision but who would prefer to stay in a residential rest home where they have already spent many years, where the environment is familiar and the standard of care is as high as they would wish or need. My hon. Friend wrote to me about one such case on 28 February. The 89-year-old lady has charges of £180 per week. When I wrote to my hon. Friend he suggested that, in view of her disabilities and the high degree of care she needs,

    “it may be that she should now be accommodated in a nursing rather than a residential care home. The limit for a non specialist nursing home is £170 per week. This higher limit could not be paid for”—

    this particular lady’s—

    “present accommodation unless the home were jointly registered also as a nursing home.”

    But joint registration of this home is not a practicable possibility. There are planning problems and the additional facilities which the owner would have to provide would only be worthwhile if all her residents were in need of the level of care provided in a nursing home. The owner does not wish to register as a nursing home and the resident does not wish to move to a nursing home.
    If a pensioner resident suffers from disablement but had become disabled before reaching pensionable age, the maximum supplementary benefit payable is £180 rather than £120, provided of course that the home is duly registered for the elderly and physically disabled. Yet if a pensioner resident becomes frail and disabled in old age, the limit is fixed at £120.
    Circular LASSL 86(1) explains:

    “This distinction is intended to avoid ambiguity between those suffering from substantial and permanent disablement and those simply becoming frail in old age.”

    That is Civil Service newspeak of the worst sort. If an 85-year-old bedridden amputee is frail and incontinent, he is disabled. Why should the cost of looking after him be deemed to be £60 a week less, if he was disabled at the age of 65 rather than 64? That is one of the worst anomalies.

    There is a similar inflexibility in the assessment of those with mental disorders. Senile dementia is not apparently classified as a mental disorder, although its symptoms are often similar. The amount of care needed to look after someone with it is a great deal more than that for an ordinary old person. Yet supplementary benefit allowances are no different.

    I know that my hon. Friend does not have responsibility for incontinent aids, but does he agree that it is desirable for health authorities to provide incontinent aids at no cost to residents in local authority, private and voluntary residential rest homes? I can understand why such facilities should not be provided to nursing homes because by their definition they are meant to provide full care and treatment, including all nursing services. But at a time when resident rest home owners are being pressurised from all sides, it is most unfortunate that in the Southampton health district the provision of such incontinent aids to residents in residential rest homes has been withdrawn by the health authority.

    In a masterly understatement in a letter to me, my hon. Friend said:

    “We do not regard the present arrangements as immune to change if the need can be shown.”

    I hope that he will show that he has thought further about the possible ways in which the system can be improved and changed, and that he will not delay in putting right some of the present shortcomings which threaten to discredit an area of Government policy for which there should be only properly great praise.

  • Roy Hattersley – 1986 Speech on the City of London

    Below is the text of the speech made by Roy Hattersley, the then Labour MP for Birmingham Sparkbrook, in the House of Commons on 12 March 1986.

    I beg to move,

    That this House, deploring the increasing influence of the City over the Government and its policies, calls upon the Government to put aside considerations of political support and personal connection and to introduce a system of regulation of, and supervision for, the financial services which will provide an adequate response to the increase in City fraud, to introduce a stricter system of surveillance of monopolies and mergers, and to adopt economic policies which are to the benefit not of the City alone, but of the whole economy and which will therefore assist in the reduction of unemployment, the rehabilitation of manufacturing industry and the provision of an adequate alternative to diminishing oil revenues.

    Today we debate the City against a background of continuing economic crisis. The fact that the existence of that crisis, the truth of the existence of that crisis, will be rejected by Conservative Members who speak underlines the gulf which divides the two sides of the House and the necessity for today’s debate. Conservatives judge economic success by the Financial Times index. We judge it by different standards, not least the ability of our nation to provide jobs for all its people.

    The facts of the economic crisis are that unemployment now stands at between 3·5 million and 4 million, manufacturing trade is in deficit and real interest rates are at record levels. Each of those individual catastrophes has been intensified by the Government’s enthusiasm for economic policies which benefit the City but damage the rest of the economy. We have today a Government of the City for the City and, by far too large an extent, by the City.

    The connection between the Government and the Tory Benches was on blatant display during the Second Reading of the Financial Services Bill when stockbrokers and underwriters from the Conservative Benches took it in turn to defend their vested interests and to argue against effective Government supervision. It is that close connection that makes a Tory Government certainly unwilling to tackle, and perhaps incapable of tackling, the City fraud crisis by instituting an effective system of regulation and supervision.

    Yet rarely a week goes past without the discovery and exposure of some other malpractice and scandal. Indeed, ​ only this morning our newest daily paper, Today, had on its front page an exclusive story about what is rightly described as the latest series of dirty tricks.

    The normal defence for the City’s behaviour and the Government’s refusal to act appropriately is the assertion that a majority of City firms is honest. Of course, I accept that, but the honest and honourable majority is not sufficiently determined to expose and act against the criminal minority. I give a current example. Ten days ago, I wrote an article in The Observer which spoke of stock exchange fraud. Early this week, I received a letter from Sir Nicholas Goodison, the chairman of the stock exchange, who asked me—I think it was intended to be a challenge—what I meant by stock exchange fraud and what examples I could give him.

    I cannot believe that Sir Nicholas does not know the facts of insider dealing, as confirmed on 11 December by the Parliamentary Under-Secretary of State for Trade and Industry in an answer given in another place. He confirmed that there were 25 prima facie cases of insider dealing and that 80 cases were referred to the Department of Trade and Industry under section 2 of the Companies Act, and he expressed anxiety about the difficulty of securing convictions in such cases. Yet Sir Nicholas challenges me to explain what I am talking about. I can only assume that Sir Nicholas’s definition of fraud is different from mine and different from that of most people outside the City.
    Some people in the stock exchange take a stronger and clearer view on these matters than does the chairman. Michael Feltham of the stock exchange finance department wrote in the Financial Times earlier this week:

    “We can track down the small insider deals … but the big fish go offshore.”

    They go offshore because of inadequate supervision and because too many people in the City who may be honest are not prepared to expose the dishonesty among them. Indeed, the City remains a charmed and closed circle wedded to the misplaced loyalty of a gentleman’s club, although the City is clearly no longer the exclusive preserve of gentleman.

    The City is incapable of regulating its affairs. Let us consider the alternatives to that, in each area, which are offered by the Government. The Government’s remedy for bank fraud is a board of supervision which is almost a subcommittee of the Bank of England. But the Bank of England, especially under its present Governor, is wholly incapable of performing that task, because the Bank of England is not the agent of Government in the City, but the voice of the City in Government. What is more, the new supervisory agency—the Bank of England—was blamed by the Chancellor of the Exchequer when the going was rough and he needed something to hide behind. It was made a scapegoat for compounding the Johnson Matthey affair, yet now the bank must make sure that errors for which it was partly responsible do not happen again.

    As a remedy for the City’s general malpractices, we are offered the prospect of legislation based on the Gower commission’s recommendations. Yet the Government know that those recommendations were made before deregulation increased potential rewards, potential risks and, therefore, the temptation to defraud. As a remedy for Lloyd’s fraud, we were offered two conflicting ​ assurances. The first was that the Lloyd’s Act 1982 is sufficient; the second is that a new inquiry will examine whether the Lloyd’s Act 1982 is sufficient.

    I ask the Chief Secretary two specific questions, although in the light of previous behaviour whether anyone will believe his answer is open to question. What does he think about, in many cases, the absence and, in all cases, the delay and reluctance to mount prosecutions against City frauds? Secondly, how would he react if I were to suggest that we abandoned any hope of pursuing social security frauds, most of which are minute compared with the rewards obtained from City malpractices?

    All that being said, and my hopes of an honest answer being optimistically renewed, I must tell the Chief Secretary that the City crime wave is not the most important or most urgent issue that we should debate. The crime wave is only one aspect of a larger problem: the City’s view of itself as an independent power that is too big, too powerful, too rich and too international to be supervised by the Government, the Government’s craven acceptance of the view that the City can act independently and the Government’s agreement that the City can develop a life of its own detached from the rest of the economy.

    The United Kingdom is the only country that talks about a separate institution— the City — as though it were not part of the rest of the world, the rest of the economy and the other prospects and hopes for the country. With the City’s international connections, only in Great Britain is its interests not so much different from the interests of manufacturing economy, but often diametrically opposed to them. Indeed, as the circumstances and facts of the past seven years prove, as the real economy of investment, output, manufacturing, exports and jobs declines, the City can benefit from that, improve its position, increase its rewards and extend its influence.

    The Government’s pandering to the City’s wishes has meant that, for the past six years, our economic policy has benefited financial services but worked directly against the interest of manufacture, employment and visible trade. The City has benefited from high interest rates, uncompetitive exchange rate and the abolition of exchange control; it has benefited, in part scandalously, from the sale of national assets.

    The City has made vast sums from the privatisation programme, and again I ask the Chief Secretary some specific questions. Much of the money—certainly some of it—was made improperly. First, the City prices the assets, or, to be more specific, it underprices the assets. It is estimated that the City underpriced the assets sold by the Government by about £3 billion. Had the Government obtained the proper price, it would have been enough to fund the entire programme of jobs for the long-term unemployed that was recommended to the House by the Select Committee on Employment.

    It is worth noting that the Government, composed of City experts—or at least financial journalists—let the City get away with it. I hope that the Chief Secretary will tell us whether incompetence or malice allowed the Government to sacrifice £3 billion to City corruption. It was one or the other. One way or another, the Government lost £3 billion of taxpayers’ money and, as the afternoon goes on, the Chief Secretary must choose which it was.

    Having underpriced the assets, the City then bought many of them at the artificially low price. Indeed, I understand — I trust that the Chief Secretary will comment on it — that some City institutions bought ​ assets in excess of the amount which they were officially allocated. As well as making that killing on the underpriced assets, the City also charged the Government an unwarranted underwriters’ risk premium, when it knew that there was no risk. The City knew that the stock would be sold and that the price was too low, yet it chose to charge the Government a commission which it knew was unjustifiable.

    Some of the questions that I would have wished to ask this afternoon have, as a result of recent prosecutions mounted and continued this week, become subject to the sub judice rule, but I can at least ask the Chief Secretary this. As it is beyond dispute that many of the assets sold by the Government have been scandalously undervalued—

    Mr. Tim Smith (Beaconsfield)

    Rubbish.

    Mr. Hattersley

    Rubbish? We shall hear the Chief Secretary defend that in a minute. Many of the assets sold by this Government have been scandalously undervalued—

    Mr. Smith

    What about the last issue of Cable and Wireless shares, which was exactly right?

    Mr. Deputy Speaker (Mr. Ernest Armstrong)

    Order. If the hon. Gentleman wishes to intervene, he knows that there is a proper way to do so.

    Mr. Hattersley

    As it is generally accepted by all those without bias or a vested interest in financial concerns—those who have are showing their spots and colours vividly and dramatically this afternoon—that what I have said is true, I ask the Chief Secretary how he proposes to avoid that scandal in the future, or is he so anxious for a quick sale of public assets to pad the Budget and make future tax cuts possible that he is prepared to sell off national assets knowing that the city is improperly and unscrupulously lining its pockets?

    Mr. Allan Rogers (Rhondda)

    My right hon. Friend was challenged from a sedentary position by the hon. Member for Beaconsfield (Mr. Smith). I hope that my right hon. Friend will listen to what the hon. Gentleman is saying. Does my right hon. Friend realise that the hon. Gentleman is parliamentary consultant to the National Association of Security Dealers and Investment Managers, and to the County bank, and obviously has a strong interest in this debate and knows what he is talking about?

    Mr. Hattersley

    I think that the interesting nature of the hon. Gentleman’s remarks was not so much his authority, which I do not doubt, but the passion with which he defended the vested interest with which he is concerned.

    I concede that, not surprisingly during the past seven years, the City has done very well by its own standards. City salaries have risen astronomically. I know that the Chief Secretary is an expert in these matters. Will he give us his judgment about City salaries and about the society in which we remove the wages council protection from the young but allow City institutions to pay men of 30, 35 or 40 not only £50,000 or £60,000 a year, but a £250,000 signing-on fee—a new phrase in the English language that goes with hello, and which the Chief Secretary knows perfectly well is common in the City? Will he comment not only on the morality and propriety of that, but on how he thinks that it affects the Government’s drive for lower wages for those at the lower end of the income scale?

    The City has done well, its salaries have risen vastly and City employment has risen while employment in the rest of the economy has slumped. We have to understand — and hon. Members who defend the City have to accept—that the City has not and cannot make up for the matching and related collapse in manufacturing industry. The City cannot fill the gap that will be left in our balance of payments when the oil begins to run out. The British Invisible Exports Council was explicit on this point. It says that it does not see the growth of services

    “as being to a major extent a substitute for decline in general industrial activity.”

    In the words of the right hon. Member for Old Bexley and Sidcup (Mr. Heath),

    “the service industries have to have something to service.”

    In the economy in general under this City-oriented Government, it has been seven years of decline, in part because the City has hopelessly failed to provide investment in export promotions, in job creation and in the areas where manufacturing industry might grow and where new jobs might be found.

    There are three sectors of particular concern. One is small firms, particularly those that need, and should be provided with, loans and investment at the soft rates common among our more successful creditors. Secondly, there is an important need for but failure in long-term investment—the failure of the City to take a long-term view of these things. Thirdly, there is a desperate need for the City, when it is examining industry, to make a more sensible evaluation of the long-term risks.

    One of the reasons why long-term risk evaluation is so often inadequate is that the City does not know about manufacturing industries, is not interested in them and is not concerned in them. In our more successful competitors in the OECD and EEC there are banks that choose to work as part of industry alongside industry and understanding its problems. Here in Britain, the City is different, superior, exclusive and industrially ignorant. However, when charged with failure to provide an adequate investment, the City always gives the same circular, self-righteous, self-serving defence. It is that there is plenty available for suitable investment. I see the hon. Member for Beaconsfield (Mr. Smith) utter the words as I say them. That is his view, but not that of British industry.

    I quote from Sir Terence Beckett, not usually on the side of Labour party economic policy, who spoke to the House of Lords Select Committee about:

    “the widespread comments I get from industry, particularly small and medium sized companies who have difficulty in getting finance from banks”.

    The British Chamber of Commerce was equally conclusive. It said:

    “Every bank will tell you that there is money available in all directions—but they have to or feel obliged to put certain criteria on the lending which are somewhat different from our overseas competitors”.

    The hon. Member for Beaconsfield may laugh at the idea of the British Chamber of Commerce complaining about the absence of investment, but he is laughing about the failure of the Government and the institutions that they support to help small firms to develop and grow.

    In any case, what does money available for suitable projects mean in practice? I give the House a definition offered to me by a west midlands clothing company whose highly successful expansion, principally into the export ​ market, was made possible only because of the help that it received from the West Midlands enterprise board. The chairman of that company, who had touted about the City looking for new investment, said;

    “If I had wanted to build a casino in Mayfair they would have pressed £5 notes into my hand. But because I wanted to make things and export things, they did not want to know.”

    They want to know about some things—the merger boom, for example, which occurs under our wholly inadequate competition policy. The City wants to finance takeovers, which have nothing to do with efficiency, output or employment, because this is a sector of easy pickings. It is work with which the real economy has no connection, work that is unproductive in terms of investment, output and jobs.

    What is more — and the tragedy and mistake is accentuated by the takeover boom—the stock exchange system as a whole concentrates far too much of its financial attention on short-term profits. Prices are determined by the most recent returns, and so are takeover profits. Now, with more and more successful predators stalking the market, company after company increasingly occupies its time in erecting protection from suddenly being swallowed up. I offer in evidence the comments made in an article in the Bank of England Quarterly by David Walker, the bank’s executive director. He talked about takeover mania:

    “re-inforcing in many boards the disposition to be cautious about innovation expenditure which reduces profit in the short term.”

    The country needs the will to innovate and a willingness to make judgments on the long-term not the short-term profits. Yet the takeover mania, the inadequacies of present competition policy, buttressed by the behaviour of the City, has concentrated industry’s mind more and more on the next share price, on the next quarterly profit and on the prospects of being swallowed up while the needs of the real economy are investment growth and jobs. Those needs are forgotten.

    Perhaps most important of all, for the City to say that its investment programmes, investment potential and the investment it makes available to manufacturing industry are meeting the economy’s needs is for the City complacently to accept an economy in which manufacture collapses, in which there is an incipient balance of payments crisis which will break over us when the oil runs out and in which there are permanently 3 million or 4 million men and women unemployed. That may be good enough for the City, with its vast salaries, its great power and its special relationship with the Government. It is not good enough for the Opposition, and I do not believe that it is good enough for the people of this country.