House of Commons Hansard Debates for 5 Apr 1990

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equipment to stick a label on their goods telling the customer how much each unit will cost to run? That would be simple and easy. I have one particular hate. This is the only country in the world that I know of where a new electrical appliance, whether a hair dryer or a toaster, never has a plug on it. People may wonder what that has to do with energy efficiency, but it has a lot to do with it. Why are we so backward in telling manufacturers to label their goods and put a plug on them? I wonder how many accidents happen when people like me do not know what wires go where because we remember the old colours.

What about lighting standards? We are probably all aware that the new soft, more expensive lights use only about 25 per cent. of the energy used by the old lights. Such bulbs will be paid for halfway through their lifetime and, thereafter, money is being saved. We have never promoted the simple idea that energy conservation need not be expensive, and that the cost of insulating one's home properly will probably be recouped in the first year or certainly in the second. The money saved by the house owner over 10 or 15 years is almost as important as the environmental savings enjoyed by the community, in avoiding the unpleasant by-products of generating energy.

People who are buying a house are willing to pay for a structural survey, but no one considers the cost of heating it. The Department of Energy is keen on promoting energy audits, but perhaps more can be done. In the United States, an energy audit costs about $25, and for another $150, simple measures can be taken to improve insulation and to stop draughts. They are simple improvements of a type that we never get around to--like mending the staircase that always creaked in grandad's day. If energy can be conserved, fewer power stations will be required.

Whenever we want more of something, we build new capacity. The consequence is that we have more houses in this country than families even though they happen to be in the wrong place--but that is the subject of another debate. It would be a simple matter to require the vendor of a property to notify a prospective purchaser of its energy efficiency. Vendors would be likely to give more thought to that aspect before putting their property on the market--perhaps commissioning an energy audit and making improvements that they had hitherto neglected. If they did so, they would achieve a higher price for their property, and its value would also be enhanced in environmental terms.

There is a maintenance office within this building, but we should also have an energy efficiency and conservation office--as should many other major buildings. The cost of the staff would be saved many times over. Once a proper system is established, savings continue for ever.

Financial assistance always presents a problem, and I generally support the Government's view. Why should we give financial assistance for improvements that will help the owner to make money? Why should the state pay for insulation from which the householder will benefit financially in the long term? However, I should be happy to see loans made available for energy conservation purposes. Last night, we were arguing over student loans to be repaid over a number of years. It would be as good or even better to invest in insulating our housing stock.

There are many elderly people, most of them ladies on low incomes not enjoying any pension payable on their late husband's former employment, who cannot afford to

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live in reasonable comfort. They have to make do with the warmth provided by only one bar of an electric fire. There is no need for that. A little expenditure would provide for better insulation and allow a person to enjoy his or her remaining years in warm comfort. The Building Research Establishment estimates that a 25 per cent. reduction could be achieved in energy consumption and in carbon dioxide emissions. The other side of excessive energy production is excessive production of carbon dioxide and of the other toxins produced by industrial processes. One cannot blame a vehicle manufacturer if the car that we all want pollutes the atmosphere with the oil and petrol that it must use. However, one can blame him if he does not take every possible step to reduce the volume of that pollution.

There have been market barriers and Government failings in not redefining the market so that there can be greater energy efficiency, but unlike in the United States, which normally leads us in energy efficiency, unleaded petrol is cheaper in this country than leaded. We have already said that we are prepared to tax petrol logically. Perhaps we should also impose less tax on other products that are more energy-efficient.

The Association for the Conservation of Energy would like value added tax removed from energy-saving products. Perhaps that is going too far, because it is likely that VAT will be with us for ever. Nevertheless, there is some logic in that argument, and we have already made something of a breakthrough in establishing the precedent of lower duty on unleaded petrol. We have said that we will tax less those things that are less damaging.

Let us consider the other side of the question. One sad example is British Gas--I have mentioned that company before, but not because I do not like it --whose tariff structure encourages customers who use less than 25,000 therms a year to waste gas. The bulk discount for the next level is such that it is worth burning and wasting power. The bulk tariff brings the total price and the unit cost down. These days that should be culpable. It should be legally wrong to be able to say, "The more you waste, the cheaper the price." That subject is also worthy of consideration by Government.

The other side of the equation is pollution produced by that vast excess of energy. We all know about carbon dioxide and I shall not insult the intelligence of hon. Members by going on about its bad effects. We know what they are. We are scared of the greenhouse effect, although we do not know why, and we are scared of nitrous oxides. We know that something is wrong and we know about global warming--or we think that we do. Perhaps, as is the case with AIDS, after a while we shall say that it probably is not as bad as all that.

The relative contribution of greenhouse gases to global warming in the past 10 years is straightforward--carbon dioxide is 50 per cent., methane 18 per cent., CFCs from our careless aerosols 14 per cent., nitrous oxides--NOs--6 per cent. and surface ozone 12 per cent. Let us just consider the 50 per cent. Half our global warming problems are caused by carbon dioxide, most of which comes from industrial Europe, using machines that it uses to produce the wealth to afford such things as studying the greenhouse effect. We can go further, as 80 per cent. of carbon dioxide is caused by the burning of fossil fuels. It is now estimated that in United Kingdom 92 per cent. of carbon dioxide is caused by fossil fuel burning, even though most of us do not have a coal fire in the house

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--although we may have a log fire for show. Basically we have stopped using open coal fires and that is why the house looks so pleasant and clean, and why the fogs of my youth are no longer with us.

Fossil fuel divides into coal--with the largest share--oil and gas. Unless specific action is taken, fossil fuel consumption--we largely produce our energy from coal--and carbon dioxide emissions will rise dramatically.

My other sorrow is that every European Community country except the United Kingdom has shown willingness to commit itself to working towards a 20 per cent. carbon dioxide reduction as part of the initial global goal. An agreement was signed in 1988. It is a shame that our country is not a signatory.

My thoughts are not of great significance nationally or locally, but they are of some significance. We are a relatively little country and if every little country took a good look at how it wastes or saves energy, we could also make many people more comfortable. We should consider the by-products of energy and clean them up--the Secretary of State is keen to do that and may be talking soon about the alternative energy sources that are so dear to me.

We should reverse the cuts made in the Energy Efficiency Office and reinstate energy service schemes. We should study building regulations-- although the new ones are good. We should say, "What about clean, alternative energy sources?" What about the wind? It causes no pollution-- it causes damage, but the sheer power of it is wonderful. What about the waves? They can cause damage, but again the power is vast. I shall not say too much about solar power in Britain, but we should think of the power that exists around our coast. We must think about the potential for energy conservation and the need for energy efficiency.

2.18 pm

Mr. Frank Cook (Stockton, North) : The hon. Member for Devon, North (Mr. Speller) has already described to the Minister the alliance in which we jointly conspire--that is, the all-party alternative energy group.

I congratulate my colleague on winning the slot today and commend him for raising this issue. I also commend his comments to the Minister for serious consideration because much of what he says makes sense.

The hon. Gentleman touched upon the financial aspects of energy efficiency and technology. I shall briefly mention employment and the benefits that can be gained there.

The hon. Gentleman and I went to Norway where we saw two semi-tech pilot plants at Toffteshallen. One is a multi-resonant oscillating water column. The other is a tapered channel. Each is experimental, but they are producing electricity for less than 2.5p per kWh. That is better than our best nuclear and our best fossil fuel plants. Each of the plants uses British technology. The turbines were developed at Queen's university in Belfast. Each plant is producing electricity reliably, efficiently, cleanly and cheaply.

Why do the Norwegians want to do that when they have hydro-electric power coming out of their ears? The answer is simple. They do not need electricity ; what they need is employment for their skilled technicians, men and women, who will come on to the labour market after North sea gas and oil have run out. The Norwegians are planning ahead, using British technology to put together

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generating stations that are cheap, manageable and easy to control. They can be introduced one at a time. One does not have to wait the 20 years necessary for the completion of a nuclear power station. Wind and wave electricity-generating stations can be built for several tens of thousands of pounds. They use labour for whom employment in this country is needed. It is what I call the City and Guilds type of labour--not boffins walking around in white coats with masks on their faces but honest-to-goodness blue-collar people. Apart from the efficiency and cost-saving that such plants represent, they would provide immediate employment for people on the Clyde, the Tyne, the Tees--from where I come--and the Mersey. The European Economic Community believes that Britain has the best wave climate in the world. That would also benefit the Third world. If we developed alternative cheaper, safer and more efficient forms of renewable energy, the Third world would be able to manage them. People there would be able to understand such forms of energy. Above all, we should provide them with something that they could afford. They could have them tomorrow, if only the political will were there.

2.22 pm

The Parliamentary Under-Secretary of State for Energy (Mr. Tony Baldry) : I congratulate the chairman and vice-chairman of the all-party alternative energy group, my hon. Friend the Member for Devon, North (Mr. Speller) and the hon. Member for Stockton, North (Mr. Cook), on their contributions to the debate. It is an important but large subject, and in the time available to me I shall be unable to respond to all the points that have been raised, or to deal with the subject as it ought to be dealt with. However, I know that my right hon. Friend the Secretary of State for Energy welcomed the opportunity that was afforded to him recently to address the all-party group. I assure my hon. Friend the Member for Devon, North and the hon. Member for Stockton, North that Ministers in the Department consider with great care everything that the all-party group puts forward. We are grateful to it for all the work that it does.

Energy efficiency can make a significant contribution to alleviating the problems of climate change. The Government believe that climate change could represent the greatest world challenge to sustainable development. We shall do whatever is necessary to meet that challenge. However, to act alone would be pointless. The United Kingdom alone produces about 3 per cent. of the world's carbon dioxide. So all nations must act together. A global problem requires a global solution.

The analyses of the Intergovernmental Panel on Climate Change will help us decide on the actions that we should take, and we shall fully meet our responsibilities once the necessary actions are determined. We shall also need to consider how climate change will affect different areas of the world so that affected regions can adapt in the future. The United Kingdom is taking a lead. As my right hon. Friend the Prime Minister announced at the United Nations General Assembly last November, we are establishing a new centre for the prediction of climate change.

My right hon. Friend the Prime Minister also proposed that the work of the IPCC should continue in order to

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provide a proper scientific base for any protocols setting targets for restrictions on greenhouse emissions. Global targets have to be broken down for each country. I am sure that that is the right approach and that the Prime Minister has wide international support for that initiative.

However, international consensus is still some months off and in the meantime we would clearly be foolhardy to do nothing. Nothing is not an option. The widespread international concern about climate change is clearly felt here. The Government share that widespread concern and are fully committed to protecting the environment. Energy production is a major contributor to greenhouse gases and we have been taking positive steps to do what we can now to reduce emissions of greenhouse gases into the atmosphere. One of the obvious ways to do that is to obtain whatever contribution we can from renewable sources of energy. Direct electricity producers such as wind and tidal energy give no gaseous emissions, and biofuels, although they involve combustion, recycle the carbon dioxide so there is no net increase.

Our policy, therefore, is to stimulate the development and application of renewable energy sources wherever they have prospects of being economically competitive and environmentally acceptable. We are doing that via an extensive research, development and demonstration programme in collaboration with industry and by ensuring a legislative infrastructure which allows renewable energy sources to compete equitably in the market.

The research and development programme on which £161 million has been spent to date is identifying the markets and developing and promoting the technology where appropriate. A prime example of a project to promote renewables was a recent joint study with the North-Western electricity board, which identified a potential of 400 MW with good prospects of commercial development in the next decade or two. Our earlier success story was the use of landfill gas as a fuel, which has additional benefits, as methane is a much more potent greenhouse gas than CO . The technology was researched and demonstrated within departmental programmes and the first 300 commercial applications are under way with a further 30 planned or under construction.

The Electricity Act 1989 provides for a private sector market in which renewable sources of energy can compete equitably when they are fully developed. In the shorter term, however, they will need some market protection while experience is gained and a manufacturing industry built up. We have therefore also provided the non-fossil fuel obligation, which should enable renewable energy to develop during the 1990s with a premium price being paid for the electricity. Renewable energy, however, will be able to contribute on a significant scale only in the somewhat longer term and we must therefore also look to shorter-term measures.

One item that all Governments will include in any internationally agreed response strategy is promoting energy efficiency. My hon. Friend outlined the need for that. We are already doing it. Energy efficiency is worth while in the economic and in the wider environmental sense. But the community as a whole, not just the Government, has to act and the community as a whole gets the benefit. We must all take action and make an immediate impact. The consequences of our inefficiency are felt not just in environmental pollution but in the bills that we pay each quarter, as individuals and as businesses.

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The economic beauty of cost-effective energy efficiency improvements is that they do not really cost anything ; savings of up to 20 per cent. of energy costs can usually be realised through simple, effective measures. Some cost literally nothing. On others we get our money back through lower energy bills in about two to three years. Savings after that come free.

At the end of the day, the efficient use of energy is the responsibility of each one of us. Where the Government are directly responsible for energy costs, we are taking positive action : Government Departments are looking to save 15 per cent. of our annual £300 million energy bill within five years, which is expected to involve a doubling of investment in energy efficiency measures. However, the Government cannot force people to use energy more efficiently. The Government can offer advice and information to consumers on which they can base their decisions on investment and energy management, but the initiative to make the savings ultimately rests with the individual. In both the economic and the environmental sense, energy need not cost the earth. It is up to all of us to ensure that it does not.

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Rural Communities

2.30 pm

Mr. Jeff Rooker (Birmingham, Perry Barr) : I am an urban dweller and an urban representative. However, I am aware from my travels around the country and from friends and constituents who have relatives in rural areas that rural life is not quite the comfortable picture given by the glossy magazines so beloved of city dwellers. Over the past few years, there has been a massive population shift in England. The adult population of the shires, which contain most of the rural communities, has increased by 2.7 million since 1976, whereas that of London and the metropolitan counties has decreased by 500,000 during the same period. Yet the institutional framework of our nation remains overwhelmingly urban dominated.

That has led to the ignorance and neglect of rural problems, and has affected housing, health care, transport, jobs and poverty. Even play facilities for children are affected. The idea that the country is so much better for the children does not work when one realises that skateboards do not run on grass. A rural child's first bike can be a parental nightmare.

Villages should be vibrant communities with a variety and richness equal to those in our urban villages. They should not be pushed into single-class pieces of detached suburbia surrounded by fields. Fewer than one in 10 now have a bank, a pharmacy or a permanent library. Progress is sometimes measured in our society by economies of scale--a concept that is the scourge of small shops, small schools and small hospitals. If we do not come to terms with changes taking place in rural areas, we will have a two- tier rural society : well-heeled, middle-aged and elderly people in holiday and retirement homes making use of urban rather than rural services, and the rural poor locked into poverty, long hours, no choice, no transport and poor housing. On health matters, I cite the joint survey last year by the Maternity Alliance and the National Federation of Women's Institutes, which found that pregnant women in rural areas face restricted choice, hospital closures and long journeys to clinics. Two thirds of rural maternity units in England have closed since 1960, yet those units are crucial. Some 32 per cent. of births in rural areas are in GP centres or community hospitals, compared with 9 per cent. nationally. Home births in rural areas are 6 per cent., compared to 1 per cent. nationally. A report was recently issued by the National Audit Office on maternity services, on which the Public Accounts Committee--of which I have the honour to be a member--will take evidence after the Easter recess.

Women in rural areas risk long journeys during labour, with the attendant risks. Most litigation currently in process relates to births in larger hospitals, not small units or home deliveries. Local maternity units do have good safety records. However, it is the fear of litigation that is behind the idea that local units cannot cope, so putting pressure on women in rural areas to travel to larger hospitals.

It is clear that the closure of local shops, and particularly of post offices, which are little used by wealthier rural dwellers, is most likely to hit those on low incomes. Fewer than one third of the rural population use local shops, but a survey commissioned a few years ago by

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the Department of the Environment found that those who did were the poorest. The same survey by Brian McLaughlin and his team found that public transport networks were thinly spread. Since that time, they have been spread even thinner.

The most deprived poor in rural areas are those on low incomes who have no car. They cannot get to "competitively" priced rural supermarkets, which are not as low-cost as urban supermarkets. Nevertheless, for some, the car is so essential as a means of transport that other household essentials--I emphasise

"essentials"--are forgone. I freely accept that car ownership in rural areas, even two cars, is not a luxury.

Transport problems in rural areas are so serious that they have a direct effect on health care. The McLaughlin study found that a higher proportion of the rural population had medical needs, yet compared to national equivalents they made less use of general medical services such as opticians and dentists, to name but two examples.

One in seven mothers living in rural areas do not attend baby clinics after giving birth. That must be a cause for concern, and it certainly was for those who wrote the report for the Maternity Alliance and the NFWI.

I briefly mentioned the forthcoming crisis, if there is not one already, for England's 8,500 village halls. Most of them--I think about 70 per cent. --are run as charities. Much depends on the location, but the potential for the extended use of those halls to help to create employment by using new technology and all the advances in communication, in addition to being used for committees, youth groups, playgroups, the elderly, doctors' surgeries, libraries and even post offices, is quite enormous. They are under pressure and will be snuffed out if we allow the European Community--these days, I support its general purposes--to impose VAT on charities from 1992. We have a major problem on our hands and a major threat to British rural life. If we are serious about tackling deprivation and social isolation, which is prevalent, particularly of women in rural communities, who suffer from poor transport, we need action not only to secure and to improve existing facilities but to improve access to them by better transport. I receive enough complaints about the lack of buses in my heavily built up constituency, where the only blades of grass are in three or four public parks, but bus frequencies of more than 30 minutes are 77 per cent. in urban areas, but only 14 per cent. in rural areas. Bus frequencies of one per day or fewer are only 6 per cent. in urban areas but 62 per cent. in rural areas. We know that that causes massive problems for the millions of people who live in rural communities,

With transport--I do not put these in any order of importance because the people directly affected are aware of the importance of the problems-- housing is by far the biggest problem in rural communities. I understand and share the concerns about development pressures and the environment, which must be addressed, but one in five of the population in England live in rural communities. That is millions of people and they are entitled to jobs, homes and a decent quality of life, but that is under attack because of the lack of "affordable" housing.

I well understand the changes in policy and emphasis, particularly through the Housing Corporation, but they

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are too slow. When I was shadow housing Minister--I took professional advice on this--I could see the sense in the geographical "rounding off" of villages and small towns with extra homes to stop sprawl. I was accused of wanting to build right across the south downs. However, as a result, I support Lord Vinson, the chair of the Rural Development Commission, who said recently that the housing needs of rural people would need, on average, only

"a handful of houses in every sizeable village".

Those homes must, of course, be affordable homes.

I want to illustrate the seriousness of the housing problem with two examples of real people. I do not intend to give the real names or locations. Barry and Judy, both in their 20s, started married life a couple of years ago in the third bedroom of Judy's parents' council home. They both come from old-established families in the village. They have been on the council list and have received no offers. Barry's ancestors are listed in the county records as farmers and his great-great-grandfather was a wheelwright--there may have been more than one all those years ago.

A cottage in the next village, just two miles away, came up for sale. It was two up and two down with no bathroom, and was priced at £30,000. They could just afford it if they both kept working. They started negotiations with the estate agent, but he advised the vendor to withdraw from the offer and to increase the price to £50,000. That was the end. Barry and Judy now live in a council flat seven miles away with no hope of returning to their local community.

My second example concerns Ian, the son of a farmer. He is getting married next year and wants no future other than to remain in his rural community and to work the land. He has no hope of a rented home in the area, so he wants to build a small bungalow on his father's farm. It will not be a mansion or an executive pile in the middle of a meadow, but a small bungalow set among the other buildings on the farm. The local community agrees that it would be a sensible thing to do, but permission to build there has been refused.

I began by saying--and I do not apologise for this--that I am an urban dweller and representative. I have no ready-made solutions to what I know are serious social and economic problems in rural areas. I know that part of the reason for the political neglect is that our current electoral system discourages the political parties from campaigning equally throughout the country. No one has ever contradicted me on that. It is a fact of life that in our system, votes cast in urban and rural areas do not have equal value in the link with elected representation.

The failure of rural communities to stop the closure of small schools and hospitals and to ensure that young adults can live in the same community as their families shows that under the present system the rural voice has no clout. However well intentioned the policies emanating from the centre-- where most policies emanate--the people they affect remain without influence.

Most people--including myself--do not like change, but change happens whether we like it or not and we cannot opt out, wherever we live and whatever our position in society. The closure of a rural coalfield causes change to the rural community and that change is devastating and negative, especially if the closure is unplanned. Commuters moving into villages and taking them over, sometimes to stop others joining through new development, causes change. I read of an example

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yesterday in the midlands. One aspect of that change has been the closure of 20 per cent. of local banks and 100 post offices a year for several years. We must attend to the consequences of such change.

No one seeks a policy for rural communities that would turn villages into living museums. Those who visit the villages, those who have friends and relatives there and those who live there do not want such a policy. We require a policy that allows local communities greater control over their own lives than hitherto. We need active balanced communities for the next century, but if shops, schools and hospitals continue to close, and jobs to disappear, and if local people are forced to move away to find a home, there is no way that the problems of rural communities can be solved. Our urban-dominated nation should and must address those problems because they affect millions of people.

I gave my debate the title "The Problems of Rural Communities". I am humble enough to admit that I do not have the solutions. I hope that I have put the problems across positively, rather than negatively, but I admit that I have referred only to the problems and not to the solutions. I invite the Minister to reflect upon them. 2.45 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. David Heathcoat-Amory) : I congratulate the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on securing the debate and on his choice of subject. He represents an urban constituency--a very urban constituency-- but he clearly has a considerable knowledge of rural issues and has thought carefully about them. I was brought up in the country and I represent a rural constituency, so I value the opportunity to debate these matters and to explain how the Government are creating a framework with the dual objective of preserving an attractive rural environment while at the same time creating a healthy rural economy.

Before I go into detail, let me put the problems of rural areas into context. At the end of his speech, the hon. Member for Perry Barr said that change was constant. I agree with that. In the past 20 years or more, we have seen huge changes in Britain as a whole. Old traditional industries such as steel, coal and shipbuilding have declined somewhat and certainly shed labour. Agriculture, too, now employs fewer people. Those industries have been replaced by others--particularly in the service sector--which have grown up and now employ more people. The age profile of the population has also changed. We have more elderly and retired people, many of whom wish to retire away from their place of work. Our attitudes to home ownership have also changed and that has led in part to increases in house prices in some areas and the consequential difficulty for people living in villages in affording local housing.

These changes are not exclusive to rural areas ; they are common to the economy as a whole. Rural areas are affected by the trend and they have their share of the problems, but in some areas the problems are no greater than those in other parts of the country, and in some they are less severe. Rural areas suffer some disadvantages. The hon. Gentleman touched on some of them, including greater distances and problems of access. But they can be

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compensated for, perhaps, by the fact that rural areas have fewer problems of overcrowding and environmental dereliction, which are probably more acute in urban areas.

I agree that there is a considerable amount of misunderstanding about rural issues. There is no such thing as a rural idyll. That is an illusion and perhaps the result of Britain being a urban society. Surprisingly few people have first-hand experience of the countryside. People do not understand the complex social and economic forces at work. The same is true of countryside issues ; people often take a simplistic view of conservation and environmental matters. I therefore welcome any opportunity to increase mutual understanding between country and town. One of the reasons why I support greater access to the countryside is that it gives city dwellers an opportunity to get out and experience the countryside, to meet people in the countryside and to improve their knowledge and understanding of it.

I want to list some of the ways in which the Government are taking a range of steps to tackle some of the problems to which the hon. Member for Perry Barr referred. We are having some success, but we are keeping the situation under review. In an evolving and changing economy, new problems arise as old ones are solved or become less acute. We are certainly not working towards a two-tier rural society with well-heeled, middle-aged and elderly people in holiday and retirement homes while the rural poor are locked into poverty and poor housing.

We are aware of the dangers of creating such a stratum in our rural areas. However, to some extent, that would be a caricature. When I was elected, many people were concerned about our villages dying. It was said that young people would move away to the more exciting towns where recreational facilities were better. Now some people are expressing the opposite fear that our villages are being overwhelmed by people moving to them after retirement or using them simply as bases from which to commute. However, that is not a realistic picture and the issues are not polarised in that way.

Newcomers to villages are often essential. If we are worried about the fact that there are not enough people to keep the local post office open or about the village shop not having enough customers or the village school not having enough pupils, we must welcome newcomers. As the hon. Member for Perry Barr said so perceptively, we do not want to create or preserve living museums in our rural areas. The Government are aware of the problem. Our main task in rural Britain is to encourage the enterprise of those who live and work in rural areas and to increase activity by the private sector. Another task is to make the best possible use of public money-- which must always be limited--in the pursuit of those aims. We also want to make full use of the opportunities to influence others to use the money to the best ends by concentrating that money in areas with the greatest need. The picture is varied and not all areas suffer from the same problems.

In general, we want to create a climate in which small businesses can flourish. The Government act through legislation or by providing pump- priming finance. To do that we have set up and are funding a range of agencies. The chief agency in England, and the best known, is the Rural Development Commission, which is sponsored by my Department. It is the main agency for diversifying the rural economy.

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courseThe RDC's tasks are to highlight rural problems, to create a climate in which rural businesses and services can prosper and to initiate action to improve the economic and social development of rural areas. It achieves that by harnessing the voluntary and private sectors in the knowledge that the public sector cannot do everything on its own. Similar tasks are undertaken in Wales primarily by the Development Board for Rural Wales and the by the Welsh Development Agency. In Scotland, the Scottish Development Agency and the Highlands and Islands Development Board fulfil broadly similar functions.

Those agencies have achieved a great deal. For instance, the RDC estimates that it assisted in the creation or retention of some 3,900 job opportunities through its workshop programme in the financial year 1988-89. The Development Board for Rural Wales holds 474 factories and has sold a further 87. Together, they provide 8,500 jobs in rural Wales. Many other agencies also help to diversify the rural economy, by stimulating the flow of resources into more remote rural areas. They include the English and regional tourist boards, English Heritage, the Sports Council, the Countryside Commission and the Nature Conservancy Council.

The hon. Gentleman talked with some knowledge about rural housing problems. Of course many people want, when they can, to buy rather than to rent a home. We have been very successful in giving council tenants the right to buy, and it would certainly be wrong if council tenants in rural areas were to be denied that opportunity. We are concerned to maintain the viability of rural communities. We recognise that affordable housing for local people to rent or buy has a key part to play. Our rural housing initiative, which was announced in July 1988, set out for the first time a specific policy on low-cost housing in smaller villages. Over the past two years we have introduced a series of measures to promote the provision of low-cost housing in rural areas.

We are increasing the level of investment in rural areas through housing associations, which have a major role to play in providing affordable housing both for rent and for low-cost sale, in particular through shared ownership. We have greatly increased the public funds available to the Housing Corporation, so enabling it to establish a special rural programme aimed at villages with a population of fewer than 1,000. When fully up and running, the programme should provide 1,500 homes a year for rent in small villages and 350 a year for low-cost sale.

We are introducing a scheme in some rural areas whereby housing associations can repurchase former shared ownership dwellings when the occupier moves on, thus ensuring their retention as low-cost housing. The Housing Corporation will guarantee to make the necessary funds available without reducing its rural rented or shared ownership programmes elsewhere.

Of course, public sector provision is not enough. We are also taking steps to encourage landowners and developers

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to help in providing affordable housing for local people. In particular, in February 1989 we announced changes to planning rules whereby local planning authorities may, in exceptional cases, release small pockets of land, not previously designated for housing, for low-cost schemes to meet local needs, subject to conditions that ensure that the houses remain available to local people.

Rural areas can also expect to benefit from the encouragement that we have given to private investment in the rented sector through deregulation and the tax incentives available under the business expansion scheme.

The hon. Gentleman mentioned health. General practitioners are the first line of health care. I remind the House that in England there are special rural practice payments for general practitioners when at least 10 per cent. of their patients in a rural area live four miles or more from the main surgery. In Scotland, there are similar provisions.

The hon. Gentleman mentioned maternity services. I understand that the clinical view is that women should be encouraged to have their babies born in hospital when possible. That must usually mean the larger and fully staffed consultant units of district general hospitals which can provide the full range of services, including those necessary in any emergency.

It is a trend of modern medicine to have larger units providing that full back-up, and hospitals of that size are inevitably located in urban areas, and it is not feasible to provide smaller community hospitals with the full range of staff and equipment. District and regional health authorities are alert to the problems experienced in rural areas, and they make provision for travelling and try to ensure that mothers living in rural areas nevertheless have proper access to such hospitals. In order to minimise the risk, provision is made so that during ante-natal care a woman who lives in an isolated area and is judged to be at risk from labour can be admitted to hospital before the expected date of confinement. I do not accept that the NHS is unresponsive to the needs of rural areas or that the standards of service that they receive are necessarily inferior to those provided in towns and cities.

We cannot expect public transport in sparsely populated rural areas to be as good as it is in towns and cities. Nevertheless, under the Transport Act 1985 we opened the way for operators to provide flexible bus services in rural areas on a commercial basis. When it is not possible to provide a service commercially, local authorities have continuing powers to subsidise such services. We have also introduced the rural transport development fund specifically to assist in the provision of rural bus services.

I am aware of some of the problems raised by the hon. Gentleman. We are not complacent about them. We are also aware that future changes will throw up new problems, and we are keeping the matter constantly under review. Our aim throughout is to protect the historic and valuable countryside that is our precious heritage, while providing excellent facilities and services for those who live and work in those areas.

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Professional and Executive Emoluments

3 pm

Mr. Hugh Dykes (Harrow, East) : Mine is the last but not least of the Easter Adjournment topics. Perhaps I have the credit of having chosen the most obscure title. Hon. Members may wonder what the title is getting at. I hasten to add that the construction of the words in the title was not my own, quite rightly according to the usual procedure and custom. I wish to raise the question of top executive salaries that top directors of companies pay themselves and the need for them to show self-restraint.

I declare an interest in several business activities outside the House, which are listed clearly in the Register. I do not need to go into them in detail and take up the time of the House. I am second to none among my colleagues in being a champion of the virtues of free enterprise, good business, business success and commercial activity. I pay tribute to the way in which the Government have encouraged that by their philosophy and been successful since 1979 in bringing about a dramatic transformaton in business practices and attitudes, and in running companies. That has stood the country in good stead and achieved for it a considerable reputation abroad.

I thank my hon. Friend the Under-Secretary of State for Employment for coming to the House for the last of these Easter Adjournment debates. I hope that I have not delayed him in going to his constituency. I am grateful to him for coming from the Department to give some answers to my comments.

It is apposite that this subject should be raised from the Conservative Benches because we have a record as a business-oriented party, and the Government espouse free enterprise. I have never been so partisan in politics that I believed that trade union reform could come only from the Conservative party and business reform only from the Labour party in a divided political society. I also pay tribute to the Government for the way in which they have taken side by side the reform of trade union abuses-- particularly in the earlier years of this Government--with the need for companies to put their house in order and indulge in better practices, and for stronger legislation on directors' responsibilities. All the companies legislation in recent years has created the necessary balance.

It is particularly interesting and relevant to raise this matter on the Conservative Benches because of growing anxieties about the excessive amounts that some chief executives, chairmen, managing directors and leading executives of companies pay themselves. I deliberately say "some" because of the way in which mechanisms work on company boards of directors and the generally welcome and impressive self-restraint that most directors have displayed, particularly those in charge of fixing their own emoluments. I have noticed that, in recent years in particular, that has become a matter of great concern to the Government. I remember my right hon. Friend the Prime Minister's dramatic response to complaints about the excessive remuneration--if that is a fair phrase--of, for example, the chairman of British Airways. She specifically referred to that before Christmas in a notable utterance.

In the past few years there have been an increasing number of comments in the press and in journals rather than in the House. That is one reason why I am raising the

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matter today. There have some references to it in the House, but only usually from the more stakhanovite Labour Members on the Bench below the Gangway.

Many recent press articles, which I shall not quote because of the lack of time, have shown the growing concern about the subject. On 1 July 1989 The Guardian had an article entitled "How Britain's bosses are taking the rise", with details of the huge pay increases of top executives, chief executives and so on, in the largest 100 companies. On 23 July 1989, a newspaper well known for its support for private enterprise and the free market, The Sunday Times, had an article entitled, "How bosses justify £534,000 a year". It compared the salaries of the 30 highest-paid executives in Britain with the performance of their companies measured by profits and the change in earnings per share.

We know that highly paid executives, to some extent with justification, justify large salaries in terms of what they describe as the international demand for their expertise, but that is often more imagined than real. I do not detect an enormous international movement of senior executives all over the world according to the exact scientific market measurement of the best emolument and remuneration.

There is a growing abuse whereby directors and chief executives give themselves large contracts of three, four or five years at the outset of their tenure of office, or when they are threatened by a takeover bid, so that if the worst comes to the worst and they are ousted, by whatever means it might be, they know that they will be protected. That produces acid comments on the shop floor among junior management executives, the public and the admittedly rather docile shareholders who seem to be the norm even in our large plcs. I pay tribute to my hon. Friend the Member for Beverley (Mr. Cran) who was one of the first of our colleagues to express anxiety about the matter. He asked the Chancellor whether he agreed that British management must continue to resist excessive wage claims and ensure also that their own snouts are not too deeply in the pay trough. The Chancellor rightly replied that he would not put the second part of my hon. Friend's question in precisely that way, but he would agree with the underlying sentiment. Similar references have also been made by my right hon. Friend the Prime Minister and others.

On 19 January 1990, The Times referred to the salary of Sir Ralph Halpern, which came under fire from shareholders at the annual meeting. It referred to the fact that, once the company's profits and turnover had begun to turn down in the current recession, an additional undisclosed payment was made to Sir Ralph Halpern as the head of the Burton group, which he did not even have to reveal to shareholders. We see the difficulties that arise when shareholders assert themselves only when it is too late and the company faces a grave crisis.

We should move to a system under which such contract arrangements are established only after a chief executive, managing director, or executive chairman, has begun his or her successful remodelling or expansion of the company, rather than from day one in any given period, usually fixed--a disturbing phenomenon of modern times--through the rather phoney mechanism whereby the so-called independent sub-committee of non-executive directors on the board fix the salary of the leading

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