House of Commons Hansard Debates for 18 Nov 1992

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Members--would do well to pay attention to what the Society of Motor Manufacturers and Traders has said since black Wednesday : "there is great uncertainty at present over the future direction of Britain's economic and European policy. Inflation is still feared, the pound is regarded as unstable at its present level (which is much too low--the industry was competitive at DM2.90-£1) and there is great concern lest the industry again be subjected to taxation to help the Government fund the PSBR. A two-speed Europe would speedily negate the purpose of the foreign investment so that new capacity would replace rather than add to existing capacity".

As my hon. Friend the Member for Ashfield (Mr. Hoon) rightly said, devaluation cannot be a substitute for tackling the underlying weaknesses of the British economy.

The right hon. Member for Shropshire, North also alerted us to the "inflationary time bomb" which is inherent in the present situation. He should recognise that much of that inflationary time bomb can be traced to precisely the devaluation in which he seemed to have so much faith.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) made at least two judgments with which I agreed. First, he said that the debate on the statement is being held unusually quickly because, the longer that the country has to examine it, the more they will realise how shallow and inadequate it is. I also agree with him that it is a shameful abdication of the country's international responsibilities for overseas aid to the poorest third-world countries not to have increased it in real terms, and it is against the best traditions of the British people's feelings.

I endorse the powerful argument of my hon. Friend the Member for Newport, East (Mr. Hughes) that everything possible should be done to boost the British car industry. Welcome though the abolition of the special car tax is--like my hon. Friend, I have long argued that it should be ended--let no one be deceived : even if sales were to increase by 70,000, as the SMMT says they might, it will still leave them 29 per cent. lower than they were in 1989. Such is the depth of the recession--and, by comparison, how puny are the measures in the autumn statement.

Can the Paymaster General answer the question that he could not answer last night when we discussed the car tax? How will that £750 million be recouped from British motorists, as the Chancellor said it would be? Also, why is it £750 million, when an extra 70,000 car sales, resulting from the abolition of the tax, would bring in £122 million in additional VAT? Does that not make the net cost of abolition £628 million? If he is going to clobber the motorist by taking the money back, should it not be £628 million and not £750 million? I hope that he will answer that question.

Welcome though the measure is, the car industry needs a restoration of consumer confidence more than anything. That will not come about as long as people fear for their jobs, are fearful of outstanding debts and are uncertain as to the direction that the economy will take under the Government. As the likely effects of the autumn statement, as opposed to its promises, have sunk in, it is increasingly evident from industry, and the high streets, as well as from the House that, whatever else the autumn statement does, it will not lift the fear of unemployment that is so damaging the economy and people's lives.

As my hon. Friend the Member for Dunfermline, East (Mr. Brown) has said, even if the promised whole 1 per cent. of growth, as predicted in the autumn statement for next year, materialises, it will leave Britain in the three

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years to 1993 with an appalling cumulative cut in real GDP of no less than 2.5 per cent., as compared with an increase of 4 per cent. in the United States, 10 per cent. in Japan, 5 per cent. in Germany, 6 per cent. in France, 8 per cent. in Spain and 4.5 per cent. in the European Community as a whole.

That nails the claim made by some Conservative Members that somehow Britain is muddling along all right in a recession that is also hitting everyone else. The difference is that, in the past few years, other European economies have been growing, while ours has contracted. They have built up their industries and rate of production, while our Government have run our capacity down. As my hon. Friend the Member for Neath (Mr. Hain) has said, they have run it down to the point where even our ability to sustain our future standard of living is threatened.

How much confidence can we have in the Chancellor's forecast of 1 per cent. growth next year and his pathetic 0.25 per cent. forecast growth in total investment? After all, this is the Chancellor who told us in his interview during "On The Record" on Sunday : "The Government cannot forecast precisely whether the economy is going to grow by 1 or 1 per cent. There are margins of error as I have constantly, constantly tried to make clear."

The Government have another chance today. Will they tell the House what are the margins of error for those pathetic forecasts of growth next year? Is the Chancellor saying that the downside of those margins of error is that there might be no growth at all? After all, he forecast growth of 2.25 per cent. this time last year, but, instead, we had a cut of 1 per cent. in GDP. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) said, that forecast is like an economic blind date--and it does not look like a very good one.

Although some of the decisions in the autumn statement may bring some limited benefit, they will be affected by the deflationary impact of others. It is all very well for the Government to boast that they now hope that the Jubilee line extension will go ahead--although they have been unable to confirm any deals that will enable that to happen--but what about transport in the rest of London? What possible sense does it make to cut £380,000 from London Transport's budget--equivalent to more than a quarter--when, as the right hon. Member for Brent, North (Sir R. Boyson) spelt out, the underground is crying out for more investment, not less?

What about the rest of Britain? Where is the capital investment that will give our country the communications network it needs and construction workers the jobs they need? Why have the Government not announced any new capital programmes? They have told us nothing new ; they have simply cited programmes that have been announced previously.

I was pleased to note that the hon. Member for Newbury (Mrs. Chaplin) welcomed public-private financing partnerships. It is a pity that her opinion was not able to prevail in her previous job as head of the Prime Minister's political office, when Conservative Members heaped ridicule on the proposals of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). As my hon. Friend the Member for Kingswood (Dr. Berry) has said, measure after measure that we set out in our programmes before the election, and which was ridiculed by the Conservatives, is now being hesitantly implemented by the Government.

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We do not complain that the Government have taken our policies. The more of our policies they adopt the happier we shall be, and the better off Britain will be. Our complaint is that they have not accepted entire programmes--their acceptance is half-hearted. What they propose in the autumn statement totally fails to match the challenge that now confronts our country as a result of the failure of their policies.

As my hon. Friend the Member for Darlington (Mr. Milburn) rightly said, the Government's industrial investment incentives are inadequate, and the cuts in training and industry budgets are particularly damaging, especially in regions with high unemployment. As my hon. Friend the Member for Hartlepool (Mr. Mandelson) said, the Government are failing to meet the need for high quality training for the unemployed. Jobplan workshops can only be of limited value as long as six people chase every vacancy.

As my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) asked, what good can come from cutting programmes which are desparately needed to regenerate inner city areas?

The hon. Member for Harrogate (Mr. Banks) rightly complained about cuts in the tourism budget, but he is too easily satisfied if he believes that the present budget for science, research and development is anywhere near adequate when many of our competitors are spending so much more and investing an increasing amount in important science, research and development for the success of industry in the future.

Several hon. Members referred to the Government's incomes policy. The obvious economic objection is that, even if it could work, it is bound to store up problems for the future. It takes demand out of the economy but will give rise to pressures in a couple of years time, precisely when inflation is likely to be taking off again. As my hon. Friends the Members for Newport, East and for Pendle (Mr. Prentice) pointed out with great passion, we also need to focus on the unfairness of that incomes policy.

Mr. Nigel Evans (Ribble Valley) : Where would the hon. Gentleman get the money to pay for wage increases in the public sector? Would he get it from cutting back current spending on capital projects, on pensions or on social security?

Mr. Smith : I am pleased that the hon. Gentleman has asked that question, because it is a variant on a question asked by several Conservative Members, including the Chancellor, who asked what the Labour party would cut to bring down the public sector borrowing requirement. We shall bring down the public sector borrowing requirement by cutting unemployment.

On the unfairness of the Government's incomes policy, may I take the example of a real home help--a Mrs. Weston--whose take-home pay is just £100 a week. She receives that sum for the responsible job of looking after elderly people, many of whom are incontinent and confused. As well as doing their shopping, housework and 101 other things, she washes and dresses them and helps them to go to the toilet. The House will agree that it is not an easy job.

The Government are telling Mrs. Weston that she can expect, at most, an increase of £1.50 per week. That sum will be more than eaten up by the £3.75 which the Government acknowledge is likely to hit her through

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inflation. Those of her colleagues with council rents to pay will find that 5 per cent. plus the increase in the inflation rate on which the Government insist will take another £2.32 or so. Clearly the Government are piling an indefensible burden on those workers least able to bear it. The British public will know that that is wrong, and will be deeply ashamed of what the Government are doing. In addition to the injustice and unworkability of the Government's incomes policy, another deep and potentially devastating problem is hidden in what the Government have said so far about that policy. They must say whether it includes increments, performance-related pay, overtime and so forth. Are increments to be included in the 1.5 per cent.? I shall give way to the Chancellor if he will tell us. The Chancellor does not want to answer the question--perhaps he does not know. If they are not included, we have not a 1.5 per cent. pay limit, but a 1.5 per cent. limit plus 1.5 or 2.5 or 3 or 4 per cent.--and that is not what the Government have been claiming.

If increments are to be included, do the Government believe that there will be enough money within the 1.5 per cent. to honour legally binding contracts? The increments on nurses' wages scales are legally binding and automatic. Will the Government legislate to set aside those increments, as the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) did when he operated a statutory incomes policy? If not, the increments will have to be paid and, together with performance-related pay and other supplements, will rapidly use up the available funds. If that is the case, the Government are assuming either cuts in cash terms for other public service workers or large-scale cuts in staff. The House deserves to be told which. As my hon. Friend the Member for Pendle reminded us with great passion, on Monday the Prime Minister appealed to the partnership and fairness of the British people. Where is the partnership and fairness in an incomes policy that gives a home help £1.50 a week and a judge £50 a week? Where is the partnership and fairness in removing wages council protection for 2.5 million low-paid workers? Where is the partnership in abolishing the National Economic Development Council--the very forum through which partnership in tackling Britain's economic problems could have been carried forward? The reality is that, even as the Prime Minister talks partnership, he and his colleagues practise division. When the Chancellor talks of confidence, he breeds despair. How can anyone have confidence in the Chancellor after all that he has said and done ? He is the Chancellor who sees little green shoots that are not there. He then protests, like a true believer in unidentified flying objects, "They were there--I saw them--yes, I did, But they have gone now." He then goes to the Treasury Select Committee and says, "Other people saw them too." No wonder that the Chancellor's colleague, the hon. Member for Buckingham (Mr. Walden), wrote in yesterday's edition of The Daily Telegraph :

"People will never quite believe what the Government tells them again."

We do not believe what the Government say in their gloss on the autumn statement. We have had not a budget for growth, but a statement for stagnation. On the Government's own admission, the statement will condemn thousands more of our fellow citizens to the despair of unemployment, bankruptcies and house repossessions.

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The statement fails because it leaves people and resources idle, not mobilised as they should be to respond to unmet needs. The Opposition have clearly stated what is needed for Britain's recovery. The ingredients are : real partnership in place of division ; a jobs programme in place of unemployment ; quality training in place of cheap labour schemes ; public investment in place of spending cuts ; homes in place of homelessness ; a Europe-wide expansion programme in place of the wasted Tory presidency ; a managed exchange rate in place of free market floating ; and a positive energy policy in place of pit closures.

We need active government for sustained economic success, instead of the incompetent meandering of a Government who have broken their election promises, failed the economy and deceived the British people. The autumn statement once again confirms the Conservative party as the party of economic failure and mass unemployment. The Government should be rejected in the Lobby tomorrow, as surely as they are rejected by the British people.

9.38 pm

The Paymaster General (Sir John Cope) : I can agree with the first few words of the hon. Member for Oxford, East (Mr. Smith) in which he said that we have had an interesting and wide-ranging first day's debate. Thereafter, I differ from him. The hon. Gentleman recycled some of the speech that he made yesterday on the Ways and Means motion on car tax. He again asked me about the abolition of car tax. The answer is the one that I gave the hon. Gentleman last night and the one that my right hon. Friend the Chancellor gave to the House today. We certainly do not intend to anticipate the Budget at this stage. Still less do we intend to anticipate its effects based on the forecasts of the hon. Gentleman or anybody else.

Hon. Members have expressed concern about the continuing recession. My right hon. Friends the Prime Minister and the Chancellor recently emphasised that that concern is shared by the Government. As everybody knows, the economic background is difficult not only for us but for other countries. Our hopes for recovery in the early part of this year have been disappointed. The fact that economic activity in other countries remains weak and the outlook in Europe has worsened further in recent months makes this country's task more difficult, not easier. Our task is to return to sustainable growth without renewed inflationary pressures.

Experience in this country shows only too clearly that growth cannot be sustained unless inflation is controlled, and we all want sustainable recovery. Retail price inflation has fallen rapidly over the past two years from almost 11 per cent. in autumn 1990 to 3.6 per cent. in October this year, while underlying inflation is only marginally higher at 3.8 per cent. Both those percentages are below the European Community average, and producer price inflation and underlying earnings growth are both lower than they have been for a generation. This progress was achieved during a period when our anti-inflationary policies were bolstered by sterling's membership of the exchange rate mechanism. The turbulent events that culminated in the suspension of that membership have not diminished our determination to prevent any resurgence of inflationary pressures, and we have recognised the need for clear yardsticks by which we can judge monetary

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conditions, and by which others can judge our monetary stance. As a result, my right hon. Friend the Chancellor has introduced a measure that Britain has never had before--an explicit target range for underlying inflation of 1 to 4 per cent. As the House knows, we intend to be in the lower part of that range by the end of the current Parliament. We have also established a monitoring range for M4 to go alongside our target range for M0.

As well as clearly laying out our objectives and the indicators on which we intend to concentrate, we have introduced considerably greater openness into the process by which interest rate decisions are taken.

The battle against inflation is never over and we must always be on our guard if we are to ensure that we can compete effectively with the best of our competitors in Europe and beyond. The good progress that we have made and the considerable downward pressures on inflation still in the pipeline have allowed my right hon. Friend to present to the House in his autumn statement a clear, comprehensive strategy for sustainable growth which has been widely welcomed. We have responded with a considered reduction of interest rates and an imaginative package of measures designed to restore confidence and boost sectors of industry that have been particularly hard hit by the recession. We have done so without throwing away financial discipline because that would unleash a new burst of inflation and kill the recovery that everybody wants to see. We have made the package time limited so as not to impede the reduction in the PSBR that will occur as the economy recovers. We are well aware that persistent, high PSBRs would have the effect of passing a heavy burden of public sector debt to future generations. That is why it is also vital to continue to exercise tight control over public sector spending, as we have done in this round.

Some hon. Members expressed concern about the high level of the public sector borrowing requirement this year and the forecast for next year. No one in the Treasury is in the least complacent about the PSBR, but it will fall back as the economy recovers. As we all know, it compares badly with what we were able to achieve before, but our tough attitudes to public spending over the past decade mean that the United Kingdom now has the lowest Government debt in the European Community, except for Luxembourg, as a proportion of our GDP, and one that is lower than those of the other G7 countries. That will help us to sustain a high public sector borrowing requirement to get us through the recession. In any case, as has been pointed out, the planned growth of public expenditure is well within the potential growth rate of the economy. This ensures that the ratio of general Government expenditure to gross domestic product will fall and that will, in itself, help us to deal with the PSBR.

Mr. Hain : May I draw the Minister's attention to page 53 of the autumn statement, in which it is said that unemployment will be 2.8 million not only in the next financial year, but for the two subsequent financial years? That is an incredible figure and if it were breached, it would drive a coach and horses through the Government's public finances and put extra burdens on the PSBR. Can he name one independent authoritative forecaster who agrees that unemployment will remain at that total?

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Sir John Cope : I am following the usual convention in saying that I am speaking about unemployment later, if the hon. Gentleman will forgive me for not replying to his point now.

My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton- Brown) rightly congratulated the Chancellor on the fact that this will be the last traditional autumn statement. My right hon. Friend has instituted some profound and important reforms in the way that the Treasury organises its business and that the Government's financial decisions are made. The importance of these reforms has been under-estimated, and it is important that they are not. Merging the tax decisions of the Budget and the expenditure decisions of the autumn round into one joint process is not easy. Apart from anything else, the ancient seasonal organisation of Parliament is being totally reorganised, and we all know the difficulties involved in changing this place.

The second major change that the autumn statement embodies is the new method of settling expenditure from the top down instead of collecting departmental bids first. We can add to the reform list the new, more open methods of handling monetary policy, to which I have referred, the coming changes in the Government's accounts to distinguish between capital and revenue and the new changes in the rules for private finance of investment that is normally in the public sector. All these reforms have been introduced by my right hon. Friend and he deserves full credit for the biggest set of improvements to our financial decision-making process for many decades, if not for a century.

Mr. Barry Field (Isle of Wight) : Did my hon. Friend see the parliamentary question that I tabled the other day? In it, I pointed out that only Ireland and ourselves still have a tax year that does not run with the calendar year. May I invite my hon. Friend to go a little further and bring that into line as well, because that is a much-needed reform?

Sir John Cope : We are open to suggestions, but not at the moment. We have noted my hon. Friend's point.

My hon. Friend the Member for Newbury (Mrs. Chaplin) referred to the changes in the rules for private finance, of which I have just spoken, and to the fact that most of the projects mentioned in this connection have to do with transport. She expressed the hope that they will go much wider. I assure my hon. Friend that they will. In some of the material that we have put out about this proposal, specific mention is made of the package of housing market measures and the lower housing association grant rates, of allowing British Rail to lease some £150 million worth of new rolling stock, provided that suitable leases are offered, and of ending the prohibition on borrowing by higher education institutions. That proposal also includes the national health service, so it goes much further than just transport.

Mr. Andrew Smith : The House deserves to know whether nurses' increments are included within the 1 per cent. pay policy and how much money the Government are setting aside to pay for them.

Sir John Cope : Settlements are the basis of the pay policy. Existing performance pay will continue within the wages bill, but of course new performance pay arrangements and new arrangments of that kind will count against the 1 per cent.

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Mr. Andrew Smith : Will the right hon. Gentleman give way now?

Sir John Cope : No, I have very little time. I gave up some of my time to allow other right hon. and hon. Members to comment, but I want to respond to many of the points raised during the debate. It is quite clear that the 1 per cent. applies to settlements. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) expressed elegantly, as always, philosophic doubts about public sector borrowing and other matters, to which we shall pay careful attention.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) expressed concern about local authority capital receipts. As he knows, the capital receipts rules were introduced in 1990 as part of the new local authority capital finance scheme, with the objective of bringing capital spending under control. Local authorities were required to set aside a proportion of their capital receipts to repay their debts.

Some local authorities did so, and it would be wrong and unfair on local authorities that took the prudent course of repaying debts from their set- aside receipts to allow others that accumulated receipts to use them. That is why the new arrangements apply to future receipts, so that people know in advance what is going to happen to them. My right hon. Friend the Member for Woking (Mr. Onslow) advanced his own plan for the pay of Members of Parliament. It was ingenious, but built more on the measures in the autumn statement than was intended. In any case, that matter is for the House.

Mr. Andrew Smith : Will the right hon. Gentleman give way now?

Sir John Cope : No. I made it clear that I will not give way because I have little time left.

My right hon. Friend the Member for Woking raised also the question of interest charged by banks, as did other right hon. and hon. Members. The Government take very seriously complaints that banks are not passing on base rate cuts, particularly to small firms. It is not for the Government to intervene in individual negotiations, but my right hon. Friend the Chancellor is taking the matter up again with the clearing banks and plans to meet their chairmen in the near future. He has also asked the Bank of England to review the latest position as quickly as possible. When a review was undertaken last year, it was shown that small firms had benefited from base rate cuts--but clearly it is time to check the position again.

The hon. Member for Newport, East (Mr. Hughes) referred to road building and the Severn bridge. The second Severn crossing, which is being built between the hon. Gentleman's constituency and mine, is an example of private finance being used in a particularly imaginative way to assist the road building programme. The hon. Gentleman welcomed the ending of car tax, on which the hon. Member for Dunfermline, East (Mr. Brown) poured scorn earlier. In this instance, the hon. Member for Newport, East is in the majority, both in the House and elsewhere, in welcoming that development.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) drew attention to some supply-side measures involving the property market, and we shall certainly ponder those. The hon. Member for Londonderry, East (Mr. Ross) raised a series of issues, some of which I have

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already touched on ; one however, was the cost of security. I have personal reason to remember what terrorism costs, in terms not only of cash but of confidence--as well as the tremendous personal cost paid by people in Northern Ireland. I shall draw the attention of my right hon. and learned Friend the Secretary of State for Northern Ireland to the two road projects in the hon. Gentleman's constituency.

A number of hon. Members--including the hon. Member for Hartlepool (Mr. Mandelson)--mentioned unemployment. I think that the hon. Member for Hartlepool misread the position slightly, but I have discovered that he is usually fairly accurate, and it may turn out when I read Hansard that I did not hear him correctly. The point is, however, that despite the increase in unemployment over recent quarters--which we all regret--long-term unemployment is still about one third lower than its peak six years ago. The object of sustained growth is to bring down unemployment ; as has been pointed out by a number of hon. Members--including the hon. Member for Sheffield, Hillsborough (Mrs. Jackson), it will not be quick or easy, but there is no quick or easy way to do it.

My hon. Friend the Member for East Lindsey (Sir P. Tapsell) made some important points about Japanese investment, which has been very valuable.

Mr. Hain : Will the Paymaster General give way?

Sir John Cope : I would rather not. I am within about four minutes of the end of my speech.

I was about to say that Japanese investment has been extremely valuable in providing jobs, and in other ways.

The hon. Member for Great Grimsby (Mr. Mitchell) was, as usual, well out of line with his party. That is no surprise, of course. Far from thinking devaluation a bad thing, as some people appear to, the hon. Gentleman appeared to consider 16 per cent. devaluation no more than marginal, and to believe that a much more substantial devaluation was required. Everyone is entitled to his opinion, but if massive devaluation were the sole answer to the United Kingdom's problems, a glance at the exchange rates over the past 30 to 40 years would lead us to suppose that the economy was very strong. I am not prepared to accept the hon. Gentleman's recipe for sustained recovery, or any sort of recovery, and I doubt whether any Opposition Members accept it either.

The hon. Gentleman presented an ingenious method of spending money without having to raise it. I confess that I did not quite follow it, but it seemed to amount to printing money and bringing about inflation. It was all very interesting, but not very relevant to what the rest of us want.

The hon. Member for Hillsborough spoke of urban programmes. She said, correctly, that £176 million would be available in 1993-94. She many not have noticed the extra spending on city challenge, which is being introduced as part of the package. Including that money, a total of £408 million will be available for urban-priority authorities, compared with £319 million this year. That is not counting the additional spending power from capital receipts--more than £500 million--that will result from the relaxations announced last week. Moreover, the resources for the urban programme in 1993-94 allow £20 million for new projects, over and above existing

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commitments. That money would be allocated through capital partnership to work alongside the capital receipts money that I have mentioned.

All in all, the debate has been interesting but the Labour party, having spent the summer arguing about whether its economic policy or its presentational skills had lost it the election, has not altered its economic policy since, so far as I can see, although the hon. Member for Dunfermline, East shouts about it louder than we are used to, which is a particular punishment for those of us who sit on the Government Front Bench.

Opposition Members seem to have a new dilemma. In facing the autumn statement, they cannot decide whether to attack our policies or to claim the credit for them. The result is that they do both. It has been impossible to tell

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

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Oil Exploration (Compensation to Fishermen)

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Kirkhope.]

10 pm

Mr. Barry Field (Isle of Wight) : I thank you, Madam Deputy Speaker and, through you, Madam Speaker for granting me the Adjournment debate. I was asked by the fishermen of the Isle of Wight to inquire discreetly whether Madam Speaker enjoys lobster or crab from time to time, because they wish to make a donation to her for granting me the debate. No doubt I can make discreet inquiries to that end via Hansard.

I apologise to the Minister for Energy for bringing him to the Dispatch Box on the issue, because he has been extremely helpful. There was a stage when I thought that the whole matter was settled. To recap, on 4 June in the House of Commons I met Mr. Romieu, the chairman and managing director of Elf Enterprise. I told him how concerned I was that there was not a proper compensation scheme in place for the inshore fishermen who were affected by the oil exploration that was taking place off the Isle of Wight. He wrote to me on 10 June and accepted that there was a need for an ex gratia payment. On page 2 of his letter he said :

"With the list complete, we will also agree with the fishermen concerned, not all of whom belong to associations"

I underline that point--

"a fair and equitable system of ex gratia payment from Elf Enterprise to secure their co-operation."

In the final paragraph he said :

"It is deeply disappointing to me that you have been angered as a result of the representations made to you by fishermen in your constituency concerning our activity. As a responsible company, it is clearly our intention to deal with their concerns, and in so doing achieve the same level of co-operation established during the 98/13 exploration programme."

That exploration was carried out by Occidental Oil which was taken over by Elf Enterprise.

On 22 June I wrote to my hon. Friend in the Department of Trade and Industry and told him that we were becoming increasingly disillusioned with Elf as it had not set out the terms of its compensation scheme. I enclosed with my letter a copy of the latest letter that I had received from the fishermen's association. I told my hon. Friend that we felt that Elf was being deliberately obstructive, particularly as the same individuals were involved in the Elf compensation scheme for fishermen as had been concerned with the Occidental scheme, because they were taken over when Elf took over Occidental. That was of great concern because effectively they had been through the exercise once before with island fishermen. However, everything looked much brighter after a while--thanks, I am sure, to my hon. Friend's intervention. On 10 July, therefore, I was able to write the following letter to him :

"Dear Tim, You have won first prize in the most helpful' Minister competition for this session and the fishermen and the Member for the Isle of Wight are pleased to acknowledge this by awarding you one week's holiday at the Field hovel during the coming recess Thank you and a thousand crustacea owe their lives to you!"

Unfortunately, my enthusiasm was a little premature. I could not possibly read into the record the Minister's

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reply. He is already under a great deal of pressure from the energy world, and I feel certain that the population lobby would be immediately on his back, were they to see the contents of his reply. As for the contents of the correspondence with one of my fishermen, I can assure my hon. Friend that I have prepared for him copies of all the correspondence with just one fisherman who now finds himself without full compensation. I hope that my hon. Friend will accept that, having carefully scrutinised all the documents the fishermen brought to me, I found that they were all the same.

This particular fisherman received a letter on 6 July from Elf Enterprise. It was a "Dear Sir" letter and it set out the way in which the compensation scheme would operate. It worked like this. There was to be a £4,000 lump sum payment on an ex gratia basis to bona fide fishermen or chartered skippers who regularly worked in the area and who were certified to do so by the local fishermen's association. There was to be £2,000 up front straight away on signing the agreement and £2,000 at the end of the survey, providing there had been no further disruption--the point being that both I and certain others had encouraged the fishermen in their blockade of the seismic survey because we had been unable to obtain a proper compensation scheme from Elf. Therefore, Elf said that it would make half the payment available as a sign of its good will straight away, as soon as all the fishermen had signed up, and that it would pay the balance at the end, provided that there was no more disruption to the work during the rest of the survey--which proved to be the case. Elf produced the agreement on the same day, 6 July. There are a number of points in the agreement, but the real point concerns item 5 which says :

"The Company may be requested by the Inland Revenue to supply details of any such cooperation payment. Such details will only be supplied on request."

Item 6 says :

"Payment will be made on the basis of information disclosed to the Company by the Skipper or Owner or his representative organisation and set forth below."

The information required relates to details of the skipper-owner, the address, the name of the vessel, the type of fishing, full or part-time, the average days fished in the survey area per month and the association to which he belongs.

The agreement contains a number of other points, including the fact that it is governed by English law. Nowhere in the agreement, however, which is absolutely standard and which was used for all the fishermen, is there any suggestion that the fisherman has to provide certified accounts, and the like, in order to obtain these payments--one of the points in contention.

My hon. Friend will have noted carefully the point that I made at the beginning : that the managing director of Elf was certain that a compensation scheme would be provided that would be available not just to members of the fishermen's association but to other fishermen. However, a number of fishermen have had no compensation. An attempt is being made by the oil company to suggest that those fishermen have not been certified, so to speak, by the fishermen's association.

I have a letter of 30 September from the Isle of Wight Commercial Fisherman's Association which says :

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"I have been requested to contact you to confirm that the people named below are members of the above association. They attended a meeting with representatives from the Elf Enterprise Company when they were told that ALL persons whose name appeared on the list that was prepared that evening would receive co-operation payments. The persons named below have been greatly inconvenienced by the survey resulting in a significant decrease in their earnings." When I first asked for the Adjournment debate this evening, I thought that I might produce a list of all the people who have been affected, or who have either not been paid or not been fully paid. I then realised that that was a treacherous course to follow because the list might not be exhaustive. I do not intend to go down that path this evening. However, I know the principal players in the problem.

We must bear it in mind that a number of fishermen have received no compensation despite the fact that they signed the agreement, the fact that they are members of the association and the fact that they went along to meetings. Their request for compensation has been refused point blank.

Joy of joys, those fishermen then received a letter from Elf Enterprise thanking them for their great co-operation during the survey and for all the assistance they had given. I wrote a rather strong letter to Elf Enterprise and received a letter back from Mr. Jackson, the marine operations manager, who is one of the serious problems in this matter. He replied to me on 14 October as follows : "The purpose of our letters dated the 1, 5 and 12 of October, sent out to all 207 individuals on our contact list was to keep people informed of the progress of the survey, which has been repeatedly delayed by inclement weather. Any misunderstanding that might have arisen as a result of receipt of these letters by fishermen who have not been made an offer of payment is regretted."

One does not have to be a genius or to know much about inshore fishermen or fishermen the world over to know that having refused them compensation payments and then to write to thank them for their co-operation is to invite a fairly robust retort. The fishermen were pretty irritated, to say the least, and so was I. By then, I had come to expect a rather lackadaisical attitude from Elf.

There were then letters dated 14 October. I do not know whether they were all sent on the same date, but they were all of the same nature. The company, under the heading

"Block 98/12 Seismic Survey--Co-Operation Payments",

pointed out where the meeting was to take place, the venue, the time and all the information that the fishermen had to produce to get paid. The company asked about the local authority licence for the carriage of passengers--charter only--the record of charter bookings, vessel logbooks and diaries. I draw my hon. Friend's attention to the fact that none of that information was required in the original agreement.

By then, the Isle of Wight Commercial Fisherman's Association was pretty angry with Elf. It sent me a copy of its letter to Elf which was dated 24 October. The association quite rightly makes the point as follows :

"The agreement that you made with the fishermen was for non-interruption of the survey and as you already know, our members have given you their fullest support in this. We would expect you to honour your side of the agreement as expediently as possible and not put further matters of contention in the way of this final settlement."

By then, the list had become extensive and there was great concern among the fishermen--I also felt great concern

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