Lords Sitting of 4 August 1972

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bristol.

IMMIGRATION ACT 1971 REGULATIONS
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when the regulations for the implementation of the Immigration Act passed last year are to be published.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, as my honourable friend announced in another place on July 27, it is proposed to bring the remaining provisions of the Immigration Act 1971 into operation on January 1, 1973. The immigration rules and the statutory instruments to be made under the Act and which are to be laid before Parliament will be laid in good time before then.
LORD BROCKWAY: My Lords, I should like to thank the Minister for that reply. May I ask if he recollects that when the Bill was passing through this House a promise was given that police control of non-patrial immigrants would not be applied, despite the clause in the Bill? Can the Minister say when the regulation dealing with that matter is likely to be published?
VISCOUNT COLVILLE OF CULROSS: My Lords, I am afraid that I have not re-read all the speeches on the Bill made in this House. If there is a regulation to be laid on this matter—and I am not sure of the exact details to be covered by all the regulations—it will be laid in good time so that it may be studied. It will probably not be laid before the House rises; but this may be dealt with in September, or possibly October.

RHODESIA: FUTURE OF TANGWENA CHILDREN
11.8 a.m.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what information they have about the reported intention of the Rhodesian régime to remove 100 children of the Tangwena tribe from their families on their ancestral lands and place them in institutions.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, I understand that the Tangwena children in question have been living away from their families on Nyafaru Farm, which adjoins the ancestral land of the Tangwena tribe, since the first eviction of the tribe in 1969. The Rhodesian authorities appear to have now removed these children from the farm, and placed them in a camp run by the Department of Social Welfare near Salisbury.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, I should like to thank the noble Baroness for that reply. Is the noble Baroness aware that I put down this Question largely because I am one of the few people who actually stayed in Nyafaru with the Tangwena people? I therefore know how specially close is the link between the mothers and their children, since they watched their huts and crops being burned down and saw their fathers being driven into the mountains by the police with helicopters and dogs. I particularly wanted to stress that aspect. May I ask the noble Baroness to request further information because, in fact, the children had not been separated from their people? May I ask the noble Baroness to check on this matter? The fathers are of course in the mountains, but the children were with their mothers at Nyafaru. Would the noble Baroness also check whether, even under the Smith régime's laws, there is any legal authority for removing these children from their mothers at this particular time?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, my information was, as given in my Answer, that the children were not living with their families. As the noble Baroness will realise, it is very difficult to get exact information. This particular action was, I understand, taken under the Land Tenure Act 1969, under which the area in question was designated European land, and before that under the Land Apportionment Act. What we regret so very much about the failure of the settlement proposals is that_ under them there would have been a Commission on Racial Discrimination to examine this kind of situation.
LORD BARN BY: My Lords, may I ask the Minister whether she is aware that this group of African individuals are squatters on the North-East boundary of Rhodesia on land that was barren and practically unoccupied? They are well-known in Rhodesia as cattle rustlers, and it is believed that they have been active in assisting the entry of terrorists from across the border into Rhodesia.
BARONESS TWEEDSMUIR OF BELHELVIE: No, my Lords, I was not aware of those facts. But even if that were so, I would regret the separation of children from their families.
LORD BURNTWOOD: My Lords, while welcoming the observations of the noble Baroness on this matter, may I ask whether she is aware that many of us in all parts of the House would not wish to be mealy-mouthed about this business? It conjures up visions of what happened at Lidice and Oradour under the Nazis.
BARONESS TWEEDSMUIR OF BELHELVIE: Nevertheless, my Lords, we have to recognise that we have little internal power in Rhodesia. This particular matter was personally raised during the negotiations by the noble Lord, Lord Goodman.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, while recognising that it is difficult to have direct conversations with the Rhodesians, may I ask the noble Baroness whether Her Majesty's Government have made any representations to the United Nations ad hoc Corn-
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mission on Human Rights, which is sitting now in London, and which has discussed this very question?
BARONESS TWEEDSMUIR OF BELHELVIE: No. my Lords; we have not. We did of course make representations earlier on, as I described, to the Rhodesian authorities themselves. We felt this might have had more effect.
LORD BARNBY: My Lords, while it is obvious that the Minister can have no jurisdiction over anything of this character in Rhodesia, does it not show what advantage would come from the establishment of more regular contact?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, so long as the illegal régime is in existence and no settlement proposals have been carried out, I am afraid we cannot have official permanent representation.
LORD BROCKWAY: My Lords, may I press the Question which has been put by the noble Baroness? In view of the fact that the United Nations' Commission on Human Rights which is dealing with wrongs in Southern Africa is now in London, is it not possible for Her Majesty's Government to make some representations to it on this matter?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I will consider that suggestion, but I know that the Commission on Human Rights deals, not so much with individuals as with persistent violations of human rights on a large scale. Nevertheless, I will look into that point.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, may I further ask the noble Baroness, who we know has great sympathy about this matter, whether she could perhaps explain to her noble friend and also to the Rhodesian Government that people cannot be described as "squatters" when they have lived in the same place for nearly 300 years?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I understand that this is a dispute which has been going on for four years, which is why we were able to make the personal representations during the settlement proposals.

HEATHROW AIRPORT: PASSENGER FACILITIES
11.15 a.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any proposals for improving the movement of passengers and baggage at Heathrow Airport.
EARL FERRERS: My Lords, my honourable friend the Minister for Aerospace announced yesterday that, at the suggestion of the Chairman of the British Airports Authority, and with the ready support of the Chairman of the British Airways Board and the Air Corporations, he has commissioned the Metra Consulting Group to carry out a study at Heathrow Airport with a view to making recommendations aimed at alleviating congestion throughout the 1970's and avoiding unnecessary delays and other sources of irritation to passengers.
BARONESS BURTON OF COVENTRY: My Lords, in thanking the Minister for that reply, may I first of all ask him just to elaborate on three brief points? Could he give us some information about the Metra Consulting Group? Who are they? What period of time is envisaged for this particular study to be completed? And how are passengers to be consulted?
EARL FERRERS: My Lords, the Metra Consulting Group are management consultants. They were unanimously selected after a competitive interview by a Steering Committee which consisted of B.E.A., B.O.A.C., the Department of Trade and Industry and the Civil Service Department. Their terms of reference and their contract call for a full report before the end of this year, and they anticipate taking random samples of interviews from passengers to ensure that passengers' views are taken into account. If the noble Baroness has any particular points she herself would wish to make, if she would care to let me know I will ensure they are passed on to them.
BARONESS BURTON OF COVENTRY: My Lords, I am sure the Minister must
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know the particular point. But might I ask him whether he recalls that in the letter I gave him last Friday it was stated quite clearly that the British Airports Authority had not been consulted in any way about the proposed withdrawal of check-in facilities at Gloucester Road Terminal; and as the Authority would have to deal with the servicing of passengers at Heathrow consequent upon any such withdrawal can he tell the House whether he thinks this study will perhaps prevent such a lack of co-operation in the future?
EARL FERRERS: My Lords, I do not know whether the study will prevent a lack of co-operation in the future, but it will certainly take into account the effects of such a withdrawal.
LORD ORR-EWING: My Lords, might I ask my noble friend (just to show there is support on this side for complaints concerning the operation and inconvenience at London Airport) to draw the Airport Authority's attention to the incredibly long wait that passengers now have to undergo before they get their baggage at London Airport? Have we really to wait until the end of the tourist season, when we have all been inconvenienced and waited endlessly—generally twice as long as one waits at any other international airport in this world?
EARL FERRERS: My Lords, this is one of the typical points which the management consultants will take into account when they are going to make their report.
BARONESS BURTON OF COVENTRY: My Lords, is the noble Earl aware that I am most appreciative of support from all sides of the House, because this is important? Might I ask the Minister whether, as this study is to take into account, I think he mentioned, further irritations to the public, and is concerned with Heathrow, it would not have been better if such a study had been set up in the first place before B.E.A. took this arbitrary decision? Secondly, as this study group is to report before the end of the year, would he find out whether it is possible to delay the decision on the proposed withdrawal of check-in facilities until after that report is published?
EARL FERRERS: My Lords, I was aware that the noble Baroness was very grateful for all the support she could get from all sides of the House, which seems to be fairly fulsome. I do not know that it is possible to say that this study would have been a good thing to do before B.E.A. took their decision, because it was a decision they were perfectly justified in taking in view of their commercial responsibilities. But I can give the noble Baroness an assurance that in fact the decision to close the check-in facilities will be delayed until after the report is made.

IMMIGRATION CONTROL: ENTRY OF MISS V. D. PATEL
11.19 a.m.
LORD AVEBURY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government in what circumstances the immigration authorities at Heathrow Airport attempted to cause Miss Vipha D. Patel to board a Qantas airliner against the wishes of the captain on Sunday, July 23, and what representations concerning this incident have been made by the Australian High Commission to Her Majesty's Government.
VISCOUNT COLVILLE OF CULROSS: My Lords, Miss Patel, who is a United Kingdom passport holder subject to immigration control, arrived from India for settlement without a special voucher or entry certificate. She was refused admission and sent back to India on July 18, but returned straight away. Arrangements were made for her removal again on July 23. After she had boarded the aircraft, in company with others who had been refused admission on similar grounds, a spokesman for the group informed the commander of the aircraft that they did not wish to travel, whereupon the commander advised them to disembark. Miss Patel was removed from the United Kingdom two days later, again returned on July 26 and was then admitted for three months. No representations have been received from the Australian High Commission.
LORD AVEBURY: My Lords, is this not a vicious and immoral policy, contrary to the European Convention on Human Rights which speaks of "inhuman and degrading treatment", such as has been meted out to Miss Patel? Would the noble Viscount agree that many of us consider that such things would not have happened if the noble Lord, Lord Windlesham, had still been in charge of the Department? May I further ask the noble Viscount whether he agrees with the leading article in this morning's Daily Telegraph—a newspaper not normally unsympathetic to the Government—that this policy is doomed to failure. Will he therefore recommend to his right honourable friend that the number of special vouchers should be increased, so that the five-year waiting period for these people who come from India can be considerably reduced, if not eliminated?
VISCOUNT COLVILLE OF CULROSS: My Lords, what my noble friend Lord Windlesham might or might not have done is something on which I really do not think I can comment. The difficulty about this sort of case is that if people will jump the queue they take the place—or they threaten the place—of those who have perfectly honourably and properly applied for entry permits. It is all very well to say that it is uncomfortable for them, but Miss Patel had (and there were others in the same group) no entry permit and no certificate. She said on arrival that she had come for settlement. She must have known that the scheme was in operation and I am not sure that she is entitled to any preference over those who have waited for some time, perfectly properly, in India and in other places for the limited number of vouchers.
As to the number of vouchers, I will certainly pass on what the noble Lord has said. But, as he knows, the number was increased quite recently and the point is that if we increase it beyond a certain amount the number of people arriving will be beyond that which the communities to which they will go can possibly assimilate in a reasonable time and manner. That is why we have to exercise some control over the numbers.
LORD AVEBURY: My Lords, is the noble Viscount aware that this queue was created not by the people concerned

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but by the vicious and immoral Commonwealth Immigrants Act 1968, which is contrary to the European Convention on Human Rights, and that a ruling of the European Court may shortly find to this effect, in which case that legislation will have to be repealed? In view of these facts, will the noble Viscount represent most strongly to his right honourable, friend that we should adopt a more liberal policy in future than exists in the case of Miss Patel and many other citizens of the United Kingdom who have been shuffled ceaselessly around the world, in some cases for periods of over a week?
VISCOUNT COLVILLE OF CULROSS: My Lords, I told the noble Lord the other day what was the situation about the European Commission. There is no final decision at the moment, and I really think it would be unwise to work on the hypothesis of what they might or might not say. As to the rest of what the noble Lord said, I will certainly pass it on but, in the first place, this Government are not responsible for the exact details of the 1968 Act. If it has to be reviewed, then no doubt it will be reviewed. But there are practical difficulties which I have just explained to the noble Lord, about increasing very substantially the numbers of those who come to this country, even if they are United Kingdom passport holders.
LORD BROCKWAY: My Lords, the Minister used the phrase that Miss Patel had "returned from India". Can he say whether she had been asked to return by the Indian authorities?
VISCOUNT COLVILLE OF CULROSS: No, my Lords. She refused to get out and stay in India.

PARLIAMENTARY PAPERS
11.23 a.m.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, with the permission of the House I should like to make a short Statement about Parliamentary Papers. I regret to inform your Lordships that there was further unofficial industrial action in the Parliamentary Press last night. As a result, no printing was possible. Copies of the Order Paper, with other essential working Papers, are
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now available, but limited quantities of Hansard will not be available until about midday. Copies will be placed in the Library. Discussions to resolve the dispute are continuing in accordance with the terms of the Stationery Office agreement with the unions, and normal work has been resumed while these continue.
LORD CHAMPION: My Lords, we thank the noble Earl the Leader of the House for making that Statement. Unfortunately, the unofficial action is timed to cause us the maximum difficulty, and it has added to the difficulties and pressures which we are already under as a result of the awful mess created by the Government's timetable for their legislation. We welcome the fact that normal working has been resumed, and hope that a satisfactory settlement will be arrived at and that we shall have no further difficulties.
I should like to end this short comment by saying that the House is grateful to our staff here for the attempts that they have made to supply us with the necessary Order Papers, and to help us with some copies of Hansard for last Monday, and indeed for yesterday.
LORD GLADWYN: My Lords, I should like to associate myself with what has just been said regarding the efforts of the staff here to get us out of this terrible mess. I hope that the dispute will soon be settled, but may I ask what the row is about? Are the printers wanting more pay than other printers or what, generally speaking, is the row about?
EARL JELLICOE: My Lords, I think this action is not connected with the difficulties of last week. There was a very small incident which arose around midnight concerning conditions of work; the dispute was not about pay. Since these are delicate areas, I think it would be a mistake for me to enlarge upon it.
I am grateful for the noble Lords' reception of my Statement. I fully recognise the difficulties which are caused to your Lordships. Through the usual channels we are taking action to ensure that those difficulties are minimised to the greatest possible extent. Realising that by making this Statement I was laying myself open to the delicate barbs of the noble Lord, Lord Champion, I should like to endorse what he and the noble

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Lord, Lord Gladwyn, have said about the very great debt which we owe to our staff in these and other matters.
LORD WILLIAMSON: My Lords, may I ask the Minister whether this action is official or unofficial?
EARL JELLICOE: My Lords, I should prefer to keep off the details of this really rather minor incident. I think I shall probably only exacerbate matters if I allow myself to be drawn on this. I hope that the noble Lord will excuse me.
LORD FOOT: My Lords, can the noble Earl say whether we are likely in due course to receive a copy of Hansard for last Monday, when we debated the Local Government Bill? This Bill is to be continued next week and there are many of us who are at a great disadvantage through not being able to read the speeches that were made on Monday last.
EARL JELLICOE: My Lords, I will certainly make it my job to look into that point straight away. I fully appreciate the point that the noble Lord has put.

ESSEX RIVER AUTHORITY BILL
Read 3a, with the Amendments, and passed and returned to the Commons.
GREATER LONDON COUNCIL (GENERAL POWERS) BILL
Read 3a, with the Amendments, and passed and returned to the Commons.
SELNEC (MANCHESTER CENTRAL AREA RAILWAY, ETC.) BILL
Read 3a, with the Amendments, and passed and returned to the Commons.

INDUSTRY BILL
11.30 a.m.
TILE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK): My Lords, I beg to move that this Bill be now read a second time. The problems of regional imbalance have been the concern of successive Governments in the United King-
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dom for nearly four decades. Much has been achieved but no solution is yet in sight. In the Government's view additional action is needed to improve both the environment in the less prosperous areas and their industrial structure and to increase employment opportunities.
The Government have been very conscious of the need to improve the total environment of those regions suffering from heavy and persistent unemployment and are determined to see that these areas are better places in which to work. That is why we have taken action in a great many fields to provide help to local authorities in these areas and to stimulate them to further efforts. The Government have encouraged local authorities to expand their programmes for the reclamation of derelict land, for which grants of 85 per cent. are available in development areas and 75 per cent. in intermediate areas and derelict land clearance areas. They have set a 10-year target for the clearance of such land. Last year they initiated a £164 million programme for additional infrastructure expenditure in assisted areas on roads, schools, hospitals and public services. In assisted areas they have made available 75 per cent. house-improvement grants. Earlier this year, under the operation Eyesore scheme, they introduced 85 per cent. grants for environmental improvements with 75 per cent. in intermediate areas and derelict land clearance areas.
In addition, further massive injections of public investment in the environment include £1,300 million over a five-year period on water and sewage and a major effort to clear our rivers and canals of the gross pollution from which too many of them suffer; over £400 million to be spent on main roads in England in the present financial year, 1972–73; and a 3,500 mile strategic network of trunk-ways and motorways is planned for completion by the early 1980's and will include another 1,000 miles of motorway. A further £60 million worth of trunk roads are now being added to the preparation pool. These extensive measures supplement the wide range of aids to encourage investment in the regions which have been built up over the years and they are now being reinforced by the measures in the Industry Bill which is before us to-day.

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This Bill has three main strands. It provides the legislation required to implement both the proposals for regional development grants and for the extension of selective financial assistance for industry as set out in the White Paper on Industrial and Regional Development, published in March at the time of the Budget, and it makes provision for extending the financial limits for the home shipbuilding credit guarantee scheme and for grants for the construction of ships and mobile offshore installations announced in the White Paper. Part IV of the Bill deals with miscellaneous and supplementary matters. When the policy set out in the White Paper was being formulated we started from the fundamental premise that the United Kingdom economy was predominantly a market economy in which particular industries, firms and products grew and declined in accordance with the markets at home and overseas which they could profitably supply. The success of any enterprise must depend on the future market for its products and its ability to supply this competitively.
Within this broad context the Government are responsible for setting a general framework of incentives, opportunities, requirements and restraints for industry. Fiscal incentives are an important feature of these responsibilities and have an important part to play in helping British industry and commerce to improve its technological strength and competitiveness. At the same time, our resources of labour, management and capital need to be sufficiently mobile to adapt to changing market conditions in the United Kingdom, the E.E.C. and the rest of the world. Equally important, full weight has to be given to the importance of reducing regional imbalance, and this involves bringing into use underemployed resources, particularly of manpower, and the strengthening of economic development in the regions as well as a substantial increase in investment. Our measures have been deliberately framed with these objectives in mind.
Part I of the Bill will establish the new system of regional development grants. These will provide the main preference for the regions in our system of investment incentives. They are, therefore, a most important element in our regional strategy. Very broadly, there
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were two basic approaches we could have adopted. We could have worked out a system which involved meticulous examination of the use to which each particular capital asset was put. But bearing in mind the administrative burden and cost to industry and Government of the old investment grant scheme and the time-scale for approvals, we rejected this approach. Instead, we shall emphasise simplicity, and we recognise that this will mean some rough justice at the margin. Not all complications can be avoided when so much money is at stake, but I feel sure that the House will approve our general intention.
We also had in the forefront of our minds that the new grants should offer a powerful incentive to firms in the assisted areas both to expand and to modernise the facilities they already have. The grants will not, therefore, be tied to the provision of employment as the Local Employment Act building grants had been. This brings in modernisation projects and will, incidentally, make the grants system a good deal simpler. But let me make it clear that the ending of the direct "employment link" does not mean that we attach any less importance to jobs. Quite the contrary. It simply reflects our belief that strengthening the efficiency of existing industry will make more secure the jobs already existing in the assisted areas and modern industry in the assisted areas will be in a much sounder position to expand.
The central feature of the new system is that eligibility for grant will, in general, depend on the assets being used in qualifying premises rather than the particular use made of them. Thus, the key question will be whether the building or the plant and machinery, as the case may be, is on qualifying premises. If it is, then in principle it will be eligible for grant. Qualifying premises are defined in Clause 2 of the Bill as those used wholly or mainly for the activities described in Orders 2 and 20 of the Standard Industrial Classification. The range of activities described in these Orders are listed in Annex A of the White Paper on Industrial and Regional Development; they are broadly manufacturing, mining and construction. Additionally, the grants will cover the processing of scrap and waste materials,

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the repairing of plant and machinery designed for use in qualifying activities and scientific research and training of staff in qualifying activities.
Ancillary or associated functions which are not expressly mentioned in the qualifying Orders, such as office work, storage or distribution, are not included except where they are conducted on premises which are preponderantly used for manufacturing or other qualifying activities. This should bring in, for example, the works office or canteen on factory premises. Where an ancillary building of this kind is near to the factory, although separated from it by, for example, a road, there is power if the applicant so requests for the building to be treated as part of the factory premises and thereby qualify for grant. The distant office or warehouse will not, however, qualify for grant. Neither will any assets, whether or not used for qualifying activities, on premises where non-qualifying activities preponderate.
The advantage we see from this approach is that it will avoid the need for complicated investigation. With minor exceptions all eligible assets will get grants so long as they are on qualifying premises—or on what will become qualifying premises once the assets have been provided. As I have said, this may result in occasional rough justice at the margin, but it seems to me that this is a price well worth paying in the interests of simplicity of operation. The system will be discretionary, as the investment grant and Local Employment Act building grant systems were, so as to provide the essential flexibility needed to deal with changing circumstances. The White Paper made clear, for example, that it is not our intention to make grants to local authorities, except for new buildings let for use for qualifying purposes, or on individual items of plant and machinery costing less than £100 and individual buildings schemes costing less than £1,000.
The Bill provides that grant may be made to any person incurring approved capital expenditure in the assisted areas. Small firms as well as large will be able to benefit. Nationalised industries with qualifying premises, particularly the National Coal Board and the British
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Steel Corporation, will qualify. Developers (including local authorities and development corporations) who provide new factories will be eligible for grant on the cost of a building if it is let as a new building to a tenant who will use it as qualifying premises. This represents an important change since developers providing buildings for occupation by others were not eligible for building grants under the Local Employment Act scheme. The payment of grant for factories built for letting should be of special benefit to smaller businesses which are often unable to raise the capital to build or buy their own premises.
Clause 1 provides for a wide range of assets on qualifying premises to be eligible for regional development grants. In development and special development areas they will cover new plant and machinery, buildings, adaptations of existing buildings and other works including mining works. In intermediate areas, and for two years in derelict land clearance areas, grants are available for new buildings, adaptations to buildings and other works, except for mining works. The rate of grant will be 20 per cent., except in special development areas where it will be 22 per cent. These grants will not be deducted from the gross cost of assets for the purpose of calculating tax allowances, so that they will, in effect, be tax free. I think it is just worth looking at the percentage and seeing how this relates to previous incentives. The investment grants, of course, while they were not taxable, were deducted in computing the amount eligible for capital allowances, whereas going right back to the days of investment allowances these were tax deductible and in that way they provided the additional benefit.
Plant and machinery used by the construction industry presents a special difficulty in that commonly it is moved from one building site to another and will not often be located on qualifying premises. We propose to deal with this by paying grant on plant and machinery used by the construction industry anywhere in the development areas. Again because this plant is often moved in and out of the special development areas, we think it makes for better sense and simpler administration for everyone to get grant at the 20 per cent. rate. In working out

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its investment programmes, it is very important that industry should be aware that—subject of course to the proposals being accepted by Parliament—regional development grants will be available towards expenditure defrayed on or after March 22, 1972. In the case of buildings and qualifying works this is subject to construction beginning after March 21.
In determining the starting date of construction, the Bill proposes that any work on clearing or preparing the site should be ignored. In the case of plant, machinery and mining works, the assets must be provided after March 21. For this purpose, we propose to take the date when plant or machinery is provided as the date it is delivered at qualifying premises. I should perhaps draw attention to the fact that, as is usual in schemes of this kind, Clause 4 of the Bill provides that the making of grant may be subject to appropriate conditions. For example, an appropriate repayment may be required if premises cease to be qualifying, or the asset on which grant is paid is moved from qualifying premises or from a development area as the case may be.
Before leaving Part I, I should like to say a word on timing. We shall not of course be able to give full detailed advice to applicants or deal with applications until we have the necessary powers. But I expect detailed explanatory material and application forms to be available during September and we shall aim to begin making payments as soon as possible after then. In the meantime industrialists should retain all relevant documents so that applications can be verified and processed quickly when the time comes.
I turn now to Part II of the Bill which is concerned with regional selective assistance. The arrangements we propose here differ in three major ways from those on which successive Governments have relied for many years. First, we are extending eligibility for selective assistance to include investments essential for the modernisation of industry. This change reflects the widely held view that, while the totally new project or the expansion of an existing project is important to regional development and the creation of jobs, the strengthening of the industrial base in the assisted areas depends also on modernising those regions. The extension of regional
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development grants to existing industry is of first importance in this work. But more may be needed in particular cases, and selective assistance will provide an additional stimulus.
Second, whereas the old powers under Section 4 of the Local Employment Act to give assistance to industry were confined to the development and special development areas, this Bill extends them to the intermediate areas.
Third, effective regional regeneration must be organised to take the fullest account of regional needs and make the fullest use of regional experience, knowledge and enthusiasm. We shall, therefore, devolve decision taking on selective assistance as fully as is practicable to the greatly strengthened regional offices of the Department assisted by the new advisory boards and the new regional industrial directors. This approach, combined with our other measures, provides the means by which the assisted areas can be helped and, of prime importance, be enabled to help themselves.
LORD BOYLE OF HANDSWORTH: My Lords, may I ask the Minister one question on what he has just said? Will there be any inter-relationship between the regional offices and the new Board which is to be set up under the Bill? Will there be any admitted cross-membership or co-ordination, or will the Minister receive quite unco-ordinated advice from both organisations?
THE EARL OF LIMERICK: My Lords, I do not think there is any proposal for cross-membership because the local boards will be drawing on those with local experience who are constituted in the areas. They will be commonly served by the work of the industrial development executive teams who will be putting up both the projects and they will therefore be working to the same set of criteria. This is a point on which I am afraid I can give no further help but I shall certainly look at it and provide a further answer.
The basic powers we require to carry through this programme are contained in Clause 7 of the Bill now before the House. The House, and industry, will wish to have a clear view of the assistance which may be provided under this clause. Essentially we will be deploying four

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weapons. First, loans: these will continue to be available on a substantial scale for projects providing employment. They will also be available for modernisation projects. The terms and conditions will be tailored to suit individual circumstances, but broadly loans for employment-creating projects will be at preferential rates whereas, normally, loans for modernisation will be at commercial rates. Second, as an alternative to loans, and as a new departure, subsidies will be available towards the interest payable on loans obtained from the market. Third, in suitable cases, guarantees designed to aid borrowers to obtain loans from the market for approved projects will also be available. Fourth, removal grants similar to those previously available under the Local Employment Acts, will be on offer to help firms seeking to move an operation lock, stock and barrel from a non-assisted to an assisted area.
We also propose (and really this represents a fifth weapon) to make full use of our powers in the Local Employment Act to provide factory space in the assisted areas. Rents, as in the past, will be based on current market value as assessed by the district valuer, but for projects creating new employment we will be prepared to consider a two-year rent-free period to a new tenant. As the White Paper foreshadowed, we also intend to make greater use of our stock of factories to rehouse existing industry. Clause 13 of the Bill proposes that the Estate Corporations' power to provide advance factories should no longer be tied to the provision of employment and will enable factories to be made available to re-house firms whose present premises are unsuitable for modem production techniques. This should both assist such firms to establish their operations on a sounder basis and will also ensure that maximum use is made of our existing resources.
I must emphasise at this point that we intend to make aid available under Part II of the Bill only for the benefit of firms and projects with sound economic prospects. The new organisation announced in the White Paper is, therefore, being equipped with the expertise needed to assess the merits of applications for selective help. The regional industrial advisory boards and the headquarters
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Industrial Advisory Board will be made up of experienced men from business and industry who can form judgments on commercial lines. The development unit at headquarters, with staff from a wide range of commercial activities will also play an important role here.
LORD DIAMOND: My Lords, may I interrupt the noble Earl at this stage to take up the point already mentioned? The noble Earl made it quite clear that these powers will be discretionary, and he has said that judgment will be exercised centrally and locally by separate industrially trained and experienced people as to economic viability and prospects. Clearly those judgments could vary. Two honest and able people can give different answers on the same set of facts. I hope, therefore, that either the noble Earl or the noble Lord, Lord Drumalbyn, will be able to help us with the obvious and important point of getting the same kind of treatment in the various areas, and getting co-ordination of policy.
THE EARL OF LIMERICK: My Lords, I think this is a most important point and it is my understanding that guide lines will be issued: Working from the development unit at the start, a common policy will be evolved and, of course, ultimately will go to the Secretary of State for decision, and it will be subject to Parliamentary control. There is also a provision to the effect that if the advisory board think fit, having been overruled by the Secretary of State, they may give their reasons to Parliament. This leads me on to the way in which we think this might work.
For example, after the development unit has made an intensive study of a particular industry or project it is possible, and it would be our hope, that private sources may be prepared to provide capital on the basis of the study, which otherwise might not be available. The powers to assist industry in the assisted areas in Clause 7 have been drawn widely. I have outlined steps to assist industry in these areas to create employment and expand and modernise their industrial base but there are other situations in which selective assistance may be essential for the economic strength of a region. For example, there may well

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be projects which, while they have good prospects of long term viability, require a measure of assistance because of their sheer size or the long time they take to come to fruition. In such cases the market normally responds to the lead and is able to provide the major contribution towards the necessary capital.
Secondly, as I have already emphasised, our resources of labour, management and capital need to be adaptable so that they can accommodate changing market conditions in Britain, the E.E.C. and the rest of the world. Industries in this situation sometimes have difficulty in adjusting to rapidly changing market conditions. In some industries a scheme for scrapping excess capacity may be needed, as has happened in the cotton industry. Temporary assistance may then be required to permit the contraction or rationalisation necessary for a new and successful future to be undertaken at a pace which mitigates the social disruption which would otherwise occur.
In such cases, effects and waste of resources are likely to be particularly serious where a substantial proportion of the capacity of the firm or industry concerned is located in the assisted areas. But it may also be serious in other parts of the country; for example, in a locality highly dependent on a single employer when there are poor prospects of finding alternative employment quickly. Thus it may, on occasion, be in the national economic interest to assist industry in the same way outside the assisted areas. Also, where a whole industry requires selective assistance it would be unfair and impracticable to assist the undertakings located within the assisted areas without including those situated elsewhere. But different criteria are needed for such assistance; these are provided for in Clause 8 which deals with assistance in all parts of the country for the purposes listed in Clause 7(2). I must make it plain that we have no intention to supplant or interfere with the normal market sources of finance for industry. We have therefore imposed a statutory requirement that before assistance can be made available in the national interest the necessary funds cannot be provided from any other source.
The powers under Clause 8 are subject to a number of important safeguards to preserve Parliamentary control. They are
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limited in duration to a period corresponding to the transitional period of our entry to Europe; that is, until the end of 1977. Also, the funds available, including those needed to back guarantees, are limited to £150 million and an Affirmative Resolution in another place will be required when a further tranche of £100 million needs to be made available. Finally, the selective financial assistance which may be paid or undertaken to be paid under Clause 8 in respect of any one project may not exceed £5 million unless there is authorisation by a resolution in another place. Where the limit of £5 million may need to be exceeded because of urgency at a time when it would be impracticable to obtain the approval in another place, as, for example, when Parliament is not sitting, the Secretary of State will be required to lay a Statement concerning the financial assistance before another place and your Lordships' House.
The Bill provides that, with the company's consent, the Secretary of State may take an equity interest in a company where this is agreed to be an essential element in getting a project off the ground. A similar power has existed under the Local Employment Acts for many years. If circumstances arise where the taking of an equity holding would make sense we shall be prepared to consider them subject to the safeguards which the Bill provides. In the first place, the Secretary of State must be satisfied that financial assistance cannot appropriately be provided in any other way. Secondly, he must obtain the consent of the company and where assistance is being given under Clause 8, he may not acquire more than half, by nominal value, of the equity share capital. Where the Secretary of State acquires shares or stock under Part II of the Bill, he will be required to dispose of them as soon as he finds it reasonably practicable to do so. And before disposing of them he will be obliged to consult the company so that their views may be taken into account in relation to the sale.
My Lords, I turn now to Part III of the Bill, comprising Clauses 10, 11 and 12, which provides for two forms of assistance for the shipbuilding industry; namely the provisions of guarantees to finance the construction of ships in the United Kingdom for U.K. shipowners,

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and a new scheme of construction grants. Clause 10, the home credit scheme, is well known to noble Lords. Its purpose is to provide U.K. shipowners ordering at home access to credit facilities on comparable terms to those available to them abroad. In view of the demise of the Shipbuilding Industry Board, the Bill provides power to enable the scheme to continue, and extends the financial coverage from £700 million to £1,000 million with provision by Order to increase this further up to £1,400 million, subject to approval in another place.
The construction grant schemes provides temporary assistance to the shipbuilding industry in view of its serious and unprecedented financial difficulties. The origin of these difficulties is the intense international competition and the extent of subsidies being granted abroad to its competitors. This led our shipbuilders in the late 'sixties to take fixed-price contracts, many of which are now seen to be unrealistic. Currently there is a low level of ordering. The Government recognise an immediate need to safeguard employment and provide a period of stability for the industry. Ninety per cent. of the employment in the merchant shipbuilding industry is situated in the development areas. There are also thousands of jobs among suppliers dependent upon the shipbuilding industry.
A long-term study of the industry is now being carried out by the Industrial Development Executive in order to allow a strategic plan to be outlined, taking into account likely developments in European policy. The special assistance already announced for Govan Shipbuilders and Cammell Laird is to be provided under Part II of the Bill. Noble Lords will be aware that Govan Shipbuilders began trading on July 1 and the Government have undertaken, subject to certain conditions, to provide adequate financial support for the company for a period of five years or until the company has achieved viability, whichever is the less. The company announced on July 18 a £15 million order from Kuwait for cargo vessels.
My Lords, that is a summary of the thinking behind the Bill. It has the several purposes which I have described, all of which are worth while in themselves
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and of considerable importance to the future of all who live in these islands. It represents a major attack on the problems of regional imbalance which affect the population of half of our country, by providing a new initiative which will stimulate the industrial investment which is so badly needed if we are to keep pace with our competitors and which will assist in promoting industrial efficiency to meet the challenges which lie ahead. The Bill cannot by itself achieve these aims. Their fulfilment will depend upon the efforts of industry, both management and labour, so that steady and more widespread growth in the economy can be achieved. But the measures proposed in the Bill will help provide strong encouragement for industry and help towards the national prosperity that we are all so anxious to see.
These measures must be allowed time to work. They are not short-term palliatives; their success will depend on the consistency of application which the Government intend to operate so that we can strengthen the areas of weakness that have for so long afflicted our industrial performance. With these thoughts I commend the Bill to the House.
Moved, That the Bill be now read 2a.—(The Earl of Limerick.)
12.3 p.m.
LORD DIAMOND: My Lords, I find myself in the usual position of offering the thanks of the House to the noble Earl for the manner in which he has discharged his task. I am also in the somewhat unusual but very pleasurable position of welcoming very warmly indeed everything that he has said and the Bill that he has introduced. It will be the purpose of those on these Benches to facilitate its passage in every possible way and as quickly as may be, because of the great need for the assistance which is being provided. I hope I do not make the Government's task the more difficult with their own supporters by giving the Bill this very warm welcome.
This is a very important Bill, and perhaps it is important in two particular respects. First of all, it now puts an end, I hope for all time, to the and argument as to whether or not the major Parties are agreed about the need for Government intervention in the private

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sector. It was a pointless argument, because everybody knew that, apart from the political embarrassment of admitting the truth, it was no more possible for Tory Governments to avoid intervention in the private sector than it was possible for Socialist Governments to nationalise everything holus-bolus, and to be unwilling to recognise that, for the lifetime of everybody here, we would be dealing with a mixed economy. If, therefore, we can all devote our attentions to improving both sectors and the whole of the economy rather than in having arguments based on philosophy as opposed to the facts of particular situations, I am sure that it will be for the benefit of our country. Therefore, I welcome the Bill on those grounds.
The other important ground on which I welcome it will not perhaps be so acceptable to the Government, but I think it is nevertheless very important in our present situation. That is the complete change of heart which this Bill represents. I shall fill in the detail a little later, and add some of the background which I am sure your Lordships would wish to have but which the noble Earl, in the interests of brevity, omitted to give. I do not know whether any of your Lordships noticed, as I did when we started our Business this morning, that there was a distant sound of bells. I did not know whether it was a Division bell or not, and so I made inquiries through "unusual channels", and found out that it was the perfectly normal and well precedented traditional rejoicing which goes on in Heaven when a sinner repenteth. I was glad of that explanation.
I want now to be very serious, and say that it is very easy for an Opposition to jibe at a Government when they make a complete change of front; it is much more difficult for a Government to change their mind, as they have done. I take off my hat to the Government for having done so, and will support this move in any way I can. I will explain shortly the reasons for doing it to your Lordships, but having those second thoughts brings nothing but credit to those who hold them. It is not absent from my mind that, just as much as the change of heart here will undoubtedly be of assistance in the development areas and to the whole of our economy, so I hope I can perceive distantly a slight change
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of heart in our industrial relations, and particularly in an Act which governs them, which again is very much overdue, just as this change is overdue, and which again will have a most important effect on our economy and our welfare. We shall be coming back to this matter during the course of next week on the Emergency Regulations. I would be most anxious to say nothing that would in any way make the path of a Government which is having second thoughts the more difficult.
I think that it is necessary to examine for a short time the change that has taken place, and to illustrate my argument I start off with the "bible" for these purposes—that is to say, the Tory Manifesto in the last General Election which said:
"We will repeal the so-called Industrial Expansion Act which gives the Government power to use taxpayers' money to buy its way into private industry."
Indeed, that Act was duly repealed. In fact, it was repealed barely a year ago. The Bill which is now before your Lordships restores not only all but more than all the powers which were in that Act, and I am happy to say in certain important clauses, such as Clause 7, does not hesitate to describe those powers in literally the same language word for word. We welcome that, but it does represent a considerable change.
The other authority I would quote is of course that passage of the speech of the Secretary of State which has become so famous when, on November 4, 1970, at column 1212 he said:
"The vast majority lives and thrives in a bracing climate and not in a soft, sodden morass of subsidised incompetence."
He went on to refer to "lame ducks", and that has come to be known as the "lame-ducks" speech. When introducing this Bill in another place he referred to the theme of "non-culpable decline". The "lame ducks" have given way to "non-culpable decline", and I rejoice that that is so.
The other aspects of the Bill which represent the most welcome change relate to investment grants. Investment grants were changed by the Chancellor of the Exchequer at the earliest opportunity, I think in November, 1970, on two grounds. Two main criticisms were made. The first was the familiar one

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which was shared by most opinion on the Benches opposite as I understand it, namely, that the difficulty about investment grants is that they subsidise incompetence—if I may go back to the words I have just quoted. You get your investment grant whether the assets towards which the grant goes turn out to be profitable or unprofitable. If they turn out to be unprofitable then you are using Government money to subsidise incompetence.
That is what is proposed in this Bill, I am happy to say—regional development grants totally irrespective of profits. You get your grant and you try to make a profit. Of course, judgment is used. I referred to that in the interruption which the noble Earl was courteous enough to allow me to make in relation to the prospects of profitability. So there we have seen a major change. The other criticism I mentioned was that proposals in the Bill require a great increase in Civil Service manpower; in fact an increase of 500, as is made clear in the introductory comments to the Bill. Of course you cannot achieve these benefits and see the implementation of your policy unless you have the necessary manpower, so I for one also welcome that.
Finally, I want to refer to the Press comment which was made when the Labour Government introduced the Industrial Expansion Bill which contained the powers which are now restored under this Bill. There were a number of provisions in that Bill, including one to take an equity interest in the private sector, which were roundly condemned by The Times, the Sunday Times, the Financial Times, the Daily Telegraph, the Spectator and the Economist—a pretty good selection of solid journalism. Not only were they roundly condemned by the Press but the C.B.I. broke off negotiations with Her Majesty's Government at that time because of these provisions. It is interesting to recall who was the Director-General of the C.B.I. at that time—no doubt carrying out the policy of his masters and carrying it out with great efficiency—namely, John Davies. I am bound to say to your Lordships that what happened to Paul on the road to Damascus is as nothing to what hap-
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pened to John on the road to sanity. We welcome it extremely.
My Lords, why has there been this complete change? Because Governments learn, some of them very slowly unfortunately, in the light of hard and harsh events that the sooner they adjust their platform speeches at election time to the needs to govern the country in the interests of the country the better. When that process of learning takes place they are affected in reaching their conclusions by the hard facts, and the hard facts which brought about this change of front are serious unemployment and serious under-investment, in particular serious unemployment clearly demonstrated in the regions to which these proposals are directed.
In the North-West region unemployment has increased in the period of the present Government's tenure of office by 80 per cent.; in the West Midlands it has increased by 100 per cent. It is interesting to observe that the rate of unemployment in the West Midlands to-day—previously one of the busiest areas in the country—is greater than the rate of unemployment in the Welsh development area at the time the Government took over. In Scotland the general rate of unemployment is around 60 per cent., and the job position, which I should like to dwell on for a moment, is that for every job open to a male 18 men are seeking it; for every job open to a skilled engineer in Scotland 29 men are seeking it—I am talking about skilled, not unskilled, labour. For the unskilled the figures run into thousands—thousands seeking every available job, on the basis of comparing the number of unemployed with the vacancies. So it is a very serious situation indeed and I am more than grateful to the Government for taking the massive steps which are proposed here, providing very substantial sums to assist towards reducing unemployment in the areas and increasing economic activity.
The two particular anxieties I have about the provisions, anxieties the remedy for which is careful watching rather than particular changes in the Bill itself, are, first, the scale on which assistance is provided. The powers provided under this Bill are wider than the powers we had in the Industrial Expansion Act: there is more money provided, the criteria are if

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anything more loose, public and Parliamentary accountability are undoubtedly less and the risks to the public purse are greater. One is very familiar with the fact that a convert is more enthusiastic than one who has always maintained a certain philosophy or a certain religion, and in case there is some of that enthusiasm around I want to make it plain to the Government that, as much as we welcome the provisions, the powers and the general attitude displayed in the Bill, we shall of course feel it our duty to watch their application because of the risks to the public purse involved due to the way in which the Bill has been drawn.
The second anxiety is one which I am sure the noble Earl will particularly easily understand, and I hope that he and his colleagues will take it on board. It is the rather technical point of the relationship with third parties. The Government make it clear that in the private sector they are going to back companies, if necessary up to 49 per cent. of the equity. When a creditor, a supplier, deals with a company which has 49 per cent. of the equity shares held by the Government, it is inclined to rely on that company as much as it would rely on the Government themselves. Indeed, it will do so unless the Government make it absolutely clear that it should not. Problems will inevitably arise where this situation develops—and one speaks not wholly without experience—unless the Government make their position absolutely clear from the word, "Go". There is the good name of the Government, on the one hand, and the reliance which will implicity be put on a company in excess of the strict interpretation of the law, on the other. That is one reason why the relationship with third parties does, I think, cause some anxiety.
The other, again arising out of the provisions of the Bill, is that the noble Earl has said that it will be the Government's practice to give financial help where help could not otherwise be obtained; that is to say, if a particular company goes to its bank and says, "We are in very difficult financial circumstances, and we need some help", and the bank says, "No, we are not going to let you have it". The company might indeed go to a merchant bank, and the merchant bank might make the same answer; or it might go to any other source of finance. The
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answer would have to be "No" before the Government helped. The noble Earl has made that quite clear, So Government help would be help to a company without funds. Whether it is technically insolvent or not, one cannot say; but what one can say is that it is without necessary funds, otherwise the Government would not be helping. As the noble Earl knows, when a Government intervene in these circumstances they take upon themselves very considerable responsibilities, far in excess of the amount of money put up, unless they take the most minute care to avoid that.
Therefore, these two reasons—(a) the implicit confidence that a supplier, a third party, would have with a 49 per cent. Government-backed purchaser; and (b) the desire of the Government in other cases to help only when that help cannot be obtained elsewhere—will again produce these problems in relation to third parties.
These are not matters, I repeat, on which I am proposing any adjustments to the Bill, or indeed asking for any answer today. What I am asking is that the Government will be good enough to bear these matters in mind, because otherwise (if I may put it in this way) if they do not take the necessary precautions they may be forced off doing what I want them to continue to do; namely, to intervene without getting involved in unnecessary liability. If they plan to intervene in such a way that they find themselves involved in excessive liability, they may draw the conclusion, "Oh, well, we cannot intervene". What I am saying to the Government is, "No; the conclusion is to avoid, by steps in advance, any unwanted liability, but to go on intervening in the interests of increased employment and higher economic activity".
My Lords, I repeat that those are anxieties, and you will have observed that I am not making any detailed suggestions for improvement of the structure of the Bill. I am taking that attitude for two very good reasons: first, because the Bill is in general very acceptable to those of us on these Benches, and, secondly, because there is no time to do anything else—and I take a practical view of life. The Government's programme, as has already been expressed in words which I

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cannot better, is in such a mess that there is no opportunity to have a real Committee stage on this Bill, to get it back to another place and to get it enacted and implemented as urgently as that needs to be done. One recognises this, and so far as those of us on these Benches are concerned—it is, of course, for other noble Lords to do what they think fit—we wish the Bill to have its speediest possible passage. If there is any need for any change, any revision, in the light of the working of the Act, as it will be, of course the Government will be able at a suitable opportunity, in six months' or a year's time, or whatever it may be, to introduce amending legislation and tack it on to whatever Bill they can find going through the House at the time which has something to do with industry—and I do not suppose that that will be very difficult. Having said that, my Lords, I repeat that we welcome the Bill; we welcome its contents, and we shall facilitate its passage in every way open to us.
12.27 p.m.
VISCOUNT SIMON: My Lords, I am very happy to be able from these Benches also to assure the Government that any help we can give in getting this Bill on the Statute Book promptly will be forthcoming. We believe that this is a very necessary Bill: the more so because the development areas (or the regions, as I think we can call them for short) clearly need help, since the advantage they have so far enjoyed has to some extent been whittled away by the extension of what is called free depreciation over the whole country, and also by the threatened withdrawal of the regional employment premium. I do not know whether there is any hope that there might be a stay of execution, or even perhaps a pardon, in the latter matter because it certainly is a way in which employment can be directly stimulated, and that does not apply to the other methods of support which are put forward in this Bill.
May I now say a word about Part I and the regional development grant? Like the noble Lord, Lord Diamond, I welcome the change of heart which the Government have had over this matter. We on these Benches have always felt that a grant was in this context superior
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to an investment allowance, and we think that the experience has shown that this is the correct view. I should certainly myself like to see—and I believe that this is possible under the Bill, because the Secretary of State has power to add items to the list—the extension of this grant beyond the basic manufacturing industries to service industries. At the outset of his speech the noble Earl made reference to improvements in the environment, and I feel that in many of the areas of which we speak the environment could be substantially improved by the injection of a certain amount of service industry, so that the community would become a more balanced community instead of being a community based entirely on manufacture. As I said, the Secretary of State can vary the qualifying activities under Clause 3(2)(a), and I hope that at some time the possibility of extending the qualifying activities to include some at least of the service industries may be considered. In another place a powerful case was made for the inclusion, for instance, of the tourist industry which has considerable importance already in the South-West and in Cumberland—and, as my noble friend has reminded me, in Wales. I often feel that in the arrangement of industry there are opportunities for tourism that have not been taken in the very beautiful counties of Northumberland and Durham, where the old basic industries have contracted.
I want to say a few words about the noble Earl's remarks on the subject of modernisation. He argued that it was proper for assistance to be offered for modernisation without particular reference to employment possibilities because modernisation was calculated to make employment more secure. I must say, in face of a particular aspect of modernisation which has been very much in our minds during the last few weeks, that that seems rather a broad statement to make—because certainly modernisation in the port transport industry has not made employment more secure; it has made it much less secure. In this context, if I may go ahead for a minute or two, the noble Earl referred to this same matter when speaking of Clause 7. If I understand Clause 7 correctly, it is not possible under it to offer assistance for modernisation unless it is, in the opinion of the Secretary of State, "likely to provide,

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maintain or safeguard employment". So as far as Clause 7 is concerned, I should have thought that the general offer of assistance for modernisation must be qualified by the requirement that the Secretary of State must be satisfied that, in the particular area, it is likely, as the clause says: "to provide, maintain or safeguard employment …".
My Lords, I now turn to Part II of the Bill. Before raising general points I wonder if I may ask the noble Lord, Lord Drumalbyn, to answer a very simple question. I suspect that I am probably the only person in your Lordships' House who does not know the answer. I think I know it, but I should like to have it spelled out. What, in Clause 7(1)(b) is the meaning of the word "undertakings"? I take it that if there is what I should call an undertaking, a business, which is carried on in all sorts of places all over the country, it is not "wholly or mainly in the assisted areas". But if it decides to set up one installation in one assisted area, then I assume that that single installation would be entitled to get the benefit of the Bill.
The curious thing is that, if that is so, it does not immediately jump to the mind why the words "wholly or mainly" were put in, unless one is considering an installation which physically straddles the boundary between a development area and some other area. If "undertakings" means single undertakings then either they are or they are not in an assisted area and the word "wholly" would have little point. I should be surprised if a company like I.C.I., which has installations all over the country—not necessarily all in the regions—decided to set up a new factory in one of the regions it could not be entitled to this assistance.
To come back to the generality of Part II, like the noble Lord, Lord Diamond, I was struck by the immense width and breadth of the assistance under this clause. I was a little concerned as to the control over what happens. The powers of the Secretary of State are very wide. The criteria in Clause 7 (which is the one I have already mentioned and of which the rubric reads: "Selective financial assistance for industry in assisted areas.") is fairly clear, but the criteria in Clause 8, on the other hand, seem to be very broad. The clause speaks
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of activities "likely to benefit the economy of the United Kingdom" and to be "in the national interest" in the opinion of the Secretary of State. That seems to be an almost subjective test. It rather depends on who is the Secretary of State and whether in his opinion some particular activity is in the national interest.
The effect of Clauses 7 and 8 taken together is undoubtedly to give the Secretary of State and his Department a very large area of patronage. The Secretary of State himself was well aware of this because in the Second Reading debate in another place he said:
"But I am very conscious that access to arbitrary and discriminatory powers constitutes a heavy responsibility, not least to justify to those who might be the victims of such discrimination the methods practised and the decisions reached."—[OFFICIAL REPORT (Commons) 22/5/72; col. 1022.]
My Lords, we are very fortunate in this country in the very high standard of integrity in public life, but we do occasionally hear whispers of things that have not gone quite right. I see behind these two clauses a real danger of excessive pressure which might in some sad instances prove too much. After all, any offer of assistance under these clauses is bound to be in response to an application. The Secretary of State, the Department and the Advisory Board cannot of their own knowledge identify places where help may be needed. Therefore, anybody whose firm has need of help must make an application. I can imagine a situation in which there is a firm which feels that it is in danger of going down. It has a number of employees who would be thrown out of work and it feels that it should go to the Minister to ask. "Can you help me?". But the Minister will see—he can only see—the case as presented to him; and we all know that cases of this kind can be presented in one way and in another way to produce different impressions.
Then, as I understand it, the matter is referred in the first instance to the Advisory Board. They, too (although, as I understand it, they are men of experience) will have some difficulty, I think, in one individual case in assimilating the facts and in putting them into their context in the national scene. Let us suppose that they felt that there was a primary case for giving assistance. There

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may be two or three other firms in the same position which have not at that stage thought of applying for assistance. Are they going to be, as it were, beaten at the post? It may even be that there is a situation where there is over-production and where (shall I say?) the least efficient firm is the one in danger of going down. If that firm makes out a case for assistance it might be that it is the next least efficient firm that goes down as a result.
I have been wondering how the Minister and his advisers can protect themselves against the sort of pressures that may come upon them and against the possibility of deciding single issues without a full understanding of all the surrounding circumstances. I am sure that I do not want (none of us wants) some elaborate procedure because that slows down the operation of necessary work. But how about a provision—perhaps the noble Lord would like to think of this; I do not expect a reply today—to the effect that before any decision is finally taken publicity is given to the proposal. This would alert other undertakings who might be adversely affected by a decision to support a single firm. It would have the further advantage that it would alert our always vigilant Press and, if there was the least chance of some improper pressure having been brought to bear on civil servants or on Ministers, then the Press would seize on it and show it up. That is something that we hope would never happen, but if it did we would hope that it would be shown up.
I have only one other point to make about the Industrial Development Advisory Board. We read in Clause 9 that there are to be
"not less than six nor more than twelve other members"
besides the chairman, and it shall
"include persons who … have wide experience of … banking, accounting and finance."
There is clearly room for others, and I hope that the Secretary of State will include some other persons. If the Board is to be wholly financially established, it is almost bound to look at projects from a classical financial angle. We do not want the Secretary of State to back only losers; but when the primary object is to promote employment in the short-term, in the hope that a project will
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eventually become viable, it seems to me that he must expect to have a certain number of losers. This may be necessary in order to effect the object of the Bill of stimulating industries in the regions.
I think it was the noble Earl who said that under Clauses 7 and 8 assistance would be given only to sound commercial projects. But as the noble Lord, Lord Diamond, pointed out, assistance is to be given to projects that no one else is prepared to back. While I think that "sound commercial projects" is perhaps a comprehensive term, I feel that a good many of these projects must be at the lower end of the "sound" bracket—if I may put it in that way. So, my Lords, I believe that it would be helpful if the Industrial Development Advisory Board contained not only bankers, financiers and accountants, but also some professional men who might bring an independent view to these matters. When I say "professional men", I am thinking of engineers, lawyers and people with academic qualifications—people who are not up to their eyes in business and who are quite capable of taking a broad view of projects.
I shall not say anything about the shipbuilding proposals, because they are temporary proposals and we shall await with interest the strategic plan which has been promised. I would conclude by saying that, in looking at this legislation we must also look ahead to what it is that we are trying to achieve. Ultimately, the regions must stand on their own feet; I nearly said "on their own two feet" but perhaps that would be plagiarising. We on these Benches have always been in favour of regional authorities with devolved powers, and I hope that that may one day come about. To my mind, it is absolutely vital that all the men and women working in an undertaking helped under this Bill, whether managers, or workers on the shop floor or wherever it may be, put their backs into a project to make it a success. The regions cannot be indefinitely sustained by help from the rest of the country, and if full use is not made of the assistance offered to undertakings by the provisions of this Bill to put themselves on a sound basis so that they may continue to flourish, then indeed the money spent will have been wasted. I should like to refer again very briefly to the service industries,

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because I believe that if the regions are to become successful growth areas in the country, they must have a balanced community with something in addition to manufacturing industry to support them.
12.46 p.m.
LORD BOYLE OF HANDSWORTH: My Lords, like other noble Lords who have spoken, I warmly welcome this Bill. I regard it as an important measure. To be frank, its appearance does not surprise me all that much. I always believed that, sooner or later, a measure of this kind would be brought before Parliament; and I share the view of the noble Lord, Lord Diamond, that in view of the tightness of the programme we in your Lordships' House had much better speed the progress of this Bill on to the Statute Book as rapidly as possible. But we are certainly in a very different world to-day from the world of the 1930s. I recall being told that it then took three months within the Government machine to get one distressed area scheduled as such. We have certainly progressed a good deal since then.
I feel that the Bill has special significance in the context of the intention to enter the European Economic Community. I was not present for the recent debate, but I find myself very much in sympathy with the line of argument uttered in that debate by the noble Lord, Lord Hale. Like, him, I have always felt that the strongest reason for wishing to join the E.E.C. is a belief in the unity of Europe; a belief that for a number of purposes—cultural, environmental, and military, as well as industrial—we need to get beyond the confines of the nation State. But at the same time—and here again I find myself in great sympathy with what the noble Lord said—my chief anxiety about this decision has always been the fear that membership would result in the rich areas of this country becoming richer and the poor areas becoming poorer; hence the very great importance of this Bill, and I would say of the whole approach to regional policy which we should aim to promote when we become members of the Community.
Before I come on to the detailed provisions of the Bill, I should like to echo the satisfaction expressed by the noble Lord, Lord Diamond, that in British politics we are now all coming to accept
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the need for a mixed economy. As the noble Lord knows, I have always shared that view. I should, however, like to say a word in answer to those who still believe that the operation of market forces could offer the whole solution, or, at any rate, by far the greater part of the solution, to regional economic problems. It seems to me that that cannot be true, for two reasons. The first reason is a theoretical one, but it is important. The old doctrine which used to be believed so profoundly in the nineteenth century that, however much richer one country or one region was than another, there was always a pattern of unregulated trade and unregulated economic development in which they could engage to the mutual advantage of both, simply cannot be applied without very considerable amendment to the economic circumstances of to-day.
The regional process is all the time getting more dynamic, and it becomes less and less realistic to regard perfect competition, on which old-fashioned market economics were based, as the norm. But, quite apart from theory, there is the practical point that we have ourselves experienced in Britain since the war, an attempt to try to do without a regional policy and to rely solely on market forces. In the mid-1950s the Government of the day, quite understandably, wanted to encourage economic activity, especially investment, and they allowed the motor industry in this country to expand in the West Midlands virtually as it wished. I was then a West Midlands M.P. as well as a Treasury Minister, and I remember the circumstances well. The policy did not work at all satisfactorily. In a single year we had an increase of 26 per cent. in expenditure on motoring in this country. But the other results were an overheating of the economy, the sudden obsolence of a whole mass of social capital, and the spoiling of what, looking back, was the best chance for a British economic miracle that we had at any time between 1950 and 1970.
I emphasise that it is not only the development areas of this country which need a regional policy; it is the potentially congested areas as well. I am sure that a regional economic policy must be in the interests of the whole nation. I therefore welcome the proposals for regional development grants in Part I of the Bill, and I would venture to say

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that the amount of the proposed grant is about right. May I suggest one candidate as an addition to the list of eligible assets? I should like to see a specific grant made available for the clearing of eyesores. I have always believed that they rank high in the priorities for assisted capital expenditure. My own criticism of Part I does not relate so much to any specific proposals, which I think are good, but rather to my feeling that we still need rather more of a regional strategy, with certain specific policy objectives.
Let me give a few examples of what I mean. First, I think we need a broader, more articulated, classification of regions in this country. Professor A. J. Brown. our senior Professor of Economics at Leeds, in his Minority Report to the Hunt Report—and that Minority Report is still very much worth reading—argued very ably the case for a fourfold classification of regions of this country: development areas, grey areas, neutral areas and congested areas. He suggested that congested areas should have to pay a congestion tax—a sort of regional employment premium in reverse. I believe that this suggestion for a more sophisticated, a more articulated approach to the regions has much to be said for for it.
Secondly, I would ask just how significant in the Government's mind is to be the role of local initiative. On this point, I found the Second Reading speech of the Secretary of State moderately encouraging. But, if we want to take the role of local initiative in regional policy seriously we must get away from one very peculiar British economic institution. I refer to the very tight central control of social capital expenditure which is imposed by Whitehall. There is no country in the Western World which has such a centralised, detailed control of capital expenditure, extending to items like bridges or to minor capital works for schools. Noble Lords who have ever served as Ministers in spending Departments will know what I mean. I have always believed—and I would like to think that in the Scottish context I have the particular support of Sir Alec Douglas-Home on this—that some relaxation is essential if we are to have a true regional policy in this country.
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Thirdly, I hope Mr. Chataway—I mention him specifically because I was very lucky to have him as my Parliamentary Secretary for two years—will try to achieve something which no Government since the war have achieved. I hope he will try to marry the housing programme in the regions with the industrial programme. We have always had a programme of advance factories and we have built a considerable number of New Towns. But I can recall the noble Lord, Lord Kahn—I wish he were here—once addressing the Tuesday Club on this subject and pointing out most convincingly that we had never tried to marry the housing programme and the industry programme closely enough.
Fourthly, I suggest that we need, so far as possible, to reconcile three aims: the right to work, the mitigation of the human costs of adaptation, and the economic need to diversify economic activity within each region. I feel that the thinking behind the Bill is stronger on the third of these matters than on the other two. For my own part, given the need for growth in employment in the depressed regions of the United Kingdom over the whole range of both manufacturing and service industries, which are not growth industries themselves, I should like to see direct grants to the regions as a supplement to the regional employment premium, or at any rate as an alternative to it, rather than the phasing out of the REP altogether. I very much agree with what the noble Viscount, Lord Simon, had to say about this in his speech just now.
I should like to add one or two specific points about labour and capital markets in the context of regional policy. First, whilst I welcome the geographical mobility grants—they are a valuable provision—I suggest that the public employment service needs to play a greater part in regional industrial policy than it does already. Its role in linking industry with the formal education system really is derisory, as is the use made, at regional and national levels, of the knowledge of local exchange managers. This is a serious matter, involving not just the problems which will arise from the raising of the school leaving age. I wish, by the way, we took more seriously the issue of job opportunities for those

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school-leavers who are in the relatively low streams. The problem is not confined to immigrants; it is very wide indeed. Again, where are the manpower forecasts oil which the Department started work in 1964 and which I recall the Estimates Committee saw as essential for an effective system of industrial training?
On capital markets, I wonder whether this Bill makes adequate provision for an effective capital market from the point of view of the regions. Whatever the scale of public support through grants, investment allowances and special capital investment, a depressed region needs most of all an increase in the flow of private capital. I must say that I was rather attracted by the speech which Mr. Harold Lever made during the Second Reading debate in another place. He put forward the idea of a regional development bank. As he pointed out, not unfairly, that is just what the Secretary of State, among his many other functions, will be offering under this Bill. We have here a curious reversal of roles. Again, I think back to the 1950s and recall Mr. Wilfred King, who was then editor of the Banker, saying that under Government policy at that time bankers were having to act as planners for a Government who had decided that planning was impossible. Now a major Department of State, a Department traditionally devoted to laissez faire policies is becoming both planner and banker. It is a curious reversal of roles over 17 years. Those are suggestions—I hope considered suggestions—about the labour market and the capital market, and about how they could be helped to work more efficiently from the point of view of the regions.
For a few moments may I now turn to Part II of the Bill, which deals with financial assistance to industry. I wish to comment on what the Secretary of State in his speech called the "mechanism" of this assistance. Part II provides for selective financial assistance not just for the depressed regions but also, in Clause 8, for the general benefit of the United Kingdom economy. I agree with the noble Viscount who has just spoken that Clause 8(1) is very widely drawn indeed. I will not read it again because the noble Viscount has just done so. During the Second Reading debate in another place the Secretary of State
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explained that the mechanism to undertake the selective assistance would be not an external agency like the I.R.C., but would be a part of Government itself. At the same time, the Secretary of State, in carrying out this function, will be advised by an Industrial Development Advisory Board which can request him to lay a Statement before Parliament if he acts contrary to its advice.
This decision to make the Government itself the agency for selective assistance, rather than an outside body like the I.R.C., was politically inevitable. I think also that on balance it was right, even though at the time I regretted the demise of the I.R.C., just as I certainly very much regretted the demise of the Prices and Incomes Board. But I think it was, on balance, right for two reasons: first, the importance of Ministerial accountability for what are large sums, and also the fact that, as the Secretary of State's speech itself showed, many decisions would be bound to be in part political.
I do not think I shall be out of order in your Lordships' House if I paraphrase one part of the Secretary of State's speech which shows exactly this point of how politics and economics are of necessity intertwined in the decisions that will have to be taken. The Secretary of State referred to what he called "difficult and controversial cases where important concerns suffer a severe financial setback". He went on to say in effect: "We must not prop up inefficient management. But where the firm has an important place in our economy we need to be sure that the setback is irreversible. We may want to provide temporary assistance while the situation is being assessed; and anyway"—and this is the important point—"profitability cannot be the only test. We must also bear in mind the employment the industry provides in relation to the future of a particular area."
My Lords, I think that those last words, even though they may cause some slight surprise to the noble Lord, Lord Diamond, were realistic. What best to do in the light of all these factors must be a decision of the Secretary of State and ultimately for the Cabinet itself. But in that case—and this is the point to which I am leading—the Secretary of State, as head of a major

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Department, must exercise a real responsibility, and there must be, I suggest, sufficient expertise in his Department to enable him to assess the advice he receives both from the regional offices and the Industrial Development Advisory Board. I would stress very much the importance not just of the avoidance of corruption and those matters to which the noble Viscount has just referred, but also the importance of sufficient skilled accountants in Government service and, indeed, all the infrastructure of professional advice that the Secretary of State needs. I was myself a member of the Fulton Committee on the Civil Service. We were rather bothered to find at that time that of 25,000 accountants employed in this country only 300 were in Government service—and not very well paid at that. I think the importance of a more professional Civil Service does arise here very strongly and I would hope that the Civil Service College, which I do not think has been sufficiently utilised, will be brought in here also.
May I pick out just one detail that I do not myself like very much: the proposal in Clause 9(4) which lays a statutory duty on the Secretary of State to lay a Statement before Parliament if there is a disagreement between him and the Board? I do not myself care for laying a statutory duty on a Minister to lay a Statement before Parliament, any more than last night I cared for putting a Select Committee into a Statute. I think it is best that Statements should arise out of the Parliamentary process itself, and if I may say so without being controversial, I see in this subsection a small example of that growing tendency, which I personally regret, of the House of Commons not just to reach out to the Executive and to question it hut to try to confront the Executive. That has been something of a growth in recent years and I think that it is an undesirable tendency.
Lastly, my Lords, let us remember that it remains a puzzle to some other European countries that Britain should have developed an extensive set of fiscal and financial inducements and yet continue to have unemployment and slow growth. I think we must admit that the fault is partly ours. M. Massé, the head of the
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French Commissariat, once defined planning rather well, in my view, as
"the art of handling short-term fluctuations in such a way as to avoid long-term weaknesses."
This is not an art in which post-war Governments, whatever their political complexion, have conspicuously excelled. But do let us remember also, in the context of this Bill, the very real problems of adaptation in a country like Britain with a long industrial tradition and a radically altered world role. For Heaven's sake let us remember the genuine problems of adaptation which exist to-day in the regions and in industries like the docks, in coalmining, steel, shipbuilding and the railways, where indeed the insecurity of employment lies at the root of our industrial relations problems.
I welcome the recent perceptible movement back towards conciliation and consensus in Government economic policy, as evidenced not least by my right honourable friend Mr. Robert Carr's admirable speech last weekend. But one essential element, I suggest, in any consensus must be the recognition that the human costs of adaptation are bound to be greatly aggravated by an overall level of unemployment higher than it need be. One pre-condition for the success of this important Bill is the recovery and the maintenance of a high level of demand for labour.
1.6 p.m.
LORD BARNBY: My Lords, I should like first of all to thank the noble Earl for the trouble he took to make clear to us in his speech to-day the many angles and provisions of this Bill. At the same time I wish to congratulate him on his good fortune in introducing a Bill with these high aims and massive requirements—a Bill which meets with unqualified approval from the Opposition, and this certainly is justified in the light of all the recommendations which have come from all sides of the House. It is obvious that something of this character is desirable for this country.
My intervention, which will be brief, is motivated by the wish to raise a couple of points which I hope my noble friend, Lord Drumalbyn, will be able to comment upon when he comes to reply. I am encouraged by the fact that my noble friend, in moving the Second Read-

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ing, himself introduced one or two specific instances. Before mentioning these I should like to take the opportunity to make a few general remarks. One point is the massive volume of funds involved in this. One wonders to what extent this fact is contributing, as it must do in part, to the current concern about the increase in the money supply and the upward pressure which it must have on prices in general.
The objects, clearly indicated throughout the speech of my noble friend, are to be labour-intensive rather than capital-intensive; that is to say, motivated by the hope of increasing employment rather than guaranteeing an increase in efficiency. This is, of course, partly an inherited position, because the last Government took action in the same direction, though some of it was less successful. I am prompted to say now that one wonders whether real efficiency was adequately pursued. Were the cost assessments adequately made in the first place and were adequate arrangements made to supervise the efficiency with which the large sums of money were employed?
It is fortunate that in this particular Bill it appears that the provision for expenditure and supervision by Parliament is of a substantial character. But at the same time, no one speaking on this could refrain from looking back at the misfortunes of the vast sums of money already handed out to Upper Clyde Shipbuilders and seeing how little good it did. Were they justified? That brings me to the two points that I want particularly to make. I always wonder why such vast sums of money are so readily accorded in the area of shipyards and shipbuilding. Why should the larger amounts not have been channelled into other sections of industry? It suggests that the large units are the ones that are most favoured. That brings me to the second point. There is much written and said about the desirability of consideration for the small business as against the large business. One would think that there may still be a means of including some procedure whereby, provided the aim is to encourage employment, grants in a smaller amount may be channelled through some mechanism, such as the I.C.F.C., which does such a good job in the encouragement of smaller firms in industry.
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Coming to the particular point on which my noble friend made some comment, it is understood that in the sphere of naval vessels specific grants are given to such ships if they are for foreign accounts. That permits sharper pencilling in the securing of contracts, all doubtless very close cut. But why is it not possible to extend that degree of subvention to naval vessels built for home purposes? That surely would encourage the efficiency of the yards capable of building them, and at the same time is would increase the likelihood of getting more of that character of work from overseas. One cannot help referring to some of the hypocrisy that came from the other side of the House when orders were possible from countries the faces of which the Opposition did not like. They said, "There must be no orders from that side because in the event of our return to power we would stop the supply of spare parts."That is only an instance which one remembers in connection with these points. I hope that my noble friend may be in a position to say something on this matter. For myself, as the first Back-Bench speaker from this side, I should like to give my unqualified support to the aims and scope of this Bill.
1.13 p.m.
LORD BALOGH: My Lords, I cannot but join the ranks of those people who welcome this Bill and, more especially, the noble Lord, Lord Boyle of Hands-worth. His brilliant and constructive speech has rendered half of my speech unnecessary, and as time goes on I shall cut it by 50 per cent. I shall not talk about the administration, or about the criteria on the basis of which this Bill will operate. The Bill represents a partial repentance of the Government from one of their major stupidities: the change from a system of grants to tax allowances. It revives, more or less, the I.R.C. and also revives the powers of "Mintec", which were so terribly attacked when they were proposed by the previous Government to enable the Ministry of Technology to give direct help to industry. Thus it is a retreat from an untenable position which we attacked and predicted. If one were to speak less charitably, one might say that Pompidou's poodle has performed a head stand, which is also a notable feat. Even the noble and learned Lord the Lord Chancellor (I am

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sorry that he is not to speak in this debate, for it would have been amusing, as was his high-spirited buffoonery yesterday) could not hide this fact. The brief of the noble Earl, Lord Limerick, which was a good, if somewhat dreary, Civil Service product, hid it even less.
What is regrettable, but also quite understandable, is that the retreat is on the wrong lines—it is a South Vietnamese retreat. The Government repented only partially, and this performance does not comprise much the most important measure. My noble friend Lord Diamond gave us a number of statistics about the increased unemployment in the regions, but he did not mention the regional employment premium. As the noble Lord, Lord Boyle of Handsworth, said, this could have been refined. I was never very enthusiastic about the administrative work we had to do owing to the resistance of the Inland Revenue. At any rate, here was something which we had advocated ever since the 1950s and which could bridge the difference—and it is a very important difference—between social and private costs; that is to say, which could make the profit motive act as a good signal to private industry.
If the Government are unwilling to learn from British examples that worked, they ought to pay some attention to Italy in this respect, which adopted such a system for the Mezzogiorno. The following important measures are in force and should be noted by the Government. For small firms up to £1 million capital, there is a grant of 35 per cent. of fixed investment. The rate of interest for a loan is 3 or 4 per cent. for 15 years. Seventy per cent. of the investment of small firms is either outright grant or a heavily subsidised one. On top of that, medium-sized firms get a grant of from 15 to 20 per cent. fixed investment and loans of up to 50 per cent. of total investment. Large firms with fixed assets exceeding £3 million get outright grant of only from 7 to 12 per cent. of fixed investment. They get loans, at very favourable rates of between 30 and 50 per cent. of total investment.
That is not the whole picture. What we want, and w hat they want, is employment, not capital intensive investment. One of the great difficulties about grants
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is that they attract capital intensive investment where employment ought to be attracted. I recommend this Italian system to noble Lords opposite because Italy has pulled itself up by its bootstraps from a very difficult and disagreeable situation. For the share of present employment which is equal to the total employment as registered by the firm on September 30, 1968, they get 5 per cent. employment premium. This is worked through the social service contribution scheme; the State pays the employer's share of the contribution. A higher percentage, up to 13 per cent., applies for the increase in employment since 1968. And a 17 to 18 per cent. direct subsidy to wages is forthcoming on employment which increases from 1971 onwards; that is to say, any enlargement or any new investment will attract 17 to 18 per cent. subsidy on wages.
It is true of course that the Italian Government are protected against the destructive clauses of the Rome Treaty by a special Protocol which we have not got. I must say I am very doubtful, for instance, that certain parts of this measure will be compatible with the E.E.C. It is no use Ministers saying they are absolutely convinced they are, because they cannot be. The sovereign decision over whether this agrees with the Treaties or not is not in our hands, and therefore any assurances are worthless. That is presumably the reason why the grant is limited mainly to 20 per cent., that being the maximum regional advantage which the E.E.C. have accepted. There is a grant of 22 per cent.—and I suppose the 2 per cent. is like the Czech baby: it is so little that it does not count as a countervention. Perhaps that is the most charitable explanation of that. The time limit set in Clause 8 also is presumably due to the destructive clauses of the Rome Treaty. I wish the Government had looked, and would look, at V.A.T. or at Social Security payments to see whether they could not be analogous to Italy's.
Clause 7 represents a resurgence of the I.R.C. powers. This is the one point on which I would disagree with the noble Lord, Lord Boyle of Handsworth. I do not believe that direct governmental power is in any way a substitute for an I.R.C. It would be if we had not vast giant Departments which have been foisted on the British system quite recently

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and which make an orderly administration quite impossible. The Minister is dead and cannot exert political supervision. Finally, the oddest thing, of course, is that we are now going to subsidise the oil companies. Both the noble Lords on the Front Bench opposite have from time to time suffered from my furious preoccupation with the oil companies; and my Charles's head bobs up again. Not only are we going to grant them, roughly speaking, 500 per cent. more than the Arabs, but we are now going to subsidise their platforms. Well, the more power to the oil companies! Slowly the Government are forced to adopt all the policies which they condemned in Opposition. I fear that this is often the case with all Governments. I remember myself some cases where we did the same, but the extent to which this Government have been retreating is unparalleled, and the only thing I can say is debuisset pridem.
1.25 p.m.
LORD TANLAW: My Lords, I am very pleased to give a welcome to this Bill and recognise it, as we do from these Benches, as a very real attempt to assist growth in the regions and the areas of high unemployment. Various reasons have been given or suggestions have been made for the Government's recent conversion. My own theory is that perhaps the Minister of State sought his inspiration among the Old Testament prophets: Ecclesiastes, Chapter XI, verse 1, would be perhaps a possibility:
"Cast thy bread upon the waters".
I think in all seriousness that this is what this Bill is meant to do; and we welcome it because of that. The Bill could also have been conceived with the regions of Scotland particularly in mind, where there are I believe at this moment approximately 12,000 people looking for every vacancy. It is an incredible figure which I believe comes from the Department of Employment Gazette.
The noble Lord, Lord Boyle of Handsworth, has made a fine speech leaving little for me to add as the penultimate speaker. But I feel some words could be said about what the noble Earl said at the beginning of his speech when introducing the Bill, concerning infrastructure. It may be relevant at the Second Reading of a Bill of this kind to imagine for a moment how an Indus
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trialist is going to react to the intentions behind this Bill, if he is sufficiently tempted, as I am sure many will be, to consider setting up a business or new industry in one of the regions designated as a development area. First of all he will, as some have already done in the oil business, have sent executives to make a report on the spot. I have, perhaps like some other noble Lords, been given such assignments in my time: to go to out of the way places and make a report. Often the first problem is to get there, and Scotland is no exception. Let us imagine that a destination North of Edinburgh is involved. How many times does one end up in Glasgow because of crosswinds at Turnhouse? If one is trying to go to Aberdeen, how many times is one told that the plane is full, and one has to wait not for another plane but for another day?
Oil executives seen on the television in these last few weeks have already said that it is becoming difficult, or impossible, to arrive at the place in which they are meant to be carrying out an investigation in order to put capital into an area. They must be very surprised. They might perhaps recognise this situation in places such as Libya or the Arabian Gulf; but I feel the infrastructure must match—and communications are an important part of it—the weight of capital that is going into the area. On arrival at a proposed site the next item is to find suitable housing for the skilled personnel who have to be brought out there. That includes directors. Even if a spanking new advance factory is available for you, more often than not, having spoken to people who invested in Scotland, it is my feeling that housing for key personnel is not accessible, or often not available. There is also the problem of the schooling of executives' children. These are key executives to whom I refer and represent only small numbers. A whole project usually rests on a few key people. As key executives usually have wives and families, if these facilities are not readily accessible then it is more than likely that the proposition begins to look untenable because they will not go to the area.
There are two more important considerations before the grants and cash incentives are looked at. The first is accessibility and the cost of despatch of

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goods to the markets, be they for export or the home market. For instance, is the road system capable of carrying products quickly and efficiently without long diversions or weight-load restrictions? How far is the nearest railway station or goods siding, if bulk raw materials or finished products have to be handled? In Scotland, regrettably, this may be many miles away. I wonder whether the noble Lord, Lord Beeching, regrets, as many of us do, the speed with which he shut down some of the main rail transport arteries, now that minerals represent the future wealth of Scotland. In Australia they are building railways to develop their mineral and oil potential; in Scotland we are told to tear them up.
Finally, and perhaps most important, is the availability of labour and the local wage structure, coupled with the attitude of the local union leaders. All these things are looked at during a first reconnaissance visit before the industrialist gets down to looking at what cash is available on the Bill. The main intention of the Bill is to reduce regional imbalance, and one of the regional imbalances is on weekly wage earnings. According to the abstract on regional statistics there is a major differential in different parts of Britain. For instance, there are variations in South Humberside where the weekly average earnings are £28·3 per week and that varies to £21·9 per week in South-West England and the Border areas of Scotland. Quite often in these peripheral areas the cost of living is actually higher than it is in the city centre, simply because of transport and so on, and this adds materially to the hardships of those working on low incomes.
On reflection I agree with the noble Lord, Lord Diamond, that it is better not to try to introduce an Amendment to this Bill to rectify the omission in Part I, Clause 4. I hope the Secretary of State will bear in mind these areas where the average weekly earnings are as low as £21·9 a week and that this will encourage him to designate them as special develop-matt areas if he has not already done so. In effect what I am trying to say is that regional development must be integrated regional development if it is to become effective, and Government assistance of a capital nature as envisaged in this Bill will evaporate unless it is
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directly linked to adequate infrastructure in regions where help is needed.
Turning to Part II of the Bill I should like to take up a point made in another place and underlined to-day by the noble Lord, Lord Boyle. It concerns the Development Board. I question, as Mr. Lever did and as the noble Lord, Lord Boyle, has done, whether a Board of this nature is the right vehicle for fiscal assistance of this mammoth kind. To me, the Board needs to be a board of merchant bankers, and one question which perhaps the noble Earl will be able to answer is the kind of remuneration the experts on such a Board would be able to receive. The kind of work that they have been asked to undertake is that of a merchant bank, which is highly sophisticated, involves immense fiscal planning and the financial assessment of the viability of the projects put forward.
With due respect to Government departments, training of a Government department man, however able, is not likely to be the same as that for a merchant banker. They look at the problems in entirely different ways, and if this Development Board is to do all the things that it is meant to do the people on it must be of the highest calibre. Clauses 7 and 8 of the Bill could be the articles of association of a bank rather than from a Minister of the Crown. The intentions and principles behind the Bill are basic banking principles but with one major difference: in order to obtain financial assistance from a bank or the I.C.F.C., which did such great work in this way, cost projections and discounted cash flows are prerequisites over and above the terms of repayment. The criteria are entirely different for the Development Board and the Secretary of State. A non-repayable scheme of this kind to satisfy a Government department does not need any of these business essentials where viability and profitability are essential but a paper that will be acceptable to Government department people and, ultimately, the Minister of State.
Industry is quite used to dealing with bankers, and the company accountant is used to preparing schemes to put before a bank in order to raise funds. I only hope that the industry in this case that we are trying to attract to these areas feels capable of drawing up a paper which

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will attract the attention of the Minister of State, which will be a different kind of paper. If they are very keen to accept funds of this sort industry may even have to go to a retired civil servant to prepare such a paper because the thinking is different, the training is different and the kind of people with whom they will have to deal is different. I hope that no abuse will remain because of this. I understand from the noble Earl that the nationalised industries will be eligible for grants, and here they may have a slight edge. The nationalised industries are quite familiar with dealing with Government departments and, to put it bluntly, they know how to write a Government memorandum in order to get the right answer. Those in industry are not quite so good at it, but I do not quibble over that.
I should like to make one final point. I think the noble Earl said that the facilities available under this Bill will be available only if the funds cannot be provided from another source. I fully accept the reasoning behind this but I should like to think that some feeling of viability is given to a company before it applies for this job. To me the implication of what the Minister was saying was that if no bank, no finance company or no enlightened individual will finance a company then that company has no future whatsoever. It is wrong to put it quite like that and I hope that I misunderstood the noble Earl.
If the position is such that the company wishes to expand, if the company's borrowing powers are fully extended and the collaterals are not there and the guarantees are not there, then I would agree entirely with the Minister, but if a company is eligible because nobody else would dream of financing it except the Minister of State I begin to have some doubts about the effectiveness of this kind of aid. If that is the case long-term employment will not, naturally, go on. This company will go broke, sooner or later, and the employment and the hopes given to people who are temporarily employed will fade away. I should like to be reassured on this point.
I should also like to welcome Part III of the Bill, which is a real attempt to give British industry an opportunity to take full advantage of the oil companies' activities around our shores. British
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industry has been complaining that it has not had proper opportunities and that the oil companies have been buying foreign rigs and so on. That is quite true, but this Bill gives them the opportunity to get the expertise to build the foundations of an industry entirely geared for mineral and oil expansion, so it is now up to them to take full advantage of it. I have no doubt that British industry will take up this challenge and the opportunities offered to them by this Bill.
To conclude, the success of any under taking of the types outlined in this Bill must be dependent upon three factors: the first is the capital which is available and attainable through this Bill; the second is management, which can be found, provided it is paid for; the third is communications, which is up to the Government.
1.39 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I should like to start by thanking noble Lords for the welcome they have given to this Bill. As the noble Lord, Lord Diamond, has said we do not always have the luxury of a complete concensus on Bills before the House, and in regard to some of the Bills that we have had before the House in recent times he and I have had occasion to disagree sharply; but I feel sure that this will not be so on this Bill. Of course he has indicated some of the reasons and I should like to meet some of the points that have been raised. Before doing so, I should like to thank those noble Lords who have spoken for remaining. If I hear rumblings, I shall take it that it is due not to discontent but to the absence of food. The noble Lord, Lord Balogh, has courteously informed me that he has had to leave for a previous engagement and apologises for not being in his place to hear my reply.
Several noble Lords referred to the Bill as a kind of repentance. The noble Viscount, Lord Simon, pointed out that once free depreciation had been extended right over the country, that in itself had removed the differential in favour of the regions and that since we were obviously still anxious to give preference to the regions some other means of doing so had to be found. The obvious way to do it was through grants. I am glad that

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the general grant system has been welcomed here. My noble friend Lord Boyle of Handsworth, whose speech we so much welcomed and enjoyed, thought the levels were about right, and that view has been shared by the House in general. The noble Lord, Lord Diamond, said that regional development grants were not profit-related. In looking at the assistance that is available in the regions one must look at the whole of the assistance, including the budgetary measures. One will then come to the conclusion that, taken as a whole, the new system of investment incentives is in fact profit-related. For example, for a typical project in a development area, 63 per cent. of the total recoveries—that is, grant and tax savings—will be in the form of tax savings and, therefore, profit-related. This compares with 28 per cent. and 38 per cent. respectively before October, 1970. It is therefore wrong to say that, taken as a whole, the assistance is not profit-related. Then of course the grants are available only in assisted areas: building grants in all of them, and grants for plant and machinery in development and special development areas only.
The second important point made by the noble Lord, Lord Diamond, was about public accountability. We are well aware of the need for this and, in our view, the degree of accountability will be much greater if a separate organisation is set up to administer the funds available. Ministers will at all times be answerable to Parliament—this, as the noble Viscount, Lord Simon, said, in some degree has dangers from the point of view of pressures—but they will be assisted by the Industrial Development Advisory Board; and if, as my noble friend said, the Secretary of State does not take the Board's advice, he must lay a Statement before Parliament, if the Board so requests. Under Clause 16, my right honourable friend will have to make an annual report or reports, and he has given an undertaking that they will include reports from the Industrial Development Advisory Board and the regional industrial advisory boards. All of this will help to protect him from the pressures of one kind or another to which some journalists fear he may be unduly exposed and which the noble Viscount, Lord Simon, thought he would have difficulty in resisting. Ministers soon get
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accustomed to resisting pressures and I would not have rated this particular danger very highly. Moreover, the Secretary of State will have the new development unit to advise him, as the White Paper says:
… on the appraisal and implementation of industrial and development needs."
In addition he will have a Director of Industrial Development, in the person of Mr. Tindale, who was a director and general manager of the I.C.F.C., and industrial directors who are to be appointed for Scotland and Wales, and regional industrial directors for the Northern, the North-Western and the Yorkshire and Humberside regions. This in itself represents a considerable degree of expertise and it also means that there will be a considerable devolution of decision-making on assistance to the regions.
As my noble friend said, guidance will be given from the centre on the way in which discretion is to be exercised in the regions. Senior Department of Trade and Industry officials at head regional offices will be accountable for expenditure in the regions and it is thought that they will be given a ceiling of grant beyond which they cannot act on their own discretion, and that above that they will have to submit proposals to the centre. One must distinguish between two different kinds of case. The noble Viscount, Lord Simon, was concerned about the possibility of assistance being given to one individual and not to another. He went on to say that the way in which the grant would originate would be through an application on the part of the individual. That is largely so, and it is so at present.
The Local Employment Acts Financial Advisory Committee has for long been examining applications, and I have no doubt that it has taken discounted cash flow and the prospects laid before it into account. In fact, the criticism has been that the procedure has been much too detailed and slow. The fact that to a large extent this can be done in the regions—particularly so far as small industries are concerned; they will of course be just as eligible as large industries—should result in a good deal of saving in time in dealing with applications and also the consideration of them with expertise and much greater local

669
knowledge. I do not foresee the likelihood of a wide disparity between one region and another in the way in which applications are dealt with or approved, for the reasons I have given, because of the accountability of the regions for the way in which they are spending the money and because the Secretary of State will have to account for it at the end of the day. Whenever you give a discretion, of course, you are bound to have minor variations but I would not have thought that there would have been any wide differences in this regard.
My Lords, the noble Lord, Lord Diamond, spoke about the relationship to third parties where Government takes an equity interest. I remember the first time that I made a Statement from this Box, and the noble Lord asked his first question, or made his first intervention after coming into this House on exactly this subject. It is one of which we are very conscious, but the fact that the Secretary of State, in taking an equity interest in companies, is taking it with the consent of the company and has also to dispose of the equity interest as soon as may be, will be clearly known to industry, and creditors and customers will realise that the Government are in the firm for a limited period and not for keeps. The point that the noble Lord made is one that will have to be very closely watched at all times, but it is one which is perhaps not quite so serious as he may at first have imagined.
There is also the point that he and other noble Lords made about the availability of finance from Government only where no other source is available. This is to a large extent a question of the time scale. It may very well be that in some cases the firm has sought to get money from the banks and from other financial institutions and has been unable to get assistance. But in the course of so doing if it was indicated that the Government were also to help it may well be that they would agree to cooperate. Indeed, as my noble friend said, the Bill provides for guarantees of private loans; so that is the kind of situation that is envisaged there.
Again, one is very well aware of the danger that for the more risky type of enterprise the private institutions may not be so willing as they are sometimes to put up finance because they think that
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the Government will have to put it up in the long run in order to safeguard employment. That is a risk, but we envisage that the kind of nexus that we are establishing under the new arrangements between Government and industry through the advisory boards, and through the use of outside people for limited periods within the machinery of Government, will reduce this risk very considerably.
LORD DIAMOND: My Lords, if that is all that the noble Lord is going to say on that point, will he allow me to say one word by way of the question, "is he aware that?". He has been good enough to describe the risk of losing the capital investment. That is not, and I underline the word "not", my concern at all. If one puts up a certain amount of capital one is aware of the risk of losing it. What the noble Lord is saying is that it may be necessary to put up this money in order to maintain employment: that is to say, in order to keep a company going that would otherwise not keep going. May I just say to the noble Lord that the Companies Act and company practice have very strict provisions about those who insist on a company keeping going, and the provision of a small amount of capital may involve the Government in vast sums of liability in that company far in excess of the capital subscribed, in order to carry out the policy of the Government in maintaining employment. I am only saying that in the hope that he will be good enough to bear it in mind.
LORD DRUMALBYN: My Lords, yes, indeed. That is a point which the noble Lord and I have discussed together at one time and another, and it is one that we will certainly bear in mind. The most frequently used form of selective assistance is, in any case, likely to be a loan granted against security, which is another of the points raised by the noble Viscount, Lord Simon. He was concerned also about the provisions in Clause 7 as to the Secretary of State's power to provide financial assistance where, in his opinion
"the financial assistance is likely to provide, maintain or safeguard employment in any part of the assisted areas".
So far as the safeguarding is concerned, this is a new development but it is in

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recognition of what the noble Lord, Lord Boyle of Handsworth, was talking about; namely, the social aspects of the support that needs to be given to the regions. It is also linked with, or at any rate supported by, subsection (2)(f)which gives as one of the purposes mentioned in subsection (1)—
"to encourage arrangements for ensuring that any contraction of an industry proceeds in an orderly way".
My Lords, the noble Viscount, Lord Simon, spoke about the service industries. The Government carefully considered the question of bringing the service industries into the grant system, but we were forced to the conclusion that we should not be justified in doing so for the following reasons: first, that grants would not be a particularly effective way of influencing the location of service activities since the great majority have to be near the people or industries that they serve. In most cases, therefore, the shops, bus depots, branch banks, restaurants, and so on, have to be in the assisted areas to serve the people who are there. But I recognise that there are cases—for example, the head offices of national organisations—where this does not hold good, and we will certainly be on the lookout for some way in which to assist those cases. It might be that they could be assisted under Clause 7. Nevertheless, it is true as a broad generalisation that the extent of these activities in the assisted areas is generally decided by the prosperity of those areas rather than whether or not we make available regional development grants.
The second reason is that to extend the system to the service sector would greatly increase the cost. A measure of this is provided by the fact that the services taken as a whole spend roughly as much on building work as the manufacturing industry. The third reason is that discrimination between different projects on the basis, for example, of the extent to which grants might influence their location, would not be feasible in a scheme of this kind which is designed to operate as simply as possible with a minimum of detailed investigation of individual projects. It would be very difficult to distinguish between one service industry and another. This kind of discrimination is more practicable in relation to the selective assistance which will
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be available under Clause 7 of the Bill, and it is our intention that selective assistance should be available to service projects in appropriate cases. I have in mind here, for example, projects which are moved from a non-assisted area to an assisted area, or projects which serve a sizeable part of the country and therefore have a genuine choice of locating inside or outside an assisted area.
The noble Lord, Lord Tanlaw, raised the question of the environment. May I say that in addition to what my noble friend said at the outset of his speech about the additional money that is being spent—the £164 million programmed for additional infrastructure expenditure in assisted areas on roads, schools, hospitals and public services—the whole concept of the organisation which we are setting up is designed to ensure a much closer liaison at regional level between industrial considerations on the one side and environmental considerations on the other. We have been very conscious of this need. I think perhaps I may say that this works well in Scotland simply because they have an organisation of their own. We hope it will work just as well in other parts of the Kingdom. I hope I have covered most of the points. I should like to say we have taken very careful note of the points the noble Lord, Lord Boyle of Handsworth, made. We shall study these very carefully indeed.
My Lords, I do not think I need presume to criticise anything the noble Lord said; I am not sure he asked me for any particular information on what he said, but there arose from time to time a general point about expertise on the Advisory Board. The Bill merely says, in Clause 9:
"The members of the Board shall include persons who appear to the Secretary of State to have wide experience of … industry, banking, accounting and commerce."
It does not mean that only persons who have wide experience and who have shown capacity in industry, banking, accounting and finance should be included. So the Secretary of State is not limited in his choice; but these are the bases on which this question of organisation is bound principally to work. I need only say that so far as the chairman of LEAFAC was concerned, he was an accountant, and I think one can be sure there will be accountants in this

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organisation as well. I can assure my noble friend Lord Barnby that small businesses are very much in our minds in setting up this kind of organisation. He also asked about naval shipbuilding. The reason why they are not included in the grants system is, very simply, that they are not in international competition, unlike our shipbuilders in this country. Tenders for building for the Royal Navy go out to firms in this country only and, that being so, there is not the same reason to give them grants. The Ministry of Defence is bound to have a very great interest in its procurement policy in ensuring continuity, and for that reason they most certainly want to see that that capability remains. So I do not think the same kind of arguments for this assistance that applied to the commercial side of shipbuilding apply to the naval supply.
The only other point—I do not want to detain your Lordships longer—was that regarding entry to the European Economic Community. We have been in close touch with the development of the Community regional policy and thinking over a very considerable time, and I am certain the facts that the noble Lord, Lord Balogh, produced to the House were well known to Her Majesty's Government. As a result we have no reason to believe there is any conflict between the measures provided for in this Bill and the obligations of membership. It remains our policy to apply a vigorous and effective regional policy and the Bill embodies such a policy; and we have no reason to think it will be in conflict with the obligations we shall be taking upon ourselves when we become members of the E.E.C.
The provisions of Article 92 of the E.E.C. Treaty have been interpreted by resolution of the Council of Ministers in October, 1971. Under this the Community is divided into central and peripheral regions and there is a limit on regional aid of 20 per cent. of the project cost in the central areas in order to prevent bidding up for mobile projects. There is at present no limit on regional aid for peripheral areas though it is intended to establish one in due course. Regional aid must be transparent—that is the word that is used; that is, openly capable of being calculable on a basis
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which enables it to be related to the capital cost. This is generally acceptable to us. Moreover, Article 154 of the Treaty of Accession provides that the principles concerning regional aid shall apply to us not later than July 1, 1973, though they will be supplementary to take account of the new situation of the Community after enlargement. It will be during the course of the first six months of 1973 that what is meant by central and peripheral areas will be settled in our case.
The importance of the maximum use of the Bill during the period of transition will not have escaped your Lordships' attention. Clause 8 brings this into relief by limiting the powers under that clause to the end of 1977. I welcome very much the resolution that has been shown by this House to-day that all concerned, whether Government, employers or labour, should join together to make the greatest use possible of the facilities of this Bill and to make certain we do achieve a measure of growth which will encourage industries to go to the regions. It has been the experience all along that only in circumstances of national growth are we able to attract new industries to the regions in any substantial degree. But in general the new assistance to be given to the regions should be of great help in reducing the imbalance that has defied the efforts of successive Governments over a long period of years, and I think that I can echo the feelings of the whole House in saying that we wish this Bill well. I am very glad indeed to have received the support for it that we have had from all parts of your Lordships' House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ELECTORAL LAW (NORTHERN IRELAND) ORDER 1972
2.9 p.m.
THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM)THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM) rose to move, That the Draft Electoral Law (Northern Ireland) Order 1972, laid before the House on July 18, be approved. The noble Lord said: My Lords, this Order relates mainly to local government elections in Northern

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Ireland, and except in one or two instances which I shall mention, its main provisions do not affect either Stormont elections or Westminster elections.
The Order has been made necessary by the reorganisation of local government following on the proposals of the Local Government Review Body chaired by Sir Patrick Macrory. In place of the existing local authorties, of which there are 68, there will in future be 26 district councils. Under recent Stormont legislation, the Electoral Law Act 1971, elections for members of these new district councils must take place in the calendar year 1972, and thereafter every four years. This increased life span from three to four years is both in accordance with the recommendations of Macrory, and in line with the provisions of the Local Government Bill now before Parliament.
It had previously been intended that these local government elections should take place in October of this year, but following consultations with a number of groups and interests in Northern Ireland, and with the Opposition at Westminster, the Secretary of State decided that the local government elections this year should be on the basis of proportional representation. Some noble Lords may remember that this was the aim of the Private Member's Bill which was put forward earlier in the Session by the noble Lord, Lord Archibald, and was the aim of an earlier Private Member's Bill put forward in the previous Session by the noble Lord, Lord Brockway. The Secretary of State emphasised that his decision related to the 1972 elections only, and did not prejudge the methods to be used in subsequent elections in Northern Ireland, whether provincial or local.
Secondly, he made clear that proportional representation had been used in Northern Ireland—unlike the rest of the United Kingdom—in the 1920s, and it seemed to us worth experimenting to see whether it would result in the better representation of minority Parties. There are many people who believe this to be so, and it seemed worth putting it to the test in this particular election later on this year.
The Order before your Lordships to-day therefore differs from the Bill which had been through most of its stages at Stormont before Prorogation,
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in that Article 4 has been added—that is the Article on page 4 of the draft Order headed, "Special Provisions as to the Local General Elections to be held in 1972". It is this Article that sets out the special provisions which will determine the form of the electoral system to be used in the local elections this year.
Section (2) of Article 4 states that any contested elections in what is described as a "district electoral area" shall be according to the principle of proportional representation, each elector having one transferable vote. The single transferable vote method—S.T.V. for short—has been chosen because it is the system which was previously used in Northern Ireland and is currently used in the Republic of Ireland as well as in other parts of the world, and because it enables people to indicate their preferences among candidates standing for Parties other than their own. Moreover, the system is a simple one for the elector to understand, since all he has to do is to indicate on the ballot paper the order of preference for as many candidates as he wishes.
The calculations that follow by the electoral officer are a great deal more complicated. I will spare the House at this stage a detailed explanation of that matter, although I have come prepared and, if necessary, can go through it when I reply to the debate. I should perhaps add that the proposal was made by the noble Lord, Lord Byers, and by others in this House that the Electoral Law Reform Society might have a contribution to make, and I can say that we are making full use of the expertise of the Society whose officers are helping us in working out the details of the scheme.
One of the consequences of the decision to introduce proportional representation in the 1972 local elections, was the need to form electoral areas which were large enough to enable proportional representation to function effectively. In implementing the Macrory proposal that there should be 26 district councils, the previous Government of Northern Ireland appointed a Boundary Commissioner. A well-known member of the Bar of Northern Ireland, Mr. Frank Harrison, Q.C., who is President of the Lands Tribunal, took on this task, and he recommended what should be the boundaries for the 26 new districts, and for

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the wards with in the districts. This was a considerable undertaking of a quasi-judicial nature, in order that local representations could be heard and fully taken into account and it was carried out in a most thorough and independent manner. The Secretary of State and I have already personally thanked Mr. Harrison and his staff for the considerable service which they have rendered to the public in this matter, and I should like to place that on record again to-day.
The Boundary Commissioner has recommended the exact areas to be covered by the new district councils and the boundaries of 526 new wards within the district areas. These would have been small single-member wards to encourage the closest possible contact between the local councillors and the people they were elected to represent. The Secretary of State then considered a number of further local objections, but decided that it was right to accept the Boundary Commissioner's recommendations in full and without amendment. However, in order to obtain the benefits of proportional representation and to allow the system to operate effectively, it is necessary to have larger electoral units than single-seater wards, and this will be done by grouping the new Harrison wards together into clusters of not less than four nor more than eight, and the remaining steps that need to be taken are set out in Article 4, Sections (4), (5) and (6) of the draft Order. As noble Lords will see, these deal with the making and publishing of proposals concerning the grouping of wards by the Chief Electoral Officer, the procedure for handling objections by the Chief Electoral Officer and the submission of proposals to the Secretary of State, and the making of regulations by the Secretary of State.
To summarise my introduction to your Lordships, this part of the Order is concerned merely with the grouping together of these new wards into clusters of between four and eight, the boundaries of which have already, as a result of an extremely thorough process, been set by the Boundary Commissioner whose recommendations we have accepted. It will be seen from what I have said that a considerable amount of work still remains to be done, and as a result the
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Secretary of State has said that it will be necessary to postpone the elections from October until later in the year. No date has yet been fixed but every effort will be made to complete the remaining stages as quickly as possible.
The other main provision of the Order to which I should draw your Lordships' attention is the creation of a new post of Chief Electoral Officer. This is contained in Article 6 which also sets out the provisions concerning persons appointed to assist the Chief Electoral Officer in the discharge of his duties. The Chief Electoral Officer will be an independent statutory official, in normal circumstances appointed by the Governor of Northern Ireland, who can be removed from office only by the Governor in certain specified circumstances. His responsibilities cover the implementation and administration of the electoral laws of Northern Ireland, the preparation and publication of electoral registers and the conduct of elections. It will be seen from subsection (4), in the middle of page 6 of the Draft Order, that the Chief Electoral Officer's responsibilities extend to Parliamentary elections in Northern Ireland as well as to local government elections.
My Lords, the type of independent, centralised electoral machinery which is proposed is, broadly, similar to that which operates satisfactorily in a number of Commonwealth countries. This part of the Order was contained in a Bill which had been considered by the Parliament of Northern Ireland before Prorogation, and had reached Third Reading in the Senate. It was generally regarded as a useful change to make at a time when local government was being reorganised, with the result that some new arrangements would be needed in any event. This brief description covers the main provisions of the Draft Order. It will be seen that the Order is fairly limited in its scope, but we believe these are useful changes to make and that the results of the experiment with P.R. will be watched with considerable interest. I beg to move.
Moved, That the Draft Electoral Law (Northern Ireland) Order 1972, laid before the House on July 18, be approved.—(Lord Windlesham.)
2.21 p.m.
LORD SHACICLETON: My Lords, I should like to thank the noble Lord for a very short and extremely interesting account—and, if I may say so, rather thorough account, considering the short time he took—of an extremely complicated subject. I propose to speak only very briefly, first because there is a further important debate coming on—but that would not stop me if I thought it was right to do otherwise—but also because this Order has not only been through Stormont virtually, although some Amendments have been made since, but it has been debated twice at very great length, the first time on a Supply Day in another place; and it has had a general welcome. It is not amendable; nor would we wish to amend it, although I have one or two queries and one point I should like to make at this moment. I take it that if it proves necessary in the process of the working out of this new and somewhat unfamiliar procedure—which, as the noble Lord made clear, is really going to present electoral officers, candidates and others with a good deal of hard thinking in order to make it work—the Government will not hesitate to come hack with a further Order to amend any aspect.
But the important thing, apart from the many other arrangements, is the introduction of proportional representation, and I should like to say that, not for the first time, my noble friend Lord Brockway can be satisfied with his pioneer efforts in this direction. I find it maddening, after I have been in disagreement with my noble friend Lord Brockway, when I find that he was more right earlier than I was. But I really think that this is a constructive move. Of course, if we had had it earlier, and if we had had it in the elections for Stormont, it is quite possible we should not be in the situation in which we are to-day. It is quite possible, for instance, that Lord O'Neill of the Maine and others—and this is pure speculation—by the use of the single transferable vote might in fact have been strengthened instead of falling. To this extent, proportional representation has an advantage, particularly in a community where there is polarisation; and there is no doubt that Northern Ireland is classically a place where it should be applied. But I must make it clear—and I say so with all
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respect to the noble Lords on the Liberal Benches, who must also have some satisfaction at this moment—that I am not in favour of its being applied elsewhere. If by any chance we should find ourselves in a situation in which we have regional Parliaments—which heaven forbid!—in this country, then I think that we should again have to think seriously as to whether, for all sorts of reasons, proportional representation would be necessary there. But that is a disaster which I hope is not likely to come. None the less, it may be that I shall find myself wrong again.
It is right to introduce proportional representation in Northern Ireland. As I understand it (I cannot remember whether I heard the noble Lord on this) this particular draft electoral law applies only to the next Elections and a further Order will be necessary at the end of a four-year period (is it?) or a three-year period. Perhaps the noble Lord will deal with this when he comes to reply: it is not a point of great substance. What this Order should do is to give much more of a chance for the moderate Parties—the Northern Ireland Labour Party, the Alliance Party and the Social Democratic and Labour Party—to do well, and tend to weaken the position of those of more extreme views. We shall see. It will be extremely interesting, but I believe that this will be a real contribution towards peaceful development in Northern Ireland.
My Lords, I have one or two further small points to make. First, I think we all find it rather odd that a deposit will be required for local government candidates. My first reaction was that this is the sort of thing that would make it more difficult for new Parties of a sensible kind to emerge, because it would be too costly. But I think I am convinced—and other noble Lords may be interested to hear what the noble Lord has further to say—that this is probably unavoidable in the present circumstances. I hope that at the earliest moment these deposits will be abolished. I understand that within this rather complicated system the proportion of votes that has to be obtained before a deposit is lost is not very great. If the noble Lord could say a word on this aspect it would be helpful.
Finally, I should like just to say this. I am increasingly bothered about the proposal about a plebiscite in Northern

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Ireland. I know that it is consistent with views expressed by Government, but let me make it clear—particularly in view of the "Hear, hear!" from my noble friend behind me—that I am not in favour of plebiscites or of consultative referenda, though I do not wish to re-introduce that subject here. Also, in the purely Northern Ireland context, the result is foregone. Everybody knows that the majority of the population of Northern Ireland will vote to remain in the United Kingdom. So we shall be no further on in this matter; and I am very much afraid that it may be provocative. Although the noble Lord may feel that he is in honour committed, and the Government are in honour committed (I fully acknowledge that this may be so), to hold a plebiscite, I can see great advantages in at least having the local government elections first and seeing what emerges from them. This will very probably give a much more accurate picture of where the feelings lie than one of these blank plebiscite votes of a kind which are unsatisfactory and which may even be boycotted.
My Lords, having said that, I should like again to echo what the noble Lord has said about Mr. Harrison and the work of those who have been concerned with boundaries. I think it right to pay tribute to those who are not merely talking but actually working hard in the interests of a better and more peaceful Northern Ireland. It may be that we shall be in for more and bitter disappointments, but this at least is a right and a hopeful step. I hope that this will be the last Order that will come to us in this way and that in future we shall have a Select Committee, even if the Government will not agree to our having a Select Committee to examine treaties and legislation emanating from the E.E.C.
2.30 p.m.
BARONESS SEEAR: My Lords, I rise to give the support of the Liberal Benches to this Instrument and, in particular, to Section (2) of Article 4 which introduces proportional representation with the single transferable vote. I should also like to disabuse your Lordships' minds of any idea that this is a routine Liberal genuflexion to the idol of P.R. In fact, vulnerable though P.R. obviously is to the point of view of any minority Party, the characteristics of P.R. which make it
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highly acceptable to us make it uniquely necessary in the situation of Northern Ireland. Democracy is not just about majority rule. It is about involving people in the important political decisions which affect their lives. And when you have an electoral system which for 50 long years has left a minority, and a large minority at that, in permanent opposition, you cannot claim that democracy is working. In fact, the electoral system as it is in Northern Ireland has created a sense of impotence in that minority and an impotence accompanied by frustration and rage, the effects of which are now before us.
We believe that in three very important ways proportional representation will help to heal the wounds of Northern Ireland. We believe that in the course of time it will give the minority an opportunity really to take part in the decisions which affect them, so that sense of impotence will be removed. Not less important, we believe that there will now be a choice within Parties and not only a choice between Parties—a choice within Parties which means that a Roman Catholic can vote for a Roman Catholic who is also a trade unionist; or if he wishes, for a Roman Catholic who represents interests other than sectarian interests. This may mean—and what could be more important?—that we could move the political division in Northern Ireland from one which is basically sectarian to a modern division based on the usual interests and attitudes which divide Parties, rather than the sterile division between religious communities that we have to-day.
Further, as the noble Lord. Lord Shackleton, suggested, it may well mean that we have the election of more moderate rather than extremist persons to positions of authority. I would echo what the noble Lord said, and if the election of moderates had been possible in Northern Ireland over the last 50 years, as began to take place while proportional representation ruled in Northern Ireland, and as has taken place in the South where there has been proportional representation for many decades, as was confirmed in the election on that very issue in 1968 then behind the very people who have striven to give a moderate leadership to Northern Ireland there would have rallied a large

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number who have not been able to express themselves through the ballot box, and many people who are dead would be alive today.
2.35 p.m.
LORD BROCKWAY: My Lords, my speech will consist only of a few sentences: I just want to welcome this Order. The Minister of State made reference to the fact that this proposal was included in the Bill which I introduced a year ago, when I was opposed by both Front Benches. Perhaps I should welcome the fact that the Leader of the Opposition generously made reference to that Bill, not only today but before.
I am very glad that the Minister, the noble Lord, Lord Windlesham, is now fulfilling these responsibilities in Northern Ireland. I do not know anyone on the Government Benches who could contribute towards the terribly difficult situation in Northern Ireland in a more constructive and conciliatory way than he. Let me add that I regret very much the fact that he is not in his old position, because one is having more difficulties today than when he occupied that post. I believe that this Order is a great and constructive contribution towards the policy of a political rather than a military solution in Northern Ireland. But for this proposal to have proportional representation in local government elections, there would have been a great danger that those elections would have been boycotted by the minority. I hope that this Order will mean that such a situation will not arise and that there will not be developments in other directions to prevent the co-operation of the minority when elections take place.
May I say a word in support of what my noble friend Lord Shackleton said regarding the plebiscite? We all take the view that the issue of Northern Ireland and the unity of the whole of Ireland must be matters for consent, but I would add to what has been said a warning that there is a very great danger that unless the situation in other directions creates an atmosphere of co-operation, an early plebiscite might actually intensify the antagonisms because of the campaign which would necessarily occur
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before it took place. I therefore urge that the Minister should be very careful indeed in any recommendation that this plebiscite should either precede the local elections or follow them immediately. While maintaining the policy that there should be a plebiscite, the Government should wait for a moment when it could take place without an intensification of the confrontation.
2.38 p.m.
LORD WINDLESHAM: My Lords, I should like to thank the three noble Lords who have spoken for the general welcome they have extended to this Order. The question of deposits was raised by the noble Lord, Lord Shackleton. He is quite correct in saying that deposits do not apply in local government elections in Great Britain, although they apply in Parliamentary elections. The situation in Northern Ireland has been different for many years. The deposit there has been £25 in the case of candidates standing for election to county councils and county borough councils, and £10 for those standing for election to urban and rural district councils. We accept that there is a case for saying the situation in Northern Ireland should be the same as in the remainder of the United Kingdom, but we took the view that in present circumstances it would not be wise to drop the practice of deposits, particularly with the introduction of P.R. This gives rise to a lot of names on the ballot paper, particularly in urban districts such as Belfast. The likelihood is that there will be a very considerable number of names on the ballot paper, so that the full benefits of P.R. may be obtained. Northern Ireland politics being what they are, it would be a simple matter to disrupt the elections completely. Informal groups could put up a whole host of names which would then have to appear on the ballot paper. This small deposit, only £15, is an effective deterrent because if a group of people were disposed to put up say 100 candidates for the purposes of disruption then £15 for each of them would add up. At this particular period of time, it seemed to us right to retain a deposit. However, our minds are in no sense closed for the future.

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The noble Lord, Lord Shackleton, asked what proportion of the votes must be obtained if a candidate is to retain his deposit. I can give him the answer, but it may not mean a good deal to him. It is a quarter of the quota. In order to know how many actual votes are needed you have to know what the quota is. This is a technical matter—and I see the noble Baroness, Lady Seear, nodding her head—
LORD SHACKLETON: May I interrupt the noble Lord for a moment? I have no doubt that the noble Baroness, Lady Seear, will be able to explain it to us both afterwards—but may I take it that the quota is something less than the total number of votes cast? "A quarter sounded rather a lot to me, but I take it that a quarter of the quota is a smaller amount.
LORD WINDLESHAM: The noble Lord, Lord Shackleton, need not wait for the noble Baroness to explain it to him, because I can do it now. The quota is very much less than the total number of votes. It is the total number of votes cast, divided by one more than the number of vacant seats, plus one.
LORD SHACKLETON: My Lords, I am very grateful to the noble Lord. This is a subject that we might next discuss in Committee on the European Communities Bill.
LORD WINDLESHAM: The noble Lord, Lord Shackleton, also asked whether the provisions of the Order applied only to the 1972 local government elections. Article 4, which is the one that concerns proportional representation, indeed applies only to the 1972 elections. Therefore at some time in the four-year life of the new district councils there will need to be further legislation. The third point raised by the noble Lord the Leader of the Opposition concerned the plebiscite. This was also mentioned by the noble Lord, Lord Brockway. The proposed plebiscite is outside the terms of this draft Order, but I take the point that this debate provides an opportunity
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for both noble Lords to put their views on record. The Secretary of State discussed the plebiscite during Question Time in another place yesterday, and I do not think it would be right for me to try to add to what he said then.
I was most interested in the comments of the noble Baroness, Lady Seear, not just on the mechanical workings of proportional representation but on what she sees as the real advantage of more effective representation—that a stronger local democracy should result. What we need to do is to see how this works out in practice. Many people feel as the noble Baroness does, and I have met several groups which have put forward arguments in similar terms in Northern Ireland. On the other hand, there are those who are not so sure that all these benefits will follow on the introduction of proportional representation, even if they hope that they will. There is very little contemporary evidence to go on, and as what there is comes from communities where conditions are very different from those in Northern Ireland, it is of only limited validity. So what we need to do is to see what the results of these local elections are, and then make some assessments for the future.
I am very grateful to the noble Lord, Lord Brockway, for his personal tribute. I came back from Belfast this morning. The darkness follows light so quickly that it is extremely difficult for anyone who is close to events to keep a sense of vision. It is most important to do so for many different reasons, particularly where the legislative programme is concerned. This series of Orders in Council are of fundamental structural importance. It is very easy to take our eye off them because of the more urgent pressures of the day-to-day situation. It would not be in the interests of, in this case, the future of local government in Northern Ireland if we were to allow ourselves to do so.
That covers, I think, all the points raised in this short debate. I am grateful for the reaction to this draft Order, and commend it to your Lordships.
On Question, Motion agreed to.

RHODESIA: SANCTIONS POLICY
2.46 p.m.
LORD ALPORT LORD ALPORT rose to ask Her Majesty's Government whether there has been any change in their intention to re-enact the Southern Rhodesian Orders in Council when they expire in November next. The noble Lord said: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. I would not argue in this House or anywhere, that there is any direct parallel between the position in Rhodesia and that in Northern Ireland; yet there was one remark made in the speech of the noble Lord, Lord Shackleton, which seemed to me to have a very considerable bearing upon the present situation in Rhodesia. It is simply this. He regretted, and rightly so, that certain actions which could have been taken months or perhaps years ago, were not taken, because, as he said, if they had been taken some of the problems which we are facing at the present moment might not be so dire and difficult so far as Northern Ireland is concerned.
The reason why I raise the subject at this particular point in the business of your Lordships' House is that this same situation applies to Rhodesia. I do not think it right that we should leave some set of proposals to be on the table indefinitely while a period of reflection continues. I do not think that time is on our side, or on the side of the Rhodesians, at the present moment. I believe that there are certain things which could and should be done now which might help to prevent some of the problems which confront Rhodesia now, and will confront Rhodesia in the future—and not only Rhodesia, but Her Majesty's Government as well.
It is right that we should discuss this matter in your Lordships' House. I am sorry that so little attention has been paid to the problem in another place during these past months. As I said earlier on, I do not think that this is something which can be left to lie. As I understand it, at the present moment the Government's position is that the proposals agreed between Sir Alec Douglas-Home and Mr. Smith, I think last year, are to lie on the table, as the phrase goes, while there is a pause for reflection. I should
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like to ask my noble friend the Minister of State how long this pause is to last, and who is supposed to do the reflecting? Is it expected that Mr. Smith, after due consideration, will come forward with new proposals which will help to resolve the doubts and difficulties of the situation and the lack of confidence, so far as his intentions are concerned, in the minds of a great majority of the Africans? May I ask whether he is likely to do that when presumably, at the present moment, the proposals which he agreed with Sir Alec Douglas-Home appear to remain the terms upon which the United Kingdom Government would be prepared to reach a settlement with the Rhodesian Front?
The second question that I should like to ask is whether it is the British Government which is to do the reflecting, and what lines are those reflections now taking? What are the possibilities that Her Majesty's Government have in mind? Are they considering abandoning or altering sanctions? Are they hoping that some change in the position in Rhodesia will get them off the difficult horns of the dilemma which they are on at the present moment? Are they working out some new and constructive policy to produce a solution which will be acceptable within the Five Principles and to all people in Rhodesia itself?
I felt—I may, of course, be wrong—that the decision to leave the proposals of last year on the Table indicates an understandable degree of exasperation and frustration on the part of Her Majesty's Ministers. It strikes me now, however, looking back, as being a slightly "governessy" attitude, the sort of thing that might apply to children in nursery days: "If you will not eat what cook has sent up, well, we will just leave it on the nursery table until you do."Your Lordships may remember how one sat there looking at that cold, glutinous mass of rice pudding, wondering whether to eat it and be sick or sit where one was until bedtime came.
There is a tendency—and that is why I take that particular simile—to consider and regard the Africans of Rhodesia as children, and to believe that change will take place and that they will learn with the passage of time as a result of the arguments put forward by the Chiefs, or what-you-will; that they will change their

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minds because they will realise the wisdom of the British Government and the Rhodesian Front and how important it is to them to take the advantages held out, so it is said, within the proposals that were reached by Sir Alec Douglas-Home and Mr. Smith.
Anybody who knows Rhodesia well, as many of your Lordships do, would know that there was no chance at any time with intimidation, pressure and all the rest of it put right out of the way—of an African majority in the towns, in the urban areas, in the native purchase areas or in the Tribal Trust lands, accepting any agreement which was acceptable to the Rhodesian Front régime. As Bishop Muzorewa has said, the terms which are at the present moment lying on the Table can lie there till doomsday and they will not be acceptable to African opinion in Rhodesia. If there is any illusion in your Lordships' House or in this country that the Chiefs or a small middle class of Africans can be compelled, persuaded or bribed to endorse the agreement, I can assure you that that is not so. Your Lordships will know, I am sure, that it was the deliberate policy of the British South Africa Company, and subsequent Southern Rhodesian Governments, over a long period of time to emasculate the powers of the Chiefs, and they did so extremely effectively. They turned them from their hereditary and traditional role within the tribe into the servants of the Government.
I say nothing against the integrity of the Chiefs. They are men of power, they are men of dignity, and also men of courage. Although they sometimes look narrowly at their own interests, they also reflect the will of the people when it is possible for the people to express that will; not when that will and the views of the people are subject to pressure from the Government and are hidden from the Chiefs. I have seen, when I was for that period in Rhodesia, Chiefs who at one time appeared to be agreeing to something which was in accordance with Government policy, changing their views very quickly indeed when they realised what the real views of their tribal areas were. There is no chance, in my view, of any factor arising which will enable the present proposals which lie on the Table to become acceptable within the Five Principles.
In those circumstances, what then should Her Majesty's Government here do? Should they leave the situation gradually to mature until something happens and which will perhaps make some new development of policy possible? I thought I would bring to your Lordships' attention in connection with this the background, as it was understood in Rhodesia, to the negotiations and to the settlement which we are at the present moment considering. It is contained in an article in the Rhodesian Financial Gazette of April this year. To me it is a most illuminating article. The Rhodesian Financial Gazette represents very closely the point of view of the rank and tile and the influential supporters in industry and agriculture as well on the Rhodesia Front regime. This is the report which it produced on April 14 about the efforts which were being made by the Rhodesian Front spokesmen to explain their attitude to the proposals made by Sir Alec Douglas-Home and Mr. Smith. It says:
"The Government's race policy will not change significantly—whether or not there is a settlement with Britain. This has been made clear by the Prime Minister, Mr. Ian Smith, in the current series of talks he is giving to the Rhodesian Front meetings throughout the country. Mr. Smith's campaign round the country is the third stage in a drive by the Front to convince members that the party has no intention of changing its basic policies—despite what opposition parties claim."
It goes on:
"At its series of meetings the Rhodesian Front has been stressing that while it will implement the proposals, it will do so in a 'Rhodesian spirit', which probably bears little resemblance to the 'spirit' envisaged by Whitehall."
It is against that sort of background that the proposals which form the basis of the settlement at the present moment lie on the Table. I suggest to your Lordships, and I ask the Government whether they will not agree, that the fact that those proposals remain current is a continuing obstacle to any new initiative, whether it be in Rhodesia or here in the United Kingdom. I should like to suggest to them that the time has now come to remove them, and to say quite categorically that the proposals which were proved by the Pearce Commission to be unacceptable under the Fifth Principle are now no longer a basis for settlement with the Rhodesian Government.
At the same time I believe they should do two other things as well: they should make it clear that in any further discussions it is essential that Bishop Muzorewa personally, and a representative of the organisation over which he presides, should be parties to those discussions. I can only give your Lordships my own personal evidence in this connection. When I had the opportunity of meeting and speaking to the Bishop here not many months ago I felt quite clear that if it had been possible for the late Sir Edgar Whitehead and Mr. Duncan Sandys to be negotiating with him at the head of the African Nationalist Party there would have been not only a chance of reaching a settlement but also a settlement which would be sustained and supported by the African opinion behind that leadership.
One must not forget that one of the great trials and tribulations, indeed one of the tragedies of Rhodesia is the way in which African Nationalist leadership has been forced always towards the Left as a result of the lack of any co-operation, any "give", so to speak, by European public opinion. Joshua Nkomo during the early days used to speak of himself as a Rhodesian, and there was a chance then that there would be an agreement which would be acceptable both to black and to white and might provide a stable solution for Rhodesia, but he fell under many influences which I regard as being tragic from his point of view and against the interests of African security in Rhodesia as well as himself. But he was largely impelled in that direction because of the lack of sympathy and support and obvious intention eventually to find some compromise on the part of the leadership within the European community. It would be a tragedy if Bishop Muzorewa were forced into exactly the same position. He is a man of quite different character and background from Joshua Nkomo, but we know what it is like to be an African leader subjected to pressures of all sorts. One must stand up for things that are not easily congenial to one or have behind one a wild and irresponsible group which is too easily identified in newspapers and by European opinion, as the real core of African political opinion. That is why I say that
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time is not on our side. It is not on the side of the moderates who remain in Rhodesia or on the side of the Europeans there. I therefore urge Her Majesty's Government to do everything in their power to strengthen moderate opinion, both European and particularly African, at this time.
This brings me to the question of sanctions, to which my Question is directly related. I have all along taken the view, certainly after their failure during, the first few months to bring a solution to the Rhodesian problem, that sanctions must fail because they are clumsy, a blunt instrument of policy, passive in their form, negative and all-embracing. Like the rain, they fall on the just and unjust alike—on men like Mr. Chinamano and Mr. Todd, who have suffered imprisonment on account of their political views, and on our interests, in exactly the same way as they fall on the leading members of the Rhodesian Front and most anti-British elements that exist in Rhodesia.
If sanctions are to be effective they must, if possible, be made positive, dynamic and discriminating, and I have a suggestion which may or may not be practicable. We read in the newspapers recently that the Burley part of the tobacco industry was suffering and might collapse. I do not have the newspaper cutting with me from which to quote and I apologise in advance if my figures are wrong, but the principle remains the same. I understand that the Burley tobacco crop in Rhodesia is manufactured to the tune of 80 per cent. by Africans. If that is the case, then it should be possible to distinguish in our sanctions policy between African-produced tobacco—for example, Burley tobacco—and the ordinary high-grade tobacco produced for the most part by European farmers. Is it possible to distinguish between tobacco grown on estates which give special advantages for African advancement—for example, special rates of wages and better conditions—and those which do not? Might it be possible by this means to encourage the attitude of mind among both Europeans and Africans that it is in their interests to be on the side of constitutional and racial progress and harmony, rather than on the side of punishing the whole population alike?
In the case of education, we know very well that the majority of African schooling is still, certainly in large measure, under the control and management of the missionary societies. In my view, sanctions should not apply against African education. I agree with the British Council of Churches that there should be some means by which money from this and from other countries is made available for the advancement of African education regardless of sanctions, and made available in such a way as to ensure that it is applied to African education and not diverted to other means.
My Lords, there are many other ways in which what I frankly mean to be discrimination within sanctions could be achieved, to the encouragement of those who have suffered most as the result of the but against those who have been the perpetrators of it. My Question is to ask the Government what their policy is with regard to sanctions. I have tried to put forward an idea which I hope may be of some value and may be considered.
Behind the situation in Rhodesia there is a continuing and increasingly tense security problem. I said earlier that time was a factor. And time is indeed a factor in this. One knows very well that increasing resources of Rhodesia are being devoted to the defence and security forces. One knows the development that is taking place in the situation in Portuguese East Africa. One knows the continuing and increasing influence of the Chinese penetration of Eastern Africa. It is a theme which I developed in your Lordships' House on a previous occasion, and I will not do so again. All I would say is that I do not believe it is enough in circumstances like these to leave a set of proposals which have no chance of success on the table for a period of reflection. This is a particular point in time when a new initiative is due from Her Majesty's Government and should be taken without delay.
3.7 p.m.
LORD GRIDLEY: My Lords, I find it somewhat difficult to follow my noble friend Lord Alport, for he has made a speech which I did not think he would make. But may I say that it seemed to me that what the noble Lord was trying
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to convey to your Lordships was that the proposals which remain on the table are not really acceptable to the Africans. We know that at the moment they have rejected them, but he overlooked the fact that over the last six years there have been talks about talks. There have been meetings on the "Fearless" and the "Tiger", and the noble Lord, Lord Goodman, has carried out extensive negotiations of a secret nature with the Smith Government. He came back here and reported very fully, in the debates which we had on the Pearce Commission proposals, on the result of those talks. Incidentally, I do not think that the noble Lord. Lord Alport, took part in that debate.
My Lords, there are, I am afraid, other reasons why I cannot entirely go along with my noble friend in the speech he has just made, much as I respect his great experience in Rhodesia and Nyasaland. I believe that he was there as High Commissioner from 1961 to 1963. As I see it, this is not November and something may well happen in Rhodesia between now and that month. It will then be—in November—the duty of Her Majesty's Government to state the reasons whether they consider it necessary to continue with sanctions in the absence of any agreement which might eventuate in the period up to November. I, for one, shall listen very carefully to what Her Majesty's Government say in November, and shall then vote according to my conscience.
I have always disliked sanctions, but at the same time I have always said that I did not know what any self-respecting Government could have done in 1966, in a dispute between Her Majesty's Government and the Rhodesian Government at that time, but impose sanctions. Those are the facts, my Lords. It is not for me, as I see it, to go into the merits of that dispute, but I think I know enough to appreciate that in 1966 when sanctions were imposed, no Government at Westminster, of whatever complexion, could have washed their hands of the whole business. If they had done so, I am quite sure they would have lost all credibility anywhere in the world.
Dealing with the morality of the case, I dislike sanctions, and I would agree with noble Lords that it seems futile to continue with sanctions when others

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break them. It seems futile for this country to go it alone—
LORD ALPORT: My Lords, may I interrupt my noble friend for a moment? I did not say that I regarded it as futile to continue with sanctions when others broke them. What I said was that I thought sanctions should be made discriminating between those who support, broadly speaking, the illegal regime and those who are opposed to it, and particularly between the European and African.
LORD GRIDLEY: My Lords, in answer to my noble friend, I was not quoting him; I was quoting the opinions of other noble Lords, who have spoken in previous debates, on the futility of sanctions. I was not necessarily referring to what my noble friend said just now. My Lords, I dislike sanctions and I agree with my noble friend that it seems futile for us to continue with them when others break them. It seems futile for this country to go it alone. Sanctions were supposed to be effective "in a matter of weeks": we have had them for six years. It has cost this country in lost trade something in the region of £48 million which we can ill afford. Sanctions have hit the African in Rhodesia harder than they have hit the White Rhodesians. The Africans for whom we have, or ought to have, responsibilities continue to be hit. The Rhodesian African continues to find it increasingly difficult to find employment in Rhodesia. We have to face all this. Are we not near the position at present when this policy is almost virtually at an end?
As regards the morality of our actions, can any one country point a finger at us about international morality when they have honoured sanctions in the breach? There may be some noble Lords who feel that, unless some agreement between Her Majesty's Government and the parties in Rhodesia is reached by November, sanctions must continue. I can conceive that the Government view—although I obviously do not know what the Government's view may be—that to drop sanctions would offend members of the Commonwealth. In that event it seems to me that it would probably be in order for my right honourable friend the Foreign and Commonwealth Secretary to go to the United Nations and say
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that we have played our part for six years, that we have virtually imposed sanctions alone, and ask why we should continue.
In spite of the vehement speeches made on occasion by leaders of the coloured Commonwealth, sometimes in racial tones, we hear very much less of this of late. I suggest that the heady effects of independence are passing and giving way to an awareness of the heavy responsibilities of independence in the running of one's own Government. I do not think therefore, for the reasons I have given, that the Commonwealth would necessarily condemn us universally if sanctions were withdrawn. In the final analysis this is a matter which will have to be settled between White Rhodesians and African Rhodesian, in Rhodesia. Failure is far too awful to contemplate.
My Lords, I hope that in the speeches that follow that no hard words about Mr. Smith and his de facto Government will fall from the lips of noble Lords, for I have this to say to Mr. Smith—and I quote from a paragraph in Lord Goodman's speech in the debate on the Pearce Commission's Report [OFFICIAL REPORT, 21/6/72, col. 267]. Referring to Mr. Smith, Lord Goodman said this:
"First of all, it is great nonsense to say that he will"—
referring to Mr. Smith—
"achieve nothing by talking to the Africans, because all they want is a change of the terms. He would achieve miracles by talking to the Africans if he merely discussed the terms with them. No great revision of these terms would be necessary to achieve a settlement with a large number of moderate Africans, and the noble and learned Lord Lord Gardiner, has rightly put his finger on a change of attitude on the part of Africans that has appeared over recent months and in the last year or so. It would not be necessary for Mr. Smith to revolutionise these proposals in order to secure more than a modicum of acceptance by the Africans throughout the country. What he would have to do is to show that he rated them as human beings; that he, too, regarded them as worthy of the self-respect of which, by the answer they have now given, they show they regard themselves as worthy".
In conclusion, it is my hope that before November Mr. Smith will act on this proposal. If he does, and if this unhappy business is settled—and there is nobody else at present in Rhodesia who can do it but Mr. Smith—then I think countless millions of people everywhere would show their gratitude at what had been achieved.
3.17 p.m.
LORD BROCKWAY: My Lords, I like to maintain the courtesies of this House. Therefore, may I just say to the noble Lord, Lord Gridley, that I have listened to his speech with, I think, understanding, and if I do not immediately make reference to it it is only because later on I hope to do so. I have looked forward to this debate with a strange eagerness. I have done so because I have wanted to hear what the noble Lord, Lord Alport, would say. He has almost unique experience of Rhodesia. I remember one occasion after he had served there when he went to examine whether there was a possibility of a settlement, and he came back with proposals. On that occasion I did not think that those proposals went far enough, but I was very careful indeed in the speech which I made not to seek to spoil them because, all through these tragic years in Rhodesia, I have been much more concerned to bring about a settlement than to be engaged in controversy on one side or another. I have not been disappointed by the speech which the noble Lord has made. I might almost say that he has now reached a stage where he is more pro-African than I am. In view of the kind of conflicts which we had in another place, that is a quite extraordinary development.
I hate the idea of just saying, "I told you so"; but I should like the Minister in approaching this problem, to remember the speeches which were delivered in this House when first the proposals for a settlement were made. Some of us then warned the Government that those proposals would never be acceptable to the African people, and we then warned the Government that they would find, at the end of any fair estimate of the opinion of the people of Rhodesia as a whole, that those terms would be rejected. My Lords, that has happened. I want very strongly to support the view of the noble Lord, Lord Alport, that it is now a mistake to think that we are in a situation of pause and calm in which we can reflect over months. Anyone who is in contact with the situation in Rhodesia knows that there is not now that situation of pause and of calm. One knows that instead, unless action is taken, the extremes in Rhodesia will become emphasised. You now have on the African side, in the African National
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Council, a moderate and a constructive and conciliatory leadership. Let nothing be done in response and that leadership will become more extreme. You have on the European side the inevitable reaction to the rejection of the settlement proposals, the more extreme elements on the Rhodesian Front becoming more assertive and demanding. Let this period of pause and inaction go on and you will have the extremes on both sides in Rhodesia becoming stronger.
My Lords, let us just look at what has happened in Rhodesia since the settlement terms were rejected. There has been this appalling tragedy at Tangwena about which the noble Baroness spoke at Question Time. This is the quite incredible situation where for centuries African people who have been at home in their areas are flying out because the area is declared to be white territory.
There is this isolation of the children from their parents, from the comfort and happiness and care which were given to them on the farms and the Government stepping in and taking them away to what they call ironically a "welfare institution". This is the kind of outrage which, if it had been committed by a Hitler or a Stalin, the Whole House would have condemned.
Let me just say that the warning which the noble Lord, Lord Gridley, gave about hoping that nothing would be said against Mr. Smith did not apply to me. I do not believe in these attacks on individuals; it is policy which is the important thing. But let me say that the action of the Administration in Rhodesia in seeking to use the Chiefs, who are their salaried officials, in order to break down African opposition among the tribes and sabotage the views of the opposition of the African population about the Pearce Commission, is another indication of the worse situation that there is in Rhodesia now. Then there is the decision of the Administration in Rhodesia that the African National Council shall not be allowed to hold any meetings in the tribal area.
There is the threat to the leaders of the African National Council, and the fact that some of them have had to flee for safety outside Rhodesia. There is the continued house arrest of the ex-Prime Minister of Rhodesia, Mr. Garfield Todd

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—and one is glad to have welcomed his daughter here. But there is not just that. There is the fact that (what is it?) for eight years now the leaders of the African movements have been kept in detention. I remember speaking with Joshua Nkomo ten years ago in London, and I suggested that within five years he would be Prime Minister of Rhodesia. He objected; he said he would be Prime Minister in one year—and he has been eight years in detention. These are scandals which a democratic country like ours ought not to tolerate for one moment.
My Lords, the Question is about sanctions. Let me again say that I hate the whole method of the penalties which are being imposed, and I hate the method of sanctions. But in the circumstances of the last years—and now—what could possibly have been done when you had in Rhodesia a Government which defied British influence, declared its independence and became a rebel Government? What else could you do? The noble Lord, Lord Gridley—and it is here that I am able to make a reference to his speech which I think anyone should make when following another speaker—said there was a danger of our becoming isolated. There was that danger just a few weeks ago. I think the tendency now is in the opposite direction.
We have had a meeting of the Commonwealth Sanctions Committee. That meeting, representing all the countries of the Commonwealth, quite unanimously declared in favour of much stronger sanctions. They made four proposals. These included the proposal that any Governments or any industrial companies which broke sanctions should suffer penalties. It was only by the influence of the British representative on that Committee that those proposals were not sent immediately to the United Nations under the British influence it was agreed that they should be referred to the separate Governments for consideration. I am going to ask the noble Baroness when she replies to say—I put this as a Question earlier on and she indicated that a reply would be available later—whether Her Majesty's Government have now come to conclusions about the decisions which were reached by the Commonwealth Sanctions Committee.
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Every country in the Commonwealth is now in favour of much stronger sanctions than have been pursued before.
But there is not merely that, my Lords. Last week there was a meeting of the Security Council. This is a report which appeared in The Times on July 29:
"The United Nations Security Council called today on all states with economic and other relations with Rhodesia to end such relations immediately'.
"It demanded that all member states should scrupulously carry out their obligations to enforce economic sanctions against Rhodesia. All the members voted for today's resolution except the United States."
Therefore the tendency now is not what it was a few weeks ago: that this country can become isolated. The tendency now is in the other direction, in favour of stronger measures.
I was most interested in the noble Lord's suggestion that there should be some discrimination about sanctions. I should like to think that it was possible. I doubt very much whether 80 per cent. of the tobacco industry is under the control of Africans. I think that 80 per cent. or more is produced by the Africans; but I doubt very much whether 80 per cent. of the control of that industry is not in the hands of great plantations which are European-owned and European-dominated. I find it extraordinarily difficult, and I should like to explore the idea, to see how you could apply sanctions to Rhodesia and discriminate on the basis of production between Europeans and Africans. I think that on education the noble Lord made a practical point. I should like to support him in urging on the Government that, despite the fact that the settlement has been rejected, the British Government should maintain their offer to make a substantial contribution towards the education of Africans in Rhodesia. I think that would be a practical point.
I want to end on a constructive note, because we are all wrong if we are thinking only in terms of penalties. I suggest that if any settlement of the problem is to be found, it must be found not just in an exchange of views between our Government and the Smith Administration. If we accept the Fifth Principle, that the whole people must support any settlement, the logic is that the whole people should be consulted in making

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that settlement. That is logical. At present, we have in the leadership of the African National Council in Rhodesia moderation and construction. I wonder how many Members of this House read the quite extraordinary report of the speech which Bishop Muzorewa, the head of the African National Council, made in the European area. This was a meeting which was quite extraordinary for Rhodesia. It was attended by 900 people, the majority of whom were Europeans. They gave emphatic support to the views which the Bishop expressed. May I just read a little of that report:
"Bishop Muzorewa said a high percentage of Rhodesians were Christians, and among Africans there was ' a deep aversion to violence … and a desire to solve differences, no matter how great, through consultation rather than by bloodshed'.
"There were virtually no tribal conflicts in Rhodesia, and the whites were not mainly settlers, but citizens by birth or otherwise'.
"He continued: 'No sane, responsible leader would want to expel its citizens. Democratic rule will also provide for the protection of the minority and their property'."
That is the spirit in which we shall find a solution and a settlement of this Rhodesian problem.
I appeal to Her Majesty's Government to recognise that the settlement proposals are now absolutely obsolete. There is not the least hope that you can go back to them and get agreement upon them. You must now look forward, and if you are looking forward you must bring representatives of the African as well as of the Administration into consultation. This proposal of a constitutional conference, which will represent the Europeans, the African and the British Government, to work out a settlement of this problem is now the only constructive solution. I beg Her Majesty's Government not just to put it into the background but to recognise that unless they proceed with this constructive idea the situation in Rhodesia will get worse, and the tragedy of actual racial conflict may occur if we are inactive.
3.36 p.m.
LORD GRIMSTON OF WESTBURY: My Lords, this debate has so far taken on a wider scope than the Unstarred Question would suggest. First, I want to comment on something which was said by the noble Lord, Lord Brockway, about the unanimity of the Commonwealth in
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asking for the intensification of sanctions. He will remember that on July 13 he had down a Question asking what was to be done to tighten up sanctions, and I asked a supplementary question of the noble Marquess, Lord Lothian, who was replying for the Government, I asked:
"Can my noble friend tell the House which members of the Commonwealth Sanctions Committee have themselves been trading with Rhodesia?".—[OFFICIAL REPORT, 13/7/72; col. 355.]
The answer that I got was that the noble Marquess did not know. But he took note of my remarks. Later on, the noble Baroness, Lady Gaitskell, asked this supplementary question:
"My Lords, may I ask the Minister this question? Is it not true that in some cases where members of the Commonwealth break sanctions it is because they have to do so in order to live at all?"—[col. 355.]
My Lords, the inference of that is that sanctions are being broken by the very people who are asking for them to be extended. All this sanctions business is surrounded by such an atmosphere of humbug and hypocrisy that it is almost unbelievable.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, may I interrupt the noble Lord? It is quite clear to what my noble friend Lady Gaitskell was referring. She was not referring to the Commonwealth at large which, as everyone knows, is in favour of keeping sanctions. My noble friend was referring simply to Zambia, and it would be quite impossible for Zambia to live without using Rhodesian electricity and importing some food. That was allowed by the Sanctions Committee of the United Nations.
Loan GRIMSTON or WESTBURY: My Lords, I can only quote what the noble Baroness said. She said:
"Is it not true that in some cases…"
not "in a case". She said "in some cases", and from that I assume that she was referring to more than one country.
BARONESS LLEWELYN-DAVIES OF HASTOE: Two cases in one country, my Lords.
LORD GRIMSTON or WESTBURY: Anyway, my Lords, as I was saying, the working of sanctions is surrounded by a fog of humbug and hypocrisy. To ask for them to be intensified is simply to ask for the fog to be made worse.

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I must say that I never thought I should hear my noble friend Lord Alport actually ask for the reduction of sanctions. I thought he was going to ask for them to be strengthened, and I must say that I was almost flabbergasted when I heard him suggest that sanctions should be reduced. That is in fact what he has asked for. One has not had time to think very deeply on his proposal when he asks for sanctions to be made discriminatory. My first reaction to that is that, in view of the way in which sanctions have operated so far, it would seem absolutely impossible to make them discriminatory. One would get into a worse mix-up than one is in at present.
Let us take a look at what is happening. The sanctions have been breached in many directions. The original reason for their introduction, which is never quoted now, is the reason for keeping them on. Every other reason is given. For instance, take the Beira Patrol. It is said that if that is taken off we shall let the Russians in. It is no longer being imposed to keep out oil: everybody knows that it is not doing so. When the Secretary of State visited Salisbury I suppose that his own aeroplane had to be refuelled with petrol brought in in defiance of sanctions. On one hand the Beira Patrol is being maintained, and on the other hand petrol which is known to have been brought in against sanctions is being accepted. That is one absurd thing.
Then there is the question of America and chrome. The American Administration wanted the chrome embargo put on again, but Congress would not have it; so America is openly evading sanctions. As we know, many countries actually in the Commonwealth are breaking the sanctions. With all that going on, to suppose that one could introduce a viable system of discriminatory sanctions is being, to put it mildly, altogether too optimistic. One suggestion which shows some thinking in the right direction from my point of view is that it is high time sanctions were reduced. I would go so far as to say that the time has arrived, with the mess that sanctions are in, when they should be removed altogether. It is not very honourable for Her Majesty's Government to be a party to maintaining a policy which is in ribbons in every
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other direction. I should like the noble Baroness, Lady Tweedsmuir of Belhelvie, when she replies to this debate, to make it clear that after November—and of course the Government are committed to keeping sanctions till then; the Orders are there—the Government should not be committed to the present situation, first because of the new demands which have been introduced, and secondly because of the shambles which the sanctions policy is now in.
3.42 p.m.
LORD VERNON: My Lords, I should like to express my disagreement with those of my noble friends who have stated in the past their belief that the Fifth Principle of Sir Alec Douglas-Home's Five Principles should be scrapped and that the proposed settlement with Rhodesia should be implemented without the agreement of the African majority. The people who have expressed that view have not been very vocal in this debate but they certainly have been on previous occasions, and perhaps they will speak later. It is a fairly widespread view among noble Lords, and it needs correction.
Many of your Lordships will have seen a recent B.B.C. television series on the British Empire. Indeed those programmes were the subject of a debate initiated in this House by my noble friend Lord Ferrier. Unlike the producer of the series, I do not believe that British colonial rule consisted only of beatings, executions and oppression in one form or another. On the contrary, when the time comes for a full and fair assessment of our colonial record I think we shall emerge with considerable credit. Not the least creditable of our achievements was that we sought, and were largely successful, to bring forward to independence all the subject peoples for whom we were responsible. In some cases it may be that independence was granted too soon and that the people were not ready for it; but I think this was forced upon us by the circumstances.
Leaving aside the rather special case of our North American colonies on the Eastern seaboard of the United States, there have been only two exceptions to our practice of granting independence to the majority in colonial territories. The first was South Africa; and there, after

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one of the most generous examples of peace that have ever been made between victor and vanquished, we handed over full power to the white minority. In due course our trust was betrayed, with consequences for the African and coloured inhabitants of that country of which we are all aware. There were terrible and humiliating consequences, and they are still with us to-day. The second exception is of course Rhodesia, where independence has been seized illegally by the white minority Government. It is probably unfair to attribute blame to the Liberal Government in 1910 which handed over power to the white minority in South Africa, because it was difficult then to foresee what would happen and it may be that no other course was open to them. But let us at least not make the same mistake again. Let us ensure that this time in the case of Rhodesia we do not hand over power to the minority.
I have not myself been a consistent supporter of Her Majesty's Government's Rhodesia policy and, notwitstanding the brilliant advocacy of the noble Lord, Lord Goodman, I did not vote in favour of the settlement, because although it was superficially attractive there was no satisfactory guarantee that it would be honestly implemented by future Rhodesian Governments. I did not vote against the settlement because the Africans were given the right of veto. They have now exercised that right—wisely, in my opinion—and, equally wisely, the Government have accepted that the settlement cannot be implemented and have said that a pause is now necessary for reflection.
My noble friend Lord Alport said that the settlement proposals were still on the Table and that this was not sufficient; but I feel that the pause means, in effect, that there must be some movement by the white Rhodesians towards the views of the African majority and, as the noble Lord, Lord Brockway, said and as my noble friend Lord Alport also said, this must mean taking into consultation on future developments the African Nationalist leaders: otherwise you are not going to get any advance. In the meanwhile sanctions are continuing and I do not see what more can be expected of the Government in the present circum-
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stances. It is regrettable that we have not achieved a settlement; but it is surely better to have no settlement than to have one made on dishonourable terms, as would be the case if it were made without the consent of the Africans. That is why I personally regard the Fifth Principle as so vitally important and why I could not support the Government were the Fifth Principle to be jettisoned. I do not think for a moment that the Government are jettisoning it.
On the matter of sanctions, it seems to me that the Government cannot commit themselves at this stage. My noble friend Lord Alport suggested, if I understood him correctly, that sanctions should be strengthened. Perhaps he did not mean that they should be strengthened; he certainly suggested that they should be made discriminatory in order not to hurt those people who are trying to help. No doubt the noble Baroness will say whether she thinks this is possible. I share the view of the noble Lord, Lord Brockway, that in practice it would be very difficult to carry out that suggestion. The noble Lord, Lord Brockway, also said that the Commonwealth countries were all in favour of the strengthening of sanctions. This is true. I am sure it is true that Zambia are breaking the sanctions only because they have no alternative. It is not only the Commonwealth countries who are affected and concerned in trading with Rhodesia. The United States, Japan, some of our E.F.T.A. partners and E.E.C. countries are also affected. We have to face the fact that if sufficient countries ignore sanctions—and I do not say that point has been reached, but it may be reached—sanctions could become a farce and we should have to review our position.
I believe that the general policy of Her Majesty's Government at the present time is correct; I hope that they will continue on these lines and I interpret the phrase "the settlement lying on the Table" as meaning that any movement will have to come from the white Rhodesian side, and in any future negotiations Bishop Muzorewa, and his African colleagues, will have to be taken into consultation.
3.53 p.m.
LORD ANNAN: My Lords, I am afraid that I hold lax views on morality

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in politics in that I have always agreed with Lord Carteret who in the eighteenth century, when writing instructions to one of our Ambassadors, said:
"It shall be your duty to jumble out something that will be of interest to our country."
National security and national welfare are always the two things which must come foremost in any discussion of foreign policy or international relations. These are essential. I sometimes dissent from my friends when they urge that this country should take a particularly strong line because they disapprove the conduct and policy of our allies or other countries with which we may not be closely connected. I dissent because invariably it is not possible for this country to dispose of its resources in pursuit of what one might call strictly moral aims. Sometimes one has to make distinctions and one has to make compromises.
For instance, although I think that the Vietnam War began in folly, and is continuing as an evil war involving the methods which are waged by our American allies, I have often dissented from those who think that our Government—whether the present or the previous Government—should have taken some special measures to indicate to our American allies how detestable they thought their policies were. It is much more our duty to act in those concerns in foreign affairs in which we personally can have some concrete influence. It is much more important that this country should devote its attentions to Northern Ireland than to Vietnam.
However, when it comes to the Rhodesian problem we have to recognise that, for better or worse, although we have little power in the matter, it is, at any rate for this decade, an issue in which we must take into account the moral problems. We have little power to do good—and perhaps I here dissent a little from what the noble Lord, Lord Brockway, said when he called for particular action to be taken by the Government to bring the Africans into consultation in Rhodesia. I do not see how we have the power to do this. But, having said that, let it be remembered that we have a special relationship with Rhodesia. We cannot avoid the fact that it was once a part of the Commonwealth and
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that the Rhodesians are still de jure subjects of the Crown.
Again, I disagree with African opinion which thought that the British had a duty to mount an armed force to overwhelm the Smith régime when it declared unilateral independence. I must say, as an old member of the Joint Planning and Intelligence Staff in the War Cabinet during the War, that I would have hesitated to advise any general to mount such an operation. I believe that had such an operation been mounted it would have ended in a situation such as that seen in the years from 1776 to 1778 in North America. Nevertheless, the fact that we do not have this power greatly to influence what goes on in Rhodesia does not to my mind at this moment absolve us from pursuing the policy which we have had to pursue since the Declaration of Independence by Mr. Smith.
The British Government nailed their colours to certain principles. It was not only the British Government of the time which did that; it was the Opposition which has become the British Government to-day. It would be regarded as a great betrayal of the principles we have stood for publicly if we now, at this moment, abolished sanctions. I share all the doubts which noble Lords have expressed about the validity of sanctions. I fully understand that the time may come when, from sheer weariness, from the sheer absurdity of the situation, with all other countries in the world trading with Rhodesia, we think it right to abandon our stand. But that time has certainly not yet come. It would be a great mistake if we fell out of step with other nations in the Commonwealth.
In this decade this issue has become something of a moral crusade among the younger members of our society. It is strongly felt to be one of the issues on which we can declare, at some cost to ourselves, our concern with the black populations in the world in their underdeveloped countries. This, it may be said, is mere sentimentalism. Yet there should be in each decade some issues which stir the sentiments not only of the young but of many civilised people. Surely the feeling that in the world to-day there is a horrible disadvantage attaching to countries in Africa—in fact,

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to black peoples all over the world—is a motivating force, one of the factors which stimulate and excite the imagination of many people to-day.
I think we should lose faith as a Government if at this moment we changed our stand. That is the only reason why I felt obliged to speak to-day. I think the suggestions made by the noble Lord, Lord Alport, about some way of modifying sanctions should be studied. I share the scepticism expressed by the noble Lord, Lord Brockway, that one can have, as it were, a two-tier sanctions policy, but nevertheless let it be studied. I am very glad to have heard the way in which the noble Lord, Lord Alport, with all his experience, opened this debate, and I should like to associate myself with another noble Lord, Lord Vernon, who I believe shares some of my own diffidence about speaking on this subject and whose remarks I took particularly to heart.
4.1 p.m.
LORD MILVERTON: My Lords, before saying what I wish to say, I should like to express my great admiration and respect for the noble Lord, Lord Alport. I say that now because what I am going to say does not entirely coincide with—in fact, it differs quite widely from—the aspect which he has painted. I rise to make a brief contribution to this debate, because I view with increasing distaste the policy of sanctions. The habit of preaching to other countries is certainly an easy exercise. Perhaps the world would be a better place if members of the United Nations decided to set a good example, instead of their present attitude of preaching. Charity is not the only virtue which should begin at home.
One cannot abolish the cultural immaturity of another race by their premature promotion to a dominant position. Ideally, the Government of a country should, as I see it, be the product of a system that is likely to place government in the hands of those competent to manage and use it wisely. The Rhodesians of European origin did not take another nation's country. They have spent generations in building a new country whose growth has attracted other settlers of African origin, with African standards of life and thought. Suddenly to pretend that they are all of equal status, differing only in colour, and that they can therefore
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be treated as one nation would mean, in short, the handing over of the present controlling minority to an immature majority with a totally different culture and outlook on life. One look at Africa teaches one that the prematurely independent countries in Africa are positive emblems of immaturity.
With those few general remarks I want now to come to this Question and to sanctions, with particular reference to the questions posed by the noble Lord, Lord Alport, and to recent statements in the Press that the Rhodesians of European origin seem to get an unsympathetic attitude from some of the Press. I gather from the Press that the British Government have joined with other members of the United Nations in urging the continuance, and still more the stiffening, of sanctions against Rhodesia. Surely we should reflect on what we are doing. Sanctions spell attempted economic murder. This is one of the aspects of war. May I ask whether the attempt to strangle a nation with an economic rope is any less ruthlessly uncivilised than strangling an individual with a rope of hemp? Furthermore, is not this policy senseless because it is unlikely to breed success? It will result in the poisoning of our future relationship with both races in a country whose friendship is of great importance to us geographically, industrially and in many other ways. It will even prejudice the livelihood of the coloured Africans whose welfare it professes to promote.
Do we so blatantly adhere to the time-honoured principle that the way to treat a dissenter is first to knock him down and then to lead him up to grace? Is not the scheme agreed between Sir Alec Douglas-Home and Mr. Smith the only visible and viable hope of gaining time—this is where I differ from the noble Lord, Lord Alport—for an ultimately amicable solution of a problem which inevitably defies any immediate final settlement? I am not blind to the immense difficulties of the Rhodesian situation, but I am sure that time and a continuously flexible approach is the only road to hope in solving a problem so intrinsically difficult. The dream that one can achieve peace and plenty through the medium of economic blackmail, in which we are engaged, can only end in a

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nightmare. Sanctions should be abandoned by the British Government at once. It was, and is, a totally unworthy policy. The position was summed up long ago by one of our greatest poets:
"'Tis not in mortals to command success—But we'll do more, Sempronius,
We'll deserve it."
4.10 p.m.
LORD GREENWAY: My Lords, I wish at the outset to thank the noble Lord, Lord Alport, for raising this Question. He was the High Commissioner when I was last in Rhodesia, which was at the time of my father's death. I am an Indian and I was naturalised in 1947. My mother and father are both buried in Salisbury, Rhodesia. I will not ask the noble Baroness to answer that conundrum. I simply state the facts.
My Lords, I shall intervene for only a very few moments. Unlike many of your Lordships I have not been to Rhodesia since the days of U.D.I. However, until my father died in Salisbury in 1962 I visited Rhodesia nearly every other year from 1950 for at least six weeks at a time. I was in Rhodesia during those years of the "Capricorn Africa" idea, the Central African Federation scheme. It was then that I got to know the Rhodesias and Nyasaland and their peoples very well—whether I was in Fort Victoria or Zimbabwe in the South or Kitwe up in the Copper Belt, which is now Zambia, Bulawayo or Chirundi Bridge which is the great bridge across the Zambesi and its great escarpment.
I must put forward the great case for the valuable efforts of the Europeans in that part of the world during those years. I was present when Kariba started and later when the Cofferdam was flooded and burst. I was there when the last brick was put on the dam, and I remember that last night when I was there with my wife and the cheerful Italians who built that great project. What a wonderful job they did! Later, I was in Kitwe, which is now Zambia, when the great electricity network of Union Miniére, which went down from Elizabethville on the Congo, was linked up straight through the Rhodesias and down to Johannesburg. Finally, my Lords, the great potential that was starting during those years from 1950 up to 1960 I sincerely hope is still going
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strong, and I hope for the day when sanctions will end.
4.12 p.m.
LORD CAMOYS: My Lords, I should like very much to support my noble friend who has just spoken. I have three points to make about sanctions. I am very much opposed to sanctions: first, on moral grounds; secondly, because the people in Rhodesia who are likely to be hurt most are the coloured people: and, thirdly, because I believe that you cannot sit on either side of an Iron Curtain or brick wall and get anywhere. One of the best ways to solve your problems and settle your differences is by the intercourse of trade.
4.14 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, regretfully I must start with an apology to your Lordships that, owing to an engagement which is unfortunately compelling, I must leave your Lordships' House at half-past four and this debate has come on rather later than I had reason to anticipate. I feel that perhaps too little attention has been paid to the basic legal justification for sanctions; namely, that, as I understand it, the United Nations Charter requires that the offending State shall have committed or intends to commit an act prejudicial to international security. The extension of that argument to U.D.I. strained the credulity of at least some of us and to-day it is even more difficult to believe as a justification. Most people—certainly I, for one—had no sympathy whatever with the action of Rhodesia in its U.D.I., nor do I attempt to justify it now. But, in so far as the general acceptance of the policy of mandatory sanctions by this country is concerned, I feel that its object was mainly penal in the hope of punishing Rhodesia for an act which we all deplore.
In the light of experience that objective has singularly failed. It has, admittedly to a small extent, affected the Rhodesian economy by a restriction of foreign resources. Its chief effect, however, has undoubtedly been to hurt the African through unemployment and a lowering of what I would say was the standard of growth of the economy of Rhodesia as a whole. My own experience of that country is now six or seven years out of date, but I think my noble friend Lord

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Alport would expect me, in view of what he knows of my previous association, to make some comment on the suggestion he made with regard to tobacco.
My Lords, this is an entirely novel suggestion. My first reaction was, I think, the one which was voiced by the noble Lord, Lord Brockway; namely, that this is terribly difficult in principle and, not only in principle, but in practice, too, because it envisages tagging the tobacco that would come on the auction market with not only the origin but also with what I would call the racial persuasion and the political affiliations of the grower who sent it. As the noble Lord, Lord Brockway, pointed out, the great majority of people interested in that crop, whether sold by Europeans or Africans, are the Africans themselves: it is the Africans themselves who are mainly responsible for growing it. Therefore I would not myself see any prospect of help to the general situation arising from such a suggestion.
As regards future general policy I feel that to continue sanctions simply by renewing them for another year could be capable of considerable misunderstanding, not only here but in Rhodesia itself. I strongly believe that the proposals, which were not, unfortunately, accepted, would have worked to the great benefit of the country as a whole, but undoubtedly to the benefit of the Africans in Rhodesia. While it may well be that the noble Baroness who will reply will refer again to the necessity for time for reflection—the Foreign Secretary referred to this and I believe the noble Baroness also referred to it in your Lordships' House on a previous occasion—and granted that time for reflection is required (a time that goes beyond November) I would put in a plea for consideration that the terms of the extension of that time, if such be necessary, be on what I might call a temporary basis and definitely not an undertaking to maintain sanctions for another full year, which I would seriously regret.
4.19 p.m.
LORD GARDINER: My Lords, I apologise for not putting my name down to speak in this debate but I have been sitting as an arbitrator to-day and I had not anticipated I would be able to be in your Lordships' House. I have on
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a number of occasions expressed my views about Rhodesia and I have no intention of repeating them to-day. I want first to thank the noble Lord, Lord Alport, for having put the Question down so that noble Lords may see whether the Government have now a Rhodesian policy and, if so, what it is.
As to sanctions, while deeply respecting the sincerity of all those who have expressed opinions, I regard with some scepticism pleas by white people that we should give up sanctions in the interests of black people whom they are harming so much; I think the black people are the best judges of what is in their own interests. Secondly, I believe that sanctions, and sanctions alone, have brought Mr. Smith three times to the conference table and will do so again. In any case I could not myself regard with favour any suggestion that we should flagrantly disregard a unanimous Resolution of the Security Council.
I look forward to hearing—I hope we shall the views of my noble friend Lord Caradon, and those others whose names are on the list of speakers, and to hearing what the Government have to say, particularly as to the actions of our own representative on the Sanctions Committee.
4.21 p.m.
VISCOUNT SIMON: My Lords, when I came into your Lordships' House this morning I did not really intend to stay for this debate, but after I heard the Question put by the noble Lord, Lord Alport, I felt that I must express from these Benches, thinly occupied though they are on this Friday afternoon, how warmly I support what the noble Lord said and the way in which he put his Question. I have no doubt that the Smith/Douglas-Home proposals should not be lying on any table; they have been rejected and there is, as the noble Lord said, no chance that they are going to be accepted by the African population. There is no point in their lying on the Table. Of course we can go on considering and reflecting, whether they are on the Table or not.
The noble Lord, Lord Gridley, quoted what the noble Lord, Lord Goodman, said in his speech in this House and the advice he gave to Mr. Smith. All I would say is that if Mr. Smith had taken the noble Lord's advice then undoubtedly the

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position would be very different to-day. If he takes that advice between now and November the position will be different in November, but at the present time there seems to be no sign that he is going to do so. In those circumstances I was not quite sure what the noble Lord, Lord Gridley, was getting at.
As regards sanctions, I liked very much the suggestion made by the noble Lord, Lord Alport, that one might be able to introduce some kind of discrimination so that they would not hurt where we do not want them to hurt. But I am afraid I am in agreement with the noble Lord, Lord Brockway, that I do not feel that that is practicable. It would be interesting if the noble Baroness who is to reply were able to say that she thought something could be done in the context of making our contribution to African education—the contribution that was promised as part of the deal which is now not coming off. This would be a splendid thing. What I do not know is whether, if a contribution is made, there is any means of ensuring, once the funds have reached Rhodesia, that they will be used for that purpose. It might be that there will be some possibility there.
On sanctions generally I found myself completely in agreement with the noble Lord, Lord Annan. It seems to me that this is the only way in which we can make an international protest, whether it is effective or not, whether it hurts us, or whether it hurts someone else. We cannot go marching down the street with banners or go lobbying people: the only way we can make a protest is by taking this sort of action. Personally, I believe that the great majority of people feel that this is a case where a protest must be made and where it would be right to continue it. I shall quite understand, of course, if the noble Baroness says that November is early enough to decide what the next action is to be.
Finally, the noble Lord, Lord Brockway, suggested—and I found myself agreeing with him—that it is perhaps for Britain, as the father figure or perhaps I should say the mother figure in this issue, to initiate the next round of discussions. Of course, as the noble Lord, Lord Alport, said, this must be discussion at one and the same time with
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Mr. Smith and with the representatives of the Africans. The noble Lord, Lord Annan, said that we have no power to do that. He may well be right, but I wonder whether we could not put ourselves into the position of inviting Mr. Smith and the representatives of the Africans to come to London for a conference. If Mr. Smith says that the Africans cannot come because he will not let them out, that is the end of it; but we shall have done the best we can to get the conference with Mr. Smith and the African leaders. I rose only to assure the noble Lord, Lord Alport, of the support that we on these Benches feel for the attitude he has taken.
LORD GRIDLEY: My Lords, my reason for suggesting that Mr. Smith might follow the proposals which lay on the table was that it seemed to me that these were proposals which had been achieved after about six years of work to try to get somebody to the table. Although the noble Lord, Lord Goodman, said they were not the best he would like, they had been accepted by the British Government and might have been the basis on which agreement could be established with the Africans, even if some modifications were required. It seems to me a complete negation of the situation not to do something about those proposals which lie there now.
VISCOUNT SIMON: I follow what the noble Lord, Lord Gridley, said. I think there has been a great deal of confusion here and it goes a long way back. Your Lordships' House, I think I am right in saying, approved the proposals by a substantial majority; but many of us who voted for the proposals voted for them because they included the clause that they had to be agreed by the Africans. Many of us believed that they would not be agreed by the Africans: because they gave the Africans the opportunity of agreeing we supported them! The Africans having rejected them, I regarded the proposals as dead, but no doubt the noble Lord will take note of what the noble Lord, Lord Gridley, said.
4.27 p.m.
LORD CARADON: My Lords, I apologise for not having put down my name to speak. I have only recently returned from Africa, where I find North of the

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Zambesi an almost universal view among the Africans I was able to consult in four separate countries. They have no doubts. As I have listened to this debate I have had three recollections in my mind. At one time I had the distinction of being a fellow member with the noble Baronesss who is to reply of the British delegation to the United Nations. At that time I resigned from my position because the Government of that day refused to accept the recommendation that African leaders should be brought into consultation. That was many years ago. My second recollection, when I was on the other side of the House, was coming back from New York to urge that the decision of this House to refuse to grant approval for the sanctions which had been agreed in New York should be reversed. I well remember coming back, and we achieved our purpose at that time. The third recollection I have is when I had the honour of presenting in the Security Council the resolution which secured the unanimous vote of the Council for mandatory sanctions against the illegal regime in Rhodesia.
I said then, and it was said by the previous Government, that the Government accepted primary responsibility for what took place in Rhodesia, a British Colony. We have claimed that responsibility. We have never sought to shake it from us. If we attempted to run away from that responsibility now, as we sometimes hear it suggested we should, then I believe we should rightly be condemned internationally by the whole range of countries represented at the United Nations. It is not for me, at this stage of the debate, to refer to the speeches made throughout the afternoon—it would be very wrong to try to do so, tempted though I may be—except to say, if I may, with very great respect, that I listened to the speech of the noble Lord, Lord Alport, with admiration for his courage and his constructive approach. I think that his voice in this matter, both in Africa and elsewhere, carries very great weight, and I am glad to pay my tribute to the lead he gives us.
We come then to the question of British interests. Certainly we must consider the matter from the point of view of British interest, and we have two clear alternatives. The first alternative is the policy of mounting pressure on the white
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minority régimes of Southern Africa; mounting pressure—political, economic and other pressures—for what purpose? Mounting pressure in order to achieve the purpose of African consultation, of African participation, in the government of their own countries. We ask no more; nor do they. It is not for us to decide exactly the programmes and methods, but it is for us to require—and I believe we have an absolute right to require—that the great majorities, the African majorities South of the Zambesi, should be consulted about their own future and should be enabled to take a full part in the government of their own countries. That is all they ask and that is all we ask, and that is what the mounting pressure is for: to achieve African consultation, to achieve African participation.
The alternative—and we have had ample warning of it in this House this afternoon—is diminishing pressure. Does anyone imagine that the Government of South Africa or the illegal régime in Rhodesia will, in regard to Rhodesia or Namibia, or South Africa itself—or, for that matter, the Portuguese Government in regard to the Portuguese territories—reverse their policies if we remove the pressure? Do they imagine that kind words will lead to a change in their policies? I say this with absolute certainty: that if we remove the pressure, if we merely rely on their own good will, then we shall be perpetuating the cruel policies which are condemned—yes, condemned—on both sides of the House. Therefore, we have a clear choice, and I think we want a clear answer. I greatly hope that the noble Baroness, who has established in this House over a number of years, and particularly recently, such an outstanding reputation, will give us the answer that the policy of this Government is considered, is persistent, is consistent; that the policy of this Government is mounting pressure to achieve justice for the African populations South of the Zambesi.
4.33 p.m.
LORD COLERAINE: My Lords, I, too, must apologise for not having put my name down to speak in this debate, but I was not certain that I could be here. I shall not detain your Lordships for long. I should first of all like to direct attention to my noble friend's

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Question. My noble friend asks Her Majesty's Government
"… whether there has been any change in their intention to re-enact the Southern Rhodesian Orders …"
So far as I know, they have never expressed any intention to re-enact them in November. In another place, my right honourable friend the Foreign and Commonwealth Secretary said that it was necessary to have a time for reflection, and that he believed that that time might extend beyond November. He said:
"… today we are keeping the status quo, and it could go on beyond November …"—[OFFICIAL REPORT, Commons, 15/6/72, col. 1763.]
There was no undertaking that it would; no declaration of intention that it would. My right honourable friend Mr. Richard Wood, who wound up that debate for the Government in another place, said this:
"The question has been raised whether sanctions will be renewed in November when the present order lapses.… I see no reason or need to pronounce finally today on a matter which has no relevance until November ".—[col. 1869.]
I hope very much that my noble friend the Minister of State will not feel obliged to go beyond what my right honourable friends said in the House of Commons.
It seems to me, listening to this debate, that there have been two illusions floating about in the air. One illusion is that Rhodesia is not an independent State but a State dependent upon us. Rhodesia is an independent State and the fact that we do not recognise its independence does not make it any less of an independent State; the fact that sanctions are being exerted against Rhodesia does not lessen its independence, any more than sanctions against Italy lessened Italian independence in 1935. That is one illusion, that Rhodesia is not an independent State. In fact, we have very little power to affect developments there, and such power as we have, as I think the noble Lord, Lord Annan indicated, is power for harm rather than power for good.
The other illusion is that sanctions are not stiff enough. The problem is not that sanctions are not stiff enough, but that they are not being observed. Are we really to suppose that the positive, dynamic and discriminatory sanctions suggested by my noble friend are more
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likely to be observed than the present ones? Surely, they are much less likely to be observed for it could be far more difficult to police them. The noble and learned Lord, Lord Gardiner, whose sincerity in these matters we all respect, but whose policy has been conspicuous by its failure over the past nearly seven years, told us that three times sanctions have brought Mr. Smith to the negotiating table and that they would bring him a fourth time. I would quote against the noble and learned Lord the opinion of another noble and learned Lord, the present Lord Chancellor, who said only a few months ago:
"All the evidence seems to show that as each successive set of negotiations has taken place they have successively disclosed a less favourable negotiating position."
That, my Lords, is a less favourable position for us. I can see no reason why, even if the continuation of sanctions brings Mr. Smith to the negotiating table again, that process will not continue. It will again be a case of the Sybilline Books, and we shall not get as much then as we shall have had now.
When I listened to the noble Lord, Lord Caradon, I could not help wondering whether sometimes in the still watches of the night he ever wondered about the morality of the United Nations' action in these matters. He is well aware that the late Dean Acheson, a great friend of this country, a great friend of international action and one of the founders of the United Nations, described the mandatory sanctions as "bare-faced aggression". I must say that when we hear the United Nations saying that Rhodesia was a threat to world peace, I can think of only one parallel and that is an exact parallel—when Herr Hitler said that Dr. Benes and Jan Masaryk were a threat to world peace in 1938.
The noble Baroness who is to reply and who, I have no doubt, will do so with her usual charm and intellectual distinction, took me to task in our last debate. She semed to think that I wish to appease Mr. Smith. I would ask her this question. In what sense can a country with a population of 50 million and more, with great industrial power, and still with some considerable military force, be said to appease a population of a quarter of a million whites in Rhodesia? The question of appeasement does not arise there. But what we have been

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doing is appeasing the Afro-Asian lobby in the United Nations; appeasing members of the Commonwealth who do not seem to wish us particularly well but who are still incapable of doing us any particular harm. There is where the charge of appeasement lies and I hope that the noble Baroness will say a word about that.
My Lords, I have great sympathy with my noble friend Lord Vernon. As he knows, I did not agree with what he said about the Fifth Principle. I think that the Fifth Principle is inoperative, but I do not think that in the light of everything that has been said we can conceivably accept the present settlement as conditions are to-day, or in any foreseeable future. I think that would be completely wrong. I agree with a great deal that the noble Lord, Lord Annan, said about morality in politics. I agree with him also, in spite of his view that politics was not the field for the display of moral gestures, that we have a special obligation to the peoples of Rhodesia which is and which must be recognised as a moral obligation. One of the worst aspects, as it seems to me, of continuing the campaign of sanctions is that, knowing we are powerless and that we cannot influence events in Rhodesia by continuing sanctions, we give the Africans the entirely deceptive delusion that somehow we are going to make things better for them through sanctions when I think that most of us know that we are not.
My Lords, there is just one more thing that I want to say and I thank your Lordships for your patience at this hour. I will quote from a greater authority than I.
"If sanctions succeed in bringing about a change of political orientation in Rhodesia, the way to a settlement, an honourable and generous settlement, is possible between the two countries.… If, however, sanctions were to fail as a result of the demonstrable failure of other countries, members of the United Nations, to fulfil their obligations, it would still be possible to reach a settlement. We should be able to go to the United States and say that, although we have carried out our undertaking under the United Nations Resolution in the letter and in the spirit, others had failed to do so. We could present them with the evidence of this failure. We should then be justified, among reasonable people, in feeling ourselves free to negotiate in those circumstances the best possible settlement of this dispute."—[OFFICIAL REPORT 18/6/1968; c. 554–5.]
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I do not know to what extent my noble friend Lord Alport has changed his views in the last four years, but that seems to me to be the wisest thing I have ever heard him say on the Rhodesian problem.
I would ask the Government to consider seriously whether the time has not come when those conditions adumbrated by my noble friend four years ago have in fact been realised, and whether it would not be more honourable and for the betterment of Rhodesians of all colours and shades, as well as for our reputation, to approach the United Nations and say, as the noble Lord suggested, "We have done our best and we can do no more." That would be honourable and intelligible. It would cause a lot of anger, but we should have to face the music. In any case, we shall have to face it one day. I suggest that the sooner we face it, the happier place Rhodesia and Southern Africa will be.
LORD ALPORT: My Lords, perhaps the noble Lord who has just spoken will allow me to say that I do not in any way detract from the views which I expressed on that occasion. The difference of opinion between him and me is that sanctions have failed. Certainly they have not succeeded in doing what they were originally intended to do, but no one should underestimate the impact they have made, and are making, on Rhodesia.
4.47 p.m.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, perhaps I should reply first to the noble Lord, Lord Coleraine, and tell him that I am against appeasement of evil in whatever size, shape or form it appears. For that matter, when the whole of the Western world and a good deal of the rest of the world were appeasing Hitler he was numerically far below the forces which eventually overcome him. I do not think that numbers have anything to do with the matter. The question is one of principle, and the principle of sanctions Governments of both Parties have thought to be the right thing in this quite horrible problem. Of course the noble Lord, Lord Caradon, can take care of himself only too well; but the remarks of the noble Lord, Lord Coleraine, as to whether the noble Lord, Lord Caradon, slept easily at night when he thought about sanctions was adequately summed

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up in your Lordships' House when we last voted on the views put forward by the noble Lord, Lord Coleraine, when he was defeated so conspicuously.
I should like to thank the noble Lord, Lord Alport, for giving us the opportunity to have this very fascinating debate. It is extraordinary that at this hour on a Friday, after a peculiarly hard week, there should be so many of your Lordships still here and, all out of place and so on, getting up to speak. I am delighted that the noble Lord, Lord Alport, succeeded in astonishing everybody, especially perhaps the noble Lord, Lord Grimston of Westbury. I should like particularly to endorse what he said about Bishop Muzorewa. There is no question but that he is a most formidable man of great moderation, of Gandhian views on anti-violence; and there is no doubt at all that we must encourage him in every possible way. We must encourage the Rhodesians themselves to have talks with a man of such stature and moderation. I am particularly glad that my noble friend Lord Brockway mentioned that really remarkable meeting with the Europeans in Salisbury. It had never happened before. There were 900 Europeans inside the hall and hundreds outside because they could not get in. I know that the noble Baroness, Lady Tweedsmuir of Belhelvie, who is to reply to this debate, will agree that we must do everything in our power to urge the Smith régime to have talks with this man.
The noble Lord, Lord Alport, will not expect me to endorse his remarks about Mr. Joshua Nkomo and, by implication, the other nationalist leaders, such as the Reverend Mr. Ndabaningdhi Sithole. If the Smith regime gets more extreme, there is no question but that Mr. Smith himself may probably have to go; and if they get even more extreme then one does not know whether a moderate like the Bishop can keep the power and influence which he has undoubtedly at the moment with the African people.
The suggestions of the noble Lord about sanctions were extraordinarily interesting. He is absolutely right when he says that the rain falls on the just and the unjust, and I wondered whether he remembered a poem of my youth which ran like this—
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"The rain it raineth on the just
And also on the unjust fella.
It raineth more upon the just
Because the unjust has the just's umbrella."
I think in this case, although I could not resist quoting the poem, it is not really apposite, because the unjust are the whites and there is no doubt at all that sanctions are hurting the Europeans more than the Africans. That is one of the reasons why, fascinating though his suggestion was, I do not think there is much hope of its succeeding. For instance, I cannot imagine the Government allowing the very, very scarce railway rollingstock (which we know to be in dreadfully short supply) to be used specifically to take the African tobacco to the ports for export, or giving them special drying facilities, and so on. I just cannot see that happening.
When so many noble Lords have said that sanctions are not succeeding, I find it very difficult to understand how they can close their eyes to their success. Of course we know that businessmen all over the world have been trying to erode them. The Gnomes of Zurich, who charge tremendous rates, have done the same and even the United States Government to their eternal shame, have broken the chrome sanction. But there is no doubt that Smith's economy is in desperate straits, as the noble Lord, Lord Alport, has lust said. We will not go over all the arguments again, but what really matters is that the keeping on of sanctions has prevented Mr. Smith getting one of the main things he wants, which is white immigration.
Let no-one on the other side of the House think that we on these Benches feel any sense of glory or triumph about the imposition of sanctions. Rhodesia is a most lovely country, and it is an absolute tragedy that the situation should be as it is. There was an article in the Rhodesian Herald the other day which said that the young people are trying to leave the country; that they can see no future for themselves, no future jobs; they see no culture and they see no political future. This is because it is a country which is trying to turn the clock back and to exist on social, political and economic injustice. As the noble Lord, Lord Annan, said, these are the very things in which the young take

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tremendous and, indeed, overwhelming interest. It is a tragedy that the situation should be as it is. But the curious thing is—and here I would certainly disagree with the noble Lord, Lord Alport—that there are quite a few benefits coming to the Africans out of the sanctions policy. For instance, because the Rhodesians cannot import consumer goods they are having to start industries of their own. This has led to a quite remarkable increase in the employment of semi-skilled Africans. Because white immigration is not materialising, Rhodesia has been forced to employ Africans where that would never have been dreamed of before. Four or five years ago when I was last there, it would have been quite unthinkable to have an African teller in a bank or to have an African behind the counter in a post office, dealing with blacks and whites equally at the same guichets. Friends from Rhodesia tell me that this is what is now happening; this is because of the sanctions that have been kept on and because of the economic situation which has followed. There are even more subtle effects. Since they cannot export these consumer goods, for the first time they are welcoming the Africans as customers.
For those who do not know Rhodesia it will seem unbelievable that when I was last there, which as I have said was about five years ago, on one occasion I went shopping with a very senior nursing sister. She was a night superintendent in the largest hospital in Harari and had hundreds of lives for which she was responsible every day of her life. She and I went to a shop, but she had to wait outside because she was black. This sort of thing is now changing because of the economic situation and because of the pressure which Rhodesia has felt from the outside. Nobody likes to feel isolated in the way that they do. There is no question that sanctions have made an enormous difference in this way. As my noble and learned friend Lord Gardiner said, one always is suspicious when the white people call for sanctions to be lifted because they are hurting the African people. Africans have not asked us to lift the sanctions. On the contrary, it is the Africans in Rhodesia as well as—as my noble friend Lord Caradon
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pointed out—Africans outside Rhodesia who have urged us to retain sanctions.
The noble Lord, Lord Gridley, asked, "Why should be go it alone?" My Lords, we have done so before, but on that occasion we had the whole Commonwealth behind us. If we lifted sanctions on this occasion we should have the Commonwealth not behind us but against us. I am quite clear in my mind that the Government know this as well as we do. I have great faith, unlike what the noble Lord, Lord Coleraine, said, that when the noble Baroness comes to reply she will fulfil what the Government have so far promised to do. In our last debate they accepted our Amendment, they accepted the point to make sanctions more effective in order to create an atmosphere for constructive discussion in Rhodesia. The noble and learned Lord who sits upon the Woolsack said, referring to sanctions:
"… they have been imposed by a vote of the Security Council, under Chapter VII of the Charter. What would be the effect of our unilaterally removing them? Certainly it would be serious, both in its repercussions on the future of the United Nations Organisation and upon our own interests. I earnestly say to my noble friends that, whatever may be the value of such a course, it is not one that we should embark upon."—[OFFICIAL REPORT, 26/6/72, col. 360.]
I lay great faith in the words of the noble and learned Lord and of the noble Baroness opposite.
The noble Lord, Lord Gridley, said that nobody should say anything against Mr. Smith and his régime; but it is very difficult not to mention one or two things. I will not go into this aspect in any detail. My noble friend Lord Brockway referred further to the peoples of Tangwena, and we were discussing this subject this morning. I know how difficult it is to discuss this matter by question and answer, and I know how difficult it is for the noble Baroness to obtain information. I should like to assure her that, quite apart from the unbelievable cruelty of taking these children away from their mothers, these children have already been deprived. They have already lost their fathers; they had to watch their homes being burnt and see the cattle taken away and the crops burnt. Their own school was destroyed by the Government of Rhodesia. These children were taken from the sanctuary of legal guardianship

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at Nyafaru with some of their mothers and relatives, to what I now find is described as an encampment outside Salisbury. The Government of Rhodesia, and the Smith régime, say, "Come and fetch your children". This involves 200 miles of travelling for these poor tribesmen, and they know perfectly well that if they do go to fetch their children they will be arrested.
My Lords, these children are being treated as hostages. It is very difficult to forgive something of that kind. And, of course, the Tangwena are not the only people forced to move; hundreds of thousands of Africans have been uprooted. I can give your Lordships so many examples: the Weya Reserve, the Mutema Reserve, the Mutambara Reserve—one could go on for ever. I will not do that, but the Tangwena are not atypical. They are just an example of why sanctions must be retained, so that the Africans do not lose their faith in us. They still look to us; and so does the world.
I should like to ask the noble Baroness whether any progress has been made (I asked her last time we spoke about this subject) in discussions with our colleagues at the United Nations on strengthening sanctions in the ways we suggested—perhaps by inspectors at ports or a permanent secretariat or something of that kind. I am quite sure that this Government will keep their word about retaining sanctions. Unfortunately, the speeches which noble Lords opposite make, calling for the removal of sanctions, echo around the world. The Press of the world nobly supports those who call for economic measures which will benefit big business, the international combines, and all the rest. Those of us who call for responsibility and morality are considered more boring. Perhaps we are though mynoble friend Lord Annan is never boring. But those will be the people who are reported. We have a great prestige throughout the world, because of the success of the Pearce Commission and the way its work was carried out. As a result, we are trusted in a way in which we had not been trusted before. We must not throw away this trust that we now have. People in the Commonwealth, people in the Third World and people in Europe, at this moment particularly,
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must still believe that Britain honours her obligations; that Britain stands by the United Nations, and that we still deeply care for the people who are in our trust.
5.2 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I also should like to congratulate my noble friend Lord Alport on having raised a debate on a Friday afternoon in which he has had no fewer than 16 speakers. He is much to be congratulated. But of course he was raising what the noble Baroness described as "this quite horrible problem"—the problem of Rhodesia, of sanctions, of how and when we are to obtain a settlement. When Lord Alport began his speech he said that time is not on our side. I must say I agree with him on that. He also asked: How long is this pause going to continue? It is only two months since we had the Report of the Pearce Commission and, as my right honourable friend the Foreign and Commonwealth Secretary said in another place on June 15, sanctions will be continued while we allow time for further reflection in Rhodesia. He made it perfectly clear that the time required would involve renewal in November of Section 2 of the Southern Rhodesia Act 1965.
We do not rule out some further initiative coming from this country. But we think that at present the best hope lies through consultation, if possible, and discussion between all Rhodesians themselves. I say "all Rhodesians" because I prefer saying that to "all races in Rhodesia". This is the whole point of this period of reflection which must give enough time; and while that is taking place we must in this country keep the status quo, which includes the continuation of sanctions. I suggest to my noble friends who are unhappy about sanctions that surely the one thing we should not begrudge those who are striving for some kind of conciliation and compromise in Rhodesia is time.
The noble Lord, Lord Alport, said that the settlement proposals, while lying on the Table, were an obstacle and that they should be withdrawn, but I would put it to him that they could very well be the basis for consultation, which is what is beginning to happen now. Both the noble Baroness, Lady Llewelyn-Davies of Hastoe, and my noble friend

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spoke in particular about Bishop Muzorewa, who I understand has had a remarkable series of informal meetings with all the Rhodesians he has so far managed to contact. By doing that I think he is trying to strengthen moderate opinion throughout his country and to endeavour to explain what are the objects of the A.N.C.
My noble friend said that he was in favour of sanctions, but asked whether they could somehow be made more discriminating. This point was taken up by the noble Lord, Lord Brockway, by my noble friend Lord Vernon, by the noble Lord, Lord Sinclair of Cleeve, and also by the noble Viscount, Lord Simon. They all, one after the other, thought that it would not really be possible to have this kind of discrimination, and that it would be very difficult to do. My noble friend Lord Gridley suggested that a lot might happen between August and November. That is perfectly true. We wish that a lot will happen, but at the moment we do not foresee that it will. He also expressed the view that sanctions are hitting the Africans harder than the Europeans, but, as the noble Baroness pointed out, while that may be true in some sense they have also brought certain benefits in that they have brought about greater employment through the creation of new industries.
My noble friend Lord Gridley said that the Secretary of State for Foreign and Commonwealth Affairs has said that if sanctions are shown to be, as one noble Lord has described them, a "farce"—and I think this was particularly mentioned by my noble friend Lord Coleraine—then we will go openly to Parliament and to the United Nations and explain why. In the meantime, I think it is worth pointing out that if we are to have any influence in a country where we really have very little power on the ground, as the noble Lord, Lord Annan, pointed out, then we have only one lever and that is sanctions. It is sanctions which have created great difficulties for Rhodesia from the point of view of investment.
None of us likes to see this happen to a people who, while many of them may now be second or third generation, were originally of British stock. But the fact remains that, however successful Rhodesia has been in getting around
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some of the trading sanctions, there is no doubt that the importance of London as an international money market, and the reluctance of entrepreneurs to risk their money in a country whose long-term future remains in doubt, have meant that the Rhodesians have found it extremely difficult to get foreign capital. It is really because of the acute balance-of-payments situation that the problem in Rhodesia has grown so much, and, as the noble and learned Lord, Lord Gardiner rightly said, it is this perhaps more than anything else which brought Mr. Smith to the negotiating table.
Some noble Lords asked: if we are to have sanctions, can we not make them more effective? I was asked what was being done about this point. When the Security Council discussed this matter on July 28, the United Kingdom delegate, together with all the other delegates, voted in favour of a resolution; and our representative, Sir Colin Crowe, said that it was not enough for the Security Council to pass resolutions. What counted was for sanctions to be carried out; and not merely by this country, he said. He quoted the Statement by the Secretary of State in another place on June 9 about the evasion of sanctions and said that we would not wish to single out particular Governments for blame but that it was necessary to keep up the pressure on the Rhodesian régime by applying sanctions. In the United Nations Sanctions Committee we urged that the recommendations of that Committee should be sent to all member Governments for careful study. This was accepted by all concerned, and this in fact is what is happening.
Several noble Lords—notably my noble friend who opened the debate, the noble Lord, Lord Brockway, the noble Viscount, Lord Simon, and the noble Baroness, Lady Llewelyn-Davies—spoke about the problem (or should I call it the opportunity?) of education. Under the settlement proposals we would have given a quite considerable sum to help with African education. But the fact remains that even under the sanctions legislation we can allow, for example, the transfer of funds to Rhodesia for the missionary societies for their schools there. In the 12 months ended June, 1972, £122,000 has been sent for capital projects, and £54,500 for running expenses in the

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schools they control. We ourselves contribute on a considerable scale to the Special Commonwealth Educational Programme for Rhodesian Asians, and those still living in Rhodesia are also eligible for the Fellowship Plan which provides for post-graduate studies in research. Britain is still the largest contributor to these Commonwealth programmes and has at a cost of £430,000 made 270 of the 400 awards granted since 1966.
Since our last debate on the Pearce Report, on June 21, there have been several calls to Her Majesty's Government to consider whether we could give any further assistance for Rhodesian African education and we are considering carefully and in detail how we could contribute something further, something which would be a humanitarian exception under the sanctions legislation. I am not in a position this afternoon to say exactly what this would be, except to say that I believe that we shall be able to do it despite the fact that we have returned to the status quo, including sanctions.
My noble friend Lord Vernon felt that the trouble with the settlement proposals was that there was no guarantee that they would be carried out. That is perfectly true. There can never be any guarantee in any country, but the fact remains—I said this in our last debate—that a hopeful sign in the Pearce Report was that, on the one hand, as far as one could understand it, those who expressed a view among the Africans were not asking for immediate majority rule now while, on the other, the Rhodesian authorities were accepting that there should be majority rule, even if the timescale was subject to different interpretation by different people. In that way, therefore, I think that maybe there is a possibility that moderate elements in Rhodesia might come together.
It was interesting to try to sum up how many noble Lords who had spoken were for and how many were against sanctions. Roughly speaking, there was a fair division between the two, and I think that those who spoke against sanctions really genuinely felt that they were not the way by which we could influence moderate opinion in Rhodesia. I think they felt that they might unite Rhodesians among themselves to overcome external pressure and that it might make for a
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better climate of opinion if sanctions were removed. But, my Lords, as we have so little power, I suggest that until there is a real movement within Rhodesia itself, among those who live there and those who will have to live there in the future, I do not think we can do anything but carry on with the situation as it is.
I should just like in ending to assure the House that we are very well aware of our responsibilities in this matter, even though at this moment we stress the need for action by Rhodesians themselves. We are still very much concerned that a solution should be found on the basis of the Five Principles and we watch very carefully and get a certain amount of news about developments in Salisbury and elsewhere, since the Pearce Report. There have been certain actions which we do not think are at all helpful towards moderate opinion, and we hope very much that these will be reconsidered. But there have also been real signs that there is a search for a settlement, and we hope and believe that everything which has been said in this House will be carefully studied, because, whether those who have spoken are for or against sanctions, we are united in this House in wanting to see an honourable end to this terrible problem within Rhodesia.
5.17 p.m.
LORD BARNBY: My Lords. I deferred until this moment participating in this discussion, because I waited to see its course and, particularly, to listen to the noble Baroness. In this House, Unstarred Questions customarily deal with a cause or a subject and are not a straight Question. The words on the Order Paper suggested a straight Question which could equally well have been put down as a Starred Question. The noble Lord, Lord Alport, whose eloquence and clarity of expression we always so much enjoy—though we frequently disagree with his views—to-day took a line entirely different from what, as my noble friend Lord Grimston of Westbury said, could have been expected. The line which he took was so novel, arresting and suggestive that its effect was completely to destroy sanctions. It was the best reasoning we have had in this House for discontinuing sanctions. I have consistently opposed sanctions

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over these several years. I will make no attempt to repeat what I have said on those occasions, but I want to associate myself entirely with what was said by my noble friend Lord Coleraine.
Coming to the noble Baroness's speech, which I particularly wished to hear, she had a very difficult case. The expressions of opinion in the House have been such as to make her course a difficult one, particularly in view of the fact that her words as a Minister will be closely followed, but I am more encouraged than I was disappointed. To begin with I felt disappointment, but the puzzle is, how long is the period of reflection to be? The noble Lord, Lord Alport, particularly stressed that point. How long is it to be? The Minister says it is to be long enough to enable all shades of opinion in Africa to get together. That may be years. I believe that there is a strong swing of opinion of Members of your Lordships' House against sanctions; it is certainly overwhelming in the country, and so it is that we are puzzled and regret that the noble Baroness was not able to say something of encouragement that sanctions might come off before the date in November which has been mentioned.
Well, my Lords, the actual position in Rhodesia is that very good settlement terms were offered to the country after sincere, delicate and painstaking negotiations between the Foreign Secretary and the Prime Minister of Rhodesia. It is regrettable. The noble Lord, Lord Goodman, recommended that the terms should be accepted. He recommended them strongly. Surely they would have benefited the Africans in Rhodesia very much now. But how can they? Of course the Pearce inquiry made a return on, I think, 6 per cent. of the population: 6 per cent—what a derisory amount! My Lords, should we be expected to make a settlement in Northern Ireland based on 6 per cent. of the population—humbug! nonsense! We should not. There are three and a half million Africans in the tribal trust lands. Go over the country; see them living in the kraals—how can you test that opinion? The situation is one which in that particular phase does not bear water.
In our discussion on the Pearce Report much play was made of the indifferent attitude of the Rhodesian Government
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towards the matter. I remember that the noble and learned Lord, Lord Gardiner, particularly emphasised that. What had the Smith Government done? But supposing an active, aggressive campaign of pressurising African opinion had been embarked upon by the Rhodesian Government from the moment a decision to have the Pearce Commission was announced, what a denial and denunciation would have taken place in this House trying to affect African opinion! There have been repeated criticisms of that kind. The Rhodesian Government took the right course of neutrality. Sanctions have not succeeded. What was their aim?—to destroy the Rhodesian Government, which means the economy of Rhodesia. If they had done so, what would have been the result? We should either have an influenced puppet Communist Government such as we have in other places in Central Africa, or we should have thrown Rhodesia right into association with South Africa. That is not what is wanted. To return to sanctions, surely these were inherited. Why is it not possible for the Government to say forthwith, as has been said by one of my noble friends behind me, "We have played our part. We have applied the necessary sanctions. Nobody else has done the same." Go to Rhodesia, and you will know that they are being broken by every other country. Why should we be the scapegoat for the world? On that point I cannot do better than quote from a letter I recently received from a very eminent general who was high in the information services during the war.
LORD GARDINER: My Lords, I hesitate to interrupt the noble Lord, but are we not getting into some difficulty? This is an Unstarred Question. The noble Lord who asked the Question has no right of reply, but other Members can speak, and at the end of the debate the Minister replies. The Minister has replied, and I would respectfully suggest that we are getting into some difficulty if other noble Lords are going to start the debate all over again.
LORD BARNBY: My Lords, I must deny what the noble and learned Lord has said, because the discussion—it was not a debate—has ranged very wide. Indeed, the noble Lord, Lord Caradon,

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sitting behind the noble himself ranged widely. Others did the same.
LORD GARDINER: But the Minister has now replied.
LORD BARNBY: I have given way once. I was on the point of quoting a letter.
LORD DENHAM: My Lords, I wonder whether I might interrupt. The noble and learned Lord, Lord Gardiner, has raised a point of order. I understand that the usual form is that the Minister replies to the Question, and that is the end of the debate. But, as I understand it, it is not out of order, though it is unusual, for other noble Lords to speak afterwards. Of course the Minister has no further right of reply, and so this is by way of a comment. I believe there is nothing in Standing Orders against this.
LORD CHORLEY: My Lords, may I say, as one who took part in this controversy some years ago, that I think what has just been said is quite right?
LORD BARNBY: My Lords, I was about to quote, with the permission of the House, from a letter received from an eminent general who was high in the information services during the war:
"It is a long time since we suffered such a national humiliation as when Wilson took this matter, an internal one if ever there was one, to the United Nations"
I dispute that sanctions are valid under the Charter. We have discussed this. They are only valid by usage, as the noble and learned Lord, Lord Gardiner, said. I have not the Hansard with me, but I can turn it up. They are valid on usage, not on the terms of the Charter.
So far as the United Nations are concerned, it is a conspiracy of blackmail by a certain proportion of the numerous nonwhites in the United Nations to try to threaten us with a loss of trade if we do anything which would be a commonsense thing to do with regard to Rhodesia. The sensible thing would be to resume contacts. I appeal for us to resume contact; to hold people at a distance is not the way to make progress. Discuss matters face to face. That is the only way to settlement in human affairs. I appreciate what the noble Baroness was able to say but I regret that she could not go further. She will surely carry away an
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impression that there is widespread concern about the further continuance of sanctions. It is in that vein that I hope she will understand the debate that has taken place to-day.

GAS BILL
Returned from the Commons with the Amendments agreed to.
AGRICULTURE (MISCELLANEOUSPROVISIONS) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments to be printed.