Lords Sitting of 15 March 1973

Preamble
The House met at three of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

RETIRED CIVIL SERVANTS IN INDUSTRY
BARONESS WOOTTON OF ABINGER: 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 how many civil servants who have retired in the past five years with the rank of Under-Secretary or above have since been employed as consultants or directors of companies operating in the fields with which they were concerned during their public service.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, since permission to take such employment is not in all cases required, the exact number is not known. Of those cases where, because of the contractual or other special relationship between the company and the Government, departmental consent is necessary, only certain categories have to be referred to the Civil Service Department by the Departments concerned. There have been some forty such cases referred to my Department in the last five years.
BARONESS WOOTTON OF ABINGER: My Lords, while thanking the Minister for his Answer, and not wishing to make any slur on anybody's integrity for which indeed I have not a shred of evidence, I should like to ask the Minister whether he does not think the time is ripe, in view of the considerable number of cases that have come to notice, for some reconsideration of the regulations governing this practice, so that not only may integrity be protected but, certainly equally important, integrity may be seen to be protected?
EARL JELLICOE: My Lords, I recognise that there is some disquiet about this matter. I also feel, and I think your Lordships will agree, that we are probably lucky enough to have the least corrupt public service in the world. That reputation has been richly deserved, and I think it is incumbent upon all of us to do everything we can to protect it. If there is disquiet in this area, as disclosed by the noble Baroness's Question, I shall certainly be glad to have a look at what may be done to allay it, without, as it were, making any commitment in this area.
LORD SHEPHERD: My Lords, could the noble Earl say how many out of that number had retired prematurely, in advance of their normal age of retirement?
EARL JELLICOE: My Lords, I am afraid I cannot without notice. One of the problems here is that there is a different age for retirement in the public service and the Government service and in the private sector. This, of course, means that there is a considerable advantage to firms; and there is, I think, public advantage in public servants working in the private sector for some years after their retirement from public service.
LORD SHACKLETON: My Lords, would the noble Earl agree that some of the most difficult decisions that Ministers have to take are in this particular area? And would he also agree that the further inquiry he may set in hand is very necessary, because of the extent to which concern has arisen over a particular case, in regard to which my noble friend made no allegations of any kind at all? Would he therefore look into—but not until he has had time to consider it—the possibility of a restatement of the principles that apply in such cases?
EARL JELLICOE: My Lords, I am grateful for the line which the noble Lord, the Leader of the Opposition, has taken in his supplementary question. As I have said, I shall be very glad to look into this matter, and if need be to communicate with noble Lords, and, if necessary, reply to a further Question on it.
LORD POPPLEWELL: My Lords, I understood the noble Lord to say that forty applications had been made in the

423
last five years. Would the noble Earl be able to say how many of those were approved or otherwise?
EARL JELLICOE: My Lords, there have been that number referred. I should again like notice in order to say what numbers have been approved or not, as the case may be.
LORD BALOGH: My Lords, would the noble Lord not agree that the time has come to look into the matter of retiring age? In almost all walks of life the retirement age has been lifted, in Oxford and Cambridge, for instance, from 60 to 67. Perhaps the noble Earl will agree that this is one of the problems that has to be tackled before we can tackle the other part of the question. Obviously these able men ought not to be put into purdah. With the relationship between State and Private sector becoming more and more intimate, a new approach is needed.
EARL JELLICOE: My Lords, it is my impression that, not for the first time, Oxford is moving in a rather contrary direction to the rest of the world.
LORD BYERS: My Lords, would it not be true to say that the general trend to-day, in industry and elsewhere, is towards lower retirement age rather than a higher one?
EARL JELLICOE: My Lords, as a former denizen of another university, that was my impression, I must admit.
BARONESS WOOTTON OF ABINGER: My Lords, could the noble Earl inform himself a little further about the retiring age in universities generally?
LORD BALOGH: Especially in Cambridge.
EARL JELLICOE: My Lords, as I have told noble Lords, I shall be glad to look into this question, both generally and particularly.
LORD HAWKE: My Lords, will my noble friend keep in mind that almost the only posts for which people in the Foreign Service, who are cast off in the prime of life, are really suited are with companies trading with countries to which they have been on post?
EARL JELLICOE: My Lords, having cast myself off from the Foreign Service
424
before the prime of life, I shall of course take due note of the observations of my noble friend.

COMMUNITY RESEARCH PROGRAMME
3.13 p.m.
LORD BESWICK: 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 proportion of the 180 million u.a. Community Research Programme agreed by the Community Council of Ministers on February 6, 1973, will come from British sources; what proportion of the 1,700 personnel proposed to be employed on this programme will be British; and what consultations took place with British research organisations and with industry generally before the British Minister on the Council agreed to this programme.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I apologise for the length of this Answer. Although decisions of broad principle on a 4-year Community Research Programme were taken on February 6 by the Council of Ministers, details are still being worked out in discussions between the European Commission and Member States. It is hoped to complete this process by the end of April. It has been agreed that all United Kingdom contributions will be made on the basis of Article 130 of the Treaty of Accession; that is, on an upward sliding scale beginning in 1973 at 45 per cent. of our expected contribution to Community funding after the end of the transitional period, January 1, 1978. On the assumption of a programme costing 180 million units of account (about £75 million) the United Kingdom contribution over four years would probably be some 20 to 25 million units of account, about £8 million to £10 million.
As yet, there are no British staff employed in the Joint Research Centre itself; but we shall expect gradually to obtain our reasonable share of posts as in other parts of the institutions of the Community. Moreover, several parts of the research programme will undoubtedly

425
be carried out under contract by laboratories outside the Joint Research Centre. One such contract might be between the Commission and the United Kingdom Atomic Energy Authority concerning the work at the Culham Laboratory on the development of a fusion reactor. The number of U.K.A.E.A. professional staff likely to be involved is some 160 to 180. In addition there will be United Kingdom/Commission contracts for research in radiobiology and other fields. There was (and continues to be) close consultation with many interested organisations, especially with the U.K.A.E.A., in agreeing the Community research programme.
LORD BESWICK: My Lords, I am most grateful to the noble Lord for the information that he has given. May I ask him whether he is aware that I am by no means against this research programme? I am just at a loss to understand how it is compiled and how the British interest is taken into account. May I ask the noble Lord whether he is aware—as I hope he is—that we have spent a good deal of time in this House and in another place and in Select Committees, discussing the principles which lie behind any research in this country? Also, may I ask him to what extent the principles eventually agreed are to be embodied into the European programme, and to what extent Parliament will be brought into the compilation of the European programme?
LORD DRUMALBYN: My Lords, as the noble Lord is aware, the Joint Research Centre was set up under the Euratom Treaty and consists of four establishments in Belgium, Germany, the Netherlands and Italy. The principles which have guided the United Kingdom in dealing with this matter are, first of all, to make certain that good value is likely to be obtained for the money spent; and secondly, to see that work to be done in Community institutions is related to actually recognised needs—or more precisely, since it was first enunciated a year or so ago, to the customer/contractor principle. So that the principles are the same. What has happened in the past is that there has been an annual meeting to set up an annual programme. The advance that has now been made is to set up a four-year programme, choosing very carefully the subjects to be researched into.
LORD BESWICK: My Lords, may I ask one final question of the noble Lord? What in the view of the British Government should be the priority, so far as this research is concerned? In which field do they think priority should be placed?
LORD DRUMALBYN: My Lords, it is, of course, inevitable that, as this stems from Euratom, there is a good deal of emphasis on the nuclear side and a large part of the expenditure is on this. It can be of use to us in, for example, the study of materials, the study of reactor safety, the work of the Central Bureau for Nuclear Measurements and so forth, including the treatment and storage of radioactive waste. On the non-nuclear side, there is study into the environment, the recycling of raw materials, hydrogen production and so forth. The principle throughout is to try to have common programmes which fit in with the individual programmes that are being carried out in the various member countries, and I hope that this will work out well. Certainly it would accord with the principles that we have been working on.
LORD WYNNE-JONES: My Lords, can the noble Lord tell us by how much the work is being reduced, and what reduction there is in the staff? Can he also tell us whether this reduction is a result of the policy of Her Majesty's Government?
LORD DRUMALBYN: No, my Lords; I do not think it is true that the work is being reduced. One part of the programme consists of 11 nuclear projects providing for 1,440 people. Another part involves the provision of a further 209 people. So I do not think it is true to say that the work is now being reduced. I cannot of course help what happened before we came into the Community.
LORD WYNNE-JONES: My Lords, can the noble Lord be a little more explicit on this point? Is it not true that the number employed previously was approximately twice the figure of 1,700 which is mentioned in the Question? Is it not also true that the reduction is a consequence of opposition by Her Majesty's Government to the programme?
LORD DRUMALBYN: My Lords, I am not aware that that is so. The past history has been a somewhat unhappy

427
one, as I said, with a kind of annual wrangle as to what work should be done from year to year. We are now trying to get it on a more permanent basis and, as I said, it is anticipated that the number will be increased. But I shall certainly look at the point made by the noble Lord and will be glad to write to him about it.
LORD KINGS NORTON: My Lords, can the Minister say what are the percentage contributions of the several Member States?
LORD DRUMALBYN: My Lords, I cannot give the contributions of all the Member States. For our part we start off with a contribution of 45 per cent. of the 19 per cent. which we shall ultimately arrive at. I think that the contributions made by the other major Powers are about that, and the minor ones are of course less.

NORTH SEA OIL: PUBLIC ACCOUNTS COMMITTEE REPORT
3.20 p.m.
LORD BALOGH: 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 measures they are taking on the observations and recommendations of the Commons Public Accounts Committee's Report on North Sea oil.
LORD DRUMALBYN: My Lords, the Government are now studying the Report, and will in due course give Parliament their views on the recommendations in it. My right honourable friend the Chancellor of the Exchequer has already announced in his Budget speech that he accepted the recommendations in relation to the set-off of losses made by oil companies from their trade in oil in other parts of the world. Another main recommendation was that, before further licences are issued, all aspects of licensing policy should be reviewed in the light of the Report. As I informed your Lordships on February 28, 1973, a major review of policy is already under way, and it will take full account of the Report. Its outcome will be reported to Parliament as soon as it is completed.
LORD BALOGH: My Lords, I thank the noble Lord the Minister for that reply, which was more forthcoming than most of his replies on this topic. May I ask whether the review will be published before any further licensing takes place, so that it can be discussed both in this House and in another place?
LORD DRUMALBYN: My Lords, the result of the review will be announced, and I can give an undertaking that no more licences will be issued before the review is announced.
LORD BALOGH: My Lords, while thanking the Minister for that reply, also, may I, feeling emboldened, ask another question; to wit, whether the review will take into account the machinery-of-government aspect of this affair? Because it is obvious that merely to close the door after the horse has bolted—many horses in this case—is not enough, and that we ought really also to have a review of the Civil Service machinery aspect of the problem, which allowed this to happen.
LORD DRUMALBYN: My Lords, without accepting the imputation of the last three or four words, I can of course say that as the noble Lord well knows, the machinery of government to deal with particular problems is always being revised and reviewed so that it meets the circumstances of the time.
LORD BESWICK: My Lords, does the noble Lord not think that it would be agreeable if he were to take this opportunity to pay a tribute to my noble friend for the assistance he has given to the Government in enabling them to move forward to meet the circumstances of the time?
LORD DRUMALBYN: My Lords, I know that the noble Lord has been an advocate of what the Chancellor has now agreed to do, but, of course, I should not like to go so far as to say that he was the only advocate.
LORD SHEPHERD: Be generous!
LORD DRUMALBYN: My Lords, I am not being ungenerous, and the noble Lord has not even allowed me to finish what I was going to say. My Lords, we do very much appreciate the special attention that the noble Lord gives to this

429
problem, and we welcome all the help that he can give us.
LORD BALOGH: My Lords, I thank the noble Lord.

FUTURE OF NAMIBIA
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 how they propose to instruct their representatives at the United Nations regarding the future of Namibia (South West Africa) following the end of the dialogue within the Government of the Republic of South Africa on April 30, and following the refusal by the National Convention, representing African tribes and Parties, to participate in an Advisory Council.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, the United Nations Secretary-General has been asked to report to the Security Council by April 30 on his further contacts with the South African Government. Instructions to our representative at the United Nations will take account of Dr. Waldheim's report and of other relevant developments.
LORD BROCKWAY: My Lords, while thanking the noble Baroness for that reply, may I ask her whether she is aware that this week, probably to-day, Mr. Vorster, the Prime Minister of the Republic, is opening the Advisory Council? Is she further aware that that Advisory Council has been repudiated by all the African political Parties in Namibia, by the coloured mixed races and by the tribal leaders; and will she, instead, influence Her Majesty's Government, when this matter is discussed by the Security Council, to propose that the future of Namibia should be decided by a constitutional Conference representing the Parties, the tribes and even those who are now co-operating in the Advisory Council?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, my information is that the first meeting of the Advisory Council is to be held on March 23, not to-day, and will be presided over by
430
Mr. Vorster. It is true that some tribal leaders have declined to nominate representatives, but I think we should wait until March 23 to see what comes front that meeting.
LORD BROCKWAY: Yes, my Lords; but is it not quite clear now that the overwhelming mass of the population of Namibia absolutely repudiates this Advisory Council, which has no power and which is entirely unrepresentative?
BARONESS TWEEDSMIUR OF BELHELVIE: My Lords, as I said, I think we should wait to find out what the people of the territory themselves think on March 23.
LORD CONESFORD: My Lords, is there some misprint in the Question on the Order Paper? What on earth is
"the dialogue within the Government …",
and how do we know that it has ended?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I did not feel it was right to refer to this particular aspect of the Question, but possibly it referred to the dialogue between Dr. Waldheim and the Government of South Africa.
LORD BROCKWAY: My Lords, is this Question not entirely correct? Is it not the case that the dialogue between the United Nations and the Republic of South Africa is to proceed until April 30, and, in that case, is not the Question absolutely correct?
LORD CONESFORD: My Lords, I think the noble Lord who asked the Question has omitted to observe that what is on the Order Paper is the word "within" and not the word "with".
BARONESS LLEWELWYN-DAVIES OF HASTOE: My Lords, although we deeply love the noble Lord, Lord Conesford, on such an important matter as this is it not much more important that we should consider the content of the Question rather than a possible misprint?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think my noble friend was quite right to draw attention to any terminological inexactitude, but, at the same time, I think also that we have in this House been discussing the substance of the Question.

ANCILLARY HOSPITAL STAFF: PROPOSED PAY AND STRUCTURE INQUIRY
3.27 p.m.
BARONESS SEROTA: My Lords, I beg leave to ask the Question of which I have given Private Notice. The Question is as follows:
"To ask Her Majesty's Government whether, in view of the demand of the British Medical Association for a full inquiry into the pay and structure of the ancillary hospital staff, and the concurrence of the National Union of Public Employees in this demand, they will agree to the setting up of such an inquiry".
LORD MOWBRAY AND STOURTON: My Lords, with the leave of the House my noble friend Lord Aberdare will answer this Question at a convenient moment after 3.30.

PRESCRIPTION AND LIMITATION (SCOTLAND) BILL [H.L.]
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD POLWARTH): My Lords, I beg leave to introduce a Bill to replace the Prescription Acts 1469, 1474 and 1617 and make new provision in the law of Scotland with respect to the establishment and definition by positive prescription of title to interests in land and of positive servitudes and public rights of way, and with respect to the extinction of rights and obligations by negative prescription; to repeal certain enactments relating to limitation of proof; to re-enact with modifications certain enactments relating to the time-limits for bringing legal proceedings where damages are claimed which consist of or include damages or solatium in respect of personal injuries or in respect of a person's death and the time-limit for claiming contribution between wrongdoers; and for purposes connected with the matters aforesaid. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Polwarth.)
LORD HUGHES: My Lords, did the Minister read the Long Title or the Bill?
On Question, Bill read 1a, and to be printed.

BUSINESS OF THE HOUSE
EARL JELLICOE: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 44 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of enabling the Counter-Inflation Bill to be taken through its remaining stages on Monday next.—(Earl Jellicoe.)
On Question, Motion agreed to.

COAL INDUSTRY BILL
EARL FERRERS: My Lords, I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move, That the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Earl Ferrers.)
On Question, Motion agreed to.

CONCORDE AIRCRAFT BILL
3.30 p.m.
EARL JELLICOE: My Lords, I beg to move that this Bill be now read a second time. It comes before your Lordships after two very full debates and a Committee stage which extended to four Sittings in another place. In the Commons, I am glad to say, the Opposition supported the Bill in principle. That was not altogether surprising, since the Bill is intended to amend the provisions of the Industrial Expansion Act 1968, sponsored by the previous Administration and designed to provide the necessary financial support for the British manufacturers engaged on the production of this remarkable aircraft, Concorde. I emphasise that what this Bill is concerned with is the production phase of this project, not the research and development phase.
I should like to give your Lordships a brief explanation of the reasons for the Bill and for the actual sums of money embodied in it. Those airlines which decide to purchase Concorde will normally make a small payment on the signature of a purchase contract, followed by

433
a proportion of the outstanding price in stages up to the date when the aircraft is delivered. At that point they will complete payment of the full outstanding price. The precise amount to be paid before delivery of the aircraft will of course be negotiated separately with each individual customer. Meanwhile, however, the manufacturers have to finance the actual construction of the aircraft before receiving full payment; and the purpose of the Bill, as indeed was the purpose of Section 8 of the Industrial Expansion Act, is to enable the Government to guarantee loans from the companies' banks or advance loans themselves to provide the essential bridging finance until the final payment is received from the customers. These loans will then be repaid by the manufacturers from the receipts of aircraft sales and eventually production will become self-financing.
The present limit on the amounts which may be advanced or guaranteed under the Act of 1968 is £125 million. I think most of your Lordships who are interested in these matters know that the two Governments concerned, the British and the French Governments, have authorised the production of the first 16 Concordes. So far, some £45 million has been spent on this production programme. However, the total commitments entered into by the British manufacturers in ordering materials, components and equipment for the 16 production aircraft is now close to the upper limit under existing legislation of £125 million. We estimate that the total amount of this bridging finance now required by the British Aircraft Corporation and Rolls-Royce (1971) Limited, after taking account of payments from airlines, may amount to £250 million. The bankers of these two firms have agreed to provide £25 million of this amount against a Government guarantee, and the remainder will be provided by the Government in the form of loans attracting the one-to-five-year Government interest rate. Hence the Bill.
Your Lordships may reasonably ask why it is necessary to raise the original ceiling of £125 million of loan finance to double that; namely, the £250 million figure written into the Bill. The answer is that since the original limit was calculated the development pro-
434
gramme has been reassessed and will take longer to complete than the forecast at that time. This has meant that the dates when aircraft can be delivered to airlines for service, and hence when final payments will be received for them, will now be later. Secondly, as we all know to our cost, there has been a period of sharp inflation since the original estimates were made, and this alone would have the effect of increasing the 1968 estimate by something like £50 million. When account is also taken of the effects of the aircraft's later entry into service, the figure of £250 million now proposed in the Bill represents little, if any, real increase over the limits originally provided in the 1968 legislation. The precise financial support needed by way of loans will depend upon a variety of factors, many of which must necessarily change as the programme proceeds. The total number of aircraft under manufacture, the number and timing of sales, the selling price achieved, the amount of advance payments negotiated with individual customers, and the size and pace of the eventual production programme will all affect the scale of loans or guarantees required.
My Lords, it would be tempting for me to speculate on the shape of the actual production programme. I must, however, resist that temptation. It is obvious that in order to offer competitive delivery dates the manufacturers must have a firm basic flow of aircraft under construction. But the actual number of aircraft being built in advance of actual orders at any one time involves a very difficult point of judgment. It depends on a great number of variable factors, some of which I have already mentioned. At the present time the manufacturers on both sides of the Channel, the British Aircraft Corporation and Aerospatiale, are examining variants of possible production programmes. When they have finished their examination, decisions by the British and French Governments will be required, but the necessary joint decision must of course await the appointment of the new French Government. In these circumstances, I am sure your Lordships will appreciate that I cannot be drawn into speculation as to the precise nature of the future production programme.
Meanwhile, assumptions have had to be made about the amount that may be

435
required as financing loans for the British firms involved in the programme. Our assumptions may prove over-pessimistic, in which case substantially less than £250 million will be needed. If, however, they prove over-optimistic, more may possibly be required and the figure could rise as high as £350 million—we are here speaking of loan finance, of course. The Government believe that in such circumstances Parliament should have the right to look at the matter again, and that is why the Bill provides that this extra £100 million should be authorised only by Affirmative Resolution. The present uncertainty which necessarily surrounds the actual size and shape and the pace of the future programme makes it difficult to forecast the date by when the loans will be repaid. The Bill therefore removes the provision in the 1968 Act that the loans and guarantees must be repaid by mid-1979. I would stress that this in no way absolves the manufacturers from repayment, which will be made automatically as the sales revenue builds up.
Concorde represents a major advance in the evolution of civil aviation, and indeed the first decisive technological innovation since the introduction of the jet some twenty years ago. It is entirely understandable in these circumstances that some airlines, who in this exceedingly competitive area of international commerce have formulated their plans for the immediate future—huge orders of subsonics, for example—may be reluctant to commit themselves at this stage to ordering so novel an aircraft as Concorde before they absolutely have to. However confident one may be of the outcome, the financial risks involved—and one would frankly acknowledge this—are considerable. As was confirmed by the previous Administration in establishing the basis for supporting the Concorde production programme, the manufacturers do not command the resources to undertake manufacture of the aircraft, and cannot be expected to bear all the risks. The Government have therefore agreed in principle with the companies arrangements which will give them a strong incentive to make a success of the project. Under these arrangements, profits will be shared between the manufacturer and the Government, and the manufacturers' level of profits will depend on the success achieved. The manufacturers have also,
436
I am glad to say, accepted that they will bear a risk of loss and the Government will indemnify them against the risk of losses above those levels.
My Lords, may I conclude these perhaps necessarily rather dry introductory remarks—after all, loan finance embodied in the formal phraseology of legislation is a fairly dry subject, even when we are speaking of figures of this magnitude—by a few brief observations of a more general and indeed of a more personal nature, and of course if there are any questions put to me or questions arising in the course of this debate I shall be glad to answer them in winding up. My Lords, I said just now that Concorde represents a great stride forward in the evolution of civil aviation. So it does, and I believe that all concerned with this project on both sides of the Channel, from the peaks of administration and management down to the humblest employee on the factory floor, can justly take a great deal of pride in what is by any standard, whatever one may feel about the commercial prospects, an outstanding technological achievement and an outstanding manifestation of Anglo-French and indeed European collaboration. My Lords, in speaking of pride we must always remember that nearly 24,000 people in the United Kingdom alone, many of them people of the highest talents and skills and of great dedication are employed on this project, the largest project of its kind which the world has known apart from the American space programme.
Having said that, I should like to emphasise, in concluding these introductory remarks, that this is not a project which we are pursuing out of any vain sense of prestige or national vainglory. The whole history of air transport demonstrates that the main commodity which it has to sell is a simple one, namely speed, and that is what Concorde in a pre-eminent degree offers the airlines and the public. Its capabilities were very clearly demonstrated on the tours which the prototypes have made. I remember very well the tour of the Far East last year in which I was privileged to take part. The aircraft halved travel time on a great many routes, and I know from personal first-hand experience the deep interest in the potential of supersonic travel which it aroused among the general public, the Governments concerned and

437
the airlines of the countries through which it passed.
My Lords, there is one illusion which the opponents of this project seek to propagate and which I should like to do my best to dispel; and here one touches on the philosophy behind this project. Concorde is often represented as a rich man's toy—the sort of aircraft from which only the international jet set would derive advantage. Nothing, in my view, can be further from the truth. One of the great advantages of air transport has been to bring within the reach of millions of people around the world the ability which was probably not theirs before to see and travel in countries far from their own. By and large, I think this is good. I am quite certain of one thing, and that is that travel of this sort, mass air travel, will enormously expand, whether we like it or not, in the years to come, and I believe that in the next two decades the great bulk of that particular traffic will be carried in the existing or the great new subsonic aircraft which are over the horizon and which are to come. But there will be other travellers for whom the ability to get at twice high subsonic speed to their destination will be of the greatest possible advantage. I am not referring here merely to the rich and to the privileged; I am referring to busy businessmen, to executives of all types, to professional men and women, to officials and diplomats—and I also have in mind even poor politicians.
Let me illustrate what I have in mind by one simple fact. My wife happened to join me in Tokyo for the Pacific leg of Concorde's tour, and because she happened to contract a rather juvenile disease called measles at an inauspicious moment she had to fly out direct to Tokyo. She flew out direct, and that very tiring journey took something like 17 or 18 hours. If that journey had been made in Concorde that time would have been cut in half. My Lords, time saving of that kind can really be of very great benefit indeed to many busy people all around the world, and there will be many routes on which savings of this order of magnitude will in fact be achieved. It is my view—and here I am expressing perhaps a personal conviction—that those airlines which are first to operate Concorde may well reap a rich harvest from their enter-
438
prise. It is with these larger considerations in mind that Her Majesty's Government, together with the French Government, have given and are giving their full backing to the manufacturers of this remarkable aircraft, and to the determined efforts which those manufacturers are making in what is admittedly a very difficult market. I hope that your Lordships will underline your agreement with the policy which is being pursued by the two Governments in their backing for all those involved in this enterprise by giving your support to this Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Earl Jellicoe.)
3.46 p.m.
LORD SHACKLETON: My Lords, we have before us to-day a small Money Bill of a kind in regard to which we do not usually spend much time in your Lordships' House, but as on some other occasions this is a vehicle for a very important decision. It is, in fact, a question as to whether we should go on with Concorde. My Lords, this is a difficult area. It is an area in which one can go on making calculations, studies, projections, mathematical models; but the ultimate decision has to rest on judgment and to some extent on faith. In my opinion that has been true of many other advanced technological projects. It is not possible for us even now to prove that whatever decision we come to is necessarily the right one. I have myself come to a firm personal view, that although there are arguments that it is folly to go on spending money on this and on subsequent aircraft, it would be even greater folly to abandon the project at this stage. I should like to give my reasons to the House. Substantially they are the same reasons that I gave in the House nearly 10 years ago when we first debated the supersonic aircraft. There are arguments—they are indeed powerful arguments—that can be given against going on with Concorde. There is the argument that one ought not to throw good money after bad. My contention is that if we do put some more money in—and this is the purpose of the Bill—we shall redeem the advantages of the earlier investment, and it is not impossible that the advantages may be very much greater than the present times indicate.

439
My Lords, in discussing Concorde it is necessary to recognise that there are those, and they are some of my noble friends and probably noble Lords on the other side of the House, who take the view that because of the way the world is going we ought to spend less money and less time on Concorde, motorways, advanced technology generally and that even growth is not necessarily a good thing; and that we ought to go in for what is now popularly called "soft technology", which consists of living in a cottage in Wales in a small commune and relying for heating on a heat pump which you make yourself—and for which you would need a little bit of outside technology—and there you would be freed from the stresses, noises and pollution of the present-day world. That is very attractive, but the fact is that the world is as it is and it is one we cannot get off—except perhaps for a few astronauts who get to the moon. The decisions we have to take in politics, industry or in our private lives may never be the complete, perfect optimum solution. They have to be the best solution in practice.
I agree with the noble Earl, Lord Jellicoe, that speed of travel is a benefit. Many people ask why people want to go rushing around so fast; why it is that speed is so much in demand. Why do we all have motor cars? Of course, the motor car is not the most speedy way to travel; it merely happens to be more convenient—and when the railways are not working one must admit that perhaps a motor car is essential. But the great social argument in favour of speed in travel has been that it has brought the communities of the world closer together and I believe that it makes a substantial contribution to the effective operation of the world's economic systems where time is very important.
I do not wish to go into a mathematical dissertation on time and travel, but it is a fact that one cannot think simply in hours; one must think in terms of journeys. The advantage of the railways being able to increase their speed by the use of advanced passenger trains, so that passengers can get from London to Manchester in three hours or whatever the time may be, will be very good. Incidentally, that may knock out some of the airline business; but that is a natural
440
development. To people who have to go to New York frequently on business the advantage of being able to do it in three hours instead of six and a half hours is a real benefit. For the great majority of leisure travellers speed is not that important. It is not essential to fly to Australia in 13 hours or 14 hours instead of having to take 28 or 30. Probably these travellers would not want to fly direct in any case; they would want to make a stop on the way. But to an individual who has to undertake the journey in a hurry speed is crucial. The noble Earl gave a striking example when he quoted the experience of his wife, although I thought it was mumps and not measles from which she was suffering.
EARL JELLICOE: My Lords, of course the noble Lord, Lord Shackleton, is far better informed than I am, and he is quite right.
LORD SHACKLETON: My Lords, I think the noble Earl said that I was quite right. I am always delighted to give him additional domestic information. In the last 18 months I have flown twice non-stop to Australia, not with the noble Earl's wife, although he and I and his wife all flew in Concorde half way to New Zealand and back in a very short period during what I can only call the noble Earl's "sales tour". I have twice flown direct to Australia and it took 28 hours, and on the whole I am a fairly good air traveller. I sleep, and I do not worry and I try not to eat too much. But on each occasion it took me three days to recover from the journey, and I shall never do it again because it is not good for one's health. In future, if I have to go to Australia, as I may well have to do on business or for some other reason, I shall always make a stop. One may fly from Hong Kong to London in about 18 hours and that is a possible journey. One may stop and perhaps lose a day and altogether one may lose a couple of days. But whether we like or not, businessmen, industrialists, Ministers and Members of Governments will need to travel fast. These are the people who are travelling in the most comfortable way they can, which is in the first class section of the aircraft.
The noble Earl made the point that being able to fly fast in this first class manner is not just a question of privilege, and it is noteworthy—I cannot remember

441
whether the noble Earl made this point—that it is primarily a question of efficiency. It is interesting to note that the Russians have gone ahead with the TU-144. It may be that the Russians are élitists, but the Chinese are interested in buying Concorde and they are the least elitist nation in the world. The fact is that supersonic travel is with us whether we like it or not. Unquestionably the Americans will build some form of supersonic air transport at some stage. As was said by the National Aviation Authority to the Congressional House Aeronautics Sub-Committee, there will, in fact, be such an aircraft; and they observed that the first and the second generations of the supersonic transports are a threat to the United States posture in civil aviation. It is quite obvious that they hope that the Concorde will be rather like the Comet—I hope without the disasters that befell the Comet—and will blaze the way for other people to reap the benefit, as has happened in the past.
I think it clearly essential that we should take account of our experience in the past. One of the difficulties regarding profitability calculations is the load factor. It is a tragedy that the British flag carriers underestimated the attraction of the VC10 and as a result, although it has achieved a higher load factor than was expected, when the time came the production line had ceased; the aircraft were not there, and we did not reap the full advantage of that plane. I think it very likely that this time there will be a very much higher load factor. I cannot foretell what it will be. One may undertake all these complicated studies. I am told that the studies of the load factor are not at all ambitious but that it is rather a small load factor. My guess is that when B.O.A.C. and Air France can fly to New York in three hours instead of six and a half hours they will make an absolutely complete takeover of all those passengers who have to travel on business and there is a real prospect that Britain and France may, for a period of years, establish a commanding lead in the world air travel market.
As the noble Earl made clear, it is not just a matter of status or prestige, but also it should bring a very considerable commercial advantage. It is interesting to note that the Study from the Library
442
of Congress of February 15 of this year ends with these words:
"The outlook is not at all bleak for the first generation Concorde. Successful experience with this aircraft on the part of B.O.A.C. and Air France may well prompt other airlines particularly those competing with B.O.A.C. and Air France on the trans-Atlantic run to turn their options into firm orders over the next few years."
My Lords, there is no country in the world, in my opinion, to whom Concorde could be more important than Australia. But whereas B.O.A.C. does not necessarily require a direct Sydney-Singapore flight, Quantas does. If I understand it correctly—it may be that the noble Earl can give the answer on this—it is only a question of marginally further development expediture to meet the Qantas requirement.
The question of route patterns is a complicated one. It is interesting to see that Concorde in its recent trials has met the requirements that were originally sought: I believe they have carried 28,000 lb over a stage length of 3,750 miles, which certainly in the days when I was in Government we were not expecting them to get anywhere near. The recent high level hot temperature tests have been successful; and I understand that some real progress has been made in regard to those agonising environmental questions. We are all deeply concerned about noise pollution, and there is no doubt that in future civilisation will tolerate this less and less. But I understand recent tests suggest that the Concorde will be no noisier than some of the existing aircraft, such as the 707 or the VC 10 which are operating now, and which, whether we like it or not, will be operating for many years to come. No one of course is going to tolerate the boom over inhabited areas. I am told, too, that the visible exhaust discharges, which have also been a marked factor in earlier versions of other aircraft, has largely been cured.
There is one other argument that I would use in support of Concorde—and here again one is in one of the more difficult areas; namely the advantages that may be derived by others from the development of an advanced technological project of this kind. It is interesting to look at the report of the Centre for the Study of Industrial Innovation on this now rather over-abused word "spin-off". I do not propose to go into the arguments

443
as to the particular advantageous types of spin-off from Concorde, but the number of firms which have claimed some advantages, and in certain cases significant advantages, from the work that they have been doing in association with B.O.A.C. is quite striking. The development of methods of quality control and production control all add to the ability that we need to have.
My Lords, in the light of all this, I think it is right for us to go on with Concorde. It is a strikingly beautiful aircraft. Its advantages could be very great, and I think it would be folly for us now not to follow up the heavy expenditure we have already made on this aircraft and seek to reap the advantages which I believe faith can bring us.

ANCILLARY HOSPITAL STAFF: PAY AND STRUCTURE
4.3 p.m.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I apologise for interrupting this debate, but it might be a convenient moment for me to answer the Private Notice Question of the noble Baroness, Lady Serota, who ask the Government:
"Whether, in view of the demand of the British Medical Association for a full inquiry into the pay and structure of the ancillary hospital staff and the concurrence of the National Union of Public Employees in this demand, they will agree to the setting up of such an inquiry?"
If I may reply in the words of my right honourable friend the Secretary of State for Social Services, he has replied:
"I have said several times that it is open to the trade unions concerned to put their case to the Pay Board, and I very much hope they will agree to do so."
BARONESS SEROTA: My Lords, first I must thank the noble Lord for repeating the reply that was made by his right honourable friend in another place. The noble Lord will not be surprised to hear that I find it extremely disappointing, and I have no doubt that the B.M.A. and the unions concerned will also find it bitterly disappointing at this moment of time when all of us concerned with the
444
future wellbeing of the Health Service would wish to see the Government taking more positive action. Surely the noble Lord will agree that the Government—and the Secretary of State in particular—have a personal and direct responsibility in this matter, and that they must take action to end the present deadlock, which has arisen, I would submit, as a result of their very rigid policies.
As to the noble Lord's right honourable friend's reply that the unions should go to the Pay Board, would I be right in thinking that even if they were to do this once the Board is set up, the Board could only make recommendations; that the recommendations would only be advisory; and that even if they were accepted in due course by the Government, the hospital workers could not receive an increase until next December? If that were to be so, would the noble Lord also confirm that this would mean that they would not have had an increase for some two years, and certainly not since the Report that his own Department received from the Department of Employment, and this because they were caught by a mere few days by the Government's freeze last November? Could he also confirm with regard to the offer of £2 that has been made, and which the Secretary of State has urged the staff to accept, that this applies only to one-third of the workers, because two-thirds of the workers in the hospital ancillary services are female, and they have been offered only £1·80?
LORD ABERDARE: My Lords, the fact of the matter is, as my right honourable friend has made clear, that there can be no revision of the Stage 2 terms of £1 plus 4 per cent., which must apply to everyone. On the other hand, although the Pay Board is not yet formally set up—it will not formally exist until April 1—the chairman, deputy chairman and officers have been appointed and could start to consider very quickly evidence submitted to them about the pay of National Health Service ancillary staff.
So far as the two points put to me by the noble Baroness are concerned, her first point was that there would have been no increase for these workers for two years if they were not to get a further increase until December. But of course that is ignoring the fact that there is an

445
offer open to them at the moment. They could accept that offer with effect from this week, and we very much hope that they will do so. On her second point, it is true that the offer is £2 per week for men and £1·80 for women, but this represents the same percentage increase for both men and women.
LORD AMULREE: My Lords, I should like to support the noble Baroness in what she has said, because although I am not really in favour of the ad hoc inquiries making more and more special cases, it seems that if the result of the application to the Pay Board will not be effective until next December, it is rather a long time for these workers to wait, especially as they are not particularly well paid at the present time. I know that they have the offer of the £2 now. One hopes that, supposing some kind of gesture is made by way of getting them before the Pay Board quickly, or getting an independent inquiry set up, they might possibly be prepared to accept the offer and thereby bring to an end a difficult and uncomfortable situation.
LORD ABERDARE: My Lords, I fully realise that difficulties occur when a freeze is operating. But there are many people who could claim exceptions, and it would be quite wrong to make one exception because it would lead to many others being claimed. I would only say that, although one fully recognises that these workers are among the lower paid, we hope that as a result of the recommendations of the Pay Board we shall be able to meet some of the difficulties of relativities and anomalies which inevitably occur when one has a freeze.
LORD AUCKLAND: My Lords, while accepting that any offer above the £2 must wait until Stage 3, may I ask whether my noble friend is aware that there is great concern in all parts of your Lordships' House, and in the country too, about the situation of these people? These are very dedicated people, and I should like to ask my noble friend whether he would make representations to his right honourable friend to make quite sure that when the Pay Board sets to work these people are given very high priority indeed. They have some difficult jobs to do—very often dirty jobs—and they work very long hours. As this is a matter of urgency, may I ask my noble friend whether he will make
446
these urgent representations to his right honourable friend?
LORD ABERDARE: My Lords, I am grateful for what my noble friend has said. My right honourable friend is fully aware of the value of the work done by these staffs of the hospitals. Certainly it will be his earnest endeavour to see that they receive fair treatment.
BARONESS SUMMERSKILL: My Lords, the noble Lord and the Government are afraid that if they accept any claim from any category of workers it will start a chain reaction. That is their argument, as I understand it. But I believe that the whole country regards this category of workers as unique, because everybody knows that throughout this century, because of their dedication—and the noble Lord mentioned that—these people, on moral grounds, have been reluctant to withdraw their labour. Withdrawal of labour is the only weapon that the worker has in the labour market. While other workers have been on strike—on strike to-day or on strike throughout the century—these people have never withdrawn their labour because they have felt vulnerable to criticism. That of course is not the only reason. They also have a high moral standard; and that is precisely why in the first place they were prepared to undertake work which many people are not prepared to do—work which is not very congenial and which is lowly paid. It is apparent to everyone that all employers of their labour are prepared to exploit them. I am asking the noble Lord not to treat these workers simply as another case and therefore to use the argument: "We must not make any exception". I am asking him to regard these workers as unique. My final word is on the fact that it was said that these women are—
EARL JELLICOE: My Lords, I hesitate to interrupt the noble Baroness, but this is a Private Notice Question.
BARONESS SUMMERSKILL: My Lords, may I ask a further question?
EARL JELLICOE: The noble Baroness may indeed ask another question.
BARONESS SUMMERSKILL: I am grateful to the noble Earl. This is a very important matter and I hope that

447
the next time the noble Earl is ill—though I hope he will not be—he will appreciate the importance of the work done by these people. May I ask this: in view of the fact that these women have been offered £1·80 that they can have right away, does he not realise that sum will keep them in the position of the poorest paid in the whole country?
LORD ABERDARE: My Lords, I am sorry not to be able to agree with the noble Baroness that one can regard any one category as being of exceptional hardship. We have the greatest sympathy—certainly all of us in this House and those who have anything to do with hospitals—with their case. But I cannot accept that it is unique. People can make equally good cases for other categories of workers. So far as the offer to the men and women is concerned, as I said before, the percentage offer is the same; and there is a further amount available to the women under the equal pay scheme later on this year, falling within the provisions of the counter-inflation policy. The fact of the matter is that these are among the lower paid workers. But the £1 plus 4 per cent. arrangements apply also to the higher paid workers; and to that extent they are fair to all.
LORD BESWICK: My Lords, is the noble Lord aware that this is typical of the high-handed attitude that the Government have adopted in the industrial relations field? Is he not aware that the Answer to the Question is both arrogant and inaccurate? It is not possible for the trade unions to put their case to the Pay Board. There is no Pay Board: it is not yet established. The Bill has not yet gone through Parliament—but yet it is stated in this cold-blooded and, as I say, arrogant way that they can put their case to the Pay Board. What is meant by that phrase if the Bill has not yet been passed? If the personnel of the projected Pay Board are there, why can they not invite the trade union officials to go and see them, and call this an inquiry and not a Pay Board investigation? If that were done and if the unions, on that basis, were prepared to recommend a return to work, would that not be a better way of dealing with the matter?
LORD ABERDARE: My Lords, I rather resent the way in which the noble Lord has called the statement "arrogant and inaccurate" and I do not think that sort of speech is likely to help in what is a very difficult situation. All I would say is that we have done our best to advance the setting up of the Pay Board. As I said originally, the Pay Board will formally come into existence if and when the Bill passes through your Lordships' House, but already the chairman and the deputy chairman have been appointed, and the officers also. They could be starting to consider any evidence that was put to them.
LORD BESWICK: My Lords, I am not referring to the noble Lord himself; I am referring to the words in the Answer. There is no Pay Board as yet, but that is what is said. And if the situation is as the noble Lord himself has just explained, then why is not the Answer phrased in a more conciliatory way? Why are the trade unions not being invited to put their case before a body of people which might be called an inquiry, until such time as the Pay Board is established?
BARONESS WOOTTON OF ABINGER: My Lords, assuming that the Pay Board comes into existence within a reasonable time, could the noble Lord give us an assurance that in their consideration of any application coming from this group of workers due weight will be given to the article of the Pay Code which requires special attention to be given to the lower paid worker? Secondly, since the Pay Code is still only a Consultative Document and these difficulties really arise out of its extreme rigidity, would the Government consider revising the Code before it becomes fully operative, so as to give rather more room for manœuvre in cases such as the present one?
LORD ABERDARE: Certainly, my Lords, it is our intention, as has been said, to pay special attention to the lower paid worker, and certainly any inquiry by the Pay Board—if the noble Lord will allow me to refer to the Pay Board—would take account of the problems of other related groups of workers. On the second point made by the noble Baroness, we are dealing here with Phase 3 of the policy. Phase 2 is concerned with the rigid £1 plus 4 per cent.

449
In Phase 3 the Pay Board will be advising the Government in time for the formulation of the third stage of policy, which will begin in the autumn.
LORD BESWICK: My Lords, is the noble Lord not aware that my noble friend was not referring to Phase 3? She was quoting from the Green Paper, which relates to Phase 2.
LORD ABERDARE: My Lords, all I can say is that it is at Phase 3 that we shall examine the problems of relativities and anomalies. Phase 2 is the £1 plus 4 per cent.
BARONESS SEROTA: My Lords, this is the point I am raising. I stress the urgency of this matter. I do not think the British Medical Association would have gone on record and approached the Government in the way that they did, if they had not been deeply concerned about the conditions in the service. I asked the noble Lord at the outset (and I should like him to confirm this) whether it is not the case that even if the Pay Board, when it is established, investigates the case and makes recommendations, and the recommendations are then accepted, the increase cannot be made available at the earliest until the autumn, and probably not until December. There is that time lag. As to the suggestion that it is now open to the unions to accept the offer of £2 or £1·80, depending upon whether one is a male or a female worker, I can only suggest to the noble Lord that it will deny these people the benefits that many of them are getting from the other side of his Department as the lowest paid workers of all, because as their pay goes up £2 so they will sacrifice £2 of family income supplement benefits.
LORD ABERDARE: My Lords, I must briefly reply to the last point of the question of the noble Baroness. The fact is that the family income supplement is paid for twelve months, so it would not automatically be sacrificed.
LORD SHEPHERD: My Lords, could the noble Lord recognise that there is some flexibility, despite the accusations of rigidity? Could not these people be treated in the same flexible way as the Government treated the banks in permitting them to raise their dividends
450
well above the rate of dividends for last year?
LORD ABERDARE: My Lords, that question does not seem to me to arise out of the particular answer that I gave the noble Baroness.
THE EARL OF ONSLOW: My Lords, would not my noble friend also agree that the lower paid workers in the form of National Health ancillary workers will be the greatest beneficiaries if the Government's counter-inflation policy succeeds.
LORD ABERDARE: My Lords, I am grateful to my noble friend. Of course they will, and indeed the whole nation will benefit.

CONCORDE AIRCRAFT BILL
4.23 p.m.
Debate on Second Reading resumed.
LORD AVEBURY: My Lords, the noble Earl, Lord Jellicoe, said quite rightly that Concorde is a great technological achievement, and he gave some illustrations which were followed up by the noble Lord, Lord Shackleton. It is a remarkable accomplishment that a considerable period of time before the aircraft is due to enter service it has already attained a level of performance much better than the manufacturers had undertaken to the purchasers. As the noble Lord, Lord Shackleton, pointed out, the Concorde carried 28,000 lb. over 3,750 miles; the figure which has been quoted in the manufacturers' literature is 20,000 lb. over that distance. The noble Lord, Lord Shackleton, rightly pointed to the success of the hot and high trials. From all the evidence, we can be certain that Concorde is technologically successful and that it will do even better than the manufacturers have claimed for it in the past. That is not the same as saying that it is going to be an economic success if and when it enters airline service. At this stage in the life of the project, when we are committing ourselves to spending a very large additional sum of money, we ought to take a hard look at the prospects for sales to the airlines in the light of the most recent developments—the cancellation of options by a number of airlines, and the prospect that only a small number of aircraft will actually be produced in the end.

451
Like the noble Lord, Lord Shackleton, I have gone on record over this project for more than ten years. The first speech I made on it was on December 21, 1962, when I said that the important factor was how much the final development costs would be, because that matter would enter into the operating costs of the aircraft if those development costs were to be recovered. I said that past experience showed that in the development of new aircraft, invariably the costs were more than the figure given at the beginning. I went on:
"I am prepared to bet a monkey to a mousetrap that future Ministers will have to come back and ask for a tot more money before the prototype even gets off the ground".
By the time the prototype flew the figure had escalated from £150 million, which was the amount quoted in 1962, to something like £730 million, an escalation of aboue five to one. That trend has continued since then. The Estimates Committee has drawn up a table showing how these development costs have risen right up to the present day. I realise that in this Bill we are talking about production costs. Nevertheless, the matter is relevant, because the sale price of the aircraft must include an element of repayment of the development costs. I should like to hear something from the noble Earl this afternoon as to what is the latest plan regarding the recovery of some, or all, of this large sum of money which has been committed by the taxpayer over the past 12 years.
I said that the economics of the aircraft were the crucial matter that we should be looking at this afternoon, because that determines how many aircraft are going to be sold. The noble Earl, Lord Jellicoe, thinks that people are going to be prepared to pay for this speed bonus. I agree with the striking illustration he produced of the reduction in travelling time between Tokyo and London. But perhaps he could tell us whether this assumes that Concorde will be able to over-fly the Soviet Union, or the United States, at supersonic speeds. As the noble Lord, Lord Shackleton, said, nobody is going to tolerate the boom over inhabited areas, and while it may be possible to go over some parts of the northern U.S.S.R. without causing annoyance to the inhabitants, there may be certain parts of the journey which have to be undertaken at
452
subsonic speed, so the benefit of the time saving that he quoted would be only a theoretical one, not a change in airline service. I agree that if that were the case, if we could reduce the journey time to Tokyo by a factor of 50 per cent., then certainly the industrialists, businessmen, Ministers, and anybody else who does not have to pay for his ticket, will use the aircraft. It is going to be an expensive journey, and I do not suppose Lord Jellicoe's wife would take kindly to going to Tokyo on Concorde if she had to pay the fare herself.
EARL JELLICOE: My Lords, nor would the noble Lord take kindly to it if he had to pay the fare himself.
LORD AVEBURY: Certainly not; that is what I am saying. Because the aircraft will be entirely first-class, and because on top of that there will be an additional 10 per cent. surcharge, its passengers are virtually going to be limited to people whose fares will be paid for by their employers, or by some other philanthropist who is prepared to subsidise their travel.
The mass market of air transport is not as critically dependent on speed as the noble Earl has told the House. If we look at the past few years we see that the enormous growth has been in the inclusive tour market, which does not depend on aircraft like the Concorde; it depends mainly for its continued reduction in real costs on the development of the wide-bodied jets, such as the Lockheed 10.11 which is being introduced into service this year by Court Line on the inclusive tours which they are operating. That is where the real growth in air traffic has taken place in the past and there is no reason to assume that it will not continue in the future. If there is this big premium market, which both noble Lords have envisaged, why is it that the only airlines who have placed firm orders for Concorde so far are B.O.A.C. and Air France?
The situation in the past few months has changed drastically with the cancellation of some of the options. At the time when the Bill was going through another place extreme reticence was needed because those options were coming up for consideration, particularly those for Pan Am and T.W.A. The Minister for Aerospace said it would be unwise for

453
any Minister to start down the road of becoming involved in the dissemination of information to people determined to use it for the wrong purposes. That is a rather wide generalisation, but I accept that it could have been true in this case; if there was the remotest prospect of Pan Am or T.W.A. taking up those options, nothing ought to have been said, and nothing was said, which might have jeopardised negotiations. But now this is water under the bridge and I think we are entitled to have some prognostications from the Minister as to what will happen with the rest of the options that are still pending, particularly, for example, the J.A.L. option which has been extended but on which the Press comment was that this was out of politeness rather than any real intention of going ahead with an order for the aircraft in future. If the orders have been scaled down to a very small number—B.O.A.C., Air France, perhaps M.E.A., who certainly made encouraging noises—then we ought not to be speaking about a sum of £350 million. Probably this is a matter that we could explore on Committee stage possibly we could limit it to the amount which is not covered by the additional Statutory Instrument. As I understand it, we have already spent the whole of the amount which was originally committed under the Industrial Expansion Act and we have to provide some more money to enable the production line to be continued. The figure might be £250 million rather than £350 million. We should then have a more comprehensive opportunity of reviewing the financing than if that amount could be raised simply by Ministerial order.
As I understand the position the amount committed covers 16 aircraft, which is more than have been ordered by B.O.A.C. and Air France; but Mr. Heseltine, the Minister for Aerospace, said in Standing Committee in the Commons that we shall not be using the money unless we are selling the aircraft. Can the noble Earl explain that statement? If we have not sold those aircraft but we have started to build the first 16, and presumably we are also ordering long dated materials for a further batch, then of course we are using the money for aircraft which have not been sold. I should like to know whether the Government have any contingency plans for
454
using those Concordes which might be produced and not taken up in the form of orders by the airlines.
Of course this money is being advanced by way of loan, and the intention is for it ultimately to be recovered when the State receives payment from the airlines, but I think it rather odd that there is no mention in the Bill of security. If the security was the aircraft, then clearly in the circumstances I am envisaging it would be impossible to recover if there was no customer. Or is it secured by a technical floating charge on the undertaking of the manufacturers, in this country B.A.C. and Rolls-Royce? Certainly taxpayers are entitled to some degree of security if very large sums of money are to be lent, as in this Bill.
It would be useful, too, if the Minister, in winding up the debate, could give us a list of those options which are still pending and some slight indication of when they are likely to reach a conclusion. At least we could then see the time-scale within which some firm decision has to be reached. In spite of my criticism I am certainly not saying that we should stop the Concorde project at this stage. I agree with the noble Lord, Lord Shackleton. We have spent a great deal of money on it and it would be catastrophic as far as the employment of the manufacturers and sub-contractors was concerned if we had to put an end to it at this moment. But we are already having to talk about the scaling down of the commitment to production. As I understand it, there has been some discussion as to whether there should be a single manufacturing line instead of the two we have at present. If so, we are faced with the thorny question of whether that line should be in this country or in France. I should be grateful if the Minister could say something about the progress of discussions on that subject.
In conclusion, I hope very much that my fears are misplaced and that the Concorde will be as much an economic success as it has been a technical success. When we think of all the effort and scientific and technological expertise that has gone into it we realise that it would be a tragedy if, as the noble Lord, Lord Shackleton, has said, like the Comet 1 it blazed a trail into supersonic flight leaving others to reap the benefit. I certainly hope that does not occur.
4.35 p.m.
LORD BALFOUR OF INCHRYE: My Lords, my first wish is to echo what the noble Earl, Lord Jellicoe, has said, in admiration for all those from the lowest to the highest who have been engaged for a good many years now in the development of this remarkable aircraft. Particularly my mind goes to those who are usually known as the "front end"—the test pilots and the air crew—for the really remarkable achievements of their test work.
In my view the Concorde opens up a great and exciting prospect for the future of Britain and France. One may argue about the economics of the Concorde, about its operational costs, operational revenue and whether it will ever be a viable proposition. One may argue that question for many hours, and various people come to different conclusions, according to their particular point of view on the project. But even if the Concorde was never what we call a strictly viable proposition, even if some of the more optimistic financial forecasts were not achieved, I think its development is absolutely essential in this technological age. With the start of the Concorde Britain and France enter the new supersonic era with a lead, and I believe the supersonic era may contain developments which our finite and limited minds cannot to-day envisage.
Aviation history is fascinating. If your Lordships will cast your minds back, it has gone in certain positive great stages. We are, I think, in the sixth stage now. The first stage was the Wright Brothers; the second stage was the development, in about 1909, of something which your Lordships may or may not know about—the noble Lord, Lord Kings Norton, does, as well as one or two other noble Lords—the rotary engine which made flying practical and which we used right up to the end of World War I. The third great development was metal construction. I can remember going to an aero exhibition at Olympia in 1920 and seeing an ordinary conventional aeroplane made in metal by Short Brothers. The fourth was the development, in the early 1930s, of what are called "skin stressed wings"—wings covered with metal; variable pitch airscrews, undercarriages tucked up. The fifth was the jet age, which we had after World War II. Now we have the supersonic age, which is Stage 6; and maybe
456
there will be a seventh stage, the interplanetary age, which I shall not see but some of your Lordships who are younger may yet see.
But here we are, Britain and France, the leaders of one of the new stages of aviation, and I cannot over-emphasise to your Lordships the importance of the position which Britain and France have managed to achieve in the start of this sixth stage. If order prospects were bleak I do not believe the Government policy should be to slow down production. The noble Earl the Leader of the House told us that the present programme is for 16. The noble Lord, Lord Avebury, was rather depressing in thinking that we might be building Concordes which might be unsold. If the Concorde failed and our faith was false, by producing unwanted aircraft we should add individual aircraft costs only to a far greater development cost which we have already spent. But against this we have faith. With our faith strong I would prefer to see the production line doubled rather than halved. Build and sell, or build and offer to lease to the world's airlines which are too timorous to buy until they have seen the product and have the faith in its operations that we have had from the beginning. That may be over-bold, but that is something I should dearly like to be considered.
LORD AVEBURY: My Lords, would the noble Lord allow me? The manufacturers offered to lease or rent the aircraft to Pan Am on almost any terms Pan Am might have demanded, and they still were not prepared to take up their options.
LORD BALFOUR OF INCHRYE: But they have not seen the final product operating. It is better to build on and on and be willing to lease rather than to cut down on something in which we have faith. If we have not complete and absolute faith then the policy of the noble Lord governs the position; but most of us, certainly those concerned with aviation, have faith in the product and its final conquest in this new era.
I should say only one more thing. The noble Lord, Lord Shackleton, in the course of his speech, with which I completely agreed, mentioned Comet 1. Let us appreciate that when we pass the Bill we are all bumping along the roof, as it

457
were, of our technical knowledge. We are not taking risks, but we are bumping along right at the top; and when you do that, inevitably things could happen in the future. If new aircraft are produced there are, broadly speaking, three matters that must run parallel: design, construction and operation. If one of those things gets out of phase as it did in Comet 1 then you meet disaster. I pray that we shall have no disaster, but I have known many types of aircraft in America and Britain which have had to face setbacks, usually rather early in their career. I repeat, I pray that there will be no setback; but if there were such a setback, let us face it as setbacks have been faced in the past and let us be quite sure that our faith is sufficient to overcome such things if they ever happened.
My Lords, I support the Bill, having admiration and confidence in those who have brought us thus far that they will bring us (Britain and France) to a position where, on the initiative and faith of these two countries, the rest of the world will say "Well done!".
4.44 p.m.
LORD KINGS NORTON: My Lords, may I first say with what pleasure I have listened to the noble Lord, Lord Balfour of Inchrye. He gave some indication of knowing that I am also a very old hand in this field. I like to remember him also in his earlier phase as Captain Balfour, and I remember the many things he did for aviation then. Like the noble Earl the Leader of the House, and the noble Lord, Lord Shackleton, I too have had the privilege of travelling in Concorde and my trip confirmed what my specialised position as Chairman of the Air Registration Board had led me to conclude over nearly a decade, that this was not only one of the most remarkable technological advances in the whole history of aviation but it was an aeroplane which had incredible merits from the point of view of safety. In the whole of my time with that organisation, the Air Registration Board, while we had never had anything quite so complex to consider we had never had anything which gave us more confidence in its ultimate success. I thought it was a splendid aeroplane and my trip in it confirmed that.
May I say that travelling in Concorde is unsensational. I remember that because
458
we had a short take-off and on a very small airfield a short landing, and there was a very noticeably powerful acceleration and a very noticeably strong deceleration. But in the air the aeroplane was quite ordinary and one was forced to conclude that travelling at Mach No. 2 and at 60,000 feet was very much the same as travelling much slower and much lower down on much more ordinary aeroplanes. For the passengers it was quiet, and it is now clear that the production Concorde will be quieter than aeroplanes like the D.C.8, the 707–420 and the V.C.10, aeroplanes which we more than tolerate to-day. Not only that, it will emit less smoke. Indeed, if your Lordships are interested in the quantitative data on these points, they were given in Written Answers in another place on December 6 last and are worth looking at.
I agree wholeheartedly with what has been said about the merits of high speed. Perhaps we are not always entirely sensible in the way we rush about. But there is not the slightest doubt that it there are two aeroplanes and aeroplane A can get to New York in six hours and the second, aeroplane B, can get there in three and a half hours, there will be a scramble and a queue to get on the faster aeroplane. It is my belief that Concorde will be flying full and doing a lot of good for France and the United Kingdom for a long time to come. The noble Lord, Lord Shackleton, referred to the high load factor. I believe that this aeroplane will have a high load factor and in that will lie its ultimate economic success.
While we are in the habit of thinking of aeroplanes on the trans-Atlantic route almost to the exclusion of aeroplanes going in other directions I believe that in the future we shall be more concerned about how long it takes to get to the Antipodes. There I think this aeroplane is going to be a great boon. I am not, any more than the noble Lord, Lord Balfour of Inchrye, particularly worried about the decision of certain North American airlines to surrender their options to buy Concorde. It has been unkindly suggested that perhaps they hoped that B.O.A.C., Air France and Iranair (which has not been mentioned so far but which has ordered three planes) would get cold feet and would follow

459
suit, and that that would have been absolutely disastrous. As has been said this afternoon, not only would a lot of people be out of work but the way would have been clear for the American S.S.T. to go forward again and ultimately scoop the pool. In the case of Qantas and Lufthansa I believe that the chief difficulty is that of range. I believe that that is something that will be overcome. But my prophesy is that these airlines will indeed take the aeroplane and that it is far too soon to be pessimistic about Japan Air Lines and Middle East Airlines.
Thus, it seems to me that the way ahead is clear; and I must say that for one who from time to time has been depressed at some vacillations in Government policy, the confident way in which the noble Earl the Leader of the House spoke was a tremendous comfort. I feel now that we can go forward with tremendous confidence; with the B.O.A.C., the Air France and the Iranair orders there is certainly enough to go on with, and we shall, I think, between us put a girdle about the earth that will make Pan American and T.W.A.'s mouths water, if your Lordships will permit a slight change of metaphor. They and many others will be coming along with their cheque books, or their Barclaycards, or whatever they use, pleading to be allowed to join the Concorde club, and I think we shall be glad to have them. The Concorde will soon be part of the world's way of living. Over the years it will be stretched and expanded; it will be updated and up-rated. I think it will probably be with us until the end of the century, and those of your Lordships who are still around then will, I think, be proud of the part this country has played with France in bringing it into being.
4.51 p.m.
THE EARL OF KINNOULL: My Lords. I should like briefly to intervene to welcome this Bill, and indeed I would welcome any Bill which assists the Concorde programme. Apart from possibly the noble Lord, Lord Avebury (who is not here, unfortunately) most of us are devotees of the Concorde. I am for that reason always amazed by the anti-Concorde campaign, what one might call the Goldring set, who claim on economic grounds that Concorde will become the
460
most expensive blunder of the decade. I am amazed because it seems they have reached the completely opposite conclusion not only to the manufacturers' calculations, which no doubt they would claim to be biased, but also a number of surveys, particularly the Flight magazine survey, and, lastly, the critical review—I presume it came down this way—of the noble Lord, Lord Rothschild, who advises the Government. I am very glad that my noble friend the Leader of the House introduced the Bill with such a great deal of support for Concorde.
I believe that the Concorde project has become something of a symbol, indeed part of our spirit of national achievement. It is a project whose physical influence alone spreads to the constituencies of one in four of the Members of another place. It is a project which, as my noble friend has said, in size of programme and technical know-how comes second only to the American space programme in the last decade. And it is a project in which British aviation has again given the world, as the noble Lord, Lord Balfour, reminded us, a technical lead. Finally, it is a project which has clearly cemented European co-operation, and I believe it is a great and brilliant tribute both to Sud Aviation and B.A.C.
As to the cost of the programme so far, it is, I think, comforting to note that the late American S.S.T. programme, which was subsequently cancelled, and which had spent over £1.000 million at the time of cancellation, had succeeded in getting only to the mock-up stage. If one compares the present Concorde programme, this would seem very good value. I am interested in the environmental statistics that have been published about the Concorde on its present performance: that at present it is quieter on take-off than the VC 10, quieter on landing than the Boeing 707 and quieter in fly-over noise than the Boeing 747.
The recent cancellations of the options for sale clearly are a setback to the production line programme, but one notices that practically no airline—I was going to say none of the airlines until the noble Lord, Lord Avebury, mentioned Pan Am—condemned Concorde on its operating economics. What is abundantly clear is that at the present time, in the present financial climate of airlines, it is virtually impossible for any airline to purchase

461
Concorde. Indeed, as I understand it, by cancelling the options many of these airlines were able to recoup capital payments they had put down.
That brings me to the first question I should like to put to my noble friend. If he accepts that airlines generally at present are financially powerless; if he accepts that the success of Concorde depends wholly on getting it into service, and if he accepts that the present high rate of interest means a number of the leasing companies have set up terms unattractive to airlines, why could not the British and French Governments, in the long-term interest of Concorde, set up a Government lend-leasing organisation? Surely this would boost Concorde and get it into service.
The second point I would put to my noble friend is on the question of the proposed routes. I am still personally a little befogged as to exactly what progress has been made and by whom over negotiations on both landing rights and overflying rights. Is it up to the operators, B.O.A.C. and Air France at the moment, or the respective Governments to become involved, and has America agreed to anything at the moment? On fares, one would be interested to know whether IATA will eventually be the final arbiter as to the rate.
The third point I should like to put to my noble friend is how the Government see the future development of Concorde. Is it not perhaps time for the European partners to discuss American participation? It is, I believe, very clear that at some time America will want to come hack into the supersonic market, particularly with the Russian "Konkordski" on the way. Would it not be an advantage all round to invite the vast American resources to play a part now, or do we want to see the Americans setting up their own Concorde programme?
In conclusion, I would again welcome the Bill and welcome the Government's support, and indeed the personal interest of my noble friend, who has given support both in the air and on the ground. I would also add my congratulations to both manufacturers, to the 600 British sub-contractors and 30,000 British people involved in the programme, for the brilliant achievement, and for bringing Concorde to the threshold of an exciting era of supersonic travel.
4.58 p.m.
LORD GORE-BOOTH: My Lords, it may seem that in this late stage of a debate that already comes late in the Concorde argument there is very little left to say. None the less, those of us, and as it seems most of your Lordships, who are interested in the pursuit and success of this project have a certain duty to pronounce themselves in the atmosphere where, outside your Lordships' House, so much of the media are at present the victims of the negative point of view. I feel that we all help this project if, although we say things which have been said before, at least we say them.
I should also like to add my voice in support of the Bill in a somewhat different capacity from anyone who has spoken, and that is as one who, since the Chicago Conference of 1944, spent 25 years at least part of the time on the fringes or in air diplomacy and such efforts as diplomacy could give to British manufacturers to sell British aircraft. If one looks over that period it is a slightly sad one. True, we had a few great world successes, notably the Vickers Viscount, and I hope that from that period will grow world success in our vertical takeoff effort, provided the disagreements between progressives and environmentalists do not prevent it. I shall come back to that point in a moment. But the period is sadly full of high ideals, brilliant experiments and then, somhow, failure.
The noble Lord, Lord Shackleton, spoke of the Comet, as did the noble Lord, Lord Balfour of Inchrye. We somehow never got that going again properly after its initial world success and disaster. Again, there was the VC.10—the best aircraft of its kind in its generation, without any doubt—which suddenly failed to become a world success because we failed to support it. Again, in a different sphere we might have had a similar success with the TSR 2. I do not comment or blame anyone for the discontinuance of that programme, but it adds an air of sadness to the efforts of this nation which, if it has brilliance, has particular brilliance in aircraft technology. So when one has been thinking about the Concorde project over all these years, all the time this pattern has been in one's mind, that if we get so far, for goodness' sake! let us then not once again falter

463
and say, "Well, we tried hard but it is really too bad."
The noble Earl who introduced the debate emphasised—and I thought very rightly—two features of this programme which give the present moment a very special importance. He mentioned it as a symbol of co-operation with our French friends and neighbours. But, if I may say so, I thought he understated that a little, because it is not just a symbol of Europe and of Anglo-French co-operation; it is a symbol that, in the worst years of Anglo-French relations in this century, we had faith enough in the ultimate validity of Anglo-French friendship and capability to go on with this project, despite all political disagreements. The other point which the noble Earl made, which was to my mind of an extremely valid nature, was his reference to this new Bill's being essentially a production Bill as opposed to an R. and D. Bill, because that is really the key of the argument against those who still want us to stop. Certainly, during the 1960s, it was entirely legitimate to criticise, to oppose the programme, to hope that it would not happen because the amounts of money involved were unforeseeable. But now that we are actually at the stage of this plane's flying—and noble Lords have flown in it and have expressed the kind of sentiments that we have heard from the noble Lord, Lord Kings Norton—that is no longer valid as an argument.
Quite apart from anything else, we have a great national product which it is now our job as a nation, and a French job as the French nation, to sell. It is no longer a question of saying that we should stop; it is a question of getting on with the job when, if we look at it in perspective, we have really reached the point of no return. I found this sentiment very much when I was on a recent visit to Australia and Japan. I found that our salesmen had been to both countries, and were going again, and there was a sort of mutter going on in the atmosphere, "Why do we have to try to sell this brilliant creation to people who are asking us very profound questions, with the background of a barrage of denigration from people in our own country?" That seemed to me to be not only regrettable in itself but totally mistimed as a way of going on.
464
Now we are reaching the stage of accomplishment—and, indeed, we have reached it—I think it is important not to oversell in this sense: we must recognise the environmental difficulties. I have studied to some extent the "anti" literature, but I found, to my encouragement, that even that literature does not say, "This cannot be done." If I understood the diagrams aright, they seem to show that you can go to Australia without a desperate effect on environment as you go. Like other noble Lords, I hope that the noble Earl will say just a word on the environmental factor and the degree to which, week by week, the prospects of overcoming that grow greater. In particular, I noticed that his honourable friend in another place was not able to say anything about developments in regard to noise, but I hope that what the noble Lord, Lord Kings Norton, had to say can be confirmed.
Taking this apparent conflict a little deeper, I would suggest that the Concorde debate is something of a symbol of the cease fire which will have to take place some day between what I have called the progressives and the environmentalists. I think there is a disposition on both sides to make war, and I am quite sure that the future of our country and the future of the human race is hound up in a conscious effort to reconcile positive elements of progress, technologically and otherwise, with the very welcome necessity to protect the environment where we can. If both sides can only approach this project in that spirit, I feel that a great deal will have been learned about the relationship between progress and environment which we still need to learn.
In the meantime, I agree very strongly with those noble Lords who have suggested that we may now, with the French, have produced the definitive plane for some time to come. There is only one proviso about this—a proviso which has been mentioned by several noble Lords, notably the noble Lord, Lord Balfour of Inchrye—that we do not have a kind of Comet disaster; and of course we cannot guarantee its avoidance. One can only express the hope that the combined design and technological skill of the French and British aircraft industries, plus the work of those who test this aircraft, will be such that any such disaster is very much less likely; and if there

465
were to be any such, I am sure the noble Lord, Lord Balfour, is right in saying that we must regard it as one of those things which happen when we are on the fringes of science, and that we must not be deterred even by that.
In a poem written over a hundred years ago by a strange poet, Arthur Hugh Clough, he used in a stanza the word "fliers", though not in the sense that we are using it now. In the same stanza he said,
"If hopes are dupes, fears may be liars".
I think we have got beyond the stage of hopes being dupes, and I feel sure that fears are now liars. It is in that spirit that I join with other noble Lords in supporting the Bill and in expressing the hope that we are now on the threshold of a great and long-lasting success.
5.8 p.m.
LORD CONESFORD: My Lords, I intervene only briefly, but I think it would be an act of cowardice on my part if I did not, since I am so far the only opponent of the Concorde project who has ventured to speak. May I say at once that of course I do not oppose this Bill. This Bill is a Money Bill, it has passed another place and, of course, will not be opposed in this House. I wish I could share the enthusiasm of so many of my noble friends. I think particularly of the splendid enthusiasm shown by my old friend Lord Balfour of Inchrye. I do not know whether he recollects it, but over 30 years ago he, as a pilot—he was also Under-Secretary of State for Air at the time—flew me to my constituency and I have never had more confidence in any pilot. I also heard with sympathy the expert views of the noble Lord, Lord Kings Norton, and, in spite of my disapproval and opposition to the Concorde project, I confess freely that if in spite of all the opposition to this project it eventually goes through and it is possible to fly to Australia in the short time that the Concorde may make possible, I may well be a passenger.
My Lords, the reason I am opposed to the Concorde project is, first of all, that I am convinced it will not bring the material rewards of which the supporters of this project are so confident. I also believe it will do so much damage to other values that it will in fact make the world a rather poorer place. But, my Lords, neither of those facts con-
466
stitutes my main objection to the Concorde. My main objection to the Concorde is the frightful misuse of scarce resources. What is so often ignored by my enthusiastic friends, when they advocate throwing ever-increasing millions into this project, is that if all these millions are thrown into this prospect then great sums, or even far lesser sums, cannot be thrown into other projects which I think are of much more value. I shall not trouble the House to develop that argument now, because my sole purpose in rising is to say that of course we do not oppose this Bill, a Money Bill approved by another place, but I do not want it to be assumed that, because all those who have spoken have been in favour of the project, there are not a great many people who are convinced—and I hope it will not surprise noble Lords if I say convinced from motives of what appears to them to be patriotism—that it is not a good cause, but a bad one. With the possible exception of the last speaker, I think nobody has suggested that opposition to the Concorde must be unpatriotic. I have forgotten the noble Lord's exact words, but in his admirably clear speech, which I enjoyed as did every other Member, he had one phrase which obviously showed that he thought the people who took my sort of view deplorable people—and that, of course, may be so.
My Lords, I may say that I am not wholly taking this view after the event. I expressed my doubts in a debate already referred to by the noble Lord, Lord Shackleton, in his speech this afternoon. He said that it was a debate of nearly ten years ago: it was actually a little more. It was a debate in this House on November 13, 1962, and it arose on a Motion for Papers by the late Lord Brabazon of Tara. In that debate Lord Brabazon, who was a great friend of aviation and not at all ignorant on the subject (as I know everybody who knew him will remember I rather think he was the first airman in this country to get his flying certificate) expressed his great doubts about this Concorde project before the vital agreement had been signed. I intervened in that debate to express my doubts about it; but I followed somebody who spoke with as much authority as Lord Brabazon on the subject of aviation, and that was the late Lord Swinton. In that debate both Lord

467
Brabazon and Lord Swinton expressed their great doubts about this project. Lord Swinton said that he would not say that this project must not go ahead, but he explained his doubts and asked the Government for arguments on the other side which would persuade him to the contrary. I took the same line. I thought it was a bad project, and I ventured to say various things which I still think to-day; and I think that events in the interval have strengthened my opinion.
What I want to say to the House is that the anti-Concorde line is not something confined to a few cranks. It was argued with conviction by my friend the late Lord Brabazon of Tara and by my friend the late Lord Swinton. Neither of them can be described as wholly ignorant of the subject, or as lukewarm on aviation. I believe that their doubts were right; I believe that the doubts I then expressed are right; and I believe it would be quite wrong if the impression were given in this House that there was only one view possible on this matter of the development of the Concorde. The object of my intervening is that I wish that to be made clear. But I want to make equally clear that, of course, I offer no opposition whatever to the passage of this Bill.
LORD GORE-BOOTH: My Lords, before the noble Lord sits down may I make a comment? I certainly respect the motives of all those who are or have been against this project, and certainly accept that they are entirely sincere. What I was intending to say—and I thank the noble Lord for his kind comment on my speech—was that a certain point comes when it is no longer in the interests of our industry, or of those engaged in the project, to take up very strongly attitudes which obstruct our salesmen, but that the moment has come to do our best for it.
LORD CONESFORD: My Lords, I am much obliged to the noble Lord.
5.18 p.m.
EARL JELLICOE: My Lords, I think there has been agreement—and I am quite certain that I would carry my noble friend Lord Conesford with me here—on a number of matters, but on two matters
468
above all. One is a personal factor and one a technical factor. The personal factor is a general consent, I feel, and a general feeling of deep admiration for all those who are involved in this great project. I should like again to express my admiration. I have seen something of those involved in what I think my noble friend Lord Balfour called "the front end of the project", and I have seldom seen such dedication in human beings as that in those who are involved in the front end of this project. Secondly, I believe there is universal agreement in your Lordships' House, from which my noble friend Lord Conesford would not dissent—he was right to give expression to his sincerely held contrary view, but I think he would also agree with me here —that this is a remarkable technical achievement. I would agree with what has been said by, I think, the noble Lord, Lord Shackleton and the noble Lord, Lord Avebury: that Concorde at the present time is up to, or indeed in certain respects beyond, the expectations of the design which were originally held out.
LORD SHACKLETON: My Lords, I was remiss. I wonder whether I might interrupt and echo the noble Earl's remarks of congratulation for the team, and in particular for that remarkable character, Sir George Edwards.
EARL JELLICOE: I very much accept that, my Lords. We all admire one of the very great men of our aviation industry.
I would also agree with the point made by the noble Lord, Lord Kings Norton, speaking from a background of very wide experience of the aviation industry, that in this plane, as in almost all planes, there is a considerable degree of potential stretch, be it in matters such as the reduction of engine noise or in capacity or in range. Range may be crucial as the manufacturers continue their sales campaign which will go on over the years. It is crucial on certain routes, as the noble Lord knows—for example, Singapore, Sydney, Anchorage, Tokyo, and one can think of many others. It is my understanding here that these questions of stretch and development are under consideration by the manufacturers on both sides of the Channel but as yet they have not agreed on formulated proposals in these respects to put to the

469
two Governments concerned. But there is inevitably a price tag attached to all developments.
The noble Lord, Lord Gore-Booth, rather invited me to say something about some of the environmental factors—the agonising environmental factors, as I think they were termed by the noble Lord the Leader of the Opposition. Perhaps I should, briefly, as a layman, respond to that invitation: I say, "as a layman", and I mean it, but as a layman who has had some personal experience of this aircraft and has also made a point of getting as much understanding as a layman can of these environmental factors. They are indeed important, and I speak as one who is as deeply concerned, and has been over a rather long period of time, with environmental questions as are most Members of your Lordships' House; I think I may claim that.
Four areas are usually involved here, and the first is the area of smoke. I know only too well (and here again I speak from some personal experience) that the prototype Concordes, 002 for example, in which I flew to the Far East, are very smoky indeed in their engines. I also happen to know, however, that the engines of the production aircraft will be virtually smoke-free and as good as the best—and this is putting it mildly—of any of the large, subsonic civil aircraft either flying at the present time or to fly. All this has been confirmed by the flights of the first pre-production aircraft based at Toulouse. Its performance hitherto has confirmed in practice what I think most of us knew to be the case in theory.
So far as supersonic overflight is concerned, this is essentially a matter for the individual Governments to decide on the basis of their own situation, their own geography and the benefits they feel they stand to gain from supersonic travel. Here, speaking personally, I would say that I have always held it to be inconceivable that there would be any question of Concorde's operating over any substantial centres of population. However, we all know that some two-thirds of the world's surface is covered by sea and that many of the most profitable air routes lie over the oceans. The fact that some 400 hours of supersonic flying have taken place over busy sea lanes without causing any com-
470
plaint confirms, I believe, that no problems will arise certainly in the maritime environment. When prototype 002 went out to Australia last summer, with the agreement of the Australian authorities it flew supersonic over a large chunk of Australia, and, rightly, elaborate tests were laid on by the Australian authorities. But to me the clinching test was the answer given by an outspoken female of one of those small hamlets over which we flew. The lady in question was eight months pregnant, and she was quoted on the Australian wireless as saying, in the inimitable Australian way, "I don't know what all the fuss was about. Concorde flew over me and my baby, and the little devil didn't even give a kick!"
Then there have been fears expressed that Concorde's operation might reduce the ozone content of the upper atmosphere and even put life at risk on this planet. Again, all this has been carefully examined and considered by our Meteoro- logical Office; and I think, it is generally considered that in meteorology we are ahead or abreast of the best in the world. Our studies have made it clear that the effects of operating even a large number of Concorde aircraft would not lead to any harmful effects. Again, I know from personal knowledge how carefully all this has been examined and monitored.
Finally, there is the question of engine noise, the fourth of these environmental factors. I should like once again to make it clear that the Government fully share the general concern about aircraft noise and the need to reduce it to the lowest possible level. We must recognise that the special requirements of a supersonic aircraft necessarily impose constraints upon manufacturers; notably engines of high bypass ratio, such as the Rolls-Royce RB 211, and those used in other recent wide-bodied aircraft are potentially very quiet, but they could not be used in an aircraft such as Concorde. But the technical attack upon Concorde's noise, both in landing and in take-off, is being strenuously pursued, and I can confirm what the noble Lord, Lord Kings Norton, and what my noble friend Lord Kinnoull have said: that there is no reason to believe that when Concorde comes into operation it will be any noisier than existing subsonic jets. Perhaps in this connection I should mention that when my right honourable friend the Secretary

471
of State for Trade and Industry and my right honourable friend the Minister for Aerospace were in Washington recently they had long discussions with the United States Administration at the highest level, and it was confirmed to them in this context that the United States Administration had no intention of placing obstacles in the way of Concorde so far as operation into and out of the United States was concerned.
LORD AVEBURY: My Lords, is it not possible that the Federal authorities would place no obstacles in our way but individual airport authorities, particularly in New York, might decide not to allow Concorde to land? I know it has never arisen, because we have not asked for permission, but is not this a theoretical danger?
EARL JELLICOE: My Lords, that is a theoretical possibility, yes. But I think the attitude of the United States Administration is very important in this respect and it has been clearly expressed.
May I turn from the environmental factors, which I have looked into rather carefully, to the commercial and financial aspects of this subject—and I must accelerate, like Concorde, as otherwise I shall be detaining your Lordships too long. I should like first of all to say that there was possibly a slight misunderstanding between me and the noble Lord, Lord Avebury. I would be the first to concede the enormous growth potential of the mass air travel market, and that that market will, broadly speaking, be catered for in the existing or the new generation of wide-bodied subsonic aircraft—I thought I had said that, and think I have. But, by the same token, I am utterly convinced there is a very good market indeed in the higher bracket, as it were, for the type of executive travel which we have been speaking about in fast supersonic aircraft of the Concorde type. That is, for the reasons which have been given, among them the extraordinary cut in travelling time and all that that means, graphically illustrated by the noble Lord, Lord Shackleton. And I absolutely agree here with what the noble Lord, Lord Kings Norton, said, that sometimes here we are too mesmerised by the North Atlantic route—very important, three hours or three hours plus as compared with seven—but there are the
472
South Atlantic route and all the wide reaches of the Pacific. This was very evident to me—and perhaps I am "banging on" too long about my personal experience—when flying from Singapore through the Philippines to Tokyo, seeing what Tokyo/London would be, and then Tokyo South. As I say, this became very evident to me, and I think we should keep our horizon rather wide here in thinking of the market opportunities of this aircraft. May I again confirm what the noble Lord, Lord Kings Norton, said so far as comfort is concerned. Concorde is certainly as comfortable as any other aircraft in which I have flown; and I can only say that I found air travel in Concorde as boring as air travel in any other aircraft, apart from the advantage of taking about half the time.
My Lords, so far as the routes are concerned, I can confirm to my noble friend Lord Kinnoull that the central operators are examining the route pattern but B.O.A.C., for example, are still formulating the best routes to meet the services on which they consider Concorde could be most profitably operated. Preliminary talks have, of course, been held with some of the interested Governments but I think it is too early yet to indicate what the precise routes will be. This is a very important aspect of the matter. It is certainly one which the Government have under very close attention indeed. My noble friend was right to touch on that.
So far as IATA fares are concerned—again a question asked of me by my noble friend—the fares to be charged by airlines operating Concorde will have to be discussed in the usual way within IATA and with other Governments, but with services not due to start until 1975 B.O.A.C. has yet to embark on these talks.
So far as options are concerned, the present position, which the noble Lord, Lord Avebury, asked me about, is that there are 30 minus options held and of course the 9 existing orders by B.O.A.C., 4 Air France, 3 Continental, 6 Eastern, 3 Braniff (who have, of course, a route pattern to South America which on the face of it looks extremely suitable for supersonic operation); Qantas 4, J.A.L. 3—and I think one should not be unduly impressed one way or the other by the newspaper reports on the J.A.L. position; Lufthansa 3, India 2, Middle East 2—and the noble Lord quite rightly drew

473
attention to the keen interest expressed by M.E.A.—and Iranair 1. In addition Iranair have signed a letter of intent to purchase two aircraft and the Chinese National Airline has signed a preliminary purchase agreement for three aircraft. I would only endorse in addition what the noble Lord, Lord Kings Norton, has said, that one should not be unduly impressed by the action of those airlines, including a number of very important ones, who have cancelled or not taken up their options. It is only natural that some should wait until the last possible moment, and perhaps some of the more experienced will wait until the last possible moment.
My Lords, turning to finance, I should like to repeat the precise position as I understand it. Not all the £150 million has been spent; £45 million has been spent, but something approaching £125 million has been committed. The noble Lord, Lord Avebury, asked me: if no orders, or no further orders, were placed, why should we need sums of the type envisaged in the Bill before your Lordships? First of all, I would not accept any suggestion that there will be no further orders; but I would say again, which is implicit in my earlier words, that manufacturing advanced aircraft efficiently necessarily depends on maintaining a steady flow of work and the commitments apparently incurred by the manufacturers will shortly exceed the limits. Consequently, not to approve an increase in the financial limits would have the effect of bringing production, even taking into account the aircraft for present customers and those who have expressed a firm intention, to a halt and any lower limit than the one proposed would inhibit the ability of our manufacturers to respond with their French partners to further orders as they are placed.
My Lords, it is quite clear to me that in the highly competitive ambiance of the aviation industry we could not expect to exploit the aircraft fully if key and critical sales had to be held up while Parliament went through the process of affirming an order. I would agree, of course, that this matter needs very careful watching, and this it will receive from the two Governments. The precise rate of production can only be decided, in view of the number of variables involved, in the light of circumstances as they
474
develop; but I hope that your Lordships will accept that it is our intention to keep a very close watch with our French partners and in conjunction with the manufacturers on this aspect of the matter.
I think we should be realistic so far as security on the loans is concerned, and we should also remember that the previous Administration accepted that the order of resources required to finance Concorde in advance of payment from customers was too great for British manufacturers to bear, and the present Bill accepts this premise which was spelt out clearly by the then Minister. But as I have said, arrangements have been negotiated with the manufacturers whereby they will share profits and losses with the Government and so provide them with the incentive to achieve the best out-turn on this investment. I think this is a fair position, my Lords, and I am sure it is a realistic position for the Government to have adopted. As for the single production line, which I think was a point which the noble Lord, Lord Avebury, put to me, there has been no proposal, as far as I know, for such a concentration of production. Clearly it will be looked at if one is received but I know of no such proposal at the present time.
My Lords, regarding the question of leasing arrangements raised by my noble friend Lord Kinnoull, I would only say that Concorde is being offered for sale with the normal credit support of export credit guarantee agencies both in this country and in France; but we do not exclude airlines wishing to purchase through leasing organisations if that is what they want and provided this does not increase the Government's liabilities. A number of such schemes are, I know, being prepared and it is for those concerned to advance their proposals to the airline and the manufacturers. This, again, is something which we have, and will keep, under very close review.
My Lords, I have spoken long enough, but I should like to say that I believe that this debate, despite the sturdy, robust opposition of my noble friend Lord Conesford, will give great encouragement to those who have confidence in this great project. Above all, it

475
will give great confidence and encouragement to those most closely involved, be it in the board room, in the pilot's seat or the shop floor, with the "sharp end" of this project.
In conclusion, my Lords, I would say that whatever we or others may decide to do, I think we should be wise to remember that already there are some 10 T.U.144s, the Soviet supersonic civil air transport, flying, or in advanced stages of production—a point that was hardly mentioned in this debate, but one I think worth bearing in mind. It is a point which bears on the question put to me by the noble Lord, Lord Avebury, about over-flying the great reaches of the Soviet Union. Undoubtedly, the United States has the capacity to enter this field and is at present pursuing research in a not inexpensive form towards the American S.S.T. Anyone advocating that we, having set our hands to this plough, should, at the moment when we are ready to drive a furrow, abandon it, must, I think, ponder the advisability of Britain, France and Western Europe opting out of a dimension of human transportation which I believe could well be crucial for the next 50 or, indeed, 100 years. I believe those who oppose this project should ponder that consideration.
On Question, Bill read 2a; Committee negatived.

PROTECTION OF AIRCRAFT BILL [H.L.]
5.42 p.m.
LORD DRUMALBYN: My Lords, I beg to move that this Bill be read a third time.
Moved, That the Bill be now read 3a.—(Lord Drumalbyn.)
On Question, Bill read 3a.
Clause 9 [Power to impose restrictions in relation to aircraft]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 1:
Page 9, line 14, at end insert—
("( ) In giving any direction under subsection (2) of this section the Secretary of State shall allow, and shall specify in the direction, such period as appears to him to be reasonably required for carrying out the modifications or alterations or installing the additional appara-
476
tus or equipment in question; and the direction shall not take effect before the end of the period so specified.")
The noble Lord said: My Lords, at the Report stage I indicated that the Government accepted the idea contained in an Amendment, moved by my noble friend Lord Trefgarne, to allow a period, which he suggested might be 90 days, for compliance with any direction relating to the modification of aircraft. The Amendment which I am now moving seeks to give effect to my noble friend's point. It does not stipulate a set period for compliance, in order to permit a degree of flexibility which we believe to be necessary, not least in the interest of the airline operators. As noble Lords will recognise, a fixed period for compliance might be too long in some cases and not long enough in others. We believe that the period should be determined in the light of the circumstances of a particular case. I hope that this Amendment, together with the existing provisions for consultation, provide a sound basis on which to deal with any modification to aircraft, and I beg to move.
LORD TREFGARNE: My Lords, I am greatly obliged to the noble Lord, Lord Drumalbyn, for moving this Amendment which substantially meets the point I made, and I hope that it will receive your Lordships' approval.
On Question, Amendment agreed to.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 2:
After Clause 13, insert the following new clause:
Special provisions as to certain directions under s. 11
".—(1) This section applies to any direction given under section 11 of this Act which—

(a) requires a person to take measures consisting of or including the construction, execution, alteration, demolition or removal of a building or other works, and

(b) does not contain a statement that the measures are urgently required and that accordingly the direction is to take effect immediately.

(2) At any time before the end of the period of thirty days beginning with the date on which a direction to which this section applies is given, the person to whom the direction is given may serve on the Secretary of State a notice in writing objecting to the direction, on the grounds that the measures specified in the direction, in so far as they relate to the construction, execution, alteration,

477
demolition or removal of a building or other works,—

(a) are unnecessary and should be dispensed with, or

(b) are excessively onerous or inconvenient and should be modified in a manner specified in the notice.

(3) Where the person to whom such a direction is given serves a notice under subsection (2) of this section objecting to the direction, the Secretary of State shall consider the grounds of the objection and shall serve on him a notice in writing either—

(a) confirming the direction as originally given, or

(b) confirming it subject to one or more modifications specified in the notice under this subsection, or

(c) withdrawing the direction; and the direction shall not take effect until it has been confirmed (with or without modifications) by a notice served under this subsection."

The noble Lord said: My Lords, the purpose of this Amendment is to provide that unless the Secretary of State specifies that a direction concerning the construction, execution, alteration, demolition or removal of a building or other works should take effect immediately, 30 days will be allowed for representations. Until the Secretary of State has reached his decision on the representations no action will be taken on the direction in question. The Amendment gives effect to an Amendment, again proposed by my noble friend Lord Trefgarne, and on Report I said I would be prepared to consider it. This Amendment is in the form of a new clause and I think it reflects the views expressed on this point by my noble friend. In effect, subsection (1) confines the new clause to directions which relate to buildings and works which are not expressly stated to be urgent. In the case of such directions, under subsection (2) 30 days are allowed for representations to be made to the Secretary of State about the need for the direction or the form it takes. Subsection (3) lays down the way the Secretary of State is to respond to any representations and ensures that the direction shall not take effect until it has been confirmed. I hope that this meets the point made by my noble friend. We have tried to meet it, and I beg to move the Amendment.
LORD TREFGARNE: My Lords, I seem to recall that the noble and learned Lord, Lord Stow Hill, had something to say about these matters when we dis-
478
cussed them at the last stage of the Bill. So far as my point is concerned, the Government Amendment more than meets the requirements, and I hope that it will meet with your Lordships' approval.
LORD BESWICK: My Lords, I think we ought to say that although it meets the requirements of the noble Lord, Lord Trefgarne, it does not go so far as my noble and learned friend Lord Stow Hill and I wished to go. An appeal to the Secretary of State against a direction by the Secretary of State is scarcely going to an independent authority. But I realise that the noble Lord has gone apparently as far as he can to meet the point that was raised, and a quarter of a loaf is probably better than no bread.
LORD STOW HILL: My Lords, I do not wish to add anything, except to thank the noble Lord, Lord Drumalbyn, for his consideration of the arguments which I ventured to advance. I am grateful to him.
LORD DRUMALBYN: My Lords, I considered carefully what was said by the noble and learned Lord, Lord Stow Hill, who was good enough to put his points to me after the last debate we had. We have gone as far as we can, because we feel that the Secretary of State has to keep control of these directions.
On Question, Amendment agreed to.
Clause 21 [Reimbursement of expenses incurred for purposes to which Part II applies]:
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 3:
Page 19, line 33, at end insert—
("(3) The Secretary of State may with the approval of the Treasury and out of monies provided by Parliament reimburse costs incurred in repairing or replacing cargo damaged or destroyed by persons carrying out a search in accordance with a directive under this Act:
Provided that no costs so incurred shall be reimbursed where the search reveals an article or substance prohibited under this Act.")
The noble Lord said: My Lords, this is in the nature of a probing Amendment and arises out of some remarks which I made at the last stage of the Bill relating to the position of third parties who might not be either operators or airfield owners and who suffer damage

479
when a search of their property is ordered; in particular, a cargo that might be on board an aircraft or about to be loaded on to it. I had in mind, for example, such a case as once occurred to me when some tanks of liquid nitrogen formed the cargo. Had they been searched it would have released all the liquid nitrogen and thus destroyed the cargo completely. There is also the possibility, and this frequently happens, that the cargo may consist of medical supplies, in particular sterile wound dressings that have to be flown at short notice in large quantities to a disaster area. If these dressings are opened and exposed to the atmosphere, they become useless. I wonder whether my noble friend can give me any assurance on this point or even—dare I mention it!—accept my Amendment.
THE EARL OF SELKIRK: My Lords, I mentioned this matter in general terms during the discussions on the previous stage of the Bill. I think that the compensation is low, and if the noble Lord could extend it, even to the extent referred to in the Amendment, it would be an improvement; but I would go even further.
LORD DRUMALBYN: My Lords, I undertook on Report stage to consider the question of compensation to third parties affected by directions to the extent that compensation is not already available under Clause 20. As I acknowledged at the time, and I think the House recognised, there are a number of instances where some form of compensation might seem to be appropriate, to the extent that they are not insurable risks or covered by existing insurance; but equally there are others where it would not seem reasonable to compensate a loss. In the time available, I have endeavoured to have inquiries made concerning how far this kind of thing would be covered by insurance, and I am informed, in what might be called an off-the-cuff answer—because, naturally, it is not possible for insurers to consider a proposal unless they have all the details of the proposal—that in most circumstances claims for damage would be met. An exception would occur if the policy contained an exclusion clause due to war activities, and it would then be necessary to consider
480
whether the security situation arose in pursuance of such activities.
I recognise `that my noble friend has sought to reflect this problem in his Amendment by confining it to the damage and destruction of cargo in the course of a search, and only where a firearm, explosive or some other dangerous article has not been discovered. I am afraid, however, that even though his provision is not mandatory, it involves a substantial extension of the obligation as to compensation. I agree with my noble friend Lord Selkirk that, even so, my noble friend Lord Trefgarne has confined his Amendment to cargo, and it may well be that cases might arise in other areas where similar arguments would apply.
It is the deserving cases, whether related to cargo or not, with which I believe we are all concerned, and while I cannot accept the Amendment I can give my noble friend an assurance that the Government have noted the feelings on this point. We shall be prepared to receive on an ad hoc basis and without formal commitment, any claims the noble Lord mentioned in the Report stage and to consider some form of ex gratia payment in appropriate cases. I should add that one would expect normal prudence to play its part in this kind of case and for people to insure in the normal way. I hope that with this assurance my noble friend will be prepared to withdraw his Amendment.
LORD BESWICK: My Lords, I wonder whether the noble Lord would see to it that the matter is considered a little further before the Bill goes to another place. It seems a little invidious to say that there shall be compensation in the case of fixed assets—and there is provision there—and then draw the line so far as goods, cargo and assets which happen to be in the aircraft are concerned. From time to time when we have put forward suggestions for improvement of the Bill the noble Lord has rested his case on the fact that he hopes these powers will not be used very often: and certainly I cannot imagine that there will be many cases where tanks of liquid nitrogen will be exposed to the atmosphere. Nevertheless, there may be cases. There may be cases where luggage of one kind or another is ripped open by order of the authorities in order to see whether

481
there are any unauthorised weapons or other articles there. In such cases, I should have thought that one ought not to have to rely upon private insurance; in such cases there ought to be special provision for compensation. In that case, therefore, I wonder whether the noble Lord would undertake—although he has gone some way, and I am sure the spirit in which he has spoken will be appreciated—to see whether something more could be done.
LORD DRUMALBYN: My Lords, I think the difficulty here is to distinguish in a Bill between the deserving cases—and the noble Lord used a similar word —and those cases where, with greater prudence, the risk could have been covered. This is difficult, and I think it is not unreasonable for the Government to reserve to themselves the right to have a look at cases to see whether a payment should be made ex gratia in particular circumstances or not. If we tried to devise particular provisions here we might well find that the Government were not able to go so far as they could if their hands were left free to make an ex gratia payment. I do not say that this will be so in every case but it is a consideration. But, as I say, we have not really had time between the last stage and this one to look fully into this point. I quite accept what the noble Lord, Lord Beswick, says, that this is something which should be looked into further. However, that will not be before the Bill parts from this House—we cannot do that except in the course of the passage of the Bill in another place.
LORD TREFGARNE: My Lords, when I moved the Amendment I said that it was in the nature of a probing Amendment, and for that reason it would not be appropriate for me to press it. I am obliged to my noble friend for the assurance he has given. When he or his right honourable friends consider this matter further, would they please bear in mind that insurance cover for this sort of damage is difficult to obtain and very expensive? It would not be imprudent of carriers not to have such insurance. It is not part of the normal cover provided: indeed, in most of the operations with which I have been concerned it certainly was not there other than in exceptional
482
cases. Having said that, I beg leave to with the Amendment.
Amendment, by leave, withdrawn.
Clause 24 [Application to Channel Islands, Isle of Man and other countries]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 4:
Page 22, line 29, after ("extending") insert ("any of").
The noble Lord said: My Lords, this is in the nature of a drafting Amendment. to remove a possible ambiguity in subsection (2) of Clause 24 in connection with the extension of the Act to the Channel Islands, the Isle of Man and other countries. What we want to be able to do is to extend all or part of the Act. As drafted, the clause might be interpreted as providing only for the extension of all the provisions or none, and thus not providing the flexibility, for example, to confine the extension to Part I, with or without any other provisions in the Bill. The Amendment is intended to remove any doubt about this. I beg to move.
On Question, Amendment agreed to.
Clause 25 [Short title and commencement]:
5.58 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 5:
Page 22, line 41, at end insert:
("(3) The following sections of this Act shall cease to have effect three years after the date of commencement—

(a) Sections 7 to 18,

(b) Sections 19 to 21, and

(c) The Schedule.").

The noble Lord said: My Lords, I am in some difficulty with this Amendment. because unfortunately it has been wrongly printed. I think it was probably my fault. As a result of the somewhat disjointed printing arrangements at present in force, I did not get my copy of the Amendment as soon as I should; the post is disrupted because of the trains, and that does not help either. The Amendment that I should prefer to be moving would be to include Clause 19 of the Bill, and to exclude Clauses 7 to 18, Clauses 20 and 21 and the Schedule. I am advised that I am unable to move a manuscript Amendment to my Amendment, so I will have merely to move the

483
Amendment, listen to my noble friend's objections—which I am sure there will be —and then perhaps withdraw it.
However, the purpose of this Amendment would have been to restrict the duration of this Bill when it becomes an Act, or certainly what is essentially Part II of the Bill, to a period of three years. Your Lordships will know that Part II was not originally part of the legislation that came before us. When we gave this Bill a Second Reading, it was really only Part I and significant parts of Part III. Part II was introduced only at the Committee stage. It gives to the Secretary of State very wide and substantial powers which, I am told, are unprecedented in our legislative history. I am of the opinion that, despite the best endeavours of all Members of your Lordships' House (and not least those of the noble Lord, Lord Drumalbyn), there are still a number of defects in this Bill and it would be wrong to put it on the Statute Book for ever and a day. I have the feeling that honourable and right honourable gentlemen in another place will take the same view, and it may well be that they will impose the same sort of restriction as I am now seeking to impose. For the moment, I will simply move this Amendment and then, having listened to what my noble friend and other noble Lords have to say, I shall probably ask leave to withdraw it.
LORD DRUMALBYN: My Lords, I am grateful to my noble friend for pointing out what the Amendment was intended to say. I am bound to tell him that even if it were amended it would still not be quite right in form—I am sure he will not mind my saying this to him. For example, parts of Clause 23 are relevant only to Part II and part of Clause 17 was included, as my noble friend will remember, as Clause 6 of the original Bill. I am afraid I cannot recommend the House to accept this Amendment because of the reason for which the Government are seeking these powers; in other words, because of the escalation in the form and intensity of violence against civil aviation in recent times, and particularly within the last 12 months. Powers are being sought solely in the interests of airlines, airport authorities, passengers and air crews and for the limited purposes set out in Clause 7 of the Bill.
484
It surely is impossible to place a time limit, whether of three years or any other period, on the incidence of violence. The extent of the threat of hijacking and other acts of violence against civil aviation will no doubt vary from time to time in the future but there is, much to our regret, no sign of a diminution in the threat, nor is there any sound reason to expect, while there is as much political unrest in the world as there is at the present time, that such violence will be eradicated in three years. My noble friend Lord Balfour at an earlier stage sought to make the Act renewable after three years for a year at a time. There was an objection to that, and my noble friend has sought to overcome it by trying to bring to an end only Part H and related clauses—I think this is the purpose—after three years.
LORD TREFGARNE: My Lords, if my noble friend will allow me, he will recollect that at a previous stage one of the objections was that we could not put a definite period to our obligations under the Montreal Convention.
LORD DRUMALBYN: Yes, my Lords; I was being explanatory and not attempting to criticise my noble friend. I was saying that at a previous stage my noble friend Lord Balfour had sought to make the whole Bill expire after three years unless it was renewed, and then to make it renewable from year to year. My noble friend has taken the point that it would not really be appropriate to treat Part I, at any rate, in this way. What he is proposing is to bring the whole of Part II and the related clauses to an end without any power of renewal after three years. But against that background it surely would be inappropriate to set any limit on the duration of the Bill, whether related to Part II or to Part I. We are anxious to maintain a voluntary system so far as possible. As I have said on other occasions, the powers will be used sparingly and there will be appropriate consultation, as there is now. We have introduced further checks today, and I hope later to refer to another one which I hope will be introduced in another place.
The degree to which the powers are used over the years will depend upon the form and extent of the threat. If the threat diminishes, as we all hope it will, the powers of course will not be used. But it would be unrealistic to legislate

485
for the end of terrorism, which is really what this Amendment seeks to do. We cannot possibly be sure that this kind of threat which we are trying to counter in Part II by making it as difficult as possible for people to gain access to aircraft would come to an end in three years. It would be entirely unrealistic to suggest that. It is for that reason only that we cannot accept the noble Lord's Amendment.
LORD BESWICK: My Lords, I should like to congratulate the noble Lord, Lord Trefgarne, on his ingenuity in drafting this Amendment as it would have been if it had not been misprinted! It is quite true, as he says, that a convincing argument was advanced by the noble Lord, Lord Drumalbyn, when we discussed earlier the time and the application of the Bill. The explanation was that it would enable us to ratify the Montreal Convention and that it would be wrong to give the Government of the day only a limited time in which to ratify this desirable Convention. However, as the Amendment cannot be pressed in any case, I have no doubt that if in another place it is thought desirable to put some sort of limitation on the Bill, the way suggested by the noble Lord, Lord Trefgarne, might commend itself to Members.
LORD TREFGARNE: My Lords, my noble friend said that we could put no limit on terrorism and that it would be wrong to legislate for an end to terrorism three years hence. The noble Lord suggested that that would be the effect of a correct version of my Amendment. I should like to say that nothing was further from my mind. I was concerned not with the terrorists but with the Ministers who might be wielding powers with a little more vigour than Parliament had either intended or thought desirable. The disabilities of my Amendment are such that I obviously cannot press it; but I hope that perhaps the noble Lord and his right honourable friends might consider this further before the Bill goes through another place and it might then be found possible to introduce some appropriate Amendment. The fact that the Bill is to be considered by another place is a saving grace, and for that reason I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: My Lords, I beg to move the Privilege Amendment.
Privilege Amendment moved—
Clause 25, page 22 line 41, at end insert—
("( ) Nothing in this Act shall impose any charge on the people or on the public funds, or vary the amount or incidence of or otherwise alter any such charge in any manner, or affect the assessment, levying, administration or application of any money raised by any such charge").—(Lord Drumalbyn.)
On Question, Privilege Amendment agreed to.
6.9 p.m.
LORD DRUMALBYN: My Lords, I beg to move that the Bill do now pass. I should like, if I may, to say a few words. I should like to thank noble Lords for their help and not least their patience, in the course of the exceptionally long time that this Bill has been before your Lordships' House.
In the first place, your Lordships all recognised the desirability of common action on the part of as many of the nations of the world as possible for the suppression of acts endangering the safety of civil aircraft in flight. The original Bill was designed to enact the provisions of the Montreal Convention creating and defining offences, establishing penalties for them and extending powers of extradition, so that we could ratify the Convention, which has now been ratified by the requisite number of nations who had originally signed the Convention. It is therefore now in operation. But before we reached the final stages of the Bill, the Government decided to ask Parliament for exceptional powers to prevent would-be offenders from gaining access to aircraft and to improve the security arrangements in an emergency or in anticipation of an emergency. We had come to think that, excellent as has been the voluntary co-operation we have been receiving from all concerned with aviation, the threat of terrorism against aviation was so grave that the public interest required us to have exceptional powers to deal with it.
My Lords, the Government fully recognise that these powers are exceptional and should be confined solely to the purpose of protecting against acts of violence, aerodromes, aircraft and persons and property thereon. We have sought powers that are adequate but no more than are

487
needed for that purpose. I can assure the noble Lord, Lord Stow Hill, that, following our discussions, we have looked again at the Bill, but we are still of that opinion. We have willingly conceded such safeguards for the public and for operators of aircraft and managers of aerodromes as we felt were right, and would not impair the exercise of the special powers if and when they are required.
I would just say—and this relates to the Amendment we have recently been dealing with—that nobody can predict how long the present wave of terrorist activities will continue. There may be a lull and they may start again. We want to be ready at any time to deal with them within the restricted but peculiarly vulnerable field of flying. It is for this reason that we have not felt able to accept suggestions that the powers in Part II should be conferred for a limited time only, or should be subject to renewal from time to time. It is of the utmost importance for the safety of passengers and crew and, indeed, for the future of aviation, that there should be as much protection as possible against such acts of violence against aviation.
There is one Amendment, or rather series of Amendments, which it has not been possible to draft before the Bill leaves this House. I refer to the Amendment proposed by my noble friend Lord Trefgarne to extend the Bill to cover air navigation installations outside the confines of aerodromes. I said at the time that we should need to make certain that my noble friend's Amendment was in due form, and that the Government would put down an Amendment at the next stage. I rather feared that implementation of this proposal required a large number of consequential Amendments to other clauses beyond the relatively straightforward Amendment of Clause 7. It was not possible to complete the work involved in time to submit the necessary Amendments for your Lordships' consideration to-day. However, the House will wish to be assured that the Amendments in question will be introduced when the Bill reaches another place. I can give that assurance.
I should like to thank my noble friend for proposing his Amendment, which received wide support throughout the
488
House, and which we were pleased to accept. I do not think that I need to add anything further to what I have said, unless any noble Lord would wish me to try to answer any questions that may be put, and I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.— (Lord Drumalbyn.)
LORD BESWICK: My Lords, it is not just an ordinary courtesy when I say that I should like to thank the noble Lord for his patience and tolerance in piloting this Bill through this House. His patience and courtesy were only equalled by his stamina. It would be wrong to think that by passing this Bill we have solved the problem of air piracy; we have done nothing of the kind. Much more important than this Bill would be an agreement between nations which would ensure that no air pirate when he lands—as ultimately he must—would be given asylum by any State on this earth. If we can make some progress on that line we shall be tackling the problem and I hope that the legal committee and legal sub-committee of ICAO are still attempting to get some agreement on this point. Meanwhile, we have done what we can. The noble Lord has helped to arm his Government with very formidable powers indeed, and I hope that we shall benefit from them.
LORD TREFGARNE: My Lords, it would be ungracious of me, having achieved a certain amount of agreement from my noble friend Lord Drumalbyn to amend the Bill, not to acknowledge the assistance that he has given to me and others to make these improvements. However, I am bound to say that I am concerned that we have granted too great a power to the Minister. I hope this will be the principal matter which will seize the other place when they come to consider the Bill. Having said that, let us get this Bill to the other place as soon as possible so that they can begin their deliberations.
6.15 p.m.
LORD JANNER: My Lords, I should first like to congratulate the Government on the step which has been taken in respect of this Bill, although all of us appreciate that that cannot possibly solve the problem which faces the world as a whole at the present time in dealing with the situation that has arisen. This Bill,

489
as a Bill, cannot be regarded as being in the nature of anything other than an extremely important Bill because it deals with an extremely important subject, a subject which is facing the rest of the world as well as ourselves. Unless additional forces are sought to cope with this situation I do not think that we shall find anything like a solution to the problem which confronts us.
Terrorism, which this Bill is intended in some way to cope with, seems to be gripping the unlawful forces of the world to such an extent that they are practically blackmailing the civilised world by their actions. I hope that instead of the Bill having to be utilised for any particular length of time, the Minister will seek to do what he can regarding the other aspects of the situation that require to be attended to at present.
We do not fully realise what lies behind the Bill being discussed, and which we are asking to be passed into law. Enormous sums of money would be involved in order to cope with a scourge that has come upon the earth. Previously I called it a cancer. I think that is the right word to use. Of course it is important that we should keep all the steps that are available to us in order to deal with it. I appreciate that the Minister cannot deal with the problem in his own Department, and that other Departments have to deal with it.
But what are we faced with? We are faced with the training of people who indulge in this terrible, horrifying practice of endangering the lives of civilians, irrespective of their nationality, or where they stand in the whole scene. They are being trained in dens which, unimaginably are allowed to exist in countries which harbour them, and in countries which pay them and, as was shown recently in the Khartoum event, not only help the criminals themselves to come to the scene of the crime, but even make arrangements so that the Al Fatah leader from Libya should escape, leaving the others to carry out the nefarious work.
What we are trying to do here is to deal with the situation in our own airports and our own air navigation, but if the training is committed, as it is being committed, and we know where it is being committed and we know who is paying for it, I think that the civilized
490
world—and it is the civilised world I am speaking about now—should come together and try to see whether this kind of Bill (which will now become an Act) cannot be strengthened by other action which is essential. The position as it stands at present, and which is indicated by this Bill, shows that precautions have to be taken of a very exceptional nature to deal with a situation that should never be allowed to arise.
I know there are comments at times—I have spoken about them before in your Lordships' House—about people (and I speak quite plainly), for example, Israelis, going to the nests themselves and trying to flush out these people. We are told that it is a terrible thing to do. Well, is it? Is it not essential from the point of view of the whole world that where-ever these criminals are being trained and however they are being trained they should be flushed out by the nations who are at present protecting them? If that were done then indeed the world as a whole would be in a position to avoid the necessity for a Bill of this nature.
It is late in the evening and one could speak for longer, but I think everyone present knows that it is essential that this Bill should become an Act as speedily as possible. Whatever views we may have about any details of the Bill, its main object and purpose is sufficiently important for us to see that it passes on to the Statute Book speedily. I hope that the Minister will have his hand strengthened in respect of the steps which have to be taken when this Bill passes through, by getting international agreement, by seeing to it that as what affects us so clearly affects other nations they themselves should come together to stop this shocking state of affairs, which includes piracy of the vilest nature. Perhaps we ought to look at it in that light when we come to the closing stages of the Bill in your Lordships' House. It is not a simple matter. It is not a matter which deals with one particular section of people in our country alone; it is a matter which is of worldwide importance, and unless and until we can get the civilised nations to take steps together the problem will not be solved. I conclude by thanking the Minister for the manner in which he has conducted the debates and congratulating him and his colleagues on having at least taken this step. I

491
hope lie will see that in the international field we shall take a prominent part in urging other nations, as well as ourselves, to deal effectively with the terrible situation that faces us.
6.24 p.m.
LORD STOW HILL: My Lords, I only rise to thank the noble Lord, Lord Drumalbyn, most sincerely. He always has the most heavy burdens thrust on his shoulders and his approach to his task is so assiduous and thorough that we are perhaps apt to take it for granted. He has been most courteous and I am personally grateful to him for the obvious trouble he has taken to consider points of view that some of us here to-night—and I in particular—have put to him in relation to this Bill. It is obviously an exceptional Bill and I am sure we are grateful to him for the trouble that he has taken in regard to it.
THE EARL OF SELKIRK: My Lords, as the noble Lord, Lord Stow Hill, has said, it is always a great advantage when the noble Lord, Lord Drumalbyn, takes a Bill, because he presents it with great clarity. He has dealt with the utmost attention and care with the points which have been raised. There were moments, perhaps, when his high abilities were a little stretched, but we have been well satisfied with the trouble he has taken in handling the matters that have been raised from time to time. We have had the advantage of starting the Bill in this House and I believe we can fairly claim to have given it a close examination. I shall be interested to see how it progresses afterwards. I should like to ask one rhetorical question: if these powers are really necessary for aerodromes, are they not perhaps necessary elsewhere, particularly in reference to the use of what are called "explosives", whether in the form of bombs or hand grenades? That is a matter which we might consider later on.
6.28 p.m.
LORD DRUMALBYN: My Lords, if, by leave of the House, I may just answer the points that have been raised, I should like to say that I am most grateful to noble Lords for what they have said. Certainly I must confess that they have stretched me occasionally in the course
492
of this Bill, and I shall undertake to see that the question raised by my noble friend, Lord Selkirk, is considered. I should like to thank the noble Lord, Lord Beswick, particularly for what he said. He is not in his place at the moment and I understand the reason.
I would just say to the noble Lord, Lord Janner, that we recognise very well that this is just one more stage in the attempt to prevent the effects of terrorism. To get rid of terrorism as a whole is a very difficult matter, but in this Bill we are doing all we can to ensure that no aircraft which leaves this country carries a terrorist or any destructive device on it, and for that matter also that no United Kingdom registered aircraft anywhere in the world will carry such a device or such a person. But the problem of nations getting together in order to see that no country flouts the will of the nations taken as a whole, is another matter which the noble Lord knows is going to be further considered in August of this year, when we hope it will be possible to take another long step towards the general objective of ridding the world of what he calls the "scourge" or the "cancer" of terrorism. As he will recall, we have ourselves put forward a recommendation for the amendment of the Chicago Convention, and we shall just have to see how the two other proposals which have been put forward are dealt with at the next stage. I am most grateful to noble Lords for enabling us to take this further step now, which should go a long way at any rate towards helping to provide safety for those who travel by air and those who frequent aerodromes.
LORD JANNER: My Lords, before the noble Lord sits down, may I ask him a further question? Will he be good enough to see that people who belong to the various movements that are set up for the purpose of training and helping the terrorists who are engaged in hijacking as well as in other acts of terrorism—movements like Al Fatah, the "Black September" Group and the Palestine Liberation Movement, even if they have not got offices in this country—if they come to this country, or attempt to come here, will not be allowed to land and add to the big burden we have already?
LORD DRUMALBYN: My Lords, as the noble Lord is well aware, he has put this point in Questions in the House and he has received the best Answers that we can give. He knows that this is rather outside the sphere with which I normally deal. But I have heard those Answers and I think he ought to be satisfied with them.
On Question, Bill passed, and sent to the Commons.

WORKS OF ART: EXPORT CONTROL
6.31 p.m.
LORD STRABOLGI LORD STRABOLGI rose to ask Her Majesty's Government whether they are satisfied with the present system of export control for works of art. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. It is twenty years since the first Report of the Waverley Committee and this seems a good time, I suggest, to review the present system of export control and to ask the Government whether they are satisfied with it. The Nineteenth Report of the Reviewing Committee was published in January and that, I was glad to see, included a warm tribute to the noble Lord, Lord Cottesloe, who has just retired as Chairman after 18 years. As the Report says:
"Those concerned with safe-guarding the art treasures of the nation owe him a great debt of gratitude."
That I should like to endorse. I am glad that the chairmanship has passed into the able hands of the noble Earl, Lord Perth. He is well qualified for the task and we wish him well.
It is generally agreed that the review system has worked satisfactorily on the whole and the Waverley criteria, which cannot be bettered, still remain the most sensible guide when deciding whether or not to grant an export licence. The great weakness in the system, though, seems to be that the national institution has often not got the money to back up the Waverley decision. Special grants from the Treasury are also dependent on other factors such as the prevailing political and economic climate. I am glad to say that there have been some concessions over the years. I welcome the very useful concessions in last year's Finance Act for example, the granting of unlimited exemption from estate duty on financial
494
bequests to museums and galleries as well as to qualifying bodies such as the National Art Collections Fund. I also welcome the exemption up to £50,000 on bequests to other charities, many of which help the arts. These concessions have brought financial bequests into line with bequests of works of art which were exempt so that we shall not have any more cases like that over the bequest by Sir Robert Hart to the National Gallery of half a million pounds when most of the money was clawed back by the Treasury in estate duty.
In the case of exempted pictures sold to galleries by executors, as opposed to bequests, there is nothing that I can find in the Finance Acts to prevent 100 per cent. remission. I understand that the present Treasury practice is to allow a 25 per cent. remission. It would, I suggest, provide a great inducement to owners to offer their pictures to galleries in this country if the remission percentage could be raised, say, to 50 per cent. for a start. I am glad that the arrangements for exemption in lieu of duty have been broadened to include works of art suitable for collections other than national collections. It is surely right that the regional museums should have their share and that the nation's art should be more widely spread, provided always that the wishes of testators are respected.
But there is one anomaly that needs to be put right. In the case of national collections, if the exempt price of the work of art is below one-quarter of the annual purchasing grant of the gallery concerned, then that sum must be refunded by the gallery to the Treasury. That will be particularly onerous in the case of collections comprising items which are individually worth less than 25 per cent. of the grant. A national museum, for example, would have to pay for the whole collection. The National Gallery would not be able to accept in lieu of duty any item worth less than £120,000, which is a quarter of the Gallery's purchase grant. I hope that the Government will consider this and allow a collection to be accepted on its total value rather than on that of individual items, and thus make it easier for it to be retained in this country.
My Lords, all these arrangements are very complicated and the Reviewing Committee urge, quite rightly, in their last

495
Report, that a simple statement should be prepared. I understand that this statement is in preparation and I should like to ask when it is likely to be published as many executors are unaware of these fiscal advantages. May I say how delighted I am that the fund to assist local collections, which is administered by the Victoria and Albert Museum, has been increased from £150,000 to £400,000. I am also glad to see that the financial level for exports not requiring a licence has been raised from £2,000 to £4,000. But I submit that works in one category should be excepted, irrespective of value, in the way that archaeological material is excepted. These are paintings, mainly portraits of eminent men and women, where the historical importance is much greater than the monetary value. I believe that the financial level was raised without full consultation with the Standing Commission on Museums and Galleries. It is causing concern, particularly to the National Portrait Galleries in London and Edinburgh. I hope that the Minister will reconsider this matter, otherwise many works, important from an historical point of view, may be sent abroad without coming to the notice particularly of these galleries. The Reviewing Committee draw attention to this special category in their Report and suggest—and I thought that this was a very good suggestion—that historical portraits should be treated as documentary material.
Turning to value added tax, the original proposals to levy V.A.T. on the whole selling price of a second-hand work of art would have been particularly damaging to our art trade. I welcome, therefore, very much the concession which is to levy V.A.T. only on dealers' and auctioneers' margins and commissions and to zero-rate all exports and certain imports. These concessions, I believe, are owed in large part to the efforts of the noble Viscount, Lord Eccles, and I should like to say how much this is appreciated. They should enable Britain to maintain her position as the leading centre for the international art market, as this, of course, depends on a free flow of works of art both in and out of the country. However, the zero rating of export sales may give a slight advantage to the foreign collector and museum, since sales, even to museums, in this country are not to be
496
zero rated. I hope that the Government will reconsider this. I should like to ask particularly whether works of art sold to public galleries in this country, either direct or through supporting bodies like "Friends", can be zero rated in the same way as works of art sold to foreign museums. This proposal has the support, I believe, of the Standing Commission on Museums and Galleries.
I must also put in a strong plea for the living artist. I am shocked that home sales by an artist of his own work will have to bear the full V.A.T. and also that new work by living foreign artists will be liable for this tax on their importation. The effect will be to discourage collectors from bringing in contemporary works of art from abroad, and to treat works of art, which should know no frontiers, like consumer goods. This is philistine and short-sighted, and it will affect the quality and range of our private collections, and, of course, through them eventually the quality and range of our national collections. The £5,000 taxable limit will also bring into being two classes of artist, those who are taxable and those who are not. In many countries of Europe the Living artist is exempt, and so he should be here, when we claim to be a country that believes in the arts.
The Reviewing Committee pointed out in their report that there are a number of major works of art still in private hands which are just as important as Titian's Diana and Actaeon. The National Gallery has, of course, mortgaged a large part of its purchase grant for several years in order to acquire the Titian. It seems unlikely, therefore, that we should be able to prevent another picture of the same calibre from going abroad if it should come on the market in the near future. I should like to ask the Government whether they have any contingency plans for, say, the Michaelangelo Tondo, which is valued, I believe, at about £5 million, should the Royal Academy decide to sell this.
Following the sale of the Leonardo cartoon in 1962 by the Royal Academy, when this was retained in the country only by the most strenuous efforts—I think we owe a great debt to the noble Earl, Lord Crawford, for his great efforts over this; I am sorry he cannot be with us to-day —the Government set up a committee of inquiry into the sale of works of art by

497
public bodies, under the chairmanship of the noble Lord, Lord Cottesloe. The committee recommended, in their 1964 report, that the control system should be reinforced by a fund to finance special grants when necessary for important purchases, and also that the Government should announce that export licences would not be issued for works of art above a certain value in the possession of public or semi-public bodies if the committee advised that they are of national importance. Where export licences are refused, the committee recommended that the Government should usually be prepared to negotiate for the purchase. Since the Leonardo, we have had the sale by Dulwich of their Domenichino in 1971, a sale sanctioned, I am sorry to say, by the present Minister of Education; a very sad story that had a happy ending, as the picture is now owned by the National Gallery of Scotland, although it very nearly went abroad. I should like to ask the Government for their views on the Cottesloe recommendations, if I may so describe them, as these seem to me to be just as relevant to-day as when they were made nearly ten years ago.
The establishment of a special capital fund is also urged by the Reviewing Committee in their report, and they have urged this in many previous reports. It has also been recommended by the National Gallery Trustees. One advantage, of course, would be that it would be easier to come to a quick decision. But there might be Treasury difficulties over hypothecated finance, especially for a large amount. The Reviewing Committee suggested in their previous report that one way over the difficulty would be the provision of a more modest sum, analogous to the purchase grants available to the national collections, but non-cumulative, acting as a long-stop to ensure the retention of items of lesser value, which are often at risk—and many of these include, of course, paintings by British arists which are very much part of our heritage. It may be better, however, to give increased grants to galleries to enable them to plan ahead, and for the galleries to let the Government, the Reviewing Committee and the fine art trade know in advance what they are interested in.
As I have no right of reply, I should like to say at this stage that I look forward to the speeches of the Minister
498
and other noble Lords, and I hope that the Government will be able to let the House have their views on all these matters arising out of my Question.
6.47 p.m.
LORD COTTESLOE: My Lords, I think we must all be grateful to the noble Lord, Lord Strabolgi, for raising this matter in your Lordships' House. It is a subject in which there is widespread interest among the public with their increasing awareness of our heritage in this country, the great heritage both of nature and of art, and a subject which, while an occasional facet of it may perhaps arouse Party feeling, is in essence one that quite transcends Party politics.
I have been fortunate, as the noble Lord has said—and I cannot be too grateful for his kind references to myself—to have been for 18 years, until my noble friend Lord Perth succeeded me in that position last July, the chairman of the Minister's Advisory Council on the Export of Works of Art and also of the Reviewing Committee that considers particular cases of applications for export licences for works of art and antiques, where they concern objects to the export of which objection has been raised by expert advisers on grounds of their national importance. It has been for me an assignment of absorbing interest and occasional vexations, but with many delights—delights not only due to the variety and the beauty of the objects with which we have been concerned, but no less due to the ready help and co-operation and friendship, given almost without exception by owners and dealers and museum directors alike. I have been very fortunate.
As Lord Strabolgi has said, the present control was set up 20 years ago on the recommendation of a committee under the chairmanship of John Anderson, Lord Waverley, a committee of which my noble friend Lord Robbins was a member. The basic concepts on which it rests, as they were laid down by that committee, have stood the test of time remarkably well. They were, first, that export control by a system of licensing is best applied to a small number of objects of high importance, and becomes progressively less effective and more irksome the larger the number of objects it is sought to control; secondly—the

499
essential corollary—that the grants available to the national collections should be sufficient to enable them to acquire by negotiation, or in the market, all but the most important and valuable of their desiderata; and, thirdly, that in every case where export is prevented the owner must be assured of an offer to purchase at a fair price.
The Waverley Committee also laid down criteria to be applied to assess the national importance of any work of art referred to the Reviewing Committee after scrutiny by an expert adviser of an application for an export licence. Those criteria, too, have stood the test of time, though there can be no doubt in my view that the increasing ease of movement about the world—we have just been talking about the Concorde—is making the context in which a great work of art or of literature can be studied and appreciated of greater importance, and the location in which it rests of less importance. As a case in point, if there were to-day a further great discovery of Boswell manuscripts, than which few things are more improbable, the right place for them would undoubtedly be Yale where they could be studied in the context of the great mass of Boswelliana, rather than the British Museum. Considerations of the same sort may sometimes apply to particular works of art.
Such is the system and it has, on the whole, worked well, largely owing to the fact that the arrangements are designed, unlike those in some other European countries, to operate with the greatest practicable measure of fairness to the owners of works of art and to the dealers who handle them. This has been a major factor in enabling London to regain since the last war its outstanding pre-eminence as the centre of the fine art market of the world; and, no less, it has been this fairness that has secured the co-operation of the trade without which no control could hope to operate successfully. Nor, my Lords, must it be forgotten that this has the effect that, while the objects referred to the Reviewing Committee are relatively few—less than 200 in 20 years—and, commonly, are not of extreme importance and value, the very existence of the control has had the effect that many items of the highest importance are offered to and acquired by
500
the national collections without ever coming into the export market at all—such works as the Memling Triptych, the Powys van der Weyden, the echanting Gainsborough of Mr. and Mrs. Andrews sitting by their cornfield, the Holbein cartoon of Henry VIII, the Goya of the Duke of Wellington and, of course, that object of supreme beauty, the Leonardo cartoon.
For such acquisitions the increase in the grants available to the national collections in the last two decades, and special grants from the Government towards particular purchases, have been an essential factor as well as the arrangements, now to be more broadly based than hitherto, for acceptance of works of art by the Treasury in satisfaction of estate duty. The increase in purchase grants has, in particular, been outstanding and welcome, greatly exceeding the inflationary increase in values. The National Gallery purchase grant, for instance, which 20 years ago, when the control was instituted, was £7,000, is now £480,000; the Tate Gallery grant has risen from £2,000 to £265,000 and one can say that, in general, the second of the basic concepts on which the control rests is at the present time reasonably satisfied. I should like particularly to congratulate my noble friend the Paymaster General on having obtained this year, as the noble Lord, Lord Strabolgi has said, a great increase in the sum made available to the Victoria and Albert Museum for aid to purchases by local collections—an increase to £400,000. Last year, it was only £150,000 and I think I am right in saying that 20 years ago it did not exist at all.
So much for the system. It appears in the light of experience that it is soundly based and that, on the whole, it has worked reasonably smoothly and well, though there have been one or two minor breaches of the control, due I think more to ignorance than to malice. I know of only one important evasion in these 20 years, the export to California of the only known portrait of Dr. Harvey in his prime by a fraudulent declaration, for which a salutary fine was imposed by the court. Of course the export of the very unattractive, but important, early Rubens of Daniel in the Lions' Den, at one time in the collection of Charles I, to whom it was given by his ambassador at The

501
Hague, was made possible only by the ill-advised but unquestionably bona fide acceptance by a reputable owner, of an offer of £500 for a picture that was sold a year or so later to the National Gallery in Washington for a sum said to be in excess of £170,000. But no system can be infallible. What are the real weaknesses? In my view, they are at the two ends of the scale—the middle ground is reasonably satisfactory. On the one hand, the system is not all adequate to cope with pictures of an astronomical value, of which the Velasquez from Longford Castle, sold for £2,310,000 in 1970, may be taken as the architype, and it is of course, in fact, an abnormality. Nor, on the other hand, is it in the least adequate, as at present devised, to deal with the modern historical archives that are of such importance to scholars, and now often of high monetary value.
As the whole field of manuscripts, documents and archives is, I understand, to be discussed by your Lordships on a separate Motion after Easter, I shall not attempt to say anything about it this evening—a most difficult and intractable field it is, with the most bigoted members of the trade, on the one hand, saying that nothing should ever be controlled, and the most extreme scholars, on the other, saying that nothing should ever he allowed to leave the country. There are of course less extreme men of both kinds between the entrenched extremists, but we shall be talking of these matters after Easter. There are at the other end of the scale three things that seem to me to be essential before the control can he regarded as adequate for the safeguarding of important elements of our great heritage. The first is that the arrangements for acceptance of important works of art should be such as to attract owners, and particularly executors, to surrender them to the nation to enrich our museums and galleries, rather than put them into the international saleroom.
Here there has been a very significant change. Not only can I hope, with confidence, that my noble friend will be able to tell us that the arrangements for the surrender of important works of art in satisfaction of estate duty will be clearly set out and publicised for the benefit of executors and owners and their professional advisors—and it is very necessary that they should be widely
502
known and understood—but he is to be congratulated on having broadened their base, so that executors can now surrender suitable items not only from the particular estate on which duty is charged, but from outside it, and where they have been exempted can obtain 25 per cent. of the benefit of the exemption. And they can be accepted not only for the benefit of a few national collections, but for the enrichment of local public collections, too.
My Lords, that is splendid, but there seems to be a nasty fly in this particular ointment, to which Lord Strabolgi referred. It is that if an item surrendered was worth less than 25 per cent. of the total annual purchase grant of the collection concerned, the museum or gallery could not accept it in lieu of duty but would have to pay for it. That does not seem to me to make any sense. I think I can understand the reason behind it, but it still does not seem to me to make sense. I hope that perhaps my noble friend may be able to tell me that we have been wrongly informed. Of course, the unlimited exemption from estate duty of monetary bequests to the National Gallery and some other collections, and to the National Art Collection Fund, to which Lord Strabolgi referred, with the corresponding exemption up to a limit of £50,000 for other charities, is most warmly to be welcomed. But while these measures are a real help, they are far from being enough. They would not have been any help over the Harewood Titian of Diana and Actaeon, a most important and beautiful work from Titian's last period which has been secured by the National Gallery only through a self-denying ordinance of the National Gallery Trustees which cripples them for some years, and by the notable tour de force of a great public appeal, topped up by a special Treasury grant of £381,500, to provide a total of more than £1¾ million for its purchase.
Nor, indeed, my Lords, would they have served to retain the incomparable Velasquez from Longford Castle; and, splendid though the Titian is, I would myself sooner have seen the Velasquez in the National Gallery. That picture must have attracted about £1½ million or 1¾million in estate duty and capital gains tax—a great windfall for the Treasury. But that windfall was in fact a part of our heritage of works of art. In my view,

503
it should have been ploughed back, so to speak, and not expended—I am tempted to say "frittered away" —in current Treasury expenditure. It would be an entirely logical extension of the arrangements for the acceptance of works of art in lieu of estate duty if the money attracted through taxation by their sale were made available towards their acquisition for the nation. Of course, the Treasury would fight tooth and nail against any such logic, but I hope my noble friend will fight with equal resolution, and that logic will prevail. It would, I think, make a great difference.
Finally, my Lords, I come to what has been repeatedly urged on successive Governments, as Lord Strabolgi said, not only by the Reviewing Committee and the Advisory Council, but by the National Gallery Trustees, by the Standing Commission on Museums and Galleries and by other bodies; and that is the essential need for a fund of some sort to back the control. It is true that the record of successive Governments in giving special purchase grants on occasion has been, on the whole, commendable, though there have been notable failures. The Oscote Lectern, that unique and splendid sculpture, and the Caxton Manuscript of Ovid's metamorphoses, now at Magdalene College, Cambridge, through the great generosity of an American who learned of its sale only by chance, spring to mind. No one who has anything to do with the control can rest content to accept the chances of important and valuable items falling on the market when the economic climate is severe unless there is a fund to back the control in such an emergency.
Such a long-stop might be provided in either of two ways. It might be provided as a large capital fund available to be drawn upon in emergency. The classic objection to that—that Parliament will not allow large sums to escape from its control—does not, I think, really hold water, for such a fund could be provided by ear-marking for this purpose a part of the Land Fund; and the use of the Land Fund for the maintenance of historic buildings at the instance of the Historical Buildings Committee makes a good precedent. Or, equally, it might be provided, as the Reviewing Committee have suggested, in the form of an annual grant analogous to the purchase grants
504
made available to the Trustees of the national collections—but, we have suggested, not cumulative from year to year. To that there could really be no objection in principle, and I earnestly commend this suggestion to my noble friend. I would say that that would not of course be a purchase grant in the ordinary sense; it would be a long-stop to prevent important items of our national heritage from disappearing from our country, almost certainly for ever, and that is a very different thing and a very different order of priority from a gallery's purchase grant. At all events, my Lords, in one way or another I most earnestly hope that my noble friend may be able to obtain for the control the backing that is an essential requirement if it is to ensure that the most important and valuable works of art from our heritage from the past are secure from export despite the vagaries of the economic climate.
7.7 p.m.
THE EARL OF PERTH: My Lords, I, too, I am most grateful to the noble Lord, Lord Strabolgi, for having initiated this Motion. I found myself very much in agreement with many of the points he made and nut forward. Of course, on a question like this—the export of works of art—a system can never be perfect, and I think it is of the greatest importance that suggestions are put forward for consideration by all those who care about and know a good deal about the subject. Certainly various of the things that the noble Lord has suggested to-day I feel sure will be taken very much to heart and thought about by the Paymaster General. The noble Lord paid tribute to Lord Crawford, who is not here to-day, for the efforts he made in saving the Leonardo, and I would certainly echo what the noble Lord said. He also paid tribute to the noble Lord, Lord Cottesloe, and in that respect I can say that there is only one section of this Report in which I played some part, and that is the Addendum, which expressed how great was the debt that we all owed to Lord Cottesloe for his work over the last 18 years. That, anyhow, I drafted. If proof were needed of what is said there, it is to be found in what we have heard to-day in his speech. That speech, with the various concrete suggestions that he

505
has made and the experience which he has recalled of various happenings, is certainly something that we, the present members of the Committee, will study. I shall see that my fellow members have it as compulsory reading; and I am sure that what I say for us will also be true for others who are concerned in Government quarters.
My Lords, the Report made four recommendations. It is not for me to comment on those broadly; that will be for the Paymaster General. However, there is one recommendation on which I can throw a little light, and that is the recommendation that a clear and simple statement of the provisions in the various Finance Acts should be made available particularly for those who are involved, be they solicitors, be they trustees of estates or what you will. I have seen this pamphlet or statement—call it what you will—in first draft, so it does exist; but I am sure all will appreciate that it is a very difficult document to get right. So perhaps we have to be patient a little longer. I have no idea of the timetable, but there is progress and, as I say, something is on paper already.
I have for long been interested in the whole question of works of art but I feel I am too new a boy to make detailed comments such as we have heard from the noble Lord, Lord Cottesloe. But two thoughts have come to me which are of great importance. One concerns an ever-closer relationship between the museum curators, directors and keepers, and the trade. Often there is a temptation on the part of museum directors to wait until, for example, something has come up at auction, and then to say, "Oh, well! perhaps we had better get this." It is one of their vital and important tasks that they should let the trade know what they are after; they should cultivate dealers, be they in London or in the country. In that way one might ensure that in respect of various treasures we did not go through the agony of wondering whether or not we were going to be able to save them at the last moment. I have found in every instance I have seen that those in the trade are only too anxious to have the right things go to the museums. So more initiative is needed on the part of the museum directors and keepers, and I am sure that the dealers will respond.
506
My second thought or realisation is the importance of the National Art Collections Fund, which has been mentioned by noble Lords who have spoken in this debate. It happens that it is celebrating its 70th birthday this year. Dare I say that I hope that all noble Lords who are sitting here are members of the Fund? If they are not, I strongly recommend that they should become members. My reason for this is that I believe that if this Fund had more money and more members it would provide one of the solutions towards solving crises which arise when a great work comes up and the gallery concerned is not able to raise the money that is needed. If we could reach a point where on such occasions the National Art Collections Fund could say, "Well, we can go half way in finding the money", it would be extremely difficult for a Government to say, "We will not match that." For those who want to put pressure on the Government or the Treasury, one of the best ways of doing it is to increase in every way the National Art Collections Fund's money and membership. If an organisation has many members, then it is a pretty strong lobby as well.
To come to the end of my remarks, perhaps one might ask whether one is satisfied with the system as it stands. I think I have said that one should never be satisfied, because nothing is perfect. But various Governments, and particularly the noble Viscount the Paymaster General, have gone a long way to help us in the whole of this task. His success is an outstanding one in getting us money for such things as local museums and in getting improvements of Finance Acts, and his efforts have not been adequately realised to date. I certainly want to join the others who paid their tributes to him. We have heard from the noble Lord, Lord Cottesloe, that the Waverley Criteria have, in his opinion—and I would support this—stood the test of time in the most extraordinary way. It would be hard to change them in any substantial degree; there may be room for some minor improvements, but, broadly, the work that was done 18 or 20 years ago still stands now. I feel that one can say with confidence that the system is working pretty well. When I look elsewhere to other countries in Europe where there is equally a system for defending

507
their treasures, I think that our system is better. If that is right, I believe the basic reason is that both the trade and the owners recognise that they are going to get a fair deal. In that respect, I would only say if ever that situation were changed, if ever the principle of a fair price, or non-penalisation of owners, were threatened, then it would be a sad day and the outlook would be black. Successive Governments have always stood against that threat. Long may their stand continue!
7.17 p.m.
THE PAYMASTER GENERAL (VISCOUNT ECCLES): My Lords, the noble Lord, Lord Strabolgi, has asked a very interesting Question. He has raised a great many facets or minor questions in his interesting speech, as have my two noble friends who have spoken in the debate. I will do my best to answer them, but it will take a few moments because of the importance and intricacy of the subject we are debating. I would add from the Government Front Bench to the tribute to the noble Lord, Lord Cottesloe, and his 18 years of chairmanship of the Reviewing Committee. I remember well when Sir John Anderson held his first inquiry and I submitted a memorandum to it at that day which was pigeonholed and nothing was ever done about it. But the Criteria, when they came out, were, and have been, a great testimony to a very wise man's drafting capacity on a very difficult subject.
There is no division among us in the House that we ought to try to keep in this country, and in a good state of repair, as many beautiful and interesting buildings and objects as we possibly can. The Government's problem is how to do this with justice to the owner and within the limited funds available, when the boom in prices on the art market looks as though it will never end. It is against this background of what one must describe as permanent inflation—more and more money chasing fewer and fewer fine objects—that I have to reply to the Question whether we think the "present system of export control for works of art" is satisfactory. Many experts are constantly telling me that it is not satisfactory; and that may be due to the fact that their judgments differ so widely on what it is we ought to keep in the coun-
508
try. I think I may say that the noble Lord, Lord Strabolgi, and I happen to be liberal in our approach to international trade in the arts, and therefore we really agree in principle that one ought not to swing over to heavy protectionism. I do not know whether that is true for all other noble Lords. It is certainly not true of many critics and curators, and I think they must have some squirrels among their ancestors. But, speaking for the Government, I can endorse what my two noble friends have said—that the present control works uncommonly well; very much better than any parallel system in any other country with which I am acquainted.
What is the reason for the enviable comparison that we can justly make? My Lords, we ought to be quite clear about this before we support any demand for an extension in the present control system. We are talking about delectable objects, small in size and very valuable in money—many of them would go into the boot of a car. I doubt whether your Lordships can think of one masterpiece that could not be concealed in a juggernaut lorry rolling on to a channel ferry. It follows that the effectiveness of our system of control depends upon the good will and integrity of owners, dealers, auctioneers, experts and officials. Our system, as the House will know, requires individual licences to be obtained for objects above a certain value, age, and length of time which they have been in this country. And these licences have to be applied for voluntarily. The system works because we have been able to count on the good will and integrity of all concerned in the trade in which very large sums of money are always at stake. If we lowered the limit of value and age so that many more works would require an export licence, or we asked the Government's advisors to refer many more objects to the Reviewing Committee, your Lordships would see that the area in which evasion must always be a temptation would be correspondingly increased. There is some evasion to-day, but we have reason to think that in the great majority of cases licences are applied for when they should be and that our control works because the area to which it is applied is small and the system itself is clearly seen to be in the public interest.

509
My Lords, we have in fact done something to enlarge the area in which licences are required. We only doubled the limit above which licences must be sought from £2,000 to £4,000, although prices have more than doubled since the £2,000 limit was fixed in 1966. It must be obvious that if a control at the point of export cannot be made as comprehensive as one would wish—and it never can be in any country—the alternative is to buy for a public collection an object that might otherwise have slipped out of the country. This is why we have been quietly improving the benefits to a British owner who gives, sells or bequeaths some work of national importance to a public collection or offers it in lieu of estate duty. The improvements that we have made are in the nature of a deliberate reply to the United States tax reliefs which we think would not be suitable in this country. The Finance Act of 1972, as noble Lords have already mentioned, made changes relating to cash gifts and bequests to national collections and arts charities. The Government also broadened the standards for acceptance of works in lieu of duty.
I now come to a point raised by both the noble Lord, Lord Strabolgi, and my noble friend Lord Cottesloe. In 1956 in another place, the Government made clear their intention not to do this in such a way that the national museums would get a straight increase in their acquisition grants, and that intention was confirmed last year during the passage of the Finance Bill. The Treasury requires this 25 per cent. rule to make the system workable so that the cases can be readily ascertained which cannot be treated as outside the scope of the normal acquisition grants. Of course, on the borderline there will be room for some argument on the application of the general rules, and these modified provisions are, as the noble Earl, Lord Perth, indicated, more than a little complicated. They are being set out in the Treasury Memorandum soon to be published—I hope within a very few weeks now—and we are very grateful for the help which the noble Earl, Lord Perth, has been giving us in drawing up a clear statement of a difficult position. When the memorandum is in the hands of owners and their advisers we can expect the offers to public collections and to the Treasury to increase.
510
Much has already happened. The Chancellor of the Exchequer must be very pleased that before all the advantages are widely known we have had a significant increase in the number of interesting offers—something of the order of as many a month now as before 1972 we had in a year. The Provincial galleries are quite obviously going to benefit greatly from the new arrangements.
I think the noble Lord, Lord Strabolgi, thought that when a picture is sold to a public collection and is thereby exempted from estate duty, the Treasury ought to offer a larger margin than 25 per cent.—this happens to be the same figure as in another instance—but I think he will remember that there is now a double concession, not only exemption from estate duty but exemption from capital gains tax. Of course, the position is complicated and that is why we had to set it out in the memorandum. I can assure him that the fact that it is 25 per cent. of the difference between the price he might have got in the market and the price at which the picture is accepted by the gallery—it is then 25 per cent. of the death duties—is already showing itself to be a very powerful incentive. So far as we can see now, there is no need to offer any greater incentive but I undertake that I will watch this matter very carefully.
I think the noble Lord asked that the limit of £4,000 above which a licence must be sought should not apply to historical portraits. We have looked at that, but it is extremely difficult to define what is a historical portrait and what is not. Further, objects of this price range —that is, below £4,000—really ought to be taken care of by the annual acquisition grant of the gallery concerned, and if it can be shown that this is not so they will no doubt make a case for an increase in grant when the present quinquennium comes to an end.
I have to say to my noble friend Lord Cottesloe that I suppose I have a dash of Treasury training in me, but the idea of earmarking the proceeds of estate duties on one kind of property to be reinvested in the same kind of property really horrifies me, and I feel that if this were to be communicated to the Treasury there might be great consternation. I think that one is simply not "on". But it leads me to say a word in answer to

511
the noble Lord's inquiry about the repeated requests by the Reviewing Committee for a large fund out of which they could assist the purchase of masterpieces for which they had held up an export licence. This matter has been looked at a great many times, and no Government have favoured such a fund, for reasons which appear to us to be convincing. The Reviewing Committee was established to warn us when a work of art should be retained in this country, and that it has done extremely well. It was not established to buy works of art. In our view it is for one of the museums to say whether they wish to acquire a particular work for which the export licence has been challenged and, having regard to their acquisition grant and such other funds as they can muster, to make the case for a special grant from the Treasury. No Government have thought it right to hand over these functions to an independent body, however eminent. Money such as is required to buy a picture like the Titian can be made available only when the gallery and the Government have considered all the circumstances, including the other claims in the field of the arts which, I can assure noble Lords, are many and urgent.
Of course, my Lords, the rise in the art market is highly embarrassing. The inflation, if that is the right word, has escalated in the last three or four years at such a rate that it is unreasonable to expect any Government to increase the grant for acquisitions to the same extent. Therefore we have to be more, and not less, selective in the use of the funds available, and each case must be judged on its merits and according to the financial circumstances. I hope I carry your Lordships with me when I say that the need to be selective lays an added emphasis on retaining works of art that have a direct connection with our own history. We must not let them go, and in the last two years we have used the special grant system to secure all the important objects of that kind that have been brought to our notice. If we had used all the money on buying one or two foreign paintings in the seven-figure class we would justly have been criticised.
512
That brings me to the very difficult question of drawing up lists of those masterpieces by foreign artists which have been in British ownership for more than 50 years and therefore could be refused an export licence if they were bought for a collection overseas. Such lists are bound to differ from author to author and in accordance with the prevailing fashion in taste. In my office we have received four or five such lists, and we are very grateful for the trouble which the museums concerned have taken in their compilation. But a cursory inspection shows that none could be accepted as definitive, and I must put it to your Lordships that we ought not to publish any of these lists or any conflation made from them. It could not be either exhaustive or a firm commitment to acquire at any cost. It would be unfair on the owners and perhaps encourage them to sell sooner than otherwise they might. It would put an artificial value on pictures not on the list but next in quality to those that were on the list.
We do not know of many British collectors willing to pay, say, £250,000 or upwards for Old Masters by foreign painters. We believe there are very few and one must assume that once lists were published our museums would not bid, since there would be no prospect of the picture going out of the country. The value of the picture would be very different when it could be sold only to a domestic buyer. Therefore the right policy is to rely on the advantages to the private owner of keeping his works of art within his family, and to increase the benefits he can get if he sells to a British institution, or if the pictures are offered to the Treasury in lieu of estate duty. For these reasons I hope that your Lordships will support us in the decision not to publish any of the lists of works of art, for which we would then be morally committed never to allow the export whatever the cost or the circumstances.
The noble Lord, Lord Straboigi, asked what about Michelangelo's Tondo? I cannot give the answer because I have not the slightest information that the Royal Academy contemplates selling that great work. I think we must assume—and I hope I am right—that they have no such intention. There are two further

513
points I must make in answer to questions which were asked. The first was asked by the noble Lord, Lord Strabolgi, and concerns objects of national importance held by a charity or trust or churches, or something like that—
LORD STRABOLGI: If I may assist the noble Viscount, it was public or semi-public bodies; that is, bodies having a charitable status.
VISCOUNT ECCLES: My Lords, I am sorry; it was public or semi-public bodies which, of course, would include churches. When these bodies decide to sell an object—and it may be in desperation in' order to raise money to preserve their other assets—they do not receive any tax advantage if they offer the object to a national collection. Therefore they are likely to go to the market to get the highest price, and the danger of export follows. We are thinking about this, and I hope we can do something helpful to meet a situation which could very easily become serious.
The second point concerned the status of a collection of objects none of which, if considered separately, would come within the Waverley Criteria. I can reassure noble Lords on that point. The Chancellor of the Exchequer, in his Budget speech earlier this month, said that the 1930 Finance Act and the 1956 Finance Act would be aligned, so now the definitions would be the same. That means that collections as a whole can be accepted as of national importance and valued as such; and also documents. So I think that settles that point.
The noble Lord asked about V.A.T. on purchases by museums. The position is that when a museum buys an object from a private person who is not registered as a trader there will not be any tax, but when a museum buys an object from a dealer the tax will be approximately 1 per cent. on the price; that is to say, 10 per cent. on the dealer's margin of 10 per cent. But if a national museum can show that it has paid V.A.T. in this way, the Government, in the 1973–74 Supplementary Estimates, will consider increasing the acquisition grant by the amount of the tax, so that the national museum is out so far as V.A.T. on acquisition is concerned. The
514
acquisition fund for provincial museums has been raised from £150,000 to £400,000 and we consider that that very large increase is quite adequate to take care of any small V.A.T. there may be on objects bought by those museums from registered dealers. The application of V.A.T. to living artists applies only after the first £5,000 of their output, because the first £5,000 is free. That figure is considerably higher than in many of the other V.A.T. countries. We do not see any reason to single out contemporary works of art from other forms of art—music, drama, or even entertainment or other small businesses. There is no reason that I can see why this particular form of artistic activity should be put into a privileged tax position.
My Lords, I have kept the House much too long, but I have been asked so many questions. I agree entirely with my noble friend Lord Perth that we all ought to support the National Art Collections Fund, and I wish him and Sir Anthony Hornby every success. I believe that close consultation between museum curators and dealers is a good thing. It is not so easy to do in respect of some departments as others, but I have seen it working well at the British Museum and I hope that it will be extended. We are ready to consider all suggestions within the main principles of our export control, because we yield to no one in our desire to keep in this country the fine things that we have. Therefore I should like to thank the three noble Lords who have spoken, and to say that we will do all we can; but so long as prices continue to rise it is obvious that when great masterpieces come on the market each case will have to be considered on its merits.

MEDWAY PORTS AUTHORITY BILL [H.L.]
The Queen's Consent signified, and Bill reported with Amendments.
UPPER MERSEY NAVIGATION BILL [H.L.]
Reported with Amendments.