Lords Sitting of 15 December 1975

Preamble
The House met at half past two of the clock: The Lord Chancellor on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

RAIL AND AIR DEATHS: COMPENSATION
The Earl of KINNOULL: 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 is the maximum compensation payment which both British Rail and British Airways can pay to the dependants of a person killed in a rail or air accident.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, when a fare-paying passenger is killed in a rail accident damages may be claimed at Common Law and under the Fatal Accidents Acts, without limit. In the case of a fatal accident to a passenger on a British airline compensation is payable unless the carrier proves that he took all necessary measures to avoid the accident. Compensation is payable up to a limit of £25,000 in international carriage, a limit the United Kingdom Government are seeking to raise by international action, and up to a limit of nearly £32,500 in domestic carriage; but if it was to be shown that the accident resulted from the intentional or reckless act of the carrier, or his servants or agents, no limit would apply. In all cases the quantum of damages or compensation awarded, subject to the limits when they apply, is a matter for the court.
The Earl of KINNOULL: My Lords, while thanking the noble and learned Lord for that reply, may I ask whether he would agree that in the case of British Airways, although there is a maximum, in practice they rarely pay below that as a minimum? In the case of British Rail, although there is not a maximum, if there is a case to be judged, the solicitors act
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ing for the defendants have to fight for a minimum. In many cases compensation is very small—even derisory—and in a number of cases the payments are not paid for three or four years.
THE LORD CHANCELLOR: My Lords, I was not aware of the matters of fact which the noble Earl has described. If he would be good enough to see me and particularise the matters, I will see that the state of affairs he has described is taken up by my right honourable friend the Secretary of State with the authorities concerned.
Lord SOPER: My Lords, would the Government agree that, in addition to a statement about a maximum, is it not an unrewarding and somewhat embarrassing business to try to calculate compensation, and could there not be a minimum which would be automatically recognised and from which perhaps advances could be made up to that maximum?
The LORD CHANCELLOR: My Lords, in the case of dependency, of course, the extent of the dependency varies from case to case depending upon the earnings of the victim and the extent of the dependency. In the case of factors such as compensation awarded for loss of expectation of life, an arbitrary figure has now been laid down by the courts of £500, and the value of that goes to the estate of the deceased. There is no compensation payable under the laws of England and Wales in respect of bereavement, but of course there is in respect of pain and suffering in appropriate cases.

LAMS and LOCAL AUTHORITIES
2.39 p.m.
Baroness YOUNG: 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 local authorities responsible for preparing land acquisition and management schemes under the Community Land Act 1975 have so far failed to do so to the satisfaction of the Secretary of State, and what percentage of the local authorities involved this figure represents.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, since the date by which Land Acquisition and Management Schemes have to be made is 31st December 1975, and the date for their submission to the Department is 1st February 1976, no authority can, at this stage, be said to have failed to prepare schemes to the satisfaction of the Secretary of State.
Baroness YOUNG: My Lords, while thanking the noble Baroness for that reply, may I ask whether she would agree that, as there are only two more weeks until 31st December, including the Chirstmas period, it cannot be said that all authorities have produced their schemes to the satisfaction of the Secretary of State?
Baroness BIRK: My Lords, the authorities were asked for a progress report by 5th December, and out of 47 county authorities, only six have indicated that they are experiencing any serious difficulty in drawing up their LAMS. I do not think that the noble Baroness has any cause for concern.
Baroness YOUNG: My Lords, would the noble Baroness say what the cost of this exercise has been, and how much of staff time has been taken away from other local authority projects in order to fulfil this obligation under the Act?
Baroness BIRK: My Lords, I cannot believe that the noble Baroness can be serious about this matter. The Act has been passed. Now it is on the Statute Book, everybody, apart from perhaps the noble Baroness, seems anxious to get on with making it work. On the one hand, she has asked whether we have the information—she asked about this continually during the passage of the Bill—and now she asks us about the cost of sending out letters to local authorities, and the cost incurred by the local authorities in replying. In order to make the Act work—the noble Baroness referred to this throughout the passage of the Act—now it is on the Statute Book I should think she should be delighted to know that we have inquired; we have found out what the progress is and we are quite satisfied about it.
The Earl of KINNOULL: My Lords, arising out of that question, could the noble Baroness say whether the Community Land Act can now be purchased from Her Majesty's Stationery Office, and why it was not available when the Act was passed into law?
Baroness BIRK: My Lords, first it had to be printed. I am afraid there were printing difficulties, as is often the case. It has now been published. As the noble Earl is aware, the Act is little different from the Bill as we discussed it during its progress through this House. All the local authorities, and everybody else, are aware of any changes that were made.
Lord HARMAR-NICHOLLS: My Lords, is the noble Baroness aware that the manner of her reply to my noble friend is a little disturbing in the sense that it does not reflect the real concern emanating from local authorities regarding whether or not this can be effective? My noble friend is doing something good at this early stage by putting on record that it is not all sweet and light, which is the impression the noble Baroness gives. It is not a bad thing to have that in mind if this Act is to be carried out as she would wish it.
Baroness BIRK: My Lords, in answer to the speech made by the noble Lord opposite—
A Noble Lord: Question!
Baroness BIRK: —I shall reply to it because I think it is important to do so, although it goes slightly outside the Question of the noble Baroness. Forty-seven authorities were asked about their progress. The vast majority have already made great progress with their schemes and only six have had any serious difficulty in agreeing. This shows that the local authorities have taken this on board and are now busy with their preparations. I consider it to be highly mischievous to give the impression—now that the Act is on the Statute Book—that the vast majority of local authorities, who are trying to make the scheme work, are doubted in this way.
Baroness YOUNG: My Lords, would not the noble Baroness agree that, as her right honourable friend the Secretary of State has already indicated that local

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authorities must cut down on expenditure, and has been quoted widely in the Press as saying, "The party is over", it is asking rather a lot of local authorities to bear all this extra expense which they had not expected to incur?
Baroness BIRK: My Lords, at this stage, I do not propose to go through this as though we were still arguing about the passage of the Act which is now on the Statute Book.
Lord SLATER: My Lords, would not my noble friend agree that, in view of the questions that have been directed at her in regard to the Question put down by the noble Baroness, it would seem that following the progress of the Bill through both Houses of Parliament, some Members of this House are questioning the intelligence of those people who are responsible for administering the Act?
Baroness BIRK: My Lords, I think that my noble friend is quite right. The less time we spend on discussing how this is to be done and let the local authorities get on with their task—particularly when I have put the facts to the House—the better it will be.

POST OFFICE: CHRISTMAS POST STATISTICS
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why, as the figures relating to letters for the customary three-week Christmas period in 1974, given in answer to her Starred Questions of 30th October and 3rd November, were apparently inaccurate and were questioned at the time and in a subsequent letter to the Minister, dated 24th November, no reply to the letter has yet been received; and what are the correct figures for 1974.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of INDUSTRY (Lord Melchett): My Lords, I have now replied to the noble Baroness's letter and she will know that the correct statistics for the three-week Christmas period of 13th December
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to 2nd January are 904 million in 1972, 781 million in 1973 and 806 million in 1974. The Post Office statistics for 1973 and 1974 quoted previously relate to the whole of December.
Baroness BURTON of COVENTRY: My Lords, is my noble friend aware that I feel so indignant that it is hard to be coherent about this matter? Is he aware that some seven weeks ago, on 30th October (Hansard, column 608), I was told that these figures would be checked? I wrote again on31st October and 5th November setting out the facts. I then received a letter asking whether I would give the evidence on which I based these serious charges. I wrote and gave that evidence, together with my sources and I asked for a reply; I then heard nothing more. On Wednesday, 10th December, when my patience was finally exhausted, I put down a Question which appeared on the Order Paper on Thursday the 11th. On Friday I received by special messenger at my home from the Department concerned a letter which said, "Let me say straight away that your figures are right. "There was not one vestige of apology in that letter! Is my noble friend further aware that, had I not pursued the matter, the House would have been in possession of wrong information and that Question Time would be quite valueless?
Lord MELCHETT: My Lords, as to the history of this matter before I took on my present job. I am quite happy to take my noble friend's word. As she said, she put down a Question on Wednesday, which was the first that I knew about the matter. She had a reply on Friday, so I hope she will accept that I acted as quickly as I could after she had made me aware of the situation. As to the matter of wrong information—as I said in the letter to her and as I have said today—the statistics were given in the Post Office Annual Report, and it was from that published information that an Answer was given to by my noble friend's Question. It has subsequently turned out to be the case that statistics were given in different Annual Reports on a different basis.
Baroness BURTON of COVENTRY: My Lords, is my noble friend aware that the more we go into this the worse the Department appears? Is he further aware

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that I stated at the beginning that a different system of accounting had been used for these figures? Much more seriously, is he aware that I am really disturbed that any Member of this House should be treated in this manner? What is one to do? Is one to be thoroughly awkward, as I have been, pursue the matter and, in the end, get to the bottom of it? Or should one not be awkward, sit down, having received wrong information, and let the Departments get away with it?
Lord MELCHETT: My Lords, if I may say so, my noble friend is not being fair when she attacks the Department about this matter. The Department merely quoted statistics published by the Post Office in their Annual Reports. The facts are that the Department of Industry does not run the Post Office and I am not the Under-Secretary-General of the Post Office; nor is my right honourable friend in charge of the day-to-day running of the Post Office. If we are asked Questions about the Post Office and the Post Office direct us to published information, it is on the basis of that information that we answer Questions put down in this House.
Lord CARRINGTON: My Lords, while accepting the fact that the noble Lord himself has nothing to do with it, may I ask whether it would not be proper for the noble Lord to apologise, on behalf of the Government, to the noble Baroness?
Lord MELCHETT: My Lords, I should be happy to apologise if I felt that there was something for which the Department was responsible and over which we had misled the House. I am afraid that, if my noble friends ask Questions about the detailed running of the Post Office, the only source of information to which the Department can turn is the Post Office itself. The Post Office then refer us to published statistics and we give them in good faith.
Baroness BURTON of COVENTRY: My Lords, perhaps I may put one more query, if the Minister does not mind. Is my noble friend aware that the Post Office gave one set of figures to POUNC, who gave them to me, and they gave another set of figures to the Minister who gave them to the House? One can only accept the figures one is given, and there
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fore I think that some retraction is necessary.
Lord MELCHETT: My Lords, I have told my noble friend and have said this afternoon that the figures previously given were based on two periods of time. The Post Office did this, as I understand it, for very good reasons. They felt that, if they based one year's figures on a three-weeks period and the next year's figures on a four-weeks period, that was a more accurate way of saying how many letters had been posted. I am sorry that my noble friend received from these two sources of information figures which contradicted each other. However, I will not accept that the Department was at fault in giving my noble friend those figures.
Baroness PHILLIPS: My Lords, is my noble friend aware that, when the Post Office Corporation was originally set up, the question of whether there was Ministerial responsibility was gone into, and it was agreed that there would be Ministerial responsibility?
Lord MELCHETT: My Lords, I am not aware that there is Ministerial responsibility for the day-to-day running of the Post Office.
Lord SLATER: My Lords, is my noble friend aware that I was one of the Ministers who was responsible for putting that Bill on the Statute Book; that there was never an undertaking given that a Minister would be responsible for the day-to-day administration of the Post Office; and that he is not responsible for answering questions on day-to-day management? Further, is my noble friend aware that, if any apology to my noble friend who first asked the Question is necessary, it ought to come from the Chairman of the Post Office Board, and not from the Minister or his Department?
Lord MELCHETT: Yes, my Lords.
Lord LEATHERLAND: My Lords, does my noble friend think that a fitting climax to this series of questions would be that all Members of the House should send a Christmas card to my noble friend Lady Burton?
Baroness BURTON of COVENTRY: My Lords, I know that we have had enough of this Question, but may I on one matter of detail ask the Minister—I

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appreciate that it is not the fault of the noble Lord, Lord Melchett, and that he has been landed with this—whether the request for an annual figure could be construed as day-to-day management on any construction whatsoever?
Lord MELCHETT: My Lords, I think that the question of the number of letters posted over a certain period at Christmas and the way that those statistics are given probably is a matter for the day-to-day management of the Post Office. May I suggest that if anybody sends any cards this Christmas they send charity Christmas cards?

BUSINESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Wells-Pestell will repeat a Statement on the National Health Service and private practice.
CIVIL LIST BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1a and to be printed.

NORTHERN IRELAND LOANS BILL
2.53 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge): My Lords, I beg to move that this Bill be now read a second time, This is a technical, financial measure which has already been debated in detail in another place. I will not detain the House with more than a brief description. The purpose of the Bill is to provide for further loans from the National Loans Fund to the Northern Ireland Consolidated Fund for approved capital expenditure. The loans will be used for on-lending to public bodies outside central Government, mainly the Northern Ireland Housing Executive and the Northern Ireland Electricity Service.
1212
Loans to Northern Ireland from the National Loans Fund are currently made under the Finance Act 1970 as amended by the Northern Ireland (Financial Provisions) Act 1972. The maximum gross total which can be lent under the 1970 Act is £450 million, and it is necessary to make provision for further loans before this limit is reached, which will probably happen soon after the end of the current financial year. So far, £361 million is outstanding under the 1970 Act. In addition £164 million is still outstanding under the Miscellaneous Financial Provisions Act 1950, so that the total sum outstanding in loans from the National Loans Fund to the Northern Ireland Consolidated Fund is now £525 million. This Bill would allow this total to be raised to £800 million, increasable by Order to not more than £1,000 million.
The Bill has three clauses, excluding the Short Title. Clause 1 sets the limit of £800 million on the total sums outstanding in loans from the National Loans Fund to the Northern Ireland Consolidated Fund, including those made under all previous enactments. It also provides that the limit can be raised once by Order subject to Affirmative Resolution of another place to not more than £1,000 million. The Secretary of State will make the loans under the Bill with the approval of the Treasury. This is a departure from previous legislation, which was enacted before the Office of the Secretary of State for Northern Ireland had been created. Clause 2 ensures for the sake of administrative simplicity that interest and principal on loans made under previous legislation, as well as under the Bill, will in future be paid to the Secretary of State. Clause 3 makes routine provision for the keeping, examination and publication of accounts.
My Lords, I will add only two points. The loans to Northern Ireland with which the Bill is concerned are not part of any subvention to Northern Ireland, since a full rate of interest is paid on them. Moreover, the people of Northern Ireland have lent to the National Loans Fund over the years through National Savings—for instance, the National Savings Bank, the Save As You Earn Scheme and by Premium Bonds—and by investing in United Kingdom Government Stock. The flow of funds between the National Loans Fund and Northern Ireland is therefore

1213
by no means one way. Secondly, I should emphasise that the Bill does not itself authorise any expenditure. It merely provides the machinery to ensure that funds can be made available for certain capital expenditure which has already been approved by the usual procedures. I commend the Bill to the House. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Donaldson of Kingsbridge.)
2.57 p.m.
Lord BELSTEAD: My Lords, as the noble Lord has explained, this Bill makes available money for certain capital programmes in Northern Ireland. I understand that the greater part of that money goes to the Northern Ireland Housing Executive and to the Northern Ireland Electricity Service. As I believe it will be possible to have a slightly wider debate than normal on the Northern Ireland economy under the forthcoming Appropriation Order, I should not wish to pursue any of the details of this Bill, but there is one question I would ask the noble Lord about its general effect.
The amount which can be lent to the Northern Ireland Consolidated Fund is increased, as the noble Lord has explained, by £275 million and by a further £200 million, if necessary, by Order subject to the Affirmative Resolution procedure. The Explanatory Memorandum to this Bill says:
"At the rate of lending now envisaged these additional funds would provide enough for Northern Ireland's requirements for approximately two years",
and then it says,
"…for a further period of approximately eighteen months",
referring to the Order-making power. Is that lending rate any higher in real terms than the rate at which money has been lent under this same power to the Northern Ireland Consolidated Fund during recent years?
One of the recipients of these loans is the Northern Ireland Finance Corporation, which does admirable work. But I think it is fair for me to remind the noble Lord that the Government now intend to widen the scale of the NIFC's powers and if it, or indeed any of the other claimants on the finance which this Bill makes available, is increasing the growth in pub-
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lic expenditure in Northern Ireland in real terms then I simply say that Parliament ought to be aware of it. My Lords, with that one question I certainly support the Second Reading of this Bill.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I am grateful for the noble Lord's support. I think the answer to his question can be given very quickly. These loans are for continued development and they represent partly the increase required due to inflation and partly real development. I do not think one can put it more clearly than that. For example, in the case of the Northern Ireland Housing Executive, not only are its costs rising but the work it is doing is increasing, and these loans cover the two elements. I hope that that answers the noble Lord's question.
On Question, Bill read 2a: Committee negatived.

APPROPRIATION (No. 3) (NORTHERN IRELAND) ORDER 1975
3.0 p.m.
Lord DONALDSON of KINGS-BRIDGE Lord DONALDSON of KINGS-BRIDGE rose to move, That the draft Appropriation (No. 3) (Northern Ireland)Order 1975, laid before the House on 26th November, be approved. The noble Lord said: My Lords, this order, which appropriates the Autumn Supplementary Estimate, is the second Northern Ireland Appropriation Order to come before this House during the 1975–76 financial year. The sum to be appropriated by this order is some £147 million, and this brings the total Estimates provision to date for 1975–76 to approximately £974 million. The details of the sum required are set out in the Schedule to the order and further information relating to the Votes involved is contained in the volume of Supplementary Estimates which has been available in the Library for some time. The greater part of the additional provision sought is required to meet pay and price increases. Pay increases either conform with or pre-date the present counter-inflation policy. As regards other increases, the most significant are £8 million to repay outstanding loans from title Shipbuilding Industry Board to Harland and Wolff; the £3 million for compensation to the Northern Ireland Housing Executive for loss of rental income

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in 1975–76 as a result of the counter-inflation policy and the £2 million required for the Meat Industry Employment Schemes.
I hope this short summary has indicated to noble Lords the purpose of this financial order which has already been considered in another place. I know that some noble Lords wish to use this opportunity to discuss aspects of the general economic situation in the Province on which the order has a bearing, and I think it is quite appropriate to do so. I assure noble Lords that I shall endeavour to reply as fully as possible to their questions at the end of the debate, and shall be glad to reply in writing afterwards to points with which I have not been able to deal. I recommend the order to the House, and beg to move.
Moved, That the draft Appropriation (No. 3) (Northern Ireland) Order 1975, laid before the House on 26th November, be approved.—(Lord Donaldson of Kingsbridge.)
3.2 p.m.
Lord BELSTEAD: My Lords, as the noble Lord has explained, this order appropriates further sums for Northern Ireland for the rest of this financial year. The previous order added £102 million to the total provision for last year, this order adds another £147 million, and I suppose there will be Spring Supplementary Estimates. It is important to make it clear that we have taken on board what the noble Lord has said and to recognise that these increases accord with the appalling rate of inflation which the United Kingdom has been experiencing. On the subject of the escalation of these figures I have no questions to put to the noble Lord, although I am grateful to him for saying that in this debate we may stray a little more widely than usual.
I should like mainly to discuss how this order relates to employment policies in Northern Ireland, but other noble Lords may wish to touch on different aspects. If one takes gross domestic product, or productivity, or simply industrial production into account, it can be claimed that between 1955 and 1966 the Northern Ireland economy was expanding faster than that of Great Britain, but unemployment remained stubbornly higher than anywhere else in the United Kingdom. It was against that back
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ground and the outbreak of violence that the 1970–75 development programme was prepared. That plan gave as a target the promotion of 40,000 new jobs over a five-year period, but admitted that it would be a formidable task to achieve; yet if one takes the period from the beginning of 1970 to the end of 1974, which I admit is not exactly the period which was covered by the development plan, I understand that more than 40,000 jobs were promoted. If I am right, this is a tribute to all those who have been involved in that work in the Northern Ireland economy.
Job promotion through industrial training has been the work of the Northern Ireland Ministry of Health and Social Services and, from 1st January of last year, the Department of Manpower Services, and I think that they have good reason to be proud of their work. The counter-redundancy training scheme, the work of the Government training centres and the innovation of the integrated workforce units have been most valuable.
Under Class IX of this order I notice that there is an increase in the sums granted of some £230,000 for the Department of Manpower Services, and I have no doubt that it will be money which is well spent. If he is able to give them, it would be interesting to have up-to-date statistics from the noble Lord regarding industrial training—how it is getting on at the moment in Northern Ireland—and particularly to hear about the recruitment subsidy scheme for school leavers. But no enduring reduction in unemployment is possible unless industry expands and new enterprises take root. The Northern Ireland economy is indebted to the efforts which were made before 1972, not least during the Premiership of my noble friend Lord O'Neill of the Maine and also during the Premiership of the noble Lord, Lord Moyola, to attract new investment into the Province, and these efforts, it is fair for us in Parliament to claim, have been continued. During 1973, six new plants were moved into Northern Ireland from the United States, Scandinavia and Western Europe. Whenever anything like that occurs it gives a valuable lead to those whom one is hoping will trade with and invest in Northern Ireland. Class VI of this order includes provision for the industrial development services of the Department of Commerce. I should like

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to hear from the Government how they foresee foreign investment in Northern Ireland holding up in these very difficult times.
It was particularly to review the levels of investment in the Province that the 1971 Joint Review Body, under Sir Alec Cairncross, was set up which proposed the establishment of the Northern Ireland Finance Corporation. The objective was to offer financial assistance to businesses threatened with severe contraction or closure which had reasonably good prospects of viability and solvency. The effect on job promotion was instantaneous. The annual report of the NIFC for 1973–74 recorded that the Department of Commerce, together with the Corporation and the Local Enterprise Development Unit, had promoted an estimated 10,000 new jobs in 1973 alone. I personally have no further figures for the NIFC and the LEDU and if the noble Lord could give me any, either in reply or after the debate, I should be most grateful. However, the Government now intend, in the words of the gracious Speech, to give an enlarged role to the NIFC. I assume that means the role as it is to be found in the Scottish and Welsh Development Agencies, and presumably this will be be done by order.
Therefore, I have only one point on this matter to put to the noble Lord. Paragraph 3 of the Cairncross Report said:
"We see little to be gained by inviting the Government to become directly involved on its own account in the funding and running of new industrial enterprises".
If the NIFC is to follow the example of the Scottish and Welsh Development Agencies, presumably it will be empowered to give grants and other financial assistance to companies in difficulties and, indeed, possibly to take control of companies. At the present time, the Government need no reminding of the perils of Government subsidies if they are given for other than commercial reasons. Hitherto the NIFC has worked to very great effect within its original terms of reference, and I ask the Government to think seriously before hanging all of the provisions of the Industry Act round the necks of the Corporation and Northern Ireland industry.
My Lords, one of the reasons for unemployment in Northern Ireland is
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the comparative immobility of people, owing to housing problems. Enterprise Ulster and the Urban and Rural Improvement Campaign have mopped up areas of particularly bad unemployment and, of course, Enterprise Ulster retrains people. I should be grateful if the noble Lord could say whether the success which undoubtedly those two organisations have achieved is continuing.
Undeniably one of the keys to the iron sectarian ties which affect some parts of Ulster would be a relaxation of the demarcation lines which almost literally disfigure so many housing estates. Class VII of this order provides for the granting of over £6 million for housing services. In 1974 the Northern Ireland Housing Executive completed a housing conditions survey which showed that, as compared with England and Wales, a greater proportion of all the houses in Northern Ireland were unfit. I understand that the Report suggested that new ways must be found to prevent homes from becoming unfit through extreme disrepair. Has any answer been found to that problem? Is the dereliction of property through inter-secretarian strife showing any signs or lessening? At what level is new house building running? What are the long-term targets for new houses, and is there any plan for the location of any large-scale new housing estates?
There are just two further parts of this Order which I should like briefly to touch on. Class V deals with agriculture and I think perhaps the noble Lord, Lord Moyola, will be dealing with that in greater depth. I simply make the point that in a country where 10 per cent of employment is directly attributed to agriculture, the recession in the pig and the beef trade until earlier this year I would assume must have caused some grievous hardship, and I believe the Northern Ireland processing plants have been in considerable difficulty. With those special problems in mind I would assume that Northern Ireland agriculture deserves a slice of the EEC Regional Development Fund which is allocated to the United Kingdom. Can the noble Lord give any indication about the RDF as it affects Northern Ireland, and can he tell the House anything about the largest item which is to be found in Class V, namely, under heading 6, which deals with grants of nearly £2½ million for agricultural assistance schemes?

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Then, Class IV deals with education; I have understood—the noble Lord will correct me if I am wrong—that the education budget in the Province has been cut quite severely. Can the noble Lord confirm whether that is so, whether the cut has been in line with savings which have been required from other Government Departments, and to what those cuts amount? I believe I am right in saying that in 1973 the school building costs in the Province rose to over £10 million, providing 24,000 new places. Is there now any evidence of any fall in the total school population in Northern Ireland? Can the noble Lord give the school building programme figures for the current year?
I know there are in Northern Ireland many pressing economic problems to which other noble Lords may well refer, and perhaps the noble Lord the Minister will be able to clarify them; but probably the most obviously pressing problem is the current balance of trade, which is in the forefront of all our minds wherever we live in the United Kingdom. Whatever the rights and wrongs of import controls, there is no doubt that the Ulster textile industry must be suffering and that the import of foreign cars into the Province last year reached the really astronomic figure of 38.4 per cent. of new cars registered.
I am afraid I have dealt with a series of points, but I end by expressing the hope that in his reply, the noble Lord, Lord Donaldson of Kingsbridge, may be able to give us some overall view of the Northern Ireland economy, and that he can offer economic and commercial reasons that there is indeed hope for the future.
3.14 p.m.
Lord SHINWELL: My Lords, when my noble friend on previous occasions has submitted orders of this character, particularly where they have involved expenditure, they have gone through almost "on the nod", and certainly with limited comment. In my recollection this is the first occasion when an order of this character has been subjected to a detailed analysis, and I am bound to say that we ought to be grateful to the noble Lord, Lord Belstead, for having undertaken that task because, when all is said and
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done, vast sums of money have been expended in Northern Ireland and we ought to know the reason why.
The situation in that area is shrouded by the violence and terrorism and the deplorable events that have occurred in recent years. But seldom have we thought of investigating the use of the sums that have been expended. In particular, how much are we spending on unemployment? How much are we expending on social security and on the repair of buildings, residential and industrial, that have been destroyed? A variety of questions occurs to me, I am bound to say for the first time—and I apologise for it—and if it had not been for the even limited analysis which the noble Lord, Lord Belstead, has undertaken I should probably have remained in my seat. Somehow there is a feeling in my mind that many other Members of your Lordships' House may think it desirable that on some occasions, if not now (because probably my noble friend the Minister is unprepared for it) we ought to have further and more detailed information.
Another thought occurs to me. I am not quite sure that it is relevant but as it occurs to me I had better deliver myself of it. It is that we are talking a great deal about the possibility of devolution. If devolution is to cost such vast sums as have been expended on one limited area of the United Kingdom, heaven knows what is to be expended if devolution is ever implemented. I beg of my noble friend the Minister, if he cannot reply in detail to the quite appropriate questions that have been addressed to him by the noble Lord, Lord Belstead—and I can understand the reason if he cannot reply now—to give us an assurance that on some future occasion, not too far ahead, we shall obtain further information in much greater detail of how much is actually spent, how it has been expended and what advantages have been derived from the expenditure, apart from the sums that it has been found necessary to spend in order to deal with violence and terrorism.
3.19 p.m.
Viscount BROOKEBOROUGH: My Lords, I should like to begin by congratulating the noble Lord, Lord Belstead, on his analysis and his approach. May I also say how very interested I was to hear

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the noble Lord, Lord Shinwell, making those remarks because I have always been slightly afraid of wearying the House with details about the financial arrangements in Northern Ireland. Everyone here who has heard me speak knows that I am passionately devoted to Northern Ireland and to its success in trying to arrive at some peaceful solution that will make the expenditure at least on law and order very much less than it is today. I am greatly encouraged by the speech made by the noble Lord, Lord Shinwell, who is a man we all respect and love very much.
In the past I have tried to encourage the noble Lord, Lord Donaldson of Kingsbridge, to try the commercial method of air travel. He tells me he has done so twice. I can only tell your Lordships that my noble friend Lord Moyola and I both regret that he was not with us today. We spent some hours this morning flying over Liverpool, waiting for the fog to clear. Eventually we got down at Gatwick. During that time, because of the security arrangements, we were not able to get at our brief cases, so that if my speech has not the usual flow your Lordships will know that it has been hurriedly prepared in the few minutes since I arrived at the House.
Lord DONALDSON of KINGSBRIDGE: My Lords, if I may interrupt the noble Viscount, Lord Brookeborough, before the flow gets bogged down, which it does not seem to have done yet, I think it is a little hard, on the worst day of fog we have had this winter, to blame either the Government or British Airways for the absolutely essential security arrangements they make. This is a wrong attack. If you say that on a fine day your luggage is not properly dealt with, or something of the sort, that I would accept. But on a day of this kind, the fact that the noble Viscount has got here at all is a very pleasant surprise to me.
Viscount BROOKEBOROUGH: My Lords, I thank the noble Lord, Lord Donaldson of Kingsbridge, for his intervention. He need not fear that I have any complaint about the security. We were given some very interesting instructions when we arrived. The first thing that happened was that we were coming from Northern Ireland and our baggage was transferred into the international customs lounge for people going to foreign
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lands. We did not feel that was so good. Then followed the instruction that, "Passengers must claim their own baggage". I wondered whether at Gatwick it was normal for passengers to claim someone else's baggage!
My Lords, I should like first to thank the Government for allowing us to discuss matters concerning Northern Ireland on a rather broader basis than would be necessarily appropriate on the Appropriations Account. I should like to inquire of the Government the method by which they are financing, and are proposing to finance, the Budget of Northern Ireland. Do they intend to provide Northern Ireland with a block grant form of financing—which is a change from the previous method by which we were financed—to meet our social services on a parity basis? Apart from that, there was continuous negotiation with the Treasury to make sure that, in individual projects, finance was given to provide the incentives to make the investments for job promotion within Northern Ireland, the object being to raise the standard of living in Northern Ireland to that of the rest of the United Kingdom.
If we are to go for a block grant system, perhaps the Government could issue a White Paper or a Green Paper to say how this is to be calculated. This has considerable relevance in the future in the discussions about devolution which will occur in Wales and Scotland. In raising this subject, it is clear that it is time we had our own devolved Government in Northern Ireland so that Ulstermen could have a say in their own affairs. I hope that when we come back to this House in January, we shall have a clear policy which should enable a Government in Northern Ireland to be set up. There is something on which all parties in that convention agreed; that was the need for devolution. Equally, all parties agreed that there is a great danger in the present situation of having a political vacuum.
My Lords, 50 years ago at the formation of the province of Northern Ireland, the difference in the standard of living between those of us who lived in Northern Ireland and the rest of the United Kingdom was enormous. Efforts have continuously been made to close that gap, but it was only after 1945, during the period

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of the Labour Government under the late Lord Attlee, that we began to get regional development bearing fruit within the region of Northern Ireland. At that time we had an agreement between the Government of Northern Ireland and Her Majesty's Government that we should have parity in all the services within the United Kingdom, and that we should make an attempt quite separately to provide extra incentives to industry to come to invest in Northern Ireland, with incentives also to encourage existing industries to expand, so as to take up the unemployment slack.
My noble friend, Lord Belstead, quite clearly has said that the unemployment situation in Northern Ireland remains very obstinate. There have been many promotion efforts by various Northern Ireland Governments, continuing with the present régime, as very long-term projects. Everyone knows that if you start to promote something today, it takes many years before it is brought to fruition. By the 1960s, the index of manufacturing production was rising at a rate of about 5.3 per cent., which was well ahead not only of Great Britain but of a great deal of Europe. This was the beginning of success which, by its own impetus, carried us over the first years of rioting and violence. With the present recession, the future seems to me to be very bleak. Unemployment in Ulster is twice the national average; indeed, in parts, unemployment is at a truly horrific level. For instance, in November this year, the figure for Strabane was 27 per cent., and if one takes males only, the figure was well over 30 per cent. I do not believe that, if there were such a figure for Great Britain, something really energetic would not be done to try to break through such a figure.
Of course, Northern Ireland must flourish and must suffer with the rest of the economy of the United Kingdom. But because if its geographical position and the fact that in the past its industrial base was so narrow, and because of its present security problems, Northern Ireland is suffering in an exaggerated way from the present economies of the Government. For instance, if a 4 per cent. cut in public expenditure produces a certain result in Great Britain, the same cut in Northern Ireland produces a very much
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greater effect. Of course, the Government have recognised that Northern Ireland has special problems. In 1973, the previous Conservative Government set out very clearly that these special problems do exist, and this has been accepted by the present Government. But the Government made clear their determination to try to establish, as rapidly as possible, a sound economy with sound employment opportunities to achieve the same standard of living in Northern Ireland, with the same opportunities for employment and the same social conditions as the rest of the United Kingdom
My Lords, the White Paper also recognised—this is very important at the present moment—the dangers of idle hands in the present situation. My noble friend Lord Belstead has drawn our attention to the exertions and the work of the Ministry of Commerce and Manpower Services in trying to encourage industry to come to Northern Ireland. My noble friend referred to our industrial training schemes, which I believe lead the world. Within the Government of Northern Ireland, there is no doubt that there is all the skill to cure the problem. What is wanted is more drive and more investment, not less. With the rising working population and, unfortunately, with some industries on the decline, new job opportunities have to be provided at a higher level within Northern Ireland than would normally apply for an equivalent area in the United Kingdom.
My Lords, in 1971—I should like to say how proud I am to have been in the Governments of Northern Ireland when the development programme from 1970 to 1975 was being formed—we saw some 7,000 new jobs being provided. Had that continued, we would really have made considerable inroads to the problem of unemployment. But all of that in the 1970s was really the result of efforts made well before, many years before that. Now that the impetus has gone I feel that I can see few signs of a vigorous promotional campaign going on at the present moment. It is worth while here stating that it is not as though our labour relations were bad; they have been quite excellent, and indeed the strike record has been the envy of many regions in this country. Of course, at the moment the problem is that so much money and

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effort is having to be spent in holding on to existing jobs, and it is a very frustrating business to be just trying to hold on and not to be developing.
This brings me to the particular problem of Harland and Wolff. Although I wish to criticise the methods the Government have employed in saving the great firm of Harland and Wolff, I would make it quite clear that I support absolutely their decision to try to re-create a viable shipyard in Belfast. Shipbuilding is a strategic industry. It operates in a special climate of its own, nation by nation protecting its own strategic industry. Since it is in fact a strategic industry, in my view the whole burden of that industry should be carried by the nation as a whole because it is up to the nation to decide what size and what shape that industry should be. In fact, it is not a provincial responsibility. I know the problems of the shipbuilding industry. I am told that at the present moment if you want to buy a ship—and who would want to buy one?—in Japan and Korea the cost is some 40 per cent. lower than the cost in the United Kingdom, and in fact it represents only the material which has gone into the ship. Under those conditions it is incredibly difficult to see what the right future of this industry should be.
Harland and Wolff have two years' work ahead of them, but the question what happens after that is a most serious affair, and should this industry still be carried by the Province as opposed to the nation we could have some very grave problems. So far as the relative efficiency of Harland and Wolff is concerned, although the output is still far too low they can compete with reasonable success in Europe if they are pricing ships. But unlike other industries that Her Majesty's Government have been rescuing, labour relations within Harland and Wolff have been very good indeed. In 1975 up to date the total amount of time lost due to strikes has been only one half hour per employee. I believe there must be many industries which would be proud to have a record like that.
The Northern Ireland Office and the board of Harland and Wolff decided that it was necessary over the next two years to have £60 million pumped into Harland and Wolff. As I understand it—and this is what I would very much like cleared
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up by the noble Lord— £30 million of this money came from the Treasury and £30 million came out of the Budget of Northern Ireland. All Departments in Northern Ireland were asked to make economies to provide this extra £30 million. Education, as I understand it, had to provide about £5 million. It seems to me that this is an attack, however obliquely done, on the agreement that we should have parity in social services within Northern Ireland. That is a very long-standing agreement. If I am right, for the next two years Northern Ireland will in fact have parity less £30 million.
I should like the noble Lord to explain, if he can, the workings of this arrangement. For the very first time since 1945, when large incentives were provided to increase job opportunity in Northern Ireland, we are having job promotion balanced against the social services. I am entirely in agreement with the Government that people in an area should realise that they have only a certain amount of money, and if they spend it on one thing they do not spend it on another; but when you are dealing with a subject such as shipbuilding, which is a national strategic industry, I feel a different set of circumstances arises. We know that there is to be a delay in the school building programme; I do not know by how much. I know the noble Lord cannot answer this, but tomorrow we may be hearing of many millions of pounds going into Chryslers. I should like to know whether the comprehensive schools around those particular works are going to be delayed in order that people there should realise the difficulty of supporting a problem industry.
The announcement in which the Minister, Mr. Orme, said to the workers of Harland and Wolff, "Raise your productivity or you will get no more money", was clarity itself, and I believe that this has been taken to heart by the men of the Queen's island. I believe that they are determined now to deliver the goods. But it does not alter the fact that in two years there may be no goods to deliver because the world's shipping trade is in such a state. I wonder whether, when it comes to the question of Chryslers, we shall have as clear an indication as the Minister of State has given to the workers of Harland and Wolff. I would hope so, because if it was not so then one could suggest that it was politics

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and political support which was playing a part in Great Britain.
Lastly, in dealing with Harland and Wolff the Government have decided to leave them out of the general nationalisation plan for shipbuilding in the United Kingdom. They have also decided to leave out Short Brothers and Harland from the aircraft nationalisation plans. I am not going to debate here the wisdom of that decision, or indeed the political unease that it has caused, because that is, to my mind, water under the bridge at the moment. It is symptomatic of our problems in Northern Ireland that that particular decision has worried a lot of people; many people feel that this was the setting up of an industry ready for a pull-out from this country. I must ask the Government what arrangements they have made to ensure that both these great firms arc in continuous contact with the nationalised industries on this side, because there is a great danger, unless those communications are absolutely clear, of both industries being left out on a limb and then disaster will surely follow.
I wanted to draw the Government's attention to the problem of communications between Great Britain and Northern Ireland. So far as we can see, services have been closed at an alarming rate, and the cost of travel between Northern Ireland and Great Britain is now absolutely astronomical. I wonder whether the Government could have a really good look at that to see whether something could be done about it. May T ask the Government to have a really good look at the expense of travel, and at whether it would not be made easier for tourists and other people if Aldergrove were made into an international airport so that people coming from the Continent would not have to stop over in London on the way through?
My Lords, I have not touched on agriculture because my noble friend Lord Moyola will be doing that. I know the noble Lord and his Government are frustrated at having to spend so much money on prison building in that sort of area. However, prison building is no substitute for job promotion, and I should like to ask the Government whether that is being carried on the Northern Ireland Budget or how it is being carried, because it is
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part of law and order which should not be taken away from our social services budget.
I would end by asking the Government to tell us how they will increase their efforts, referred to in the White Paper. Do they intend to continue greater incentives to industry to come to Northern Ireland than exist in other areas than Northern Ireland, as has happened in the past? Have they calculated the vast scale and the form of investment that will be necessary in order to improve the standard of living, the standard of employment, and social conditions in Northern Ireland within the foreseeable future? And what do they consider to be the foreseeable future? Is it ten years, or what? I await the noble Lord's reply.
3.41 p.m.
Lord MOYOLA: My Lords, I must apologise to the noble Lord. Lord Donaldson of Kingsbridge, for the fact that I have not been able to give him any inkling at all of what I intend to say. As he will have heard, I spent a good part of the morning circling Liverpool in an aeroplane. Although I had good intentions, I am afraid that it was not possible to fulfil them.
I should like to support what the noble Viscount, Lord Brookeborough, has just said about the unemployment problems of Northern Ireland. I have not studied the matter in depth in the way that he has, but I have noticed the rather steady stream of factory closures which we have seen over recent months. It comes home to one particularly when one sees it happening on one's own doorstep. In my own small village of probably less than 1,500 people, we have seen two out of four factories close in the past four months. Unfortunately, it was the two largest which closed, and the two that remain, being very small, can have no hope of absorbing the people who have lost their jobs. It comes home to one particularly when one knows of two people in the same family suddenly finding themselves on the dole. I hope that the noble Lord will be able to give us some joy on the unemployment picture.
The main thing I want to talk about is agriculture, against the background of unemployment. As a farmer, I should declare that I have, of course, an interest. In Northern Ireland agriculture is still

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our largest industry; something of the order of 14 per cent. of the working population are involved in it and its ancillary industries. It follows, therefore, that if our economy is to keep its head above water, it is important that agriculture should be on a sound footing. I am fully aware that over here, too, farmers have been through a bad time in the past year, but when there is a recession the remoter areas feel the draught first and feel it hardest. Over the past year, 1974–75, farm incomes in Northern Ireland have been 40 per cent. below what they were in the preceding year, and if one takes it back further, 20 per cent. below the average of the four years before that.
A good deal has already been said about our geographical problems. The hard facts of geography add enormously to our difficulties. In saying that, I want to say how much we in Northern Ireland have over the years appreciated what we know as the "remoteness grant" which has been given to us by successive British Governments. This grant compensates in part, not by any means in full, for our transport disadvantage. I would at this stage, without labouring the point, like to ask the noble Lord whether he will give us an assurance that that grant is going to continue—I understand that it is shortly due for review—and that it will continue at a higher rate than heretofore, in order that it may compensate for the enormous increases in freight charges by road, sea and rail. When this calculation to decide on the amount of the grant is made, I hope it will not be forgotten that many of the things which farmers require have to come into the country, such as agricultural machinery, foodstuffs and so on, and of course the finished product has to go out again. There is a charge on many agricultural items both ways, and consequently this remoteness grant is of the greatest importance.
I should like to turn briefly to beef, which of course climatically we can produce best and easiest. Because of that, two-thirds of our cows are devoted to producing beef calves. As we all know, losses among beef farmers in the past year were pretty heavy. Farmers incurred enormous debts last winter, and although calf prices were much better this year, in many cases they were not sufficient to pay off the debts which had been
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incurred. As a result, because the price of cows is reasonably good at the moment, an enormous number are being slaughtered to pay the bills. Again, because at the moment there is a good trade in calves to the Continent, an enormous number are being sent there. It all means that if something cannot be done there will be an acute shortage of store cattle in the near future, because there will be comparatively few cows to breed, and there will be a great deal less beef for the market, and we are all going to pay more.
One further point I should like to make on beef relates to the variable premium, which we in the North of Ireland have appreciated enormously. Because of the stretch of water, I suppose we in the North of Ireland almost always receive less for our beef cattle than do farmers here. I think that buyers allow for transport costs—and generally a hit more. There are, of course, times when the price is still low with us, and because prices are good here we receive no variable premium. Put another way round, if the price in Great Britain was as low as the Northern Ireland price, then there would be a premium. I would suggest to the noble Lord that if he would let us have our own target price in Northern Ireland it would put Northern Ireland farmers on a much more equitable basis, and a much more fair basis, compared with their colleagues in Britain.
I should like to turn to grain. Until we joined the EEC, our grain importers in Northern Ireland were able to buy their grain on the world markets at, roughly speaking, prices that were comparable with those paid by the rest of the United Kingdom. Now we have to buy from the EEC and, because we are on the periphery, we have to pay a good deal more by way of transport charges than is the case in the rest of Britain. I am told that at the moment the disadvantage for us, compared with our counterparts in, say, Liverpool, is about £4 a ton, but if one takes the figures over the whole country, I am told that the average is about £7 a ton. To put it another way, in Northern Ireland it costs us £l more to finish a pig than in the rest of Britain. This is a serious disadvantage, and of course one has to add the fact that many of the pigs are exported to this country, so

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that there is a transport charge on that as well.
This is a particularly serious matter in a country of small farms because to make up for the shortage of agricultural land, people go in for intensive farming: in other words, pigs and poultry. The seriousness can be no better emphasised than by some figures which I have been given which show that the pig breeding herd in Northern Ireland fell by about 37 per cent. last year as opposed to only 17 per cent. in this country, and that was at the time of the recession. If people go out of intensive farming, they do not come back to it.
They do not have the capital to get back and, in the present climate of serious unemployment, it will not be easy to find jobs for people who leave this occupation; there are in Northern Ireland now about 14,000 people unemployed in the pig, poultry and related industries. This problem needs urgent attention; it needs either a direct subsidy on the transport costs or, on an EEC basis, a subsidy which, I have no doubt, would have to be, and should be, applied to the whole island of Ireland. It does not matter which way it is done as long as it is done quickly, and it must be done before confidence is eroded again and further unemployment occurs.
The noble Viscount, Lord Brooke-borough, referred to the question of transport betwen Northern Ireland and Britain, a matter which affects the economy, industry, business and, to some extent, the whole fabric of the Northern Ireland society. In the past year, we have been deprived of the Belfast-to-Heysham passenger service which British Rail ran both ways daily across the Irish Sea. It was taken off at the beginning of April when one would have thought the tourist trade was increasing. If there was ever a chance of the service paying, it was then; one's mind boggles at the reason. We are also told that we are to lose the daily service between Belfast and Ardrossan, and we have been told that we may lose—I emphasise "may" because I hope otherwise—the Townsend Thorenson service between Larne and Stranraer. The problem for industry and business are obvious, and when one
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realises that, in addition, the return air fare has just been increased to £44 for what is in fact a 50-minute journey, the situation is even more serious.
I have no doubt that some noble Lords will say that one pays that much for travelling from Glasgow or Edinburgh to London, but they are not comparable situations. There is no strip of water between and therefore there is no problem of having to transfer from train to boat and boat to train. In any case, the train takes only five hours from Glasgow to London, whereas one cannot get from Belfast to London in even double that time, except of course by air. Thus, the two things are not comparable, although many will argue that they are. I recognise that there are enormous problems for the undertakings which provide transport across the Irish Sea, but I believe that if it were made a little cheaper and perhaps a little easier for people to make this journey, it could be of help to business and industry, and, perhaps, also the community side of our problems. The rundown in transport services does not encourage industry to come to this area or help the bank balances of industries which want to send a director to London to do business.
On the community or social side, we all benefit by having our outlook broadened by travel, and particularly this is so where there has been a period of strife, when hatreds have been built up and there have been difficulties of this sort. As these hatreds die down, it would be of enormous help if people could be encouraged to get out of their environment and see how similar communities live in other parts of the world; if nothing else, going away provides a cooling-off period. I ask the noble Lord to examine this matter urgently, because it is totally wrong to allow one part of the United Kingdom to become, or feel it is becoming, isolated, as we are beginning to do. This is a real danger to employment, and if travel were made easier it might be a contributory factor to bringing peace. These are all matters which concern us in Northern Ireland. They are all problems which are magnified by the fact that we are a long way from the centre of things and I hope that when the noble Lord replies, he will be able to give me some joy on some of them.

THE NHS AND PRIVATE PRACTICE
3.57 p.m.
Lord WELLS-PESTELL: My Lords, with the permission of the House, it might be convenient if I were now to repeat a Statement made in another place by my right honourable friend the Secretary of State for Social Services on private practice and the National Health Service. The Statement reads as follows:
"The House will be glad to know that this morning I have met representatives of the medical and dental professions on the Government's proposals for phasing private practice out of NHS hospitals. As a result of this meeting, they are ready to call the Central Committee for Hospital Medical Services and the British Medical Association Council and the Council of the Hospital Consultants and Specialists Association together later this week and submit proposals to them for urgent consideration. It is hoped that they will be accepted and normal working resumed.
"As the House will be aware, the Prime Minister and I met a representative delegation of the professions on 3rd December at which the professions expressed anxiety that the Government's proposed legislation on phasing out private practice from NHS hospitals could render nugatory the practice of private medicine in this country which the Government have always said they do not intend to abolish. At that meeting outline proposals were put forward by the noble Lord, Lord Goodman, which were regarded as the basis for urgent exploration. The Prime Minister undertook that these proposals would be examined and that the professions would be informed of the Government's response.
"Since that time a process of clarification has been taking place with me through the noble Lord, Lord Goodman, and proposals have been evolved which the Government hope will lead to an end to this dispute. If the professions as a whole agree these proposals and normal working is resumed, the Government will embody these proposals in their legislation.
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Under the proposals, a copy of which has been placed in the Library, the professions make clear their continuing opposition to the phasing out of private practice and reserve their right to try to influence Parliament's decision on the point of principle, but they acknowledge that this may become the will of Parliament. It is proposed that the legislation would embody two principles: first, that private beds and facilities should be separated from the NHS and, secondly, an expression of the Government's commitment to the maintenance of private practice in this country through the renewal of the provision in the National Health Service (Amendment) Act 1949 which maintains the right to private practice by entitling doctors to work both privately and in NHS establishments. These two commitments will be related through the establishment of an independent board set up by the Government. The board will have an independent chairman, two members drawn from the medical profession and acceptable to it and two members appointed after consultation with NHS staff and other interested parties.
"The criteria under which pay beds and facilities would be phased out in the legislation will be the reasonable availability of alternative facilities for private practice. It is accepted that there are some pay beds and facilities which on this basis, and on the basis of their under-use, could be phased out without delay. The Bill will therefore contain a Schedule, giving details of 1,000 pay beds which will be phased out of the NHS within six months of Royal Assent. The Schedule will be drawn up on the criteria which I have mentioned and after consultations with all concerned. The phasing out of the remaining pay beds would be determined by the independent board which would be guided by the following criteria: that there should be a reasonable demand for private medicine in the area of the country served by a particular hospital; that sufficient accommodation or facilities existed in the area for the reasonable operation of private medicine, and that all reasonable steps had been, or were being taken to provide those alternative beds and facilities. This would be

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kept under continuous review. Where all reasonable steps were not being taken, that would, after due warning, be in itself grounds for withdrawing pay beds and facilities in the hospitals concerned.
"One of the factors the board would bear in mind in deciding whether private facilities for specialised operations, treatments and investigations should be phased out would be the willingness of the NHS to make such facilities reasonably available on an occasional basis in specified circumstances and at an appropriate charge. The Secretaries of State would have to be satisfied that there would be no disadvantage to NHS patients and that such patients were admitted on the same basis of medical priority as NHS patients.
"As stated in the Queen's Speech the regulation of the private sector following the separation of pay beds will be subject to further consultation with the professions. In the meantime the Government need to be satisfied that developments in the private sector do not significantly endanger the service the NHS gives to its patients and will enter into consultation with the medical profession as to how this can be achieved by voluntary means. The consultations would cover the point as to whether any reserve powers that it proved necessary to take in the legislation might be exercised by the independent board.
"The Government believe that the smooth phasing out of pay beds would be facilitated if, pending their withdrawal, a system of common waiting lists were to be introduced. The professions have expressed reservations on this matter, but it is proposed that the legislation should instruct the board to examine this and make recommendations to the Secretaries of State within six months of Royal Assent to the Bill.
"I hope that, in the light of these proposals—with which the Secretaries of State for Scotland and for Wales associate themselves—the professions will now accept that this is a matter for Parliament and end the damaging industrial action by senior medical staff. The issue of private practice in
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National Health Service hospitals has long been one of great controversy, not least within the Service itself. These proposals will ensure that the policy of separation is achieved, but in a way which should allay the fears of the medical profession, and provide an enduring settlement."
My Lords, that is the end of the Statement.
4.6 p.m.
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Wells-Pestell, for having repeated a very long and somewhat complicated Statement which we shall be glad to study in detail at a later stage. Many matters are raised in this Statement—matters which your Lordships' House debated at length in a debate earlier this month. First, there is a primary matter, to which we take particular exception, the phasing out of 1,000 pay beds. Here I quote the Statement:
"…which will be phased out of the NHS within six months of Royal Assent."
This is wholly repugnant to the professions who have been in close touch with the noble Lord's right honourable friend. It is also wholly repugnant to this side of your Lordships' House and to all those concerned with the prosperity of the National Health Service and private practice in concert.
We believe most sincerely that the arbitrary nature of this decision will not lend itself to future harmony within the profession. Perhaps the noble Lord would be able to tell the House the reason for this decision. We take the view that it would be better to defer this decision so that it becomes a matter to be considered by the board which is to be set up at an early stage. We are naturally glad that in the terms of the Bill there will be provision for the re-enactment of the National Health Service (Amendment) Act 1949,which will maintain the right to private practice in the profession and will entitle doctors to work both privately and in National Health Service establishments. We believe that this is fundamental, and we are pleased that the Government have at last yielded to the very real arguments put forward by the profession.
Finally, what particularly concerns us is the question of the private sector in its

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various establishments after the Bill has been laid before your Lordships' House. I remind your Lordships of what the Secretary of State said in her speech at Folkestone on, I think, 9th October, relating to the circumscribed way in which Her Majesty's Government see the private sector operating. This has no mandate whatever in the Government's programme. There was nothing whatever in the programme about the circumscribed way in which they foresee private beds being made available. We recognise that it may be necessary to reach a new distribution of private beds, but this is a wholly different matter and one on which we hope the board will work in close consultation with the profession.
4.10 p.m.
Lord AMULREE: My Lords, I should like to welcome in a very warm fashion the Statement which has been made because I am pleased to see that it has now been accepted that it is the will of Parliament which must remain supreme. This means that there is a good chance that the consultancy profession will call off the strike in which they are indulging now—because although it may be covered up by the words "industrial action", it is in fact a strike—and that, as I said to your Lordships the other day, is something in which I do not think members of my profession should indulge. The other thing about which I am a little uncertain, although I do not disagree with it at all, is that we are told the facilities for private work will be separated from the National Health Service but will be allowed to continue on the understanding that there is no interference with the work for the National Health Service patients. My Lords, apart from the pay bed issue I have never come across any example of facilities being available to private patients which has militated against work for the National Health Service, and I have worked for the National Health Service for a period of20 years.
One further point I should like to make concerns the waiting lists. It has always seemed to me that there was an enormous amount of work to be done on waiting lists because, from what little experience I have had of them, I have never been certain how genuine they are. I see that the board is to make a recommendation about waiting lists at the end of six
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months. I wonder whether six months will really be long enough to do what will be an extremely difficult and intricate job. Finally, my Lords, I am rather disappointed that the Statement contains no reference to the Royal Commission which, about six weeks ago—I cannot remember exactly; it is so long ago that I have almost forgotten when it was—we were promised would be set up. I am surprised there was no reference to it in the Statement, and one wonders whether, again, this is to be an egg which will be addled from the start.
Lord REIGATE: My Lords—
Lord WELLS-PESTELL: My Lords, I am sorry, but I think that the practice of the House requires me to answer the two Front Bench spokesmen first. I think this is an inopportune moment to have another debate on the National Health Service, and if I may say so with very great respect to noble Lords, I hope we shall not be tempted to do that. I am surprised that the noble Lord, Lord Sandys, should talk about a certain repugnance on the part of the consultants at the idea of phasing out at one fell swoop 1,000 beds. I think that, if he consulted them, he might well find that that repugnance does not exist. They recognise, as we all recognise. that we have 4,451 private beds within the National Health Service. Only about 2,500 of them are in full occupancy. I admit that some of the others are used for a few weeks in the course of a year, but when you total them it amounts only to something like 2,500. I think that most people who are aware of the situation would recognise that we could dispose of 1,000 beds without any detriment at all to private practice. The question of the remaining beds will be one for the board to deal with. It will be for the board to see whether there is a sufficient number of pay beds available in any one district. This is their function, and it will be their decision. Perhaps I could leave that there.
My Lords, I am grateful to the noble Lord, Lord Amulree, for his contribution, which I thought was a very balanced one. As to his point about the Royal Commission, the only comment I would want to make is that the function of the Royal Commission is to look at the whole of the National Health

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Service. This Statement deals with a specific problem, so far as private practice and the consultants are concerned, and my right honourable friend the Secretary of State wanted to deal with this separately in view of the pressing and urgent need to get this result.
Lord REIGATE: My Lords, may I ask the noble Lord two questions? First, will the board, whose functions are at the moment rather difficult to follow, be able to take into account the problem of pay beds in teaching hospitals, where private beds have always had a special importance for a variety of reasons? Secondly, what will be the position about foreigners? Am I right in saying that British subjects will not be encouraged to use pay beds in National Health Service hospitals, but that such beds will still be available to foreigners? Will those be included in the 1,000 or not?
Lord WELLS-PESTELL: My Lords, I cannot answer the noble Lord's second point. I just do not know; but I will find out, and I shall certainly let him know what the position is.
Lord REIGATE: My Lords, with respect, it is a rather important point.
Lord WELLS-PESTELL: My Lords, the noble Lord is talking about private beds available to foreigners. I was saying that, so far as private medicine is concerned, 1,000 beds can be disposed of without imposing any difficulties on private practice in this country. With regard to pay beds in the teaching hospitals, this will be a matter for the board to look at and to review, and it will be for them to make a decision on it.
Lord PLATT: My Lords, I do so agree that we should not turn this into an occasion for a major debate. I understand that a certain compromise is within our reach, or our possible reach, and anything which will prevent the medical profession behaving as it has been doing in recent times would be very greatly to my satisfaction. I endorse everything that the noble Lord, Lord Amulree, has said about that. With regard to waiting lists, to which he also referred, I think there is an enormous amount of bogus in waiting lists. When you really go into them I think you will find that an
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enormous percentage of them are in fact children waiting for tonsil and adenoid operations which are probably much better not done. It is high time that somebody looked into this matter very seriously.
As your Lordships know, I have no personal advantage to gain by the continuance of private beds, but I reiterate what I have said before; that is, that I think private practice is an enormously important education to any consultant and, so far from private practice militating against the National Health Service, it has always been my view that private practice increases a doctor's experience of medicine in the populace as a whole, and that this is to the advantage of the Health Service. I hope that a satisfactory compromise will be reached.
Lord HARMAR-NICHOLLS: My Lords, I wonder whether the noble Lord, Lord Wells-Pestell is aware that, though he has a facility for making complex matters sound easy, the Statement was a complex one. He must be aware that, however favourably one may view its outcome, it is full of face saving and reflects the fact that there is a conflict into which ideology seems to enter. It is vital that we should be objective about this important matter. Is it too late for it to be put to a Royal Commission where it could be brought back into objective consideration the result of which everybody would accept, instead of passing it on in this way in which, clearly, there is a conflict of thought which can only be damaging in the future?
Lord WELLS-PESTELL: My Lords, the noble Lord is quite right. There are ideological differences and I have never been at any pains to deny that that is so. I believe that there must be a certain point where noble Lords on different sides of the House will not meet. The obvious thing to do is something which we have always been very good at; that is, trying to effect a compromise. I can only say what I said when we had the National Health Service debate in this House on 3rd December; that is, that, rightly or wrongly, we regard the issue as a political one and feel that it must, therefore, be determined by Parliament. We may be wrong about that, but that is how we feel. We do not believe that this is a matter which can be decided by the Royal Commission. Anything else, yes, but I should

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have thought that we had here not only grounds for reason and understanding but grounds upon which a solution to this rather distressing problem can be built.
May I add while I am on my feet that I have been looking again at the Statement in the light of the remarks of the noble Lord, Lord Reigate. It is a difficult Statement to take in. I said that the National Health Service would need to
"…make such facilities reasonably available on an occasional basis in specified circumstances and at an appropriate charge."
I feel that the answer is that beds for such purposes as the noble Lord described would be provided in that way.
Baroness GAITSKELL: My Lords, would not the Minister agree that, whatever we feel about the private beds issue—whether or not we feel it to be a matter of principle—it is true that private beds and private practice are no threat to the National Health Service, which can be run only as a public service?
Lord BOOTHBY: My Lords, before the noble Lord, Lord Wells-Pestell, replies, may I ask whether he has considered how much Her Majesty's Government and, indeed, all of us owe to the noble Lord, Lord Goodman, who has played a great part in this business, as in many others? Indeed, in so far as the Government are governing the country at all, the noble Lord seems to be doing most of it, and I feel should be paid a tribute.
Baroness LEE of ASHERIDGE: My Lords, the noble Lord, Lord Boothby, has anticipated what I wanted to say. No one will get a perfect ideological solution, but I should like to feel that, when Members have read their Hansard and had time to consider this complex Statement, they will feel that we should send our congratulations to the Minister responsible, to the noble Lord, Lord Goodman—who is lurking in the background— and to the representatives of the medical profession.
Lord WELLS-PESTELL: My Lords, briefly to reply to my noble friend, the whole purpose of this operation is to ensure that the National Health Service is able to offer a really comprehensive, effective and efficient service, while alongside it there is private practice. I would endorse what the noble Lord, Lord
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Boothby, said, but it is hardly for me, occupying such a junioir capacity in your Lordships' House, to extend the thanks of my right honourable friend to the noble Lord, Lord Goodman. I am sure that she will have done this herself much more effectively than I could do.
Lord SEGAL: My Lords, since the phasing out of the first 1,000 beds over a period of six months is a very considerable compromise on the part of the Government would my noble friend not agree that it would go a long way to provide reassurance to the various contributory schemes, as well as providing a very useful source of extra revenue to the National Health Service, if the phasing out of the remaining 3,000 beds were considerably slowed down after the end of the first six months?
Lord WELLS-PESTELL: My Lords, I cannot make any comment on the speed. This matter will depend entirely on the Board and it may well take some appreciable time before they are phased out. It may well be that there will be pockets—or perhaps I had better say "areas"—in the United Kingdom where it may take an extremely long time before one can offer a comparable service. So I believe that we must think in terms of a long-term operation rather than something which will take effect in six or 12 months.

APPROPRIATION (NO. 3) (NORTHERN IRELAND) ORDER 1975
4.26 p.m.
Debate resumed.
Lord DONALDSON of KINGSBRIDGE: My Lords, if we may now resume the discussion of the Appropriation (No. 3) (Northern Ireland) Order, may I first say to my noble friend Lord Shinwell—
Lord BELSTEAD: My Lords, I do not want unnecessarily to extend the debate but I believe that there may be another noble Lord who wishes to speak before the noble Lord replies.
Lord GREY of NAUNTON: My Lords, I was not aware that the noble Lord, Lord Donaldson, was about to reply and I should, in any event, hesitate to add to the talk about Northern

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Ireland and its problems. Much talk—and there is much talk—may equally well be the cause of troubles as their cure. So much that is said over here is about what is bad in Northern Ireland and all too little is said, and even less is listened to, about what is good. That is my excuse for seeking to add a few words to the specific points which have been made by the noble Viscount, Lord Brookeborough, and by the noble Lord, Lord Moyola. Five years in a privileged position in Northern Ireland taught me that, despite the undoubted bad, there is a great deal of good. Several years away from Northern Ireland since then have, alas! taught me that many people over there feel, rightly or wrongly, that not enough is said here on their behalf about what is good.
The draft Instrument before your Lordships is one that will appropriate a very large sum of money for the service of that part of the United Kingdom which is across the Irish Sea. There are others outside your Lordships' House who, for understandable reasons, would cheerfully excise that part from the United Kingdom and cease entirely to appropriate monies for it. That has never been the intent of Her Majesty's Government and the draft Instrument before the House is further proof of this. So I may be open to the charge of pushing at an open door if I try to justify Northern Ireland's claim to its share of what is available from the United Kingdom. However, the purse on which Northern Ireland must claim is, alas! very much slimmer than it was in the days when the statement about parity of services to which the noble Viscount, Lord Brookeborough, referred was made. It may therefore be necessary to speak up for the worth of the claim, not just on some promise made in the past but on its intrinsic worth.
There are two ways of speaking about Northern Ireland, neither of which is in the least likely to lead to success. The first is to utter some broad generalities and open oneself to being instantly controverted; the other way is to go into the endless complexities that undoubtedly surround anything discussible in that wonderful land. The second of these alternatives is tedious and your Lordships' House has had enough of it in the past and I shall have at least the merit of
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brevity if I use the "generality" method. I boldly say that there is, in spite of all the grievous tragedies of Northern Ireland that have anguished and perplexed the rest of the United Kingdom, a great good there that merits help of the kind that it is proposed to give by this appropriation of money.
We have been told that the level of unemployment there is twice the national level and that there are large pockets of unemployment where the level is vastly higher than anything anywhere else in the United Kingdom. I hope that no one will think that a fair deduction from this is that the majority of those out of work in Northern Ireland are unemployable. The contrary is the case. An instance can be taken from Short Brothers and Harland. Any firm that earns a Queen's Award to Industry can justly be proud of it. It is almost unbelievable that in the stresses of Belfast in recent years and in all the uncertainties and difficulties of the aerospace industry, Short Brothers have won the Queen's Award to Industry no fewer than eight times. This is something which is unparalleled except by (I think) two great companies with many separate divisions, some of which have earned the Award from year to year.
The fact is that with good management and wise understanding of the work force, Northern Ireland people are skilful and industrious; and if the question is asked whether strenuous efforts (to which tribute has been paid by noble Lords who have spoken previously) should be continued to reduce unemployment at the same time as the large and difficult problem of unemployment in the rest of the United Kingdom, the answer undoubtedly is, Yes. There is the additional consideration that the levels of unemployment in Northern Ireland are of themselves so destructive of self-respect as to be a direct cause of civil disorder and resort to anti-social behaviour. So there is a special need to tackle the unemployment problem there.
It is patently true that the Ulstermen themselves have contributed to the loss of job opportunities. This has happened not only through direct violence and the mindless destruction of life, limb and property but in other less direct but equally reprehensible ways. It would be a brave director or senior executive of a company

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who would stand up at an annual meeting of shareholders to explain why it was decided to invest further large sums of the shareholders' money in the reconstruction or further development of a business in a place with so dismal a reputation as has Northern Ireland. But there are good reasons for doing just that. There are the specific arrangements that have been made by succeeding Governments which have been mentioned this afternoon: the advance factories and the financial inducements. But beyond those there are the great advantages of intrinsic skills and, as the noble Viscount has said, a reputation for good industrial relations and a responsible trade union organisation.
It is dangerous for any non-Irishman to express any general views about the Irish character, particularly if he proposes to be in any way less than complimentary, but I wonder whether it is not true that the Irish have themselves in times past given the impression that they are, to put it politely, a little light-hearted about money. Some may be so; but the cold statistics of savings in Northern Ireland show that the Ulsterman is a canny man about money and the saving of it. This is all the more remarkable at the present time when, elsewhere in the United Kingdom, saving does not seem to be a great virtue, and the mutability of human affairs in Northern Ireland is greater than it is over here and consequently there is even more temptation to spend what one has and take no heed for the morrow. The Ulsterman is a great saver and a good regarder of his money and it may be assured that the monies appropriated for public services in Northern Ireland will not be frittered away.
My Lords, the noble Viscount referred to the terms of the White Paper of 1973, Northern Ireland Constitutional Proposals, Command 5259, and I am sure that the same principles there set out are still those that move Her Majesty's Government today. It was declared that the overall level of public expenditure in Northern Ireland would be determined in the light of the objectives to which the noble Viscount drew attention and would be compatible with public expenditure policies for the United Kingdom as a whole. As we are all so sadly aware, the harsh facts of economic life have turned very much against the United Kingdom as a whole since then; but des-
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pite all the unfavourable publicity and despite its self-inflicted wounds, Northern Ireland, not only as an integral part of the United Kingdom but on its own desserts—which far exceed the much more publicised defects and defaults—should have the parity of treatment which the White Paper set out and which had for many years before that been the basis of United Kingdom policy.
The noble Viscount, Lord Brookeborough, asked some searching questions as to the basis of the calculations which lie below the details of the sums of money which are to be appropriated if the draft order is approved. It is not for me to traverse that ground or to venture to accept the invitation of the noble Lord, Lord Shinwell, to go into such things; but one is surely entitled to hope, whatever arrangements underlie these calculations, that what Her Majesty's Government do about money for Northern Ireland will be the result of sympathetic, specific, realistic and effective consideration of the needs and desserts of a much maligned part of the United Kingdom.
4.39 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am grateful to the noble Lord, Lord Grey of Naunton, for intervening. He has the respect of, I think, all members of the Northern Ireland Province and he reminds us that although there is a sense in which the preservation of the Province in something like its normal state is a cost to the United Kingdom, this is a cost which is very much worth while. I, for one, agree entirely with what the noble Lord has said. He made one or two points to which I think I should refer. He mentioned the excellent industrial relations, and the noble Viscount, Lord Brookeborough, spoke of the half-an-hour-per-employee time lost in Harland and Wolff.
Nobody who has anything to do with agriculture, as I have, in Northern Ireland can doubt the extreme energy of the Northern Ireland worker. There is a basis here of a possibility of industrial efficiency which is not so striking to the eye elsewhere, though there are other difficult problems. My noble friend Lord Shinwell was not right in suggesting that this is the first time these figures, which come up two to three times a year, have

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been subjected to fairly close analysis. As a matter of fact, six months ago we had a debate not very different from today's debate, dealing with all the same points which have moved on a little in the way things do. It is desirable and healthy that we should do this from time to time and, as noble Lords know, I have once or twice criticised one or two noble Lords for talking out of turn, but not on Appropriation Orders.
I should like to support the noble Lord, Lord Belstead, in his praise of the work of the Manpower Services Commission. This is one of the most important things that we are doing in Northern Ireland. Our industrial training programme is the most sophisticated in Western Europe. In Northern Ireland nobody lives more than 25 miles from a training centre. That is a remarkable statement. We have ten times as many training places per head of population as in Great Britain. These are supplemented, as noble Lords will know, by schemes to train workers on company premises, and groups of workers as an integrated work force, by direct labour schemes such as "Enterprise Ulster" and the Urban and Rural Improvement Campaign. I spoke about this the last time we were discussing this matter. The work they are doing is absolutely first class. They are collecting men, who seem to have been out of work for some time, from the employment exchanges and turning them into semi-skilled and hard workers so that they can go on and hold down a job elsewhere. It is excellent.
The noble Lord, Lord Belstead, asked about foreign investment. Clearly this is a matter of the greatest importance. It is not too easy at the moment to attract new investment in Northern Ireland for obvious reasons. The United Kingdom is subject, as we all know, to a serious recession. It is part of a world recession which has United Kingdom elements all of its own, and Northern Ireland is always a percentage worse in its economic problems than the United Kingdom. So when we are discussing investment in Northern Ireland we cannot expect to be particularly cheerful. It is very difficult to get investment here and it is still more difficult in Northern Ireland, but we continue to try. Last year, representatives of the Department of Commerce visited over 1,000 companies outside Northern Ireland
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—which was twice as many as in the year before—and since 1st January 1974 seven foreign-based firms have been attracted and will eventually provide something like 750 new jobs. It must be admitted that much energy has to be devoted (one noble Lord said this) to the task of persuading firms to continue and not decrease their activities in Northern Ireland and, where possible, encouraging them to expand. My right honourable friend Mr. Stan Orme spends his whole time on this and probably spends more time trying to stop things closing down than with expansion and getting new investment.
The noble Viscount, Lord Brookeborough, asked what other methods, apart from the Northern Ireland Finance Corporation, were available to encourage investment in Northern Ireland. The Department of Commerce, which has greater and more flexible incentives than anywhere else in the United Kingdom, is working away at this. Grants of up to 40 per cent. can be offered towards the cost of constructing new buildings and the provision of plant and machinery and advance factories can be made available at favourable rents. The United Kingdom Government industry schemes relating to special sectors are available too. There are currently some 58 foreign-based firms in Northern Ireland employing some 29,000 people, but no new American companies have come this way since 1969. Since 1975 the Department of Commerce has promoted 3,055 new jobs, which is not too bad. So much for foreign investment.
I do not want to say a great deal about the NIFC; there will be an Order before Parliament within a matter of a month or two regarding its new name and new terms of reference. We will leave those discussions until that date. The noble Viscount, Lord Brookeborough, said that we did not need to be reminded of the perils of pushing money into non-viable firms. First of all, it is not intended that it should have power to give grant aid on its own account. It will operate commercially so far as possible. In the circumstances of Northern Ireland we cannot expect that public ownership will never be appropriate. I should like to remind the noble Lord of the encouraging and hopeful start of Strath Earn Audio Company as a result of help from the Northern Ireland Finance Corporation.

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This is an entirely successful development. I would also mention the half stage that my colleague and right honourable friend the Minister of State has reached with the Ben Sherman Shirt Company in Londonderry. Here, they have halved the number of factories and work-force and are now trading at a profit. It is early days, but it is possible, by this kind of careful investigation, to put a little money here and there and to make things go which were otherwise not going. These points are worth mentioning because, as the noble Lord, Lord Moyola, said, it is depressing to find these companies shutting down in small areas, such as in the area in which he lives, where there seems to be no adequate substitute. We are doing something about this; something is happening here.
This takes me to URIC and Enterprise Ulster, which I referred to before. URIC provides employment for 2,500 men at a cost of £7½ million per annum. It also includes various amenity projects under district councils, but these will be phased out by the end of 1976–77, to be taken over by Enterprise Ulster. This direct labour organisation aims to equip the unskilled, long-term unemployed for work as well as to provide employment. There will be expansion of the organisation currently employing about 1,500 people on 100 or so projects, concentrated in areas of high unemployment, and will probably employ over 1,600 men by the early part of the coming year. It is undoubtedly a success and is now being copied in many respects on this side of the Irish Sea. It is particularly important in relation to possibilities about which the noble Lord, Lord Moyola, referred regarding intensive farming running down and there being people out of work in the country areas. It is about the only thing which can be put in here to be effective and it is important.
The noble Lord, Lord Belstead, asked about the school-leavers' unemployment subsidy. My information is that the reduction in the number of school-leavers in the Province has been noticeable as the result of this action, but there were still over 3,000 school-leavers on the register in November. The improvement is not effective enough, but it seems to have achieved something. The noble Lord also asked whether Northern Ireland agriculture receives money from the EEC
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Regional Development Fund. The answer is that as yet it does not, but I do not think there is any reason to suppose that it never will.
The noble Viscount, Lord Brookeborough, raised a number of points, some of which have been covered already. Perhaps the most interesting one concerned the block grant. This is a very interesting subject and, in relation to the future discussions we are to have on devolution, a most important one. There are relevant sections in the White Paper on devolution and in the Report of the Northern Ireland Convention. We are still studying the Report of the Convention and shall note what the noble Lord has said. There is no block grant at present; and this matter could be appropriate only if there were a devolved Administration to receive it.
The situation at present is that public expenditure in Northern Ireland is one of the fifteen programmes into which total public expenditure is broken down in the annual White Paper which the Chancellor presents to Parliament. The first place to which a Minister looks to finance a new service is within his own programme. If room cannot be found there. there may be savings to be made from some other programme or from the provision made in the public expenditure survey for contingencies. But in the present very difficult climate for public expenditure, it is practically impossible for any Minister to get money from outside this programme, and the choice may be between abandoning a project and finding offsetting savings. There is simply no money available elsewhere. Though a block grant may be a useful thing in easy times, it is quite unhelpful in hard times.
One of the most important points raised today has concerned Harland and Wolff and the question of nationalisation. In the first place, Harland and Wolff were nationalised in August of this year, well in advance of the rest of the United Kingdom shipbuilding industry, and the private shareholding in Short Brothers and Harland is now very small and of no practical significance. However, the Government do not feel it would be right to include these two companies among British shipbuilders and British aerospace—the point which was raised by the noble Viscount. These companies, important as they are to the economy of

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Northern Ireland, should be controlled locally and should be the direct responsibility of any future devolved Administration. Moreover, in the view of the Government, it will be to the advantage of the two companies and their work forces if they have an identity separate from the Great Britain nationalised industries rather than being peripheral part of them. This is not to say that the companies will lead an existence of isolation from the nationalised firms in the rest of the United Kingdom. Noble Lords may rest assured that the Government realise the importance of close and continuing links between the Northern Ireland companies and their counterparts in Great Britain but it is a little early to say exactly what form such links should take, as the counterparts are not yet in fully-fledged existence. However, the point is an important one and it will be observed.
The noble Viscount wondered whether the firm's status as a United Kingdom firm with a worldwide reputation and commitments would be jeopardised by exclusion from British shipbuilders. We think that such fears are greatly exaggerated. There is no evidence to suggest that keeping Harland and Wolff separate from British shipbuilders will lead to any lack of confidence in the firm on the part of shipowners. Its success will depend upon its ability to meet the needs of shipowners both at home and abroad. As the noble Lord has pointed out, Harland and Wolff is known worldwide and has a reputation for skill in the building of ships. The Government are determined to see that the yard succeeds.
I was enormously impressed a week or so ago, after speaking at a Chamber of Commerce dinner, when I was followed by the new chairman of Harland and Wolff, Sir Brian Moreton. I thought that his confidence was infectious, his pride in his factory was inspiring; and I feel that if anybody can bring off this venture, he will. We must not be to gloomy about the possibilities for Harland and Wolff. A great deal of money has been put into it, and we have made it absolutely clear that there is no more. My own view is that under this leadership we have a very good chance of pulling this venture off and, of course, if we do that it will be of immense value to the Pro-
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vince, whereas to allow it to fail would be a great disaster—though we are not bluffing when we say that it may come to that. However, I am full of hope, and I hope that the kind of absolute negative which has been given about no more money will satisfy the noble Viscount.
I should like to turn for one moment to the agricultural worries of the noble Lord, Lord Moyola. Goodness knows, I share most of them! The particular point I should like to deal with refers to the feeding stuffs differential. We have had a very elaborate examination made by the Ministry of Agriculture in this country, the Department of Agriculture in Northern Ireland and the feedingstuff merchants on the differential between the two. As the noble Lord said, they have given a perfectly firm figure, that the cost of the grain required for a poultry or pig ration in Liverpool is about £4 a ton cheaper, or it was when the examination was made—because it varies a certain amount—than it is in Belfast. I will not go into detail at this moment, but there is available here a report which noble Lords can see if they so wished. Basically, the reason for the differential is transport and delivery in bulk in England, and there is nothing whatever we can do about that.
Therefore we are up against the problem: are we to ask for new money to equalise this position? As may be imagined, we are exploring this matter very carefully. There is a real danger of a significant run-down in the 14,000 people which the noble Lord, quite rightly, allocated to the intensive industries, plus the processing of what they produce. There is a great deal of labour at stake The difficulty is that the industry in Great Britain would be only too happy to take up any reduction in pig, egg and poultry supplies from Northern Ireland. The Government are therefore in a real dilemma. We cannot be justified in subsidising in the long term the production of commodities in Northern Ireland which can be produced more cheaply on the mainland, without the need for any large amount of new capital. The case must be a social, rather than an agricultural one. I personally am most anxious to see Northern Ireland agriculture prosperous and healthy, and this must include some intensive production, though the basis must always be grass.
Viscount BROOKEBOROUGH: My Lords, did the report say how much of this differential is due to the fact that we have gone into the EEC and the supply of our grain coming into the ports in Northern Ireland has had to come a different way?
Lord DONALDSON of KINGSBRIDGE: This is discussed, my Lords. But the point is that ten years ago it would have made an enormous difference whereas now, with grain the price it is, it makes very little difference. If we ever got back to cheap grain, then our membership of the EEC might be a handicap, but with grain at its present prices it simply is not.
We have in the Province the skills; and the capital is already invested there, although some of it is running down. The question of whether to replace it is a commercial one about which the firms involved must make up their own minds. But, as with the air fare for the noble Viscount, Lord Brookeborough, the distance is a heavy and costly disadvantage. Any mitigation of these difficulties must require new money, and noble Lords will appreciate how difficult this is to come by today.
I can assure the noble Viscount that we are acutely conscious of the problems which he has mentioned, and we hope to make a statement on the subject in the fairly near future. The noble Viscount also asked about the remoteness grant. All I can say about that is that we think it is a very valuable grant and we shall give nothing away on it without a great struggle; in other words, we shall try very hard not to give anything away. I think we shall succeed.
My last word, because I have taken long enough, is on the air fare situation. First, I should like to point out that a couple of million pounds have been spent at Aldergrove in connection with the TriStar. Six months ago, I was hauled over the coals by every speaker about the horrors of TriStar. I left it a little late, but I myself have now been a couple of times by TriStar, and have found it extremely comfortable and quick. So I believe that the difficulties have now been dealt with. But when one considers whether one should subsidise people who are at a distance from the rest of the United Kingdom, but who are members of it, in order to get them
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over more quickly, one is up against an extremely difficult problem. All I can say is that if I were asked to pronounce my reaction would he very unfavourable, but the Government have not gone as far as that. The present position is that the Economic Council in Northern Ireland is looking at this matter and will make some suggestions. I think I shall say no more.
In a time of maximum difficulty, I am happy to have had the opportunity of answering some of the questions, and those I have not answered I shall reply to in writing. It is most important that we should not shirk open discussion of our very serious problems in Northern Ireland, and I thank noble Lords for the debate which we have had.
On Question, Motion agreed to.

LICENSING (AMENDMENT) BILL [H.L.]
5.2 p.m.
Lord HARMAR-NICHOLLS: My Lords, I have to open on an extremely sad note. My noble friend the late Lord Cowley had intended to speak from the Opposition Front Bench on this Second Reading, and I think everyone will recognise that his death at 29 years of age is nothing short of a tragedy.
Several Noble Lords: Hear, hear!
Lord HARMAR-NICHOLLS: It will be a great loss to your Lordships' House. He would have been, and intended to be, a significant Member of the Front Bench and the loss which we shall suffer will, perhaps, be second only to that of his family.
My Lords, I beg to move that this Bill be now read a second time, and I do so with some confidence for I know that one of its most important aspects will have the full sympathy of all of your Lordships, even including the noble and learned Lord on the Woolsack. I say that because as recently as last Wednesday, 10th December, as is recorded in Hansard, the noble and learned Lord the Lord Chancellor said:
"…some of the current flow of legislation can be obtained from the number of pages added to the Statute Book in the three decades from 1943 to 1972. In the period 1943 to 1952, there were 15.600 pages; 1953 to 1962, 11,000; 1963 to 1972, 18,000. In 1973 alone

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the addition to the Statute Book was no less than 2,248 pages."
He then went on to say:
"I have not immediately available the figure for 1974 I suspect it might well have exceeded that number."—[col. 955.]
There were 46,848 pages added to the Statute Book in 30 years, and the implication of what he said, and of the way he said it, was that this figure ought to be reduced whenever possible. The noble and learned Lord then said:
"The fundamental question with which we must deal today is how best to improve the content, form and clarity of this large volume of legislation which Parliament produces." [Col. 958.]
From all sides of the House we applauded those assessments, and I think it was right to do so. So I expect to have the unanimous support of your Lordships on that aspect because, whatever else this Bill may or may not do, it marginally reduces the volume of words on the pages of the Statute Book and improves the clarity of the legislation which remains. I do not think we should ignore the importance of that trend, however minuscule it may be.
As to the background, the Licensing Act 1964 was itself a consolidating Act arising from the previous Licensing Acts of 1949 and 1961, and subsection (5) of Section 76 of the 1964 Act, which I am now asking should be repealed, contains words which, apparently, were automatically carried forward from the 1961 Act. It is not unusual to have this automatic carrying forward which, with hindsight, we think ought to have had more detailed examination; such things often go through, and on that occasion it did go through.
Many of your Lordships know so much better than I that in these days of considerable legislation, when great calls are made on our Parliamentary draftsmen, sentences which seem innocuous in one Act are automatically carried forward into new legislation. As regards this small subsection which I am asking should be removed, I have checked the opening speeches made on Second Reading and the speeches made during the Committee and Report stages of the 1961 Act, and at no time was any reference made to it; at no time was it regarded as being of any importance whatsoever.
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This was clearly a case of an automatic carrying forward of a subsection which, as events turned out, has proved to have a somewhat unfair effect on certain sections of the community in a way which was clearly not envisaged.
Subsection (5) of Section 76 has to do with the operating of special licensing hours certificates for functions held on licensed and other premises. I myself have sat as a licensing magistrate for some 25 or 30 years, and this is the sort of matter with which one deals almost automatically within the terms of the Act. Apart from that, I should at this stage declare an interest as a director of companies which will be marginally affected declare this interest very eagerly, for that means that I am virtually in a position to testify from practical experience what will flow if we do nothing today. Certainly, I can show from practical contact how small concerns will be affected, for my concern is very small indeed. But the fact that one can approach with a little knowledge what would otherwise be looked upon as a very technical subsection means that one is speaking with rather more authority than one could do if one were speaking from the brief which is normally supplied from outside when matters of this sort are discussed in your Lordships' House.
However, by obtaining a special hours licence under the 1961 and 1964 Acts it is possible for patrons at functions designed for dancing and eating also to purchase intoxicating drinks, as well as soft drinks and coffee, within limits prescribed by magistrates but beyond normal licensing hours. Since 1961, people at such functions have utilised this right both by having their drink brought to them and by fetching it themselves from whoever was serving, according to which was most convenient to them. So we have a situation where for 14 years the licensees, the police and the public have accepted that as the correct interpretation of the Licensing Acts of 1961 and 1964.
If the point had been examined by the Parliaments of those years I truly believe that this is what they would have established, because to allow things to work in that way is both practical and makes sense. However, in December 1973 a Torquay licensee who was operating under a special hours certificate was

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found by the magistrates to have infringed the general licensing laws. He appealed against the magistrates' decision. As a consequence, and almost as a by-product, this case went to the Divisional Appeal Court and eventually to the Lords of Appeal in this House.
The case of Bradbeer v. Carter established for the first time in law the legal meaning of the words in Section 76(5) of the 1964 Act. They ruled that the legal meaning of the word, once attention had been drawn to it, was not the meaning that I maintain Parliament had in mind, if they had looked at the subsection when it was included. As I have said, there is no evidence that they did look at it. When the words of Section 76(5), which were automatically included without comment in the Act, were put under the powerful microscope of the Law Lords' inquiry the words were found to mean something quite different from what had been accepted for 14 years. I hasten to add that the noble and learned Lords who dealt with this appeal were not examining the principle. They were asked merely to adjudicate on the meaning of a word. They were confined to that very narrow and very proper legal task.
Just as the removal by me of this subsection from the Act in no way interferes with the general principle of the way in which the Act will continue to be applied, so the Law Lords' concentrated on the legal meaning of one word "Bar" and their decision interfered with something which had worked satisfactorily for so long. In law, the words mean that in operating a special hours certificate outside normal licensing hours nobody can purchase his beverage direct from the servery, only b y waiter service at his table. Previously if you had wanted your beverage to be served by a waiter at your table you could have that service, but if it was more convenient for you to collect it you did so. It made no difference to the amount which was drunk, nor to the amount served, nor to the running of the function. It was just a narrow point as to whether what you had to drink should be served to you by a waiter or should be collected over the counter.
In itself it is a very tiny point but I assure your Lordships that unless it is rectified hundreds of establishments, which provide proper and desirable out-
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lets for people's leisure, will be forced to close. That is the economic consequence which will flow from this decision. The tens of thousands of people who utilise these establishments as part of their leisure in a very satisfactory and pleasurable way will find that this service is no longer available. If we lose the opportunity of putting right this point it will benefit nobody but will frustrate and inconvenience many. As I have said, it will bring real hardship to some who, under the accepted situation of 14 years, have invested in hotels and halls, often with grants from the Government or Tourist Boards. I believe that our resorts in particular will suffer. At a time when we want to encourage people to use our home resorts instead of going abroad, I believe that the result of removing this facility will make it considerably more difficult to render our resorts attractive enough to keep our people at home. To insist on waiter service only is against the accepted fashion of today. Those of us who go to functions see this for ourselves. Once people have eaten they want to mix and move around, not to be pinned to a table. These are the kind of things which it is right for us properly to recognise in the age in which we live.
If waiter service only is insisted upon to supply people's needs the economic consequences are quite clear: many establishments will be unable, at present charges, to give the kind of service they have given for 14 years. Their charges to their patrons will have to go up very considerably, even if this service is allowed to continue. I believe that we must take that point into account when we are considering what appears to be a technical subsection which was automatically slipped into the 1964 Act without any discussion at any time and without it being properly understood, since for 14 years it was generally understood to mean that it was possible for this choice to be left to the patron. If we do not alter it the cost will make it completely uneconomic for many people to continue in business. I state that as a fact and I do so categorically from my knowledge of the economics of this trade as it affects small concerns. The risk to the continued employment of about 200,000 people, not to mention the musicians and artists, is real and disturbing, especially at a time when unemployment is a very real worry

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to everybody, particularly in the arts where the level of unemployment is extremely high.
I am not dragging in these points in order to make an emotive appeal regarding a sectional matter. These are the practical consequences which will flow if the legal meaning now given to one word upsets the operation of a previous understanding of an Act which had worked quite satisfactorily.
The scope of this Bill is truly minimal. None of the known susceptibilities normally related to licensing matters is involved in the repeal of this subsection. I know and respect the point of view of people who react in an emotional way to the purchase and consumption of intoxicating liquor. The repeal of this subsection has nothing whatever to do with that well-understood emotional reaction. There is no question of extending the licensing hours; there is to be no increase in the amount of licensing space; there is no possibility that as a consequence more drink will be served or consumed at similar functions than has been the case during the last 14 years. It has got nothing whatever to do with what I call the "gut" feeling of the normal "anti-licence man". However, unless we deal with it and it is carried through to the end there is the risk of adding another irritating chore to the tasks of our police force. They will have to face the unpopular task of reversing a situation that affects people's leisure which has operated satisfactorily for so many years. People will not understand the change and it will be one they will resent. I believe to the detriment of the police image.
At the beginning of this new week I do not hesitate to say we have just passed through one in which the assiduity and skill of the British police have reached new heights. We are all proud of the way in which they carry out their duties, and the strength that they will gain to carry out their future work will result from the new image which they earned last week. We must not weaken that public esteem by giving the police a task of applying unnecessary pin-pricking legislation which can only irritate. I believe this is important and I do not believe that in dealing with what I admit at once is a narrow technical point we
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ought to ignore what will flow from it. We know that in carrying out their tremendous tasks the police image is very important in being able to get the support and sympathy of the general public. We all know of the way little things connected with motor-car parking and other technical matters which we pass through in legislation upset people. This is something—interfering with people's leisure and with their way of life—which can do so much more damage than we realise unless we look below the surface.
For all these reasons I ask your Lordships to give this Bill a Second Reading. I must tell your Lordships that in anticipation of the Bill's going to another place I shall at Committee stage ask your Lordships to accept a minor amendment to the Long Title—again for purely technical reasons which have been pointed out to me. Apart from that, I submit the repeal of subsection (5) of Section 76 of the 1964 Act to your Lordships with confidence and hope, and I beg to move that the Bill be now read a second time.
Moved, that the Bill be now read 2a.—(Lord Harmar-Nicholls.)
5.22 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, at the beginning of his speech the noble Lord, Lord Harmar-Nicholls, referred to the passing of the noble Earl, Lord Cowley. I understand that reference to this will be made later this evening, but nevertheless as the noble Lord, Lord Harmar-Nicholls, has referred to it, may I say on behalf of this side of the House how much we share his feelings of profound shock at the death of Lord Cowley and we wish to convey our deep sympathy to his widow in what must be a most terrible 24 hours. If I may say so at the same time, I am quite sure that those officials at the Home Office who had dealings with Lord Cowley when the Party opposite was in Office would certainly wish to be associated with those words. I will say no more now because I know that this evening tribute will be paid to him.
It is my intention to intervene this evening only briefly, so far as this Bill is concerned, and I am glad to be able to tell the noble Lord who has just spoken that the Government do not intend to

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oppose it. The Bill itself is extremely short, as the noble Lord has pointed out. Its intention was explained to the House by the noble Lord in introducing this debate, and as the noble Lord said, it springs from the judgment of your Lordships' House in its judicial capacity in the case of Bradbeer v. Carter. In essence, the question for decision by the courts in that case was, "What constituted a bar?" Bars are defined in Section 201 of the Licensing Act 1964 as including:
"…any place exclusively or mainly used for the sale and consumption of intoxicating liquor".
It is sometimes a hazardous business to guess at the original intention of Parliament and the noble Lord touched on this point. It seems fairly clear that the definition of a bar was designed to ensure that, if a room or space was used primarily for drinking, it should not escape any statutory controls on bars simply because it did not contain a counter over which drinks were served. As your Lordships' House in its judicial capacity has already noted, the definition in Section 201 is not an all-embracing definition of the term "bar". It simply gives an indication of what this term includes.
But if there was, until the judgment, doubt about the definition of a bar, the exclusion of bars from special hours' certificates under the 1964 Act is clear. Indeed, this exclusion goes back some time. It appeared in the Licensing Act of 1949, when a limited amount of late night drinking was permitted for the first time for a great many years. And the exclusion of bars remains in existing licensing law which was consolidated in the 1964 Act. The provisions of the Act concerning special hours' certificates are set out in Section 77. This provides for the issue of special hours' certificates on two conditions. First, a music and dancing licence must be in force, and second, the Justices must be satisfied that the premises are structurally adapted and bona fide used, intended to be used, for the purpose of providing music and dancing and substantial refreshment, to which the sale of intoxicating liquor is ancillary.
Section 76 of the Act—this is the point to which the noble Lord referred—deals with the permitted hours where special hours' certificates are in force. Its effect is that the consumption and sale of alcoholic liquor is allowed on premises
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covered by a special hours' certificate beyond the normal closing hours which apply to licensed premises. These permitted hours may be up to 2 a.m., or in certain parts of London until 3 a.m. The subsection of Section 76, to which the noble Lord referred, brings the two issues of bars and special hours' certificates together. It provides that nothing in the section applies in relation to any bar. Nevertheless, despite this the practice has grown up over the years in premises covered by special hours' certificates of serving drinks direct to customers over bar counters. The reasoning was, apparently, that in any premises to which a certificate applied the sale of drink would necessarily be an ancillary activity. These premises could not therefore be regarded as bars as defined in Section 201; that is in the sense of a place exclusively or mainly used for the sale and consumption of intoxicating liquor.
Many people would agree that the practice of serving drinks direct to customers over bar counters is not unreasonable provided that the sale and consumption of the drink is as Section 77 requires truly ancillary to the provision of music and dancing and substantial refreshment. However the recent judgment in Bradbeer v. Carter has been widely interpreted as meaning that bar service to csutomers is definitely excluded and that the interpretation put on the Licensing Act by the entertainment industry for many years has been wrong. The judgment of the court arose of course from the case they had before them and its applicability to other premises is not something on which it is possible to comment authoritatively. But it is certainly clear that most owners of late night entertainment premises as well as many police forces regard the judgment as having widespread application and it is argued that the livelihood of many of those employed in the industry may consequently be at stake.
The argument runs that the judgment imposes what amounts to a new requirement to provide waitress service at a table rather than bar service direct to the customer. The Government, of course, take seriously the estimates which have been put to them of the numbers likely to be laid off as redundant because of the implications of the judgment, while recognising that inevitably it is difficult to quantify such estimates with precision.

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Nevertheless, we accept that the new situation has given rise to widespread inconvenience and resentment both to club proprietors and to their customers. We take the view, however, that Government legislation should be in the context of any legislation that is introduced following consideration of the Erroll Committee's Report. In any event, there would be no opportunity in the current Session for a Government Bill on this substantial issue.
We are, therefore, grateful to the noble Lord, Lord Harmar-Nicholls, for the opportunity he has given to your Lordships' House of expressing a view on the matter. If his Bill finds favour with your Lordships, I cannot, of course, predict with any confidence its prospects of making progress in another place. But I can say that the Government would not oppose its passage there if Private Members' time could be found. As I have indicated, the Government would have preferred to deal with liquor licensing in one major Bill, on the basis of our consideration of the Erroll Committee's Report. Nevertheless, the recommendations contained in that Report would not appear in any way to be prejudiced by immediate action to reverse the Bradbeer v. Carter judgment, if that is the course that commends itself to the House.
5.30 p.m.
The Lord Bishop of LONDON: My Lords, I would wish to add my voice to those of the two noble Lords who have just spoken in expressing our deep regret at the untimely death of the noble Earl, Lord Cowley. Perhaps noble Lords do not know that we on these Benches have a special reason for being grateful to the late Earl, because for the last two years or so he has been acting as one of the Secretaries of the International Affairs Committee of the Board of Social Responsibility of the Church of England. He has made a very considerable contribution to the thinking and the work of that Board, and we therefore see his passing with the greatest distress and regret. We wish to associate ourselves with the words of sympathy that have been expressed to his family.
My Lords, the noble Lord, Lord Harmar-Nicholls, has been speaking with
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great persuasiveness about the minimal effect he believes his Bill will have upon the situation regarding the consumption of alcohol, and the clubs involved in it. I am sorry to have to shake his optimism in the universal support that he may receive, both in reducing the size of the Statute Book and also in removing what appears to be an irritant, for indeed, if there are passages in the Statute Book which are exercising what some would think to be a valuable restraint, then it is desirable that they should be there.
As the noble Lord has pointed out, the purpose of this Bill is to remove words which have been recently interpreted by the Law Lords in a certain way so as to make legal a practice which has grown up, and apparently been accepted for the last 14 years, as regards special hours certificates. It is difficult to see how that practice can have arisen, since I would contend that the words of the Act are perfectly clear. As the noble Lord, Lord Harris of Greenwich, has reminded us, Section 76(5) of the current Licensing Act states quite categorically:
"Nothing in this section applies in relation to any bar in premises or a part of premises to which this section applies…".
It is therefore very difficult to understand how anyone could have thought that the supply of drinks over bars in special hours certificate places could ever have been regarded as legal. We ought to appreciate that the powers granted by special hours certificates give a very considerable extension of drinking time at night; until 3 a.m. in central London, and until 2 a.m. elsewhere.
I would contend that Section 77 of the Act is quite clear in placing certain restrictions upon the supply of liquor in order to exert some control upon a situation which might otherwise get badly out of control. Section 77 of the Act states that places which get special hours certificates are to be used for the purpose of providing music and dancing and substantial refreshment, to which the sale of intoxicating liquor is ancillary. It seems that if the sale of drinks over the bar is allowed for its own sake, then there will be a very extended amount of drinking. Indeed, as one of the noble and

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learned Lords giving judgement in the House of Lords remarked:
"The bar counter would be a magnet to those people whom the Act meant to discourage, those who come to drink and only to drink".
There is a further complication in this matter, since the granting of a special hours certificate is so uncontrolled so far as magistrates are concerned. In the 1964 Act it is laid down in Sections 77 and 78 that where licensed premises or registered clubs have suitable premises and possess a music and dancing licence, and are intended to be used for providing music dancing and substantial refreshment to which the sale of intoxicating liquor is ancillary, the licensing justices shall grant a special hours certificate if it is applied for. It appears that they have no discretion in the matter; if the conditions are met, then they must give the licence. Moreover, the licence is not always to be granted by those who may have the best knowledge of the situation. In some places the licensing justices give the authority, but in others authority is not given by those who know the situation as regards liquor and therefore there is an area where the licence may be given by those who are not aware of the full and overall situation.
Moreover, it is very difficult indeed for proper inspection of these places. As the law stands the police may enter a club only when they suspect that the law has been broken. Therefore, it is very difficult for anybody either to refuse a licence, or to control the situation when a licence has been granted. If therefore this subsection is removed from the Act it may very well open the door to unlimited drinking up to 2 a.m. or 3 a.m., which was not the object of the Act as originally passed. Unfortunately, I cannot agree with the noble Lord, Lord Harmar-Nicholls, that this is unlikely to have any far-reaching effect. There are a number of public houses which have already introduced regular striptease entertainment of a rather unsavoury nature. It would seem very likely that owners of these places, as soon as this amendment to the law has been made—if, indeed, it is made—will be queueing up to get a special hours certificate. The magistrates would not be able to refuse them, and therefore there would be a great extension of drinking in the late night, at a time when there is growing alcoholism
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and a growing difficulty in getting transport during the early hours of the morning.
I think your Lordships ought to examine this Bill with the greatest possible care. It is probable that some of us would wish that it could be very considerably amended and if we are not able to amend it then we may find it necessary to oppose the Bill at Third Reading.
Lord WIGG: My Lords, will the right reverend Prelate the Bishop of London allow me to ask him one simple question? If he suspects that as soon as the Bill reaches the Statute Book—assuming it does—there will be a queue of people wanting to start a striptease programme in their clubs, could he explain to the House why they did not do it before the Law Lords gave a decision? For 14 years they could have done so, without starting a queue to do it.
The Lord Bishop of LONDON: My Lords, I am afraid I cannot enter into the minds of people who run establishments of this kind. All I can presume would be that when they know there is no doubt about the law, then they would find a certain amount of encouragement to go forward.
5.40 p.m.
Lord SOPER: My Lords, I, too, am sad at the passing of the noble Earl, Lord Cowley; I knew him little, but I admired him much and I am sorry at his passing. I am at the same time happy once again to engage in a combined operation with my noble and ecclesiastical friend in some effort towards the Church militant, and in this case I hope the Church triumphant, because I am implacably hostile to this deletion from the law and will deploy what arguments seem to me to be necessary, in addition to the admirable statement of the case which my noble and ecclesiastical friend has just made.
I find myself in total disagreement with the noble Lord, Lord Harmar-Nicholls, even in his anticipation that we would all agree with him in the attempt to reduce the amount of legislation. I remember it was Sarah Bernhardt who was once asked her opinion about the Ten Commandments and she said there were too many of them and the number

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ought to be reduced. Only reduce legislation if indeed that legislation is either ambiguous or is unnecessary. I believe that this piece of legislation rests upon a very necessary distinction between two forms of drinking which have not, as yet, been sufficiently identified; one is bar drinking and the other is mealtime drinking. It almost blisters my teetotal tongue to say this, but I think there is a reasonable case for the intake of alcohol—I would not accept this, but I think it is reasonable to deploy this argument—when it is part of a civilised accompaniment to eating and to pleasure seeking; indeed if I were pressed I think I might say that when the earthly paradise does arrive light wines might ecclesiastically be permitted.
But that is no argument for the present situation, in which I believe that the great majority of those who are intemperate find that intemperance aided and abetted by what is described quite accurately as bar drinking as opposed to the more civilised form of drinking which takes place to the accompaniment of a meal. It is on this ground that it seems to me that the Act which it is the intention of the noble Lord should be amended is perfectly clear and perfectly sound. Where drink is associated, even at late hours and early hours in the morning, with the other methods of pleasure and happiness, enjoyment, if you like, associated with meals taken and shows seen and participation in dancing—though I would not want to include striptease—this is a matter upon which it would be, to a very large extent, a repudiation of elementary rights, privileges and liberties that I think ought not to be infringed. But where this habit of bar drinking is recognised for what it does and what it constitutes, then I am implacably opposed to it.
I believe that this kind of drinking is far in excess of what is required, even by those who cannot subscribe to a temperance platform. I believe it is a prime cause of the kind of alcoholism with which I am in regular touch and which I know about. Moreover, I think it is a very sinister element in accident-prone situations. For at two and three in the morning there are very few taxis about and there is practically no public transport available; I believe it would be highly
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likely that those who had been drinking earlier on, as I suppose they would have been, and who continue drinking to that hour, particularly bar drinking, are likely to produce irresponsibility on their way home and are more likely to use their own cars in the absence of public transport. I think this is a real menace and ought to be included in any conceptual view of this whole situation.
But, principally I would say this—and if the noble Lord, Lord Harmar-Nicholls, regards this as emotive, I make no apology for it; it is certainly emotional, but I have never believed that rationality is the exclusive right of those who would proceed to legislate and that emotion is a suspect element in legislation. I have an emotional concept of the situation which I would venture to offer to your Lordships. We are at this moment intolerably accepting a level of alcoholic drinking among young people, stimulated by advertisements of the most rancid and, in my judgment, morally dubious kind; I believe that we are progressively moving to a situation in which more and more young people are liable to become alcoholics. I make no apology for making this claim; that is, that this legislative suggestion is highly likely to increase the probabilities of intemperance and over-drinking. To switch the emphasis away from the bar to the more civilised form of drinking with meals is not, so far as I am concerned, the summum bonum, but it is a very necessary and requisite part of intelligent legislation. It is represented by the Act as it stands, and I hope very much the Act will not be changed.
5.47 p.m.
Lord STOW HILL: My Lords, would your Lordships be so very good as to extend to me the indulgence of allowing me to add a few observations, although I am afraid I neglected to put my name on the list of speakers. If your Lordships would allow me to do that, I promise to keep my observations very short. I must preface them by asking to be associated with the sad expressions with which the debate began. It really is a very unhappy moment in which to rise to one's feet in the presence of the loss that we all have sustained.
My Lords, the point that I wanted to raise was this. It is common ground

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that the object of Parliament in enacting subsection (5) of Section 76 of the Licensing Act 1964 was to ensure that when a special hours certificate was granted drinking should only take place as an incident to other activities, dancing, eating, listening to a performance or whatever it might be. That, I think, everybody accepts, and, if I am right in understanding his very forceful presentation of his case, that would be accepted by the noble Lord who has introduced this Bill. The point that I wanted to raise—I think with the noble Lord more than with any other Member of your Lordships' House—is this. What his Bill seeks to do is to strike out of Section 76 of the 1964 Act any reference to "bars"; in other words, if the noble Lord's Bill is passed un-amended, there is no exclusion whatsoever of bars in relation to these special licences.
What the noble and learned Lords did, when sitting in a judicial capacity, which produced the judgment that we have in mind, was to construe the word "bar" as used in subsection (5), and they construed it as they thought the language required it should be construed in the context in which it was used. If the noble Lord's Bill is passed, there is no exclusion whatsoever in relation to bars, whatever the word means, and one accepts of course, at once, that it means what the noble and learned Lords expressed as their opinion in the decision they were considering. But that goes by the board if the noble Lord's Bill is introduced and passed; there is no exclusion whatever in relation to bars.
I should like to put my argument in the form of this question. Supposing you had, in a club in relation to which there was a special hours certificate granted, something which incontestably everybody would recognise as a bar, a room separately set apart for people to lean against a bar and drink and do nothing else. Then, as I understand the noble Lord's Bill—I may have got it wrong and if so I apologise—drinking could take place there. It would be contrary to the intention of the Act, but nevertheless there would be. I should have thought, a bar. I should have thought the noble Lords' Bill perhaps should require amendment, at least in this sense; if he strikes out subsection (5), he should substitute for subsection (5) some definition of a bar,
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or some definition of a place in which drinking was not to take place, in relation to premises of the sort we are discussing, to take the place of the wording which at present appears in subsection (5).
Lord HARMAR-NICHOLLS: My Lords, I intervene only because it might help to deal now with this very pertinent and significant point. The whole point of having to remove this is because these functions will take place in rooms where there is a bar. If you have to build new premises without a bar, those are the economic consequences of which I spoke that would mean that the whole place would not be there to offer to patrons at all. There is no question that, in removing this, that you are removing the need for it to be primarily music and eating. That will still be there under the rest of the 1964 Act; this merely removes the section which says, now that we have had this ruling, if it happens to take place in a room where there is a bar it is illegal. I intervene only to make that point, because I thought it was right that the misapprehension that the noble and learned Lord is under should be dealt with at once.
Lord STOW HILL: My Lords, I am extremely grateful to the noble Lord for his intervention. I cannot have made my point clearly. May I put it again. Assuming that you permit dancing, eating, and so on, to take place in a room in which there is a bar, and assuming that you proceed from the premise that the definition, or interpretation, laid down by noble and learned Lords in the decision we are considering is too wide—in other words, assuming that in the case which their Lordships were considering the noble Lord would have wished there to have been an acquittal—then I would ask this. Supposing you accept a much narrower definition of the expression "bar", supposing you assume premises in which there is a restaurant, tables, a dance floor, and all the rest of it, in which there is a bar at one side, a bar at the other side, but in which also there is a separate room which is devoted entirely to drinking, and in relation to which nobody could conceivably say that that was not a bar—in other words, it is a bar in a very much narrowed sense—as I understand the noble Lord's Bill that bar would have to be entirely disregarded. If a number of persons went into that bar for the sole

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purpose of drinking and for doing nothing else whatever—not dancing, not eating, just drinking, leaning up against the bar there and having drinks brought to them —then, as I understand the Bill, that would be perfectly permissible.
What I respectfully suggest is not that we should vote against the Bill tonight, but that at some time or other an Amendment to the Bill needs to be considered to see whether one does not necessarily have to incorporate some exceptions in relation to what obviously, and beyond any controversy, would be understood by ordinary people to be a bar and nothing but a bar. That is the only contribution that I should like to make. Speaking for myself, I would not oppose the Second Reading, but would ask the noble Lord to accept that nevertheless perhaps his Bill goes rather far, and that it may be necessary in due course to amend it by excluding some parts of premises of this sort, parts which undoubtedly, and beyond any controversy, are a bar set aside for drinking.
5.53 p.m.
Baroness PHILLIPS: My Lords, I wonder whether the noble Lord would forgive me for intervening. I too did not put my name down because I was not certain what exactly the Bill involved until the noble Lord introduced it. First, I should like to be associated with the deep feeling of sympathy for the noble Earl's family in this very sad time. His death was a terrible shock for all of us.
I am rather fascinated by the fact that the noble Lord who preceded me, who has a very fine legal mind, appears not to know what is common practice in public houses. Many of us go to these places, and I always feel when we debate these matters that we are slightly hypocritical, because we debate them in relation to licensing in a place where, at any time we wish during the sitting of the House, or even afterwards, we can partake of alcoholic liquor without eating, dancing, or even a striptease performance. We must bear this in mind when we consider what people outside like to do.
I have every sympathy with this Bill. I hope that we shall debate the whole of the Erroll Report and bring into effect some of its very far reaching recommendations. I am sorry to disagree with the right reverend Prelate, and indeed
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both of my noble friends on this side. This Bill will hardly increase the drinking of alcohol because of the characters who are going to materialise. There seems to be something doubtful in the suggestion about them "leaning on the bar". I do not know why you should drink more because you lean on the bar, but if they come in they will still have to buy a ticket and partake of the food and witness the performance before they can have alcohol. To suggest that people would come in to get some more drink at 2 a.m. in the morning is really suggesting a rather long-term way of obtaining extra drinks.
We already have all sorts of changes taking place in our public houses. I think that I am right in saying that striptease is not dancing. I believe that we have laws which say that you can move if you have a certain amount of clothing removed, but if you take all of it off you have to stand still. Of course, this rule may have been modified. I think that music and dancing is interpreted in a slightly different way. What we all want to see is what I call the civilising process of the public house. We do not want to have a place where people go to drink as much as possible in as short a time as possible because they do not have with them their wives, or some other friends, and therefore it is not as sociable or indeed as attractive a place as it should be.
I feel that this Bill will go some way to putting right another point. We have not very many enforcement officers for these different laws, and if we take up the time of the enforcement officers in finding out whether People are being served with drinks, or whether in this "do it yourself" age they are obtaining drinks for themselves, it seems that we shall again waste time which should be utilised in much more important spheres. I should like to support the noble Lord in his Bill. Also I say to the Minister that I hope that we shall have the opportunity in this Session of making some change in the licensing laws by taking up some of the recommendations of the Erroll Report.
5.57 p.m.
Lord WIGG: My Lords, may I apologise to the House for not putting my name down, but I did not think that tonight I should have to listen to three speeches that I have listened to which

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were more than flesh and blood can stand—at least so far as my flesh and blood is concerned. Before saying what I want to say, and so that my temperature can go down a few more degrees, may I join previous speakers and express the sense of sadness shared by all at the passing on of Lord Cowley. I did not know him very well, but we did have occasion to meet on the Lotteries Bill, and he was a most agreeable and considerate colleague. I am sure all of us join in expressing our deepest sympathy with his family in the irreparable loss they have sustained.
Turning now to this debate, can we get this Bill into focus. It does not introduce striptease, either in warm weather or cold weather; it does not induce people to drive home recklessly; it will not encourage any streakers; it will not encourage people even to have an extra cup of tea, because until very recently, for at least fourteen years, everyone, including the police and the Judiciary, thought that the law was in fact what Lord Harmer-Nicholls' Bill now seeks to make it. In other words, some £200 million has been invested in constructing premises to do what apparently the noble Lord, Lord Stow Hill, does not believe in fact they have done. The premises have been erected, and some 300,000 people are employed in this connection, because they thought the law was as it was thought to be.
Then two or three of your Lordships took off and interpreted the English language in a way which I never thought was possible. They obviously do not know what a bar is. A bar is a place not at which people lean but where they go to buy a drink; and it is perfectly clear—indeed, it is part of the explanation for the decline of religion in this country—that the two spokesmen for religion tonight are completely out of touch with the habits and practices of ordinary people. For example, the right reverend Prelate the Bishop of London showed not only that he is out of touch with people but is out of touch even with simple logic, because he wanted us to believe that there would be a queue, presumably of alcoholic drivers, to do that which they could have done for the last 14years but have in fact not done.
The overwhelming majority of people who are affected by this are ordinary,
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decent, working-class folk and they will not be at the bar. They will not be having a bun, a sausage roll or a drink unless they have gone to an establishment where singing or dancing is taking place. That is the condition; there must be dancing and music for this to happen. This is an age in which there is a short-tage of waitresses and waiters; but, according to the Law Lords, the customers can sit down and die of starvation and thirst, yet they cannot buy a drink, or perhaps even obtain a glass of water, until a waiter comes on the scene.
Lord HARMAR-NICHOLLS: My Lords, I am sorry to interrupt the noble Lord, particularly when he is arguing on my side, and I do so simply to make it clear that, as the Bill stands in my name, I am in no way critical of the Law Lords' decision. That decision was one which they, in their wisdom, thought was correct, and it very likely is. The fault here could be that of Parliament, because of the looseness of the words used.
Lord WIGG: My Lords, the noble Lord, Lord Harmar-Nicholls, has a veneration of the Law Lords which I do not share. They arc ordinary mortals like me, they can make mistakes like I do; but they are able to read English in a way which no other person living has so far read it, and I think that is barmy. Their decision will cause loss of livelihood for hundreds and thousands of innocent people, and it will sterilise a very large capital investment which this simple measure seeks to put right. That is the beginning and end of the story.
I have no interest in this matter. I cannot at the moment call myself a strict teetotaller, although it is true that years ago—about 50 years ago when I was a private in the Army—I joined the Army Temperance Association because by so doing I got "char and wads" buckshee. For the benefit of the right reverend Prelate the Bishop of London, it meant that I got tea and cakes free. I have had half a pint of bitter at various times since then, but generally I do not drink and I do not condemn the habits of others. The pattern of social behaviour involved in what this measure seeks to do is one which I wholeheartedly commend. It is arrant nonsense to suggest, Law Lords or no Law Lords, that this measure, if it reaches the Statute Book,

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will open the gateway to striptease, increased drinking, alcoholism and streaking when people are going home at night. In fact, what it will do, as the noble Lord, Lord Harmar-Nicholls, said, is relieve the police of the onerous and unpopular task of invoking the law to interfere with what are the social habits and practices of ordinary people.
Normally I do not find much time to share the views of the noble Lord, Lord Harmar-Nicholls, but I share this with him: we both come from the Midlands, and we both have the habit of plain speaking. The only difference between us is that he is polite to the Law Lords and I am not. Apart from that, I give his Bill every support; I hope it will get a Second Reading and will go back to another place, where it has already had a trial run; without opposition it got the unanimous support of the House of Commons under the Ten Minute Rule. The noble Lord is performing an important social duty which I hope will receive wide recognition because his Bill restores the position to what everyone has thought it to be for the last 14 years.
6.5 p.m.
Lord CAMPBELL of CROY: My Lords, I intend to be brief and I am speaking on this issue because of the tragic death of my noble friend Lord Cowley, to whom noble Lords have paid tribute, and I join in the tributes which have been paid to him. It is sad that so much promise should have been lost. We shall miss him in many ways, as I know very well, having had the good fortune during the past year to be occupied on this Bench with some of the same subjects in overseas affairs. I associate myself with the message to his family that has gone out from your Lordships' House.
I have come to this debate at very short notice, having been asked to do so this afternoon. I started flying from Inverness at eight o'clock this morning and my plane was diverted to Birmingham owing to fog. I wish, first, to congratulate my noble friend Lord Harmar-Nicholls on taking this initiative. He is clearly aiming to rectify a weakness in existing legislation where an interpretation has recently been made by the highest court in the land, your Lordships' House sitting in its judicial capacity—an interpretation which
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is different from that previously accepted by those most concerned. That is to say, a "bar" has been defined for certain purposes and a waiter service is required instead of a bar service in the circumstances which have been described during the debate. This difference is likely to affect the livelihood and business prospects of a number of people in this country. There is need for clarity in legislation. We feel that it is also a good thing to avoid new and arbitrary restrictions arising, unless they are necessary for social or other reasons. On this Bench we favour clarity in the law and simplification of it if possible, as was made clear in the debate in this House recently on the Renton Committee's Report.
My noble friend's Bill accordingly starts by commending itself under these headings to somebody on this Bench. Decisions, however, on licensing matters constitute a subject which is usually left by both Front Benches to individual Members of this House and another place; in other words, this is usually a free vote subject. I note that the Government do not intend to oppose this Bill. The noble Lord, Lord Harris of Greenwich, confirmed that it is thought by those who are affected by this recent judgment that it will have wide application to other cases, and he mentioned that this was causing disquiet, even resentment, because of the probable effects on the entertainment industry, which in turn is related to the tourist industry. I thought it was relevant and of interest to this House that he stated that the change proposed by my noble friend, if it were made, would not be inconsistent with anything the Government would be bringing forward as legislation on the Erroll Committee Report.
During the debate, though, we have also heard speeches from the right reverend Prelate the Bishop of London and the noble Lord, Lord Soper. The right reverend Prelate warned that if this Bill went through it would lead to people coming to functions of the kind we have been discussing with the principal purpose of drinking at a bar and they would get round the requirement that there should be music, dancing and food and the requirement that drinking should be an ancillary activity. In this he was joined by the noble Lord, Lord Soper, who took a similar view. Their concern

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means that we must look very carefully into this. Their argument is that, though a certain interpretation was generally accepted for 14 years, the passage of the Bill establishing that situation definitely would lead to a substantial increase in late night drinking. That is a matter which we can only go into at a later stage, having in the meantime tried to find out the facts so far as we can.
The Bill applies only to England and Wales, and I hope it means that there are not similar problems in Scotland. However, I am well aware that the licensing legislation is separate and that the Scottish legislation is in need of reform because it was I who set up the Clays on Committee to review the Scottish licensing legislation. This was the equivalent of the Errol Committee. I made a symbolic gesture at the same time, one of my main concerns being the reduction of drunkenness in Scotland. My symbolic gesture was, as Minister of Road for Scotland, to straighten out the Devil's Elbow. The Clayson Committee reported shortly before the change of Government last year and I was glad to note that the Queen's Speech told us that the Government intend to put forward a Scottish Licensing Bill in this Session. It seems, therefore, that the Clayson Committee Report will be acted on before the Errol Committee Report. The subject we have been discussing today will come up in a much wider context when that Bill comes before us.
I mention in passing that there is a great need for a change of attitude in Scotland. I was particularly struck by what the noble Baroness, Lady Phillips, said, because there there is a need for more social activities to be associated with drinking in public places, so that men do not simply go to a bar to drink and do nothing else and to try to drink as much as they can before closing time. In the meantime, where England and Wales are concerned, I hope that the initiative taken by my noble friend will lead to a satisfactory solution of the problem which has been raised by this recent legal interpretation.
6.12 p.m.
Lord BALERNO: My Lords, may I rise for a moment to support what my noble friend Lord Campbell of Croy has said about the urgent need for a revision of the licensing laws in Scotland. I can
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go back one step further than he, in that I was a member of the Guest Committee for the revision of the licensing laws, which sat 10 or 15 years ago and of which the Clayson Committee which my noble friend set up was supposed to forward and bring up to date the recommendations. I sincerely hope that the Government will implement what I understand to be their intention to make a proper revision of the licensing laws in Scotland.
There is one other point in relation to Scotland which I feel might be of interest in this discussion. It is that during the Edinburgh Festival last year a quite astonishing thing happened, in that any publican, any person who served drink and almost anybody who applied for a late licence could get one up to about 3 o'clock in the morning. Licences were granted with great freedom and very little objection was made. We all expected there to be some bad effects, but none was reported. Whether it was that the many visitors to the Festival who came from outside Scotland were trained to enjoy late night drinking and knew how not to abuse it I do not know, but even we native Scots did not abuse it and there was no increase in the number of convictions for drinking and driving or any other such offence. So I commend this to your Lordships and I advise the House that a little audacity in this matter would not be out of place.
6.14 p.m.
Lord HARMAR-NICHOLLS: My Lords, I should like to wish the best of luck to Scotland. The only reason I am confined to England and Wales is because the 1964 Act is so confined. I should like to thank the noble Lord, Lord Harris of Greenwich, so effectively, for filling in the decision which came from the Law Lords. I feel that it is very important that that explanation should be on the record in such detail but I did not think it right that I should take up your Lordships' time in giving it. The noble Lord, without any sort of collaboration with me, filled in something which is vital and, I felt, did so most effectively.
To the right reverend Prelate I should like to say that I do not feel that he is looking at the matter in a practical way. He does not need me to tell him that anybody who intends to go to a function just to drink and to do nothing else will not

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be stopped because there is waiter service. Those sort of people are the ones who corner the waiter. This ruling will not stop those who are a nuisance to everybody and who are not welcomed by anybody who is running a function. It will make no difference if the bar is removed. The point which the right reverend Prelate makes about people who do not eat or listen to the music but who merely drink will not be affected. Those people will always be there. I am a member of the right reverend Prelate's church and I read the Lesson regularly. He and I know that we have people who are intolerant in their religion. We know that they are a nuisance too, but that does not alter the fact that they turn up, that they are always the first ones to be there and that they are a nuisance. This is one of the disadvantages which we have to try to overcome when we are putting forward the real purpose of our interest in our Church. I was rather sorry that the right reverend Prelate introduced the question of striptease. I do not feel that it was necessary and it does not come into any argument relating to the removal of subsection 76/5.
I felt the same about the noble Lord, Lord Soper. The only reason I am using my right to reply is to say to him that it is quite clear that he and I will be on different sides when matters such as this come up. I know a lot about him because he is famous. He knows nothing about me, but let me tell him this: my father and grandfathers on both sides were miners and my two grandfathers and my father, having been in the mines at something like 11 or 12, left mining at the age of about 30 to become local publicans. That is the sort of thing that happens having done that dangerous and awful job. I was born in a pub in the Black Country of England and I cannot accept from the noble Lord that the only people who are civilised are those who drink their wine at a table being served by a waiter. I have seen that civilised people come to bars, and that there is nothing wrong in coming to bars. I have seen throughout my life that bars are well-run and that the sort of people the noble Lord objects to are those to whom the publican objects. I believe that perhaps the best policeman for moderation and good sense and
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I for seeing that young people do not over-drink and that the road safety element is remembered are the people who run bars. I wanted to say that because it is quite clear from the noble Lord's reaction that it differs from my life's experience and puts me on the side of finding that things are not so black as the noble Lord has satisfied himself they are. That is a debate which I have no doubt we shall have on many occasions.
I felt that the noble Lord, Lord Stow Hill, raised a point which it is essential to make clear. This was the question of a separate room with a bar. He again used the right reverend Prelate's argument that, with a separate room, only people who wanted to have a drink would come. However, the practical considerations are these: in hundreds of places where these very desirable functions take place, the one room is not big enough for both the eating and the dancing. It is quite usual for there to be a separate room and for people to leave the dance floor and the music in order to go to the other room to have a drink and food. If, by being legalistic, we make it impossible for these functions to take place, we shall come back to the point which I made originally that this really means that they will not be able to happen at all because, on the economics of the argument, they will not be able to take place with resultant unemployment. I have looked at this and I truly believe that the most effective and shortest way of dealing with this is by removing the subsection. It in no way interferes with the necessity for music, dancing and eating before one can have a special licence. I have great sympathy with the noble Baroness. Like myself, she understands the way in which good, decent people enjoy themselves, without having to be associated with striptease or with deliberate dangerous driving and such matters. However, the points which the noble Baroness had in mind about the general relaxation have nothing whatever to do with this Bill. Mine is a very tiny section, merely putting into law what has in fact been the case for about 14 years.
I have the confidence that when we get to Third Reading those points may perhaps be better understood. It may be that the right reverend Prelate will not repeat his suggestion that they might seek

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to divide the House on Third Reading. I am convinced that if this matter is looked at in a detailed and proper way, it will be seen that it in no way interferes with the general view which noble Lords are entitled to have regarding the overall matter of having intoxicating drinks at all. What I propose is intended to provide a cleaner, better law which will lead to good living. It is with the confidence that this is also the view of your Lordships that I submit this Bill for a Second Reading.
The Lord Bishop of LONDON: My Lords, before the noble Lord sits down, may I ask him whether he would accept that the situation regarding the granting of special hours certificates is unsatisfactory in that the magistrates have no discretion? Would he consider it possible to introduce some discretionary power for magistrates in the granting of these certificates?
Lord HARMAR-NICHOLLS: My Lords, that matter is quite outside and beyond the particular point I wish to argue today. If I went into those fields I think that the right reverend Prelate and I would be on different sides. But I should not like to injure the good opinion which I hope I have earned for my point of view on this narrow issue, by going into the wider issue today, although, as I said to the noble Lord, Lord Soper, I have no doubt that we shall find that we shall be protagonists when these matters—such as those which the noble Baroness, Lady Phillips, referred to—are dealt with in this House at a later stage.
On Question. Bill read 2a, and committed to a Committee of the Whole House.

FIREARMS (AMENDMENT) (NORTHERN IRELAND) ORDER 1975
6.23 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the draft Firearms (Amendment) (Northern Ireland) Order 1975, laid before the House on 7th November, be approved. The noble Lord said: My Lords, this Order in Council amends the provisions of the Firearms Act (Northern Ireland) 1969, as itself amended by the Firearms (Amendment) Act (Northern Ireland)
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1971, and the Firearms (Amendment) (Northern Ireland) Order 1973. Its main purpose is to improve existing controls and to clarify existing legislation in one or two respects. It follows a review of the control of legally-held firearms in Northern Ireland which was carried out last year, and while it makes a few changes of some significance in the law, there is no change in the general principles governing the issue of firearm certificates. Legally-held firearms are very strictly controlled in Northern Ireland—more so than in Great Britain.
The Order abolishes firearm permits. The permits in question are unique to Northern Ireland firearms legislation and simply allow a person to keep a firearm within his dwelling-house. He may not use it. There are only about 1,300 permits in existence, and they authorise, mainly, the possession of collectors' items, souvenirs, or antique weapons. In practice, the chief constable has for some time preferred to issue the normal firearm certificate in respect of such weapons, so that the system of permits has become superfluous. On expiry of a current permit, the holder will have to apply for a firearm certificate. The chief constable will of course have to satisfy himself that the person concerned satisfies the basic statutory qualifications for the issue of a firearm certificate but, subject to this, firearm certificates will be granted in substitution for the old permits. A modified fee only will be charged on the grant of a firearm certificate in these circumstances.
Some Amendments are made to that section of the Northern Ireland Firearms Act which permits the possession of firearms in certin circumstances without the need for a firearm certificate. In particular, the opportunity has been taken to regularise the use of air rifles at shooting galleries, at amusement arcades, church fetes or bazaars. For historical reasons, the police have until now exercised a discretion in allowing the use of these weapons at such functions so long as the person conducting or carrying on the range had a firearm certificate. This practice is now being regularised. Additionally, an exemption which was provided for institutes of higher education, or other approved research centres where studies in forensic medicine, ballistics or similar studies are undertaken, is being removed. There has been great difficulty in defining exactly what constituted an

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institute of higher education and any firearms held by such institutes or centres are held on the authority of firearms certificates. The exemption is therefore unnecessary.
The law is also being clarified in regard to the possession in Northern Ireland of firearms held under the authority of a firearm certificate or shotgun certificate issued in Great Britain. Generally speaking, these arc regarded as valid in Northern Ireland and this will continue to be the case, but in addition the Order introduces a new provision which will permit the possession in Northern Ireland, for sporting purposes only, of firearms or ammunition held by a person who normally resides outside the United Kingdom and is authorised to hold those firearms or ammunition under the law existing in his own country. Quite a few sportsmen from Continental countries come to Northern Ireland to shoot for sport and there is quite a traffic of sportsmen between the North of Ireland and the South. At the moment these persons must acquire Northern Ireland firearm certificates, however short their stay, and this is not a satisfactory arrangement. Regulations will be laid before Parliament setting out the conditions under which such firearms may be brought into Northern Ireland.
Under the firearms legislation in both Great Britain and Northern Ireland, persons convicted of crime are prohibited from possessing firearms for varying periods. If, for example, a person is sentenced to imprisonment for a period of more than six months, but less than three years, the prohibition applies for five years from the date of his release. If the period of the sentence exceeds three years, then the prohibition is for life. The reference to date of release has raised the question of the suspended sentence where, of course, there is no date of release as such. This Order amends the Northern Ireland legislation to ensure that a person who is given a suspended sentence comes within the statutory prohibition, by relating that prohibition to the date of the sentence, as opposed to the date of release.
Since 1920 the minimum age limit for possession of any firearm in Northern Ireland has been 16 years. It is considered that the age of majority is a
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better test of the maturity appropriate to the responsibility of possessing and using a firearm and accordingly the minimum age limit is being increased to 18 years. At the same time, it is conceded that the genuine enthusiast in what is, after all, a recognised international recreational pursuit should be permitted to become accustomed to the handling of firearms at an earlier age; and it is therefore being provided that young persons between the ages of 16 and 18 may have, and use, a firearm for sporting purposes under controlled conditions; namely, in the company, and under the supervision of, another adult who holds a firearm certificate for that firearm. Special provision is also being made to allow the young farmer between the age of 16 and 18 to possess firearms for the control of vermin on lands on which he works or resides.
My Lords, I have already mentioned that firearms control in Northern Ireland is more stringent than in Great Britain. The chief constable of the Royal Ulster Constabulary has greater powers of control than his counterpart in Great Britain. He may, for example, revoke a firearm certificate where he feels that the person holding it has no longer any good reason to have it. To complement his powers of revocation it is considered that the chief constable should also have the power to require the surrender of the firearms and ammunition to which the certificate relates when he revokes a firearm certificate, instead of simply the power to demand the surrender of the certificate itself. Apart from anything else, a person holding firearms or ammunition without the authority of a firearm certificate is holding them illegally. The provision will simply mean that when a firearm certificate is revoked for any reason, the firearms and ammunition to which it relates will be held safely in police custody until the owner can dispose of it.
In order that the police may have the fullest possible information about the movement of legally-held firearms, it has been decided that transactions between registered firearms dealers and between registered firearms dealers and private persons should be notified to the police in the same way that private persons already have to notify transactions under existing legislation. Noble Lords may

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be aware that in Northern Ireland certain firearms are ballistically tested so that their characteristics may be recorded for purposes of forensic comparison. It follows that if any of these firearms are repaired, altered or converted this could alter the characteristics already recorded. Accordingly, the Order requires that when such alterations or repairs are made the owner of the firearm shall report them to the police within 48 hours so that arrangements can be made for retesting if this is felt to be necessary. The existing penalties for firearms offences in Northern Ireland are generally less than those in Great Britain, and the opportunity is now being taken to bring them completely into line.
I now turn to the question of firearms clubs. At present, there are no more than 57 of these clubs in active operation in Northern Ireland. Three of them use full-bore or military-type rifles, about 20 use air rifles and the remainder use miniature or 0.22 calibre rifles. The clubs operate under the authority of Declarations of Approval issued under the Unlawful Drilling Act 1819, which simply permit the members of the club to assemble for target practice. The only other form of control is that firearm certificates must of course be held by either the club or club members. It has long been felt that this is an inadequate system of control, and power is now being given to the Secretary of State to impose conditions on Declarations of Approval which will more satisfactorily regulate the operation of the clubs. I might say that this proposal has been discussed with the governing bodies of the sport in Northern Ireland, and they are in general agreement with, and indeed welcome, the proposal. An undertaking has been given to those bodies to discuss again the types of conditions which should be imposed.
My Lords, I am confident that you will accept this measure as a reasonable extension of the already stringent controls over legally-held firearms in Northern Ireland. No one would deny that the real problem there is the illegally-held firearm, but clearly in the emergency which exists there—indeed, at any time—it is only prudent to control legally-held weapons as much as possible, consistent with reasonable facility for gun sportsmen to carry out the sporting activity of their choice. My Lords, I doubt whether your Lordships
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remember (why, indeed, should you?) but when the Green Paper on the Control of Firearms was debated in your Lordships' House in October 1973 I spoke strongly in favour of more stringent controls on weapons in Great Britain. Your Lordships will therefore not be surprised to know that I strongly commend this Order to this House. My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft Firearms (Amendment) (Northern Ireland) Order 1975, laid before the House on 7th November, be approved.—(Lord Donaldson of Kingsbridge.)
6.34 p.m.
Lord BELSTEAD: My Lords, I should like to thank the Government for the consultations which have preceded the presentation of this Order. The original draft of the Order really was not suitable in a variety of ways. Representations have been heeded and, I think, heeded to very good effect. I particularly support the prohibition on those convicted of crimes from holding guns for specified periods. Towards the end of his remarks the noble Lord referred to the menace of the illegally-held gun. A point was made in another place about the posting of firearms certificates and it was asserted in another place that many of these certificates go astray in the post in Northern Ireland. Under those circumstances, I wonder whether I might add my voice to what was said in another place and ask the Government whether they would look at that point again.
My Lords, I trust that the exchange of firearms permits for new certificates under Article 3 will attract only a very small fee. I am sure that this new provision will be accepted provided it is not accompanied by unreasonable expense for firearms holders. I think it would be an excessively cautious society—and an impracticable one, too—if young persons of over 16 were absolutely prohibited from learning to handle a shotgun in a country where so many people are involved in agriculture. Article 8 deals with this in a sensible manner, and this is very welcome.
I was glad to hear the noble Lord say that the conditions for firearms clubs are to be discussed with the governing bodies of the sport, because I think all who are involved in those clubs, and, also, all

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who are involved in target shooting, sometimes find it difficult to be able to get the necessary practice. I remember discussing this with members of the staff of a school in Northern Ireland which regularly sends a team to shoot at Bisley, and they made the point that it was very difficult for their pupils to be able to practise. If it can be arranged that things are not made more difficult to organise than necessary, then the clubs will be very grateful.
The only question and slight criticism which I would raise is that it would perhaps have been helpful to have had another Schedule at the back of this Order listing the differences between Northern Ireland legislation on this subject as it will stand when this Order is agreed, and legislation as it affects the rest of Great Britain. But I think that this has become fairly clear from the explanation which the noble Lord has given, and I most certainly support the passing of this Order.
6.37 p.m.
Lord MONSON: My Lords, I should be grateful if the noble Lord, Lord Donaldson of Kingsbridge, could kindly clarify two or three points pertaining to this Order, the majority of the provisions of which I find not unreasonable. Could the noble Lord confirm that shotguns, air guns and 0.22 rifles are collectively responsible for fewer than 1 per cent. of the murders committed in Northern Ireland since August 1969; and is it not the case that the majority of existing permits relate to relatively harmless sporting weapons of this category? Thirdly, could the noble Lord perhaps indicate how many murders since August 1969 have involved legally-held weapons, of whatever calibre?
Finally, my Lords—I may be unduly alarmist in this—is the noble Lord entirely satisfied that Article 6 might not open a dangerous loophole? It is common knowledge that arms and ammunition are reaching terrorist groups in Northern Ireland from certain countries to the East, West, South and South-East of the United Kingdom; I shall be no more specific than that. Is there not perhaps a danger that Article 6 might allow certain politically-motivated nationals of the countries concerned to bring in arms and
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ammunition to these groups under the pretence of being innocent sportsmen?
6.39 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am grateful for the general support which this Order has received. I note the point made by the noble Lord, Lord Belstead, about the posting of firearms certificates. This is being looked at—it is obviously rather important—but I do not think we have got very far on it. We do not usually draw attention too obviously to parity in the wrong direction, and I think the legislation in Northern Ireland concerning firearms is going to be better than the legislation over here; so this may be a good reason for not having a Schedule showing how much we are ahead.
The noble Lord, Lord Monson, asked two questions. I can give him an answer which is not exactly in the form of an answer to the question he asked, but I have a record here of the number of crimes in 1975 which involved weapons, and the type of weapon it was, stolen from a legal owner, which I think are the relevant figures he wants. What I have not got is whether the crimes were murder, attempted murder or armed holdup. There were 5 committed with pistols, 5 with revolvers, 2 with shotguns, 1 with a self-loading military rifle, 2 with rifles and 2 with submachine guns, making 17 in all. Add to that 13 for the year before and there is a fairly nasty average because the truth is that these are the worst kind of crimes, and although the bulk of these crimes are committed by illegally held firearms, in so far as any are committed with firearms stolen from people who hold them legally, we cannot be too careful in trying to stop it.
So far as Article 6 is concerned, I think the noble Lord is worrying unduly. The procedure will be that if a Bavarian sportsman wishes to come and cull some of our antlered beasts, which we have in beautiful quantity in Northern Ireland, he will write to the chief constable saying that he is bringing in a gun of a certain make and asking for a temporary permit for it. The chief constable will be obliged to find out that he is who he says he is—he probably will be staying with a friend of the noble Lord, Lord Monson. It will

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be for the chief constable to check this; and providing he is who he says he is, and is going where he says he is going, he will be issued with a certificate valid front arrival to departure. My Lords, I am grateful for the general reception of this order. I think it will improve our general position in Northern Ireland.
Lord MONSON: My Lords, before the noble Lord sits down, I thank him for his reply, which satisfies my doubts about Article 6. He mentioned unspecified crime committed with a submachine gun. Is it the case that individuals can hold submachine guns under existing legislation?
Lord DONALDSON of KINGSBRIDGE: My Lords, almost certainly this would have been stolen from a UDR holding. There was an instance. Whether it is the one we all know about I cannot say.
On Question, Motion agreed to.

MONEYLENDERS (CROWN AGENTS) BILL
6.44 p.m.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I know that many noble Lords have referred to the noble Earl, Lord Cowley, but I should not want this particular opportunity to pass without saying something about him on behalf of the whole House and particularly because this Bill was one of his special subjects. It is difficult to believe that someone so young, so active and so sincerely and enthusiastically alive to all the things he believed in could have gone from us so suddenly. I have debated many times with him on aid and on foreign affairs and there has always been that unfailing good humour and courtesy which we grew to expect from him. More important than that, perhaps, was the fact that he had a very deep knowledge of his subjects. He was becoming a skilled debater and there can be no doubt that he could have gone very far in the service of this House. The fact that his untimely and, indeed, tragic death has happened in this way will be a very real loss to his Party, to the whole House and, I think, to the country. Perhaps, most important of all, we are all thinking of his young wife and her little daughter. We
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know her, many of us: we are all thinking of her and we send her our love and our deepest sympathy.
My Lords, I beg to move that this Bill be now read a second time. The purpose of this Bill is to establish that the Moneylenders Acts do not apply, and have never applied, to the loans made by the Crown Agents for Overseas Governments and Administrations either directly or through their wholly owned companies. The Bill involves no addition to public service manpower, nor to public expenditure. Your Lordships may remember a leader in the Daily Telegraph of November 25th which said:
"It is not often that Parliament is given the chance to consider a Bill of just two clauses which could save the taxpayer hundreds of millions of pounds, without cutting defence spending or the social services and on which Members can be wholeheartedly in agreement without breaching or even stretching Party lines."
Indeed a unique occasion—well, rare anyway. As my right honourable friend the Minister of Overseas Development said in his Statement on October 16th, which I repeated and which foreshadowed this Bill, he was informed in August by the chairman of the Crown Agents that the loans in question could be contested as irrecoverable and any securities related to them as unenforceable on the grounds that the Crown Agents are neither licensed moneylenders under the terms of the Moneylenders Acts nor a bank for the purpose of those Acts. As I think the House knows, before 16th October the Crown Agents had received some indications that their money lending status might be challenged. They had, in particular, received a letter from the liquidators of the Vehicle and General Assurance Company Limited requesting information on this point. The point has proceeded no further; but this was the necessity for this Bill.
It has always been understood that the Moneylenders Acts did not apply to the Crown Agents as servants of the Crown; they have also been advised that if this matter were brought before the courts they would have a very good case. However, if there were a challenge in the courts it would obviously certainly take a long time to resolve, and even if a judgment favourable to the Crown Agents were given on one loan it might not cover all the other loans.

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Noble Lords will understand that the delay and uncertainty could significantly worsen the Crown Agents' financial position. I think that noble Lords know that the Crown Agents' function at present is to provide financial, technical and commercial services to over 100 Government and 200 other public bodies overseas. These services include large-scale procurement activities for their overseas principals, about £113 million of which is business in the United Kingdom. Noble Lords will appreciate the consequent benefit to our balance of payments. I should like also to stress—I am afraid I have said this before—that they manage over £800 million in sterling securities and cash for their overseas principals. It is most important work which noble Lords on all sides of the House recognise. Of course, the Government want to see these valuable services continued for the sake of the Crown Agents overseas principals in the developing world and for the sake of this country in its relations with overseas countries. That is why the Government have emphasised many times that they stand behind the Crown Agents; if we do stand behind them we lay the taxpayer open to the liability of the potential cost to the Crown Agents of the circumstances I have explained. I cannot precisely estimate the total liability, but it is generally agreed that at maximum it would just about exceed £400 million, and that is without taking into account future interest payments on the loans.
My Lords, I think the House will realise that the main beneficiaries would he those property companies, secondary banking companies and other companies to which the Crown Agents have made loans or, in the case of insolvent companies, their other creditors. Can I come quickly to the element of retroactivity which some noble Lords will find distasteful? We always find retrospective legislation distasteful. I want to emphasise that this Bill does not involve overruling either a decision of a court or a clear legal proposition. I have mentioned an inquiry from one liquidator. Other questions about Crown Agents' money-lending status have been raised in correspondence; but no legal proceedings concerning the loans have been started before the Statement on 16th
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October. Neither have the Crown Agents instituted such proceedings. We are not therefore altering anything which has been decided. The House will agree that it is not therefore retrospective provision in the sense that the House might normally find objectionable.
May I emphasise that the House wish to remember that we are acting in the interests of the taxpayer and in relation to a very large sum. We must make the legislation bite on the loans which Crown Agents have made in the past, and those are the loans which are now in question. Nor do I think that it can be said we are seeking double standards between the public and the private sector. Noble Lords who follow these matters will remember that the Ship Mortgage Finance Company Act 1962, enacted when a Conservative Government was in power—I am making no political point about this—was a private Act related to a company in the Private sector, and was similarly retrospective. Therefore, in enacting this Bill, Parliament would not be adopting double standards.
In another place, the question was raised at the Committee stage of the Bill as to whether litigation had been started in which the Moneylenders Acts had been pleaded. My honourable friend the Parliamentary Under-Secretary of State said that he understood that no such litigation had been started, but if this proved to be inaccurate he would see that this matter was put right in your Lordships' House. Since this assurance was given I have been informed that a writ was served on Four Millbank Investments Limited after notice of this legislation was announced in Parliament on 16th October, claiming that a certain transaction was invalid. However, no details of the grounds on which the claim rests have yet been received, and it is not possible to say on what basis the action is being brought. I can say, however, that no defence under the Moneylenders Acts has been pleaded. I thought I ought to tell your Lordships of this writ so that there should be no further misunderstanding.
Some of your Lordships may question, as was done in another place, whether Parliament is being asked to legislate in the dark before we have more information about the Crown Agents in

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general; in other words, before my right honourable friend's White Paper is published and, of course, before the results of the Fay Committee are known. May I stress again that tonight we are dealing with current day-to-day activity of the Crown Agents, which is urgent. May I stress the word "urgent". The long-term future will be dealt with in the White Paper and in the ensuing legislation. All noble Lords know that this is not an easy problem and that we have to keep in the forefront of our minds the need to maintain the confidence of the overseas principals. I think everyone will agree that this time we have to get the framework absolutely right, and we need a little time to do this.
The conclusions of the Fay Committee, in whose conclusions noble Lords are deeply interested, will provide the reasons why and how the Crown Agents got into their financial difficulties, which nobody denies. But, of course, these things take time and the conclusions will not be available until some time in the coming year. In the meantime, we have an urgent need to clarify the Crown Agents' moneylending status now so as to avoid further financial problems. Until we have clarification, the Crown Agents may suffer serious loss of income and may be unable to recover capital owing to them. It is a risk we must eliminate urgently.
It is a very foggy night, but perhaps I may make one or two technical points in explaining the Bill. I will be as brief as I can. It has only two clauses. Clause 1 provides that the Moneylenders Acts shall not apply and shall be deemed never to have applied to loans made by the Crown Agents, either directly or through wholly-owned companies. It also declares in subsection (3) that this exemption shall not prejudice any status, privilege or immunity of the Crown Agents, or such a company as servants or agents of the Crown. Clause 1(1) is framed to cover any period when there was only one Crown Agent, when, in order to comply with the requirement that a company needs more than one shareholder, the other shares in the companies wholly owned by the Crown Agents were held in trust for them by a member of their staff acting in his official capacity.
Clause 1(2) is simply a definition of the Crown Agents which is needed because there is no legislation establish-
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ing them; they derive from the prerogative. It is more involved than might otherwise have been necessary because the titles of the appointments made to the Crown Agents by successive Ministers have not been identical. Clause 2(2) is included because legislation to repeal the Moneylenders Acts has already been enacted, as the House will understand, under the provisions of the Consumer Credit Act 1974.
I will not go into the Bill in more detail now; if noble Lords have questions on it, I will reply later. I want to stress that the position of the Crown Agents is unique. Their status for the past 150 years has never been dealt with in legislation or tested in the courts. I am sure the House will agree that we must clarify a situation which could soon increase the potential burden on the taxpayer for financial support to the Crown Agents to a degree which would be unacceptable. We have therefore prepared this Bill to place beyond doubt in this limited respect the position of the Crown Agents and their wholly-owned companies. I beg to move.
Moved, That the Bill be now read 2a. —(Baroness Llewelyn-Davies of Hastoe.)
6.59 p.m.
The Earl of GOWRIE: My Lords, like my noble friend Lord Campbell of Croy during our previous business, I am here as a substitute for the late Lord Cowley. I should like to thank the noble Baroness the Government Chief Whip most sincerely for her references to him. We are all very shocked by his death at less than 30 years of age and amid all the happiness of his strong family life and commitment and, likewise, of his strong commitment to a public career. It is conventional that we as a House pay our respects usually to Members of Privy Council rank or beyond upon their death; but I believe as a colleague and friend of Lord Cowley that I may join those on this side of the House in expressing to his young and charming wife our warm feelings for him and our great sadness at his loss. This House, Parliament and the country, as the noble Baroness suggested, are not so full of young men committed to careers in politics that we can afford to lose them lightly. My late noble friend was only at the start of his career; but I am glad to be able to recall that he was in 1973, albeit briefly, the youngest member of

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any British Government for very many years, and that surely was a promising start.
Lord BROUGHAM and VAUX: My Lords, may I interrupt my noble friend, on behalf of Maria Cowley, whom I am seeing later this evening. I will pass on the messages from my noble friend, the noble Baroness and the House.
The Earl of GOWRIE: My Lords, I am grateful to my noble friend for that intelligence.
I turn now to the Moneylenders (Crown Agents) Bill, which was, as we would expect, very disarmingly moved by the noble Baroness the Government Chief Whip, who itemised carefully and accurately all the areas of conceivable opposition that I might be able, at short notice, to raise. I understand that the Crown Agents manage overseas property, whether real or financial, belonging to Governments. Most Government institutions and banks in this country are covered by the Moneylenders Acts so that liability is not limited unless this Bill becomes an Act in the case of the Crown Agents. The noble Baroness mentioned that to all of us, as Parliamentarians, there is an element of distastefulness in retrospective legislation. Certainly here very large sums of money could be involved. She mentioned a total sum of some £400 million being at risk with overseas banks and institutions, as a result of doubtful debts in the 1974 accounts, of loans to Bristol banks and institutions, of overdrafts, commitments to overseas principals and interest received and liable to be repaid if judgment went against the Crown Agents. Since many people could theoretically be denied lawful benefits which they could expect to receive, I think there is an element of distastefulness here.
The noble Baroness said that the Bill does not involve overruling the decision of any court or any existing legal proceedings. I would say, with respect to her. in view of that sentence, "So we would all hope". I acknowledge, with her, that retrospective legislation may be unavoidable in this case. I believe it would have been better if we had received more information and if the White Paper outlining the intentions of the Government about the future of the Crown Agencies were published at least during the consideration of the later stages of
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this Bill. I was going to ask the noble Baroness whether that would be likely, but she has pre-empted me and indicated that it would not, and that the later stages of the Bill would be proposed without that information. However, I must agree with her that confidence in the Crown Agents must be maintained, and particularly where foreign Governments are concerned and at a time of great indebtedness towards them.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, perhaps I may be allowed to add a couple of words. I am quite sure in my own mind that nobody believed that the Moneylenders Acts did apply to the Crown Agents at the time when the transactions which may be in question were arrived at, that the Crown Agents were never intended to be caught by the Moneylenders Act sand that nobody could put up a defence under the Moneylenders Acts for any reputable reason whatever.
7.3 p.m.
Lord PEDDIE: My Lords, I should like to join in the expressions of deep regret and sympathy upon the passing of one of our colleagues. I did not know him well, but certainly had a great respect for his quiet charm and tremendous friendliness. I shall always remember him for those qualities.
Regarding this Bill, I do not think there is any doubt that here we have a piece of retrospective legislation, and no Parliamentarian can welcome retrospective legislation. But I believe that there are occasions when it is necessary to right a wrong or correct a mistake, or, as the noble Baroness said, to clarify a situation. I am sure that this Bill is justified on at least two of those counts, and therefore I welcome it as a piece of completely justifiable legislation.
Before making any further comments, I should declare an interest in that I am chairman of a company which has a financial connection with the Crown Agents; but beyond that my main reason for intervening in this debate is my continuing critical interest in the affairs of the Crown Agents—one which extends over almost five years. The noble Earl, Lord Selkirk, and I have frequently drawn attention in the past to most disturbing elements in the operations of the Crown Agents. Indeed, I can claim personal responsibility for exciting the interest of

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a number of Members in another place, which I think had some influence upon the activities which resulted in the Stevenson Report of May 1972—a Report which, incidentally, we never had the privilege of reading.
The noble Earl, Lord Gowrie, while welcoming the Bill, said that it was the responsibility of Government to give more information. I agree that the Crown Agents, and indeed the public, in times past have suffered a great deal because of the reluctance of Governments to give all the facts. I hold equally responsible the Party opposite, because I remember vividly that on 21st November, 1973—and I shall paraphrase Hansard—in response to questions posed at that time the statement was made by a Member of the Party opposite that the Crown Agents had adapted their organisation and structure to deal with a wide range of technical and financial services. The spokesman went on to say that in the light of the Stevenson Report they agreed that fully owned subsidiaries staffed by Crown Agents personnel should be developed to deal with specialised financial services of the Crown Agents. Beyond that, the statement was made that the investment policy pursued by these companies should be in accordance with the trustee analogy and consistent with their name and standing. I welcomed that statement at the time, and particularly the comment that the investment policy was to be in accord with the trustee analogy, but I must say that no full description of what was meant by that phrase was given. Presumably we were not aware of the full situation at that time.
Furthermore, I regret that the White Paper which has been promised by this Government has not yet been produced. It was as far back as 17th December 1974 that this Government made a cash injection of £85 million, and I would pay them this compliment: that occasion marked the first time ever of the giving of a full and frank expression of complete Government support for the Crown Agents. That was a most important decision—so important, as the Crown Agents themselves will testify, that it added to the confidence which was felt by overseas investors and resulted in a very substantial increase in deposits. My figures are in excess of those quoted by my noble friend. They indicate as
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much as £1,200 million of overseas funds now being handled by the Crown Agents.
I agree that this Bill involves no public expenditure. If it is not accepted, it could involve expensive litigation, the benefit of which could only be to property companies, fringe banks and others who have obligations to the Crown Agents. I believe that the Crown Agents have enormous potential, and in spite of a long, long period of criticism, I personally would say that I have absolute confidence in them, and particularly in the knowledge of Mr. Cuckney, who is the chairman and a man of outstanding reputation. I welcome this opportunity of making such a statement.
I would end by making this comment. I look forward to the publication of the White Paper, which is long overdue, and I hope that it will advocate a public corporation of a character which provides backing by the State but gives a considerable measure of independence to the Crown Agents themselves. I believe that the Crown Agents have been in the past, and can continue to be, a very useful asset to this nation. They have done tremendous work and I am quite sure that this House will give full support to, and will indeed welcome, this Bill as being a very necessary step to put matters right and make sure that we have continued progress on the part of the Crown Agents. I have great pleasure in supporting the Bill.
7.10 p.m.
Lord BRUCE of DONINGTON: My Lords, the noble and learned Lord, Lord Hailsham of Saint Marylebone, will correct me if I am wrong but, to the best of my recollection, under the Moneylenders Act 1927, there are only two ways in which a borrower can avoid his obligation of repaying a loan to a moneylender. The first is when a moneylender is not a registered moneylender as such, even though he holds himself, or a firm holds itself, out to lend money. The second is under Section 6 of that Act, which automatically voids a contract and any security given in respect of a loan if the contract for the loan does not state all the terms. The only reassurance upon this Bill that I require is that no borrower shall suffer as a result of its passing, by reason of any reference to Section 6 of the Moneylenders Act 1927. So long as I

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have that assurance, I think that the Bill should be thoroughly supported.
7.12 p.m.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, it is not often that I am able to thank the noble and learned Lord, Lord Hailsham, for help on these matters, but I thank him very warmly for his very clear and helpful intervention about the relationship between the Crown Agents and the Moneylenders Act. I hope he will forgive me for saying that he was absolutely right in his interpretation of the situation, and I am most grateful to him. Indeed, I am also grateful to my noble friend Lord Peddie, because we all know that he has been a very deeply knowledgeable critic of the Crown Agents in the past, and when he gets up I never quite know what he will say. So I am grateful to him for at least approving of two points in the Bill.
Of course he was right to be critical. As my right honourable friend said in another place when he was dealing with the current financial situation, no one has ever tried to pretend that the financial situation is good. Of course the Crown Agents are technically insolvent—I think that term has probably applied to me all my life and, unfortunately, bank managers take these matters rather seriously—but, even so, as the House knows, since my right honourable friend made his Statement about the £85 million, and the Bank of England's offer, neither of those guarantees has had to be taken up, and the Crown Agents have not had to fall back on them. Furthermore, as my noble friend Lord Peddie said, deposits made by oversea Governments and bodies have gone up, so that confidence in the Crown Agents has been maintained and increases. I should not like to argue figures with my noble friend Lord Peddie, but there is no doubt that they have gone up. This is what matters and it is of tremendous importance.
I share with the House the regret that we could not have had both the White Paper and the Report of the Fay Committee before we had to take this little but very important Bill, but I can promise your Lordships that the White Paper will be out very shortly. I know that that is a phrase which Government often use, but I really believe that it will be with
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us very soon. I have already said that we shall not have the Report of the Fay Committee very soon and, in the meantime, it is essential to get on with this Bill. I think my noble friend Lord Peddie will be satisfied with the White Paper when we get it. It will not only set out the history of the Crown Agents, but will describe what is proposed for its future functions, and the specific powers—I think this is important—which should rest with the Minister.
The word "incorporation" is always used in these matters. It describes a relationship of a kind which noble Lords perfectly understand between bodies in the public sector and Ministers responsible for them. I think that the White Paper will clarify the responsibility and broad oversight which the Government need to exercise, as has been proved by past events, over the activities of the Crown Agents, but will leave the Board to run their day-to-day activities. Most important, it will not disturb the traditional relationship between the Crown Agents and their principals. It must be admitted that this is an extremely difficult nut to crack. All sorts of Administrations have had a go at it. My noble friend referred to the Stevenson Committee. Everyone has tried to get this straight. At last, Her Majesty's Government have now grasped the nettle and I think that in a very few weeks we shall see the White Paper. But, again, may I emphasise that we need this Bill now, immediately, in order to save for the taxpayers millions of pounds possibly being forfeit.
The noble Earl, Lord Gowrie, asked me a question. I think the answer is that it will be the Crown Agents who are denied the right to recover loans which all concerned would have considered to be recoverable. As the noble and learned Lord, Lord Hailsham, pointed out, their debtors will be denied only the right to advance a contrary interpretation of the Act which the Government do not consider to be a correct one. The noble Earl also referred to the difficulties which another place have found in the law being left to the courts to determine. Of course, the courts interpret legislation handed down by Parliament, but if Parliament becomes aware that there is a lack of clarity in the application of legislation,

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then it is right and proper that Parliament should clear it up and I believe that this Bill represents such a case.
So without going into further details on this foggy night, may I again say that the Bill does not prejudge the repeal of the Moneylenders Act. It will cease to have effect at the same time as the Moneylenders Act ceases to have effect through the orders I have mentioned under the Consumer Credit Act, and its remedial effect in relation to past loans will continue. At this time of utmost restraint on public expenditure, it would be quite unacceptable to take on what could be an avoidable burden. We can dispel such doubts about the Crown Agents' past moneylending status only by legislation such as this Bill which I am recommending.
On Question, Bill read 2aand committed to a Committee of the Whole House.

OECD SUPPORT FUND BILL
7.18 p.m.
Lord JACQUES: My Lords, may I first join in the tribute to the late Lord Cowley, and in the messages of sympathy which have been sent to his wife and family.
My Lords, I beg to move that this Bill be now read a second time. It is a short Bill of five clauses. Its purpose is to enable the "United Kingdom" to join with 23 other nations in the formation of a Financial Support Fund of the Organisation for Economic Co-operation and Development—commonly known as the OECD. There is some urgency in regard to this Bill, because the Fund does not commence to operate until countries representing 90 per cent. of the quotas have deposited their instruments of ratification. Therefore, we have an obligation to our partners to proceed with reasonable haste. Also, it is in our interests to do so. Our country is committed and indeed to some extent is dependent upon international trade. Since the purpose of this Fund is to foster international trade it is also in our interests to ratify the Agreement as soon as possible.
The massive increases in oil prices in the autumn of 1973 and the summer of 1974 gave rise to considerable financial difficulties throughout the world. The consuming countries were unable to adapt
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their economies quickly enough to the changed circumstances and in consequence they had massive deficits in their overseas accounts. On the other hand, the producing countries had only a limited capacity for taking the imports which their newly found wealth enabled them to buy. Consequently they had massive surpluses and there was a grave danger that these surpluses would be invested in a way which did not correspond with the pattern of deficiencies. There was, therefore, the great possibility of financial markets throughout the world being threatened. There was the even greater possibility that individual countries which, through no fault of their own, found themselves in financial difficulties would seek to take unilateral action in order to correct their own balance of payments. Usually it is action which restrains trade, deepens the depression and delays recovery. It was to prevent that from happening that the Agreement with which the Bill is concerned was made.
Many proposals have been made for what is now commonly known as recycling the petrodollars, and this is one of them. However, this proposal has its own characteristics. First of all, before any member of the Fund can make a claim for assistance he must show that he is encountering serious external financial difficulties. Secondly, it must be shown that the country has made the fullest use of reserves and other forms of credit. Therefore, it is quite clear that this is regarded as the safety net.
This is not a Fund in the sense in which we usually use the term. It is not a permanent institution with its own resources. It is intended only that money will be raised to meet applications and the money raised will be unlent immediately. Consequently, there is no question whatever of a floating debt. The size of the Fund is measured by its potential for raising money and unlending it. Each of the countries which is a member of the Fund is allotted agreed quotas which indicate, first, the measure of the risk which is being undertaken by each country. Secondly, they indicate the voting strength which each country will have in making decisions. Thirdly, they give a rough guide as to the amount which a country can expect to be able to draw if it is in difficulties. The total of the

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Fund is 20 billion Special Drawing Rights, which is equal to 24 billion United States dollars. The United Kingdom's share is 1,600 million Special Drawing Rights, or 8 per cent. of the total of the quotas. Therefore, we have a percentage of the risk and a percentage of the voting power. Also, it is a guide to what we could expect if we needed to apply for assistance.
When a country makes an application to this Fund for assistance, it has to prove not only that it is encountering serious external financial difficulties but that it has made the fullest use of its reserves and other forms of credit. Also, it has to prove that it is following economic policies which are consistent with the objectives of the Fund. The object of the Fund is to avoid the need for countries to take unilateral action which would restrain trade. Consequently, a country which was taking unilateral action that would restrain trade is unlikely to receive a great deal of sympathy from the governing committee of the Fund.
Loans will be granted for a maximum period of 7 years and will be subject to the economic policy conditions to he agreed between the governing committee of the Fund and the applicant. Before any member of the Fund could obtain his full quota he would have to obtain two-thirds of the weighted voting strength of those members of the Fund who were voting. Our quota is 1,600 million Special Drawing Rights, which at the present rate of exchange is £917 million, and if we made an application for the total amount two-thirds of the votes would have to be in favour of granting it. Before any country can obtain twice its quota, 90 per cent. of the votes must be in favour of granting it; and before it can obtain more than twice, 100 per cent. of the votes must be in favour.
When an application is received the governing committee can decide to call upon the members who have a choice of two options in deciding how they will proceed to deal with the call. First of all, they can make available the money or credit. If we did that it would be a charge to the National Loan Fund, and any capital repayments and interest on the loan would go to the credit of that Fund. This is provided for in Clause 2 of the Bill. Alternatively, we need not
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contribute at all; we may be content to allow the money to be raised elsewhere by the governing committee and then we would simply guarantee the amount. Therefore, we have an option. Either we can provide the money or just be guarantors. If, of course, we guaranteed and had a loss it would have to be charged to revenue, not to capital account, and. therefore, it would be a charge to the Consolidated Fund. That is dealt with in Clause 3. A further alternative is that when it receives an application the governing committee of the Fund need not go to the members of the Fund for either contributions or guarantees. If it wishes, it can raise the money elsewhere on the collective guarantee of the members of the Fund.
If it did that our share of the liability would be 8 per cent. because our quota is 8 per cent. of the total. In practice, any loss that we are likely to make because of our guarantees will probably be negligible, for any default by a member of the Fund will probably be technical in the sense that the member was unable to find the necessary resources at the due date but found them afterwards. Therefore, any liability arising out of this Fund is likely to be temporary. The usual privileges and immunities are granted under the Agreement. In particular, there is tax relief to non-residents on securities issued by the Fund. This is dealt with in Clause 4.
In conclusion, the creation of this Fund is evidence of the willingness of developed countries to act in concert to overcome the effects of the oil crisis, and that we welcome. The provisions for the supply of credit may appear to be complicated but that is because an attempt has been made to make them flexible, so that the members of the Fund can adopt the methods which are most suited to their financial position and their legal procedures. So far as the United Kingdom is concerned, our first commitment is gradually to reduce and eliminate our external deficit, because while we have it we have to finance it. We have many different ways in which it can be financed. We welcome this facility, but we do not expect to have to use it in the near future. It is intended as a safety net and we intend to treat it as such. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Jacques.)
7.31 p.m.
The Earl of GOWRIE: My Lords, it is by custom rather than constitutional provision that your Lordships' House debates but neither amends nor delays Money Bills. Until the last few months it had never occurred to me to question this sensible national habit, but I must say that the Government's record of economic management makes me question our wisdom a little, it being so much worse even—and I stress the word "even"—than the previous Conservative Government's record, and so much worse even than the record of Mr. Wilson's previous Administration. In my view, there is probably more economic expertise and skill and practical experience in your Lordships' House than in another place, even if it is not much on parade today. I feel so pessimistic about the chances of any kind of national recovery under this Administration—even short-term recovery—that I rather wish we could block Money Bills, precipitate a constitutional crisis and force a General Election. But I acknowledge that for the time being this is wishful and indeed somewhat Antipodean thinking.
Consider, as an instance of the fearful cul-de-sac in which the Government are holed up, the present Bill. It is a perfectly sensible Bill and the noble Lord, Lord Jacques, introduced it in his usually clear and sensible way. Normally one would welcome it—or not exactly welcome it since the circumstances that engendered it, the OPEC cartel, the rising oil prices of 400 per cent.—are not exactly convivial topics. But one could at least have said that it was entirely sensible for the OECD countries to club together to set up a Fund to help each other finance the massive balance of payments deficits resulting from the oil producers' limited capacity to absorb imports from us, the oil importing industrial economies.
This legislation before us is the result of the desire of the United Kingdom to become a principal likely beneficiary of the Fund, since we are all too easily capable of demonstrating to the governing committee of the Fund that we are, under the qualifying rubric stated by the noble Lord, Lord Jacques, encountering serious internal financial difficulties. Un-
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for the Gvernment we are also, under the same qualifying rubric, required to demonstrate that we are making the fullest use of our reserves and other forms of credit.
One of the first things that your bank manager requires of you, when you apply to him for a loan because you are in trouble rather than because you have a bright or expansionist idea, is that you should state your intentions and chances of avoiding the same kind of trouble in the future. Yet we now know that, despite all the firmly-stated intentions to reduce public expenditure which the Chancellor of the Exchequer has been making, plainly he will do very little of the kind. Let us look briefly at the figures. The annual public expenditure review is to be completed next week and the White Paper is due in January. We understand that cuts of £3,000 million are proposed for the next two or three years, but in the present year we have exceeded last year's forecast by nearly £2,000 million, excluding the interest on that extra £2,000 million, so that in fact after interest it is of course a lot more.
At the start of this financial year the public expenditure of 1976–77 is expected to be £4,000 million lower than previously, but we have the roller effect, the effect of accumulated interest and the compound interest and we have extra expenditure projects such as the Chrysler crisis, and the like. To put it mildly, it also seems to me to be unlikely that at a time of sharply rising unemployment the Chancellor will be able, or will wish, to raise income tax.
Only yesterday, in an article in the Sunday Times, the Chancellor wrote, mentioning the social wage, that if we raise public expenditure in the short-term at the expense of productive investment we shall destroy our chances of improving public services in the future. I contend that we already have destroyed those chances, and for very many years to come. So the governing committee of the OECD Support Fund is faced with the British Government hurrying through this legislation in order to qualify for help, stating their intention of reducing their public borrowing requirements, but effectively doing the reverse the lesson of Chryslers is that we can only increase I our public borrowing requirements—by

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how must we shall probably learn tomorrow.
My honourable friend Mr. David Howell has calculated in another place that our existing outstanding amount of foreign currency loans to the public sector—I am talking not about general public borrowing but only foreign currency loans—is in the region of £9,500 million. The annual interest on this figure cannot be far under £1,000 million—or a modern billion—in each year, so that in addition to the OECD Support Fund entitlement—the Bill we are discussing today—we owe money to the IMF General Account, the IMF oil facility, the US Federal Reserve and the EEC joint borrowing scheme.
Of course I acknowledge that we shall have to borrow—or rather to continue borrowing—for a very long time to come but as we know from the recent history of the aerospace, shipbuilding and motor car industries there is a distinction between borrowing to get back on one's feet and borrowing to stave off reality just a little bit longer. The Government, like Mr. Micawber, are hoping for something to turn up and they think they know what it is—North Sea oil. But as the OPEC experience has warned us, this is next to useless unless a common energy policy and minimum price levels can be agreed. Yet the whole posture and behaviour of the Foreign Secretary recently has put this into jeopardy and raised the deepest and, I should think, justifiable suspicions among the very nations whose Support Fund we are now scrabbling to utilise. My Lords, one need not kow-tow to one's bank manager, but there is no reason to spit in his face.
My Lords, a final contradiction. It seems likely that on Wednesday the Government will introduce selective import controls. Certainly there are widespread rumours to this effect. It also seems likely that these will satisfy the TUC very little, some of whose leaders are urging a siege economy. What on earth good would a siege economy do to British Leyland or to the jobs it generates? What good would it do to Chrysler, whose continued existence in this country as a creator of goods and work depends entirely, as the Department of Industry acknowledges, on co-operation from the company's European subsidiaries?
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The noble Lord, Lord Jacques, said that the governing committee of the Fund would look with distaste at a Government who took unilateral action directed at disturbing the balance of world trade. I agree with him, but do the Government realise that if they introduce import controls on Wednesday these would be totally incompatible with the principles of the Fund whose legislative effects we are debating? In my opinion, it would be a far better thing for the country and for the House if we refused to give this Bill a Second Reading, at least until Thursday. I have to say I regret that our conventions preclude us from doing so.
Lord JACQUES: My Lords, the noble Earl, Lord Gowrie, has been very selective in the evidence he used. If I were going to the bank manager, I would point out that the first thing this country has to do is to bring down the rate of inflation, and that there are strong signs that the Government have taken effective action. The latest figures show that for the first time in more than three years the monthly rate has fallen three months in succession—I repeat, for the first time in three years. I would remind the noble Earl that this Government have not yet been in Office for two years.
My Lords, I would also point out that in the last six months the average increase in the Retail Price Index has been just over 1 per cent. bringing the inflation rate down, on an annual basis, to something around 15 per cent. That indicates that the action recently taken by the Government, with the co-operation of both sides of industry, has been effective. That is the most important thing to do. The noble Earl criticised the public expenditure of the Government, but he did not spell out the alternative. The alternative would be massive unemployment.
On Question, Bill read 2a; Committee negatived.

HILL LIVESTOCK (COMPENSATORY ALLOWANCES) REGULATIONS 1975
7.42 p.m.
Lord STRABOLGI Lord STRABOLGI rose to move, That the draft Hill Livestock (Compensatory Allowances) Regulations 1975, laid before the House on 27th October, be approved.

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The noble Lord said: My Lords, these regulations, will, with your Lordships' approval—which I hope will be forthcoming—implement the livestock subsidy provisions of the European Economic Community Directive on the Less Favoured Areas. The regulations will replace the hill livestock schemes, variations of which have already operated under United Kingdom hill farming legislation since 1946. For the first time, aid to hill sheep and hill cattle producers throughout the United Kingdom will fall within the compass of one scheme, and for the first time the House is being asked to approve a hill livestock subsidy scheme made under Section 2(2) of the European Communities Act. Before passing to the content of the proposed new regulations, I propose to remind your Lordships, if I may, of the background to the Directive itself.
My Lords, the Directive had its roots in the United Kingdom's negotiations to enter the Community in 1970 to 1971, conducted by the Conservative Administration. The attention of the Community was drawn to the special problems of our hill farmers, and in the Treaty of Accession the United Kingdom obtained general recognition of the need for the Community to take special measures in such areas. Subsequently, the preference of the original EEC members for a Directive related to the mountains only was broadened so as to take account of a wider area of land including the livestock rearing areas benefiting from United Kingdom hill sheep and hill cattle subsidies.
Noble Lords had the opportunity to consider the proposals of the Commission for the Directive on 3rd February this year, when it received a general welcome. On that occasion, I voiced from this Dispatch Box the dissatisfaction of the Government about the proposal of the Directive to limit headage payments on livestock—which I think we shall have to get used to calling "compensatory allowances"—to farmers who were not receiving a State retirement pension. I am glad to say that we were successful in getting this difference of treatment removed, although each member country has to bear the full cost of any livestock subsidies paid to pensioners. The amended Directive was finally approved at the end of last
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April, and member countries wishing to take advantage of its provisions have to introduce their own legislation implementing them within a year.
I should now like to summarise the main features of the regulations. First and foremost we have been able to include virtually the same definition of eligible hill land as in the former schemes. In other words, hill areas which were accepted as fully eligible under those schemes will be accepted under the regulations. The Directive does, however, restrict the payment of compensatory allowances to occupiers of three hectares—approximately 7½ acres—of eligible hill land. I am afraid this means the exclusion of some farmers who were previously able to claim. They are relatively few in comparison with the total number who benefit, but we are actively considering how best to cushion the blow.
My Lords, there are two other differences which I feel I should bring to noble Lords' attention. The payment of a compensatory allowance will depend upon the claimant signing a simple undertaking that he will continue to farm at least three hectares of eligible land for the next five years. State pensioners will be exempt from this provision. I believe that it will prove possible to administer this provision fairly bearing in mind that the regulations provide for release from the undertaking on a number of grounds including circumstances beyond a farmer's control.
The other difference concerns the limitation on payment. Here there has always been some difference in approach North and South of the Scottish Border, as, indeed, often happens, but throughout the United Kingdom regard has always been had to the carrying capacity of the land and to the need to have some limitation on the number of animals qualifying for subsidy. We have, however, always treated claims for cows and sheep separately even though they were grazing the same land. This separate treatment will no longer be possible because the Directive imposes an overall financial limitation of 50 units of account—which is about £28.50—for each hectare of hill land. Thus some farmers who stock fairly heavily with sheep and cows will, I am afraid, find that the limitation on

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the payments they receive under the regulations is more severe than under the hill livestock schemes. There is, of course, nothing necessarily permanent about the 50 units of account.
Otherwise such differences as noble Lords will find in the regulations are mainly of a technical and administrative nature. For example, there will for the first time be a common qualifying day for cattle and sheep of 1st January. This means that this winter's hill sheep subsidy formerly paid in relation to a December date is being deferred for about one month. We hope that this inevitable delay in the first year of the changeover will not cause farmers too much inconvenience. I can assure noble Lords that we are fully aware of the need to deal with farmers' claims as quickly as possible in the New Year. The rates of subsidy payable under the former orders have been incorporated in the regulations including, of course, the higher rates of hill sheep subsidy which followed the Annual Review earlier this year.
My Lords, I began by pointing to several respects in which the new regulations differ from the old United Kingdom schemes. I hope, however, that I have made it clear to noble Lords that in most respects the regulations will continue aid to hill farmers on much the same basis as before. I suggest that our negotiators in Brussels have, considering the total absence hitherto of any Community arrangement for financing this sector of the farming industry, done a remarkably good job. I can assure noble Lords that we shall take every opportunity open to us to seek modifications in the Directive to improve the position of our hill farmers where such modifications appear desirable.
Finally, may I remind noble Lords of two very important considerations: first, aid under the Directive will continue on an indefinite basis ensuring the future of hill farmers; and, secondly, the United Kingdom stands to gain a very substantial FEOGA contribution in the region of £12 million annually towards the cost of paying the allowances. I hope the House will see fit to approve these regulations, and I beg to move.
Moved, That the draft Hill Livestock (Compensatory Allowances) Regulations
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1975, laid before the House on 27th October, be approved.—(Lord Strabolgi.)
Viscount AMORY: My Lords, I should like only to say to the noble Lord that from the very clear description he has given it seems to me that in general these are very sensible arrangements. May I ask him one question with regard to the £12 million he mentioned towards the end of his remarks? Is that, as it were, the net receipt to this country arising from these provisions, or would the net receipt be something less than that, or is it impossible to calculate what the net receipt will be?
Baroness ELLIOT of HARWOOD: My Lords, may I also welcome these regulations, speaking as, I think, the only hill farmer in this House at the present moment. As someone who has now for 40 years been a hill farmer and in receipt of subsidies and assistance, which all hill farmers have had, I am very glad that in the speech the noble Lord made—and I might perhaps say how clearly and succinctly he put the case; I was listening with the greatest possible interest because I am affected by this—he also said that the Government are anxious that the hill farmers, whether in Scotland, England or Wales, shall not have any less assistance than they have at the present time. That is extremely important because the fluctuation in prices to which we are subjected in this country—I am not complaining; it happens to everyone—is such that if one cannot have some fairly stable under-pinning of the industry it is very difficult to carry on.
Last year was a disastrous year; this year is a bit better, but you have to go back quite a long way to even it out, and costs are rising all the time. So I do welcome this measure. I hope the Government will continue to support these agricultural discussions at Brussels and try to get the best they can for this country. It is something which affects quite a number of farmers and quite a number of people who eat beef and mutton. We do not want to have any less; we want, if we possibly can, to increase this production, which will save imports and save money. So I congratulate the Government on this and hope that they will continue to stick up for the hill farming industry.
7.54 p.m.
Lord SANDYS: My Lords, I am afraid I do not share the intimate knowledge and expertise of both my noble friends in this particular area of hill farming. I should like to thank the noble Lord, Lord Strabolgi, for his very clear statement. We are feeling our way towards aligning our agricultural legislation in this country with the Common Agricultural Policy; it is a process to which we must become accustomed, and the sooner we can become acclimatised to that system the better. There are, however, many matters which will affect the farmer.
I would begin by commenting on the EEC Directive and to comment first of all on Article 3(4) because, as noble Lords rightly said, there are some farmers who will be affected. One understands that there are involved about 750 farmers, mainly but not wholly in Wales, due to the fact that the areas which are defined in Article 3(4) are in danger of depopulation. There is a problem here, and I hope the Ministry will be able to give some assistance to the farmers affected. There is no area of farming in this country which is more important, certainly to the knowledge of the National Farmers Union, than the hill farms, because of the very close interchange in the markets between the hill farming areas and the rest of the country and the great importance of the national stockyard which is derived from the hill farms.
I should first like to ask the Minister whether his right honourable friend the Minister of Agriculture has implemented the full compensatory amount which is possible to achieve under the Directive. We understand that there is a little elbow room here, and perhaps the noble Lord may be able to tell us whether the full amount has been set out in this draft Statutory Instrument.
My second point is this. Can we be assured that the arrangements for winter keep will be unaffected? On reading through in some detail the EEC Directive we understand that Article 10 relates to aids for fodder production and pasture improvement. Of course we do not know what the Government have in mind, particularly as the regulations before us relate specifically to compensatory amounts; but it would be helpful if the noble Lord could assure us that the exist-
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ing arrangements for winter keep are unaffected.
As to the amounts concerned and the limitations placed, as the noble Lord, Lord Strabolgi, has said, there is a limitation of three hectares, which we believe to be 7.41 acres, as a minimum acreage. This affects some farms and some smallholdings, and there will be those who will be affected by it who previously were able to claim full subsidy. Other noble Lords have commented on this particular aspect. We hope that suitable arrangements will be made by the Minister in this regard.
Lord DAVIES of LEEK: My Lords, may I ask my noble friend a question since, as a Welshman and brought up for a while in Cardigan, I know what the hill farming means there. I had not intended to speak until after Christmas, but here I think I should say a word for the sweetest mutton in the world, which is Welsh mutton. These are very small farms, and for centuries the very small acreages, unbelievable as it may sound, were enough to keep the hardworking hill farmer going. I hope that this small acreage will receive some new look from the Government. In Wales particularly we are interested in what happens to the small Welsh mutton farmer.
Lord GLENKINGLAS: My Lords, before the noble Lord sits down, and being personally interested in hill farming, would he not agree that one of the great attributes of Welsh sheep is that, whatever area they are supposed to be confined to, they can always get over or under or through any fence that God has ever devised?
Lord DAVIES of LEEK: My Lords, I agree absolutely; but it was not for me to say that. The mountains are free.
8 p.m.
Lord STRABOLGI: My Lords, I should like to say how grateful I am to noble Lords in all parts of the House for the general welcome given to these regulations. I will do my best to answer the questions that have been raised. I am very grateful to the noble Viscount, Lord Amory, for what he has said. He raised one point about the FEOGA contribution. We cannot precisely calculate the net benefits to the United Kingdom, but the reimbursement represents 25 per cent. of

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United Kingdom expenditure, and we are the largest beneficiary in the Community, so we can be sure that there is a net gain over the United Kingdom contribution to FEOGA funds in respect of this particular EEC measure.
I am grateful to the noble Baroness, Lady Elliot of Harwood, for what she said, and also to my noble friend Lord Davies of Leek. If I may I shall refer later to the questions they raised about the farmers who have been excluded. First, I should like to answer the questions raised by the noble Lord, Lord Sandys, to whom I am also grateful for his constructive approach. He asked first whether the Government have taken advantage of the maximum permissible rates of subsidy allowed by Brussels for both cows and sheep. At the current rates of exchange for the Green Pound, the maximum level of subsidy permitted by the Directive is £28.48 for cows and £4.27 for sheep. This compares with the rates included in these regulations of £24.50 for cows and £3.60 (at the higher rate) for sheep.
Member-countries determine their own rates within the minimum and the maximum rates laid down in the Directive. Our current rates for sheep reflect a sizeable increase (that is, 60p per ewe) from the Annual Review determinations for 1975, and an increase of over 100per cent. in rates of sheep subsidy in only two years. The Government, though, are aware of the pressure from the industry for an increase in the current rates, and this is a matter which is under discussion as part of the Annual Review of the agricultural industry.
The noble Lord also asked me to confirm that the winter keep supplement will remain at the same level and is unaffected by the order. The winter keep headage supplement is included in the rates of allowance shown in the regulations, and will no longer be calculated as a separate item. In Scotland, acreage payments were also payable as an option to headage payments and noble Lords will have an opportunity of debating this later in the week when, through my noble friend Lord Kirkhill, the necessary order revoking the acreage scheme comes up for approval. I understand that the Secretary of State is actively considering with those concerned how best to cover
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the position of those Scottish farmers who previously benefited from the acreage scheme, and hopes to make an announcement early in January.
There is also the question of those farmers who enjoyed the old subsidies but will no longer qualify for the new allowances, referred to by the noble Baroness and by my noble friend. The new regulations disqualify about 1,300 farmers at present receiving hill livestock subsidies compared with some 63,000 farmers who are expected to benefit from the new allowances. Some 1,200 farmers with less than three hectares, most of whom are part-time farmers, will not benefit, as was mentioned by the noble Lord, Lord Sandys. In the past these farmers have received a total of £42,000 of subsidy annually and it is estimated that the average loss of subsidy per farmer will be roughly £35. One hundred farmers in England and Wales in the so-called "scheduled areas" will also be disqualified. They will lose a total of £33,000 of subsidy and an average of £330 each. However, many farmers in these two categories will be able to claim the beef cow subsidy, which should go some way to mitigate their loss. The Government are of course sympathetic towards these farmers and we are actively pursuing proposals designed to make available some alternative aid. I am glad to say that it is hoped shortly to announce details of arrangements for helping the farmers concerned.
On Question, Motion agreed to.