Lords Sitting of 20 March 1975

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

EEC AID TO VOLUNTARY BODIES
Lord CHELWOOD: 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 which voluntary organisations in the United Kingdom received or were offered financial aid from the EEC's own resources in 1973 and 1974 and in what amount; in which cases, if any, this affected the contribution made to their funds by Her Majesty's Government; and if they will give an assurance that any Community aid to voluntary bodies will in future normally be ignored in assessing the scale of Government aid.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, I am not aware of any voluntary organisations in the social services field in the United Kingdom which received or were offered grants by the EEC in 1973 and 1974. The effect, if any, on grant aid from the Government of any Community aid that might be received by such bodies would depend on the purposes for which it was given and the circumstances as a whole. I cannot give the general assurance for which the noble Lord has asked.
Lord CHELWOOD: My Lords, I thank the noble Lord for that reply, which, unfortunately, still leaves a question mark over this matter. As he knows, the United Kingdom received some £25 million, from a total sum of £100 million, from the Social Fund last year. Would it not be contrary, in principle, to the spirit of Community intentions to withdraw or reduce, or threaten to withdraw or reduce, a Government grant simply
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because a grant had been made by the Community's Social Fund?
Lord SHEPHERD: My Lords, when grant aid is given consideration is given to the whole proposition, to the resources of the organisation. I have said that I cannot give an assurance, because all these matters need to be looked at. But if the noble Lord has any particular organisation in mind where there may be some doubt, then if he would like to see me I will see what I can do about it to put people's minds at rest.

SHORT-TIME WORKING IN INDUSTRY
3.8 p.m.
Lord ROCHESTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether in view of the present and prospective employment situation, they will publish monthly figures showing the estimated amount of short-time working in manufacturing industries on a more up-to-date basis than is permitted by the existing procedure.
Lord JACQUES: My Lords, as from today up-to-date provisional estimates of short-time working will be made available with the monthly unemployment figures. In addition, the official figures relating to a week 2½ months before publication in the Department's Gazette at the end of each month will be made available some what earlier in the unemployment Press notice for the month.
Lord ROCHESTER: My Lords, while thanking the noble Lord for that reply— in which he has entirely satisfied me by acknowledging the need for at least a provisional estimate of short-time working to be made available on an up-to-date basis each month, as I understand will be done from now on—may I ask a further question of which I have given the noble Lord notice? Assuming a normal working week of 40 hours, what does the most recent estimate of the number of hours lost through short-time working and lay offs represent in terms of the equivalent number of wholly unemployed people?
Lord JACQUES: My Lords, may I thank the noble Lord for having given me notice of this question. The answer is in two parts. First, taking the official figures, they relate to mid-January; in mid-January there were 128,000 work people on short time. They lost the equivalent of 1,470,000 hours, and that was equivalent to 36,000 wholly unemployed. May I now turn to the provisional estimate, which refers to midMarch; that is to say, now. The provisional estimate of people who are working short time is 220,000. If the average hours lost per worker are the same as they were in January, then this would be equivalent to 63,000 wholly unemployed.
Lord ROCHESTER: My Lords, I am much obliged to the noble Lord.

RAW MATERIALS AND PRICE STABILISATION
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their attitude towards the proposal by the OPEC nations meeting at Algiers for an international conference of the industrialised and developing nations to consider the stabilising of oil prices and world stability in relation to the supply of raw materials and international finance.
The PARLIAMENTARY UNDER-SECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, Her Majesty's Government welcome the reference in the Declaration of the Algiers Summit on 4th to 6th March to co-operation between developed and developing countries. It has long been our view that these problems can only be resolved by closer international consultation. We hope that this process will get off to a good start at the preparatory conference proposed by the French Government for 7th April.
Lord BROCKWAY: My Lords, while thanking the Minister for that reply, may I ask him whether the suggestion at the Algiers Conference went a little further than that? Did it not also propose that.
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there should be a discussion between the other producers of raw materials and the developed countries? And is it not tremendously important, if inflation is to be contained, that there should be some consultation regarding the stabilisation of all the raw materials which come from those countries.
Lord GORONWY-ROBERTS: My Lords, I would not dissent from the conclusion to which the noble Lord comes in his supplementary. As to his premise, it is true that the intended agenda goes beyond oil. Nevertheless, the first meeting will be preparatory, in the sense that there will be discussions as to procedure and also agenda. I have no doubt that an effective compromise will be reached so that a useful effective agenda will be adopted.
Lord CARRINGTON: My Lords, is the noble Lord aware that certainly on these Benches what he has said will be greatly welcomed? There has been far too little consultation between the producers and the developed countries. Would he not also agree that to widen the conference in the way that the noble Lord, Lord Brockway, and the Conference are advocating, really is to suggest that all the problems of the world, or very nearly all of them, can be solved at one moment? A very great deal of preparation for such a conference would be necessary before it takes place.
Lord GORONWY-ROBERTS: My Lords, I am grateful to the noble Lord for what he said in the first part of the supplementary, and I endorse what he said in the second part: a very great deal of preparatory work would be necessary to make this kind of conference effective. We are ready to attend, with a view to its being a help towards other conferences and, in particular, to the work of the International Energy Agency.
Lord GLADWYN: My Lords, can we assume that there will be agreement between the nine Members of the European Community before the meeting in Paris on April 7th?
Lord GORONWY-ROBERTS: My Lords, we cannot assume that. We can only hope.
Baroness GAITSKELL: My Lords, while welcoming very much the Minister's

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Answer, may I inform him that I have some slight reservation about this preparatory conference because at every conference that has taken place in the last few years, the developing countries have emphasised and stuck on denunciations of past exploitations; and, whatever they have been discussing, whether population, food or trade, there is always a harking back to the past and no understanding of the fact that in a democracy like ours we also have to sell their ideas? While we have a responsibility to inform our own people about the inequalities and injustices in the world—
Several Noble Lords: Question!
Baroness GAITSKELL: I am asking a question, my Lords—we also have the problem of selling their ideas to our own people.
Lord GORONWY-ROBERTS: My Lords, I hope very much that those concerned will read, ponder, study and learn the right lessons from what my noble friend has just said.
Lord BROCKWAY: My Lords, is my noble friend aware that while I rarely agree with the noble Lord, Lord Carrington, I am in agreement with his approach to this problem? While quite obviously one has first to discuss the question of oil prices, will Her Majesty's Government take this opportunity to prepare for a much wider conference about the cost of all raw materials from the developing countries, a matter which will deeply affect our cost of imports as well as inflation in this country?
Lord GORONWY-ROBERTS: My Lords, we are already doing that. There will be a special session of the United Nations General Assembly in September to deal with development and international economic matters over a very wide range, and we are taking a full part in the preparations for that.
Lord BALNIEL: My Lords, while agreeing that a tripartite conference of this kind could be very helpful in enabling producers and consumers in the developing countries to plan ahead, may I ask the noble Lord whether he is aware that it is absolutely essential that the consumer countries should co-ordinate their views— for example, on the conservation of
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energy or the development of alternative sources of energy—before the conference takes place? What progress is being made in this sphere?
Lord GORONWY-ROBERTS: My Lords, as for the co-ordination of policy in regard to oil and its products, the noble Lord will know that yesterday and today the IEA has been in conference, and is, I think, making some progress in these matters. As for commodity and other questions, a great deal of progress has been made as the result of the Kingston Conference and we look to the special session in New York in September to make further progress on raw materials and commodities generally.

EEC AID COMMITMENTS
3.18 p.m.
Baroness WARD of NORTH TYNESIDE: 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 to give a full list of the commitments in relation to all the various bodies which can allocate money from the EEC to projects in the United Kingdom, the projects agreed to and the amounts of money involved.
Lord JACQUES: My Lords, the following figures refer to the two years from the United Kingdom's accession to the EEC to 31st December 1974. First, commitments for grants to the United Kingdom—from the Social Fund, £50 million; from the Agricultural Guidance Fund, £12 million; from the Coal and Steel Community, £7 million, a total of £69 million. Secondly commitments for loans to the United Kingdom—from the European Investment Bank, £113 million; from the Coal and Steel Community, £77 million, a total of £190 million. Thirdly, other receipts from Budget—from the Agricultural Guarantee Fund, £175 million; from other Budget funds, £34 million, total of £209 million. Fourthly, projects—the commitments cover well over 100 projects in the United Kingdom, ranging from a £15·6 million loan for a nuclear power station to a grant of £4,500 for a minor research project.
Baroness WARD of NORTH TYNE-SIDE: My Lords, I thank the noble Lord for that information. May I ask him to let me have all the detail involved when it is to hand, so that I may see what parts of our country are getting help? Will he bear in mind that our being in Europe is a great advantage to this part of the world? May I also ask—because when I last asked a Question he told me that he would help me to get the facts I wanted—how he intends to let me have the information which I have sought? Will it be in writing, by seeing me or by putting it in print, because he will realise that I like to know all the details of these matters. I want to know, for example, what help we shall be getting for the North Shields fish quay and similar projects.
Several Noble Lords: Answer!
Baroness WARD of NORTH TYNE-SIDE: My Lords, may I have an answer?
Lord JACQUES: My Lords, the noble Baroness has raised two issues that call for reply. The first concerns the list of projects. As I said, it contains well over 100 projects and I shall have to consider her request before saying that I will send her a letter giving her all the details. But I assure the noble Baroness that her request will receive consideration. Secondly, my Lords, as to help with the noble Baroness's taxes, since Hansard is not available I cannot look up what the noble Baroness has said and what I said, but as soon as Hansard is available I shall do so.
Baroness WARD of NORTH TYNE-SIDE: My Lords, while thanking the noble Lord for what he had to say, would he be so kind as to remember, on detail, that while it may be very useful to the Administration not to print 100 items, the same is not true in regard to the country? If, as I understand, the Prime Minister and many others wish us to remain in Europe, it would interest the country to know the details of what has been done to help us before the Referendum. So would the noble Lord please reconsider? Even if it is a bore for him, it is not a bore for the country.
Lord JACQUES: My Lords, as usual, I shall do my best.
The Earl of BESSBOROUGH: My Lords, am I not right in saying that the European Movement has published in their latest document 178 different ways in which the Community has helped this country since we entered the Common Market; and would the noble Lord agree that those 178 ways are accurate in so far as the loans and grants are concerned? It seems to me that this should be publicised to the maximum. Further, could the noble Lord say that the Government will confirm what the European Movement have already put forward?
Lord JACQUES: My Lords, I am acquainted with the document in question. I speak for Her Majesty's Government, not for the European Movement.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, which part of Her Majesty's Government?

OIL TAXATION 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 la, and to be printed.

CONSOLIDATED FUND (No. 3) BILL
Lord JACQUES: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a— (Lord Jacques.)
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution), Bill read 3a, and passed.

SOCIAL SECURITY BILL [H.L.]
3.25 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that the Commons Amendments be now considered. Like the two Bills which follow, this Bill is purely a Consolidation Bill which consolidates part of the enactments relating to National Insurance and social security. The Amendments are purely consequential on the enactment of the Social Security Benefits Act and I therefore propose, with the leave of the House, to move them en bloc.
Moved, That the Commons Amendments he now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.
[References are to Bill (92) as amended by the Joint Committee on Consolidation Bills.]

COMMONS AMENDMENTS
[Nos. 1–17]
Clause 19, page 21, line 12, leave out "section" and insert "Act".
Clause 30, page 34, line 3, leave out "the appropriate figure" and insert" £20 ".
Clause 30, page 34, line 15, leave out from beginning to first " ' week' " in line 20 and insert "In this subsection".
Clause 30, page 34, line 23, at end insert—
"(2) With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, subsection (1) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 45, page 50, line 15, leave out "the appropriate figure" and insert "£20".
Clause 45, page 50, line 23, leave out from beginning to first "' week' " in line 28 and insert "In this subsection".
Clause 45, page 50, line 31, at end insert—
"(4) With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, subsection (3) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 66, page 62, line 27, leave out "' £13'" and insert "£20".
Clause 66, page 62, line 34, at end insert—
"(4A) With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, subsection (4) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 106, page 91, line 20, after "paragraph "insert" or paragraph (b) below".
Clause 124, page 106, line 24, leave out "30(1), 45(3) and 66(4)" and insert "30(1) and (2), 45(3) and (4) and 66(4) and (4A)".
Clause 125, page 107, line 8, leave out "1" and insert "1(a)".
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Clause 147, page 123, leave out lines 36 to 39.
Clause 147, page 124, line 7, at end insert—
"(4A) For the purposes of subsections (3) and (4) above, a certificate purporting to be signed by or on behalf of the Secretary of State as to the date on which the evidence in question came to his knowledge is conclusive evidence of the date on which it did so."
Clause 147, page 124, line 24, leave out "paragraph" and insert "subsection".
Schedule 15, page 173, line 18, at end insert—
"11A. Regulations made by virtue of section 30(2) or 45(4) of this Act for the purpose only of prescribing a day."
Schedule 16, page 174, line 40, at end insert—
"2A. Regulations made by virtue of section 66(4A) of this Act for the purpose only of prescribing a day."
The LORD CHANCELLOR: My Lords, with the leave of the House, I beg to move that the House doth agree with the Commons in their Amendments Nos. 1 to 17 en bloc.
On Question, Motion agreed to.

SOCIAL SECURITY (CONSEQUENTIAL PROVISIONS) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons' Amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill 96 as amended by the Joint Committee on Consolidation Bills]
[Nos. 1–9]
Schedule 1, page 11, line 20, leave out "(4)" and insert "(6)"
Page 6, leave out lines 15 to 17.
Page 11, line 34, column 3, at end insert—
"In Schedule 5, paragraphs 1 to 4.
"Schedule 2, page 14, leave out lines 30 to 33.
Page 15, leave out lines 31 to 35.
Page 24, line 4, at end insert—
"Pensions (Increase) Act 1971 (c. 56)
46A. In Schedule 2 to the Pensions (Increase) Act 1971, for paragraph 26 substitute—
"26. A pension payable under Schedule 10 to the Social Security Act 1965 (National Insurance Commissioners)"."
line 43, leave out "15" and insert "16"
Schedule 3, page 40, leave out lines 3 to 6 and insert—
"(2) Sections 139(1), 166(1) to (3) and 167(3) of the new Act (provisions about regulations, including reference to N.I.A.O. and Parliamentary control) apply to regulations under this Part of this Schedule as they apply to regulations under that Act, except that section 139(1) does not apply to such regulations made within a period of 12 months beginning with the appointed day."
Page 43, leave out lines 31 to 39.
The LORD CHANCELLOR: My Lords, with the leave of the House, I beg to move that the House doth agree with the Commons in their Amendments Nos. 1 to 9 en bloc.
On Question, Motion agreed to.

SOCIAL SECURITY (NORTHERN IRELAND) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill (93) as amended by the Joint Committee on Consolidation Bills]
[Nos. 1–14]
Clause 19, page 20, line 39, leave out "section" and insert "Act"
Clause 30, page 33, line 33, leave out "the appropriate figure" and insert "£20"
Page 34, line 1, leave out from beginning to first " 'week' " in line 6 and insert "In this subsection"
Page 34, line 9, at end insert—
" (2) With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, subsection (1) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 37, page 41, line 25, leave out from "prescribed" to end of line 29
Clause 45, page 50, line 4, leave out "the appropriate figure" and insert "£20"
Clause 45, page 50, line 12, leave out from beginning to first " ' week ' " in line 18 and insert "In this subsection"
Clause 45, page 50, line 21, at end insert—
"(4) With effect from such day as may be prescribed in the week containing 6th April
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in a year mentioned in the first column below, subsection (3) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 66, page 62, line 27, leave out "3" and insert "£20"
Clause 66, page 62, line 34, at end insert—
"(4A) With effect from such day as may be prescribed in the week containing 6th April in a year mentioned in the first column below, subsection (4) above shall have effect with the substitution for '£20' of the amount specified in relation to that year in the second column below—

1976

£35

1977

£50."

Clause 106, page 91, line 3, after "paragraph" insert " or paragraph (b) below"
Clause 121, page 101, line 18, leave out from "altered" to end of line 22 and insert—

"(a) by any Act passed, or Measure of the Northern Ireland Assembly enacted, subsequent to this Act, or by an uprating order ; or

(b) in consequence of any such Act, Measure or order altering any maximum rate of benefit."

Schedule 14, page 161, line 26, after "after" insert "the passing of the relevant Act,"
Schedule 14, page 161, line 39, after first "of" insert "the passing of an Act,".
The LORD CHANCELLOR: My Lords, with the leave of the House I beg to move that the House doth agree with the Commons in their Amendments Nos. 1 to 14 en bloc.
On Question, Motion agreed to.

ENDANGERED SPECIES BILL [H.L.]
3.25 p.m.
Lord WYNNE-JONES: My Lords, I beg to move that this Bill be now read a second time. I introduced the Bill just over a year ago in a slightly different form and your Lordships gave it a Second Reading on that occasion. As your Lordships will recollect, during the past year there have been certain political upsets in the country. We had two General Elections and, consequently, the Bill was not carried any further. In the late summer—just before the second General Election—I was in touch with Her Majesty's Government, and I learned that it was quite probable that they might be able to introduce a Bill on this subject. Consequently, the present Bill has been in abeyance until now.

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I now bring forward the Bill because I am given to understand that there are difficulties which Her Majesty's Government have been facing in connection with having their own draftsmen put any Bill into proper shape. In consequence, there is, I believe, some difficulty in their proceeding immediately. However, this Bill is still of importance. It is still a Bill which ought to receive the approval of Parliament, because, though one may say that this is not one of the most urgent problems facing the country at the present time, nevertheless the Bill concerns a problem which is of great importance throughout the whole world. It is a problem which we can play a part in solving.
My Lords, if we delay too long we shall find that a great deal which is irrevocable has occurred during the period of delay. We shall find that numerous species of plants and animals will have disappeared when we could have been taking steps to prevent that disappearance. I shall not suggest that it is possible to preserve indefinitely every single species in the world. That is not the point. It is quite clear that, for one reason or another—and for reasons which are very often beyond the control of man—species do disappear; but man has enormously accelerated the rate of disappearance, especially in this present century. Where as over several hundred years, a relatively small number of species have disappeared, during the present century species have been dying out at the rate of about two every year, and we have more and more which are in danger at the present time.
My Lords, this is a matter of which people have become steadily more aware. If one went back a couple of hundred years, I suppose that one would find that people took very little notice of the disappearance of species. When we went through an industrial revolution, its leaders and we ourselves—the people who benefited in many ways from that industrial revolution—did not worry too much about the impact of what we were doing on nature around us. However, poeple have gradually begun to realise that what takes place as a result of our civilisation and industrialisation can have quite disastrous effects on species both of animals and of plants. I think that it would be fair to say that in the United States, in
890
the middle of the last century, there were a number of people who began to realise that, if they were not careful, they could not enjoy the very environment which they so much liked and in which they wished to live. People like Thoreau and Audubon played an important part in America in rousing people's consciousness of the ravaging of the environment.
I think it was in 1872 that the first National Park, the Yellowstone Park, was set up in America, and shortly afterwards the Sequoia Park was set up; and two or three other parks were set up immediately after the Yellowstone Park. This meant that a new attitude began to be created; people came to realise, not only that human beings matter, but that human beings could live their lives properly only in an environment in which they were attempting to conserve both the physical world round about them, and on top of that, the animal and vegetable world round about them, in order to have something which gave them enjoyment and beauty and which preserved life in this world. In this century this movement has gained pace, and I expect that your Lordships are well aware of a book called The Wildlife Crisis, written by the Duke of Edinburgh and James Fisher. It is a fascinating book because it gives one a great insight into what is going on all over the world. We find, for instance, that early in this century in Bengal there were about 40,000 tigers; I think the figure is now down to about 700. When a species falls below a certain point in numbers we are reaching the point of extinction, and surely we do not want that to happen.
We are not a country with tigers, wild boar, bears, lions, elephants, rhinoceros or anything like that roaming all over our countryside, and so one might say: "Why are we concerned with it?" We are concerned because the parts of the world which have these species are the parts of the world where it is very easy and very tempting for people to raid the reserves, to kill the animals, to sell their furs, and to sell parts of the animals; and these get sold not in the countries where the animals live, but in Western Europe, here in Britain, and in the United States of America. Therefore we can take our part in peventing this ravaging of wildlife by introducing legislation which prevents the export and import of such parts of wild

891
animals, or wild animals, as are included in an endangered list. We can do this by a method which is not really very difficult; and that is the purpose of this Bill, the Endangered Species Bill. It is to prevent the unrestricted trade in wild animals and the parts of wild animals, and in wild plants and parts of wild plants.
My Lords, it may be asked whether this is something which we must do immediately. I believe we must do it and that we cannot afford to wait. I quote from the preface to the book to which I previously referred, written by Prince Philip, in which he states:
"Time is fast running out and it remains to be seen whether those in political authority can shoulder their responsibilities in time and act quickly enough to relieve a situation which grows more serious every day."
That is the whole point. It is no use saying, "Oh yes, we believe that we should like to do this. Let us take time and consider how we are going to do it. We have plenty of time; after all, these animals have existed for centuries." They have, my Lords, but they are being obliterated daily. In other words, the time scale is not the time scale behind us; it is the time scale in front of us, the time in which they can continue to live.
Therefore this Bill is an attempt to bring to your Lordships' immediate attention, to the immediate attention of Parliament, the absolute necessity of dealing with this problem. Two years ago an international conference was held in Washington, in the United States. The conference was called by the International Union for the Conservation of Nature and Natural Resources and it passed a Convention which set up a model for preventing trade in the endangered species. Three appendices were attached to the Convention. The first appendix related to the species which were considered to be threatened with extinction; and trade in these species should be strictly controlled. Appendix 2 related to species not immediately in danger but which needed protection; trade in these species should be carefully regulated. Appendix 3 stated that any member State could add its own indigenous animals and plants to this if it felt they were in need of protection.
I do not want to go into all the details of how one implements such a Convention, but the Convention is finally imple-
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mented by sufficient numbers of countries ratifying it; and it was laid down that ratification by 10 countries would be sufficient to bring the Convention into operation. I am given to understand that seven countries have ratified, while two others have introduced their own legislation to carry out the terms of the Convention and, presumably, will be prepared quite soon to ratify. In other words, we have reached the point where, of nine countries, seven have actually ratified and two more will probably ratify in the near future; and it would need only one more country to ratify to make the Convention operative.
But, my Lords, while this is highly desirable, all of us have a certain scepticism about international Conventions and we begin to say, "Well, that's very nice; but supposing all sorts of countries pass these Conventions, where do we come into it?" It would be good for us to ratify the Convention as soon as possible; but we can come in apart from ratifying the Convention, because we can pass legislation ourselves to ensure that this import and export business does not occur within this country.
On the last occasion when I introduced this Bill, there were certain remarks made from the Government Benches about it. The then Minister, speaking from her brief, gave us to understand that the Government thought they could already ban this sort of trade through existing legislation. It is very interesting to know that perhaps they can; and, if so, one wonders why they have not done it. Only last year, to give an example of the way in which things are still slipping through, I am given to understand that 1,000 cwt. of baleen oil, either whale or dolphin, were imported into this country. It so happens that this is not permitted; but it was allowed in. But even more than that that, it was allowed to be reexported; in other words, we in this country were indulging in trade in a material which concerns a highly endangered species. If it is already possible for action to be taken under existing legislation, why has action not been taken in such a case?
Only the other day, attention was called to an action brought in this country against someone who was importing ivory in order to make certain artefacts, carvings and so on—something which is not

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supposed to be allowed. But no action has been taken! Private action had to be taken. The reason is that the existing legislation is not in one place; it comes under a number of different Acts and these concern, first, the prevention of the introduction of diseases and the prevention of the introduction of pests; and, naturally, they come under the Department of Agriculture and Fisheries. We have bird protection. There are Acts dealing with bird protection, but that matter does not come under the Department of the Agriculture and Fisheries. Then we have conservation which comes under the Department of the Environment of Agriculture and Fisheries. We have bird protection. There are Acts Agriculture and Fisheries, the Home Office, the Department of Trade and Industry and the Department of the Environment all operating and involved, with no single legislation covering the whole lot.
Clearly, it is very troublesome for Customs and Excise officers to be operating legislation when they do not really know where they are in the matter; when it is covered by a whole lot of different Departments. It is not unnatural if a lot slips through, not because anyone wants it to do so, but because no single authority can stop it getting through. Therefore, I submit it is important that we have a single piece of legislation which clearly definies the position with regard to the import and export of different things. I do not wish to weary your Lordships with lengthy details, because we have had a discussion before. All I ask is that we should now go forward with this Bill, and thereby give power to the Government to operate properly the policy which I am quite sure they really want to use. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a. —(Lord Wynne-Jones.)
3.44 p.m.
Lord MELCHETT: My Lords, it is with mix feelings that I intervene at this early stage in the debate to indicate the Government's view on my noble friend's Bill. Mixed feelings, because what I have to say may not entirely satisfy my noble friend, although I do have some very good
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news for him. And mixed feelings because this is a subject in which I have a close personal interest. I was delighted when the Convention on International Trade was drawn up in Washington. It was undoubtedly a great achievement by the many dedicated groups of conservationists involved, and it reflected great credit on the Governments of the many countries involved—although some may say: "Better late than never". Certainly, many will say: "Actions speak louder than words"; and without implementation, I am afraid that Conventions of this kind achieve something between "very little" and "nothing".
The British contribution to the Convention was notable, not just for its drive and expertise but also for its concern that the Convention should emerge as a practical document that could, and would, be made to work. The Convention is, nevertheless, a complex one. It covers a multitude of species and it requires different forms of control for those species in Appendix I which are presently endangered and for those in Appendix II which may become so if action is not taken to protect them. It requires the control of readily recognisable parts and derivatives as well as of whole specimens. It sets out detailed requirements to be observed by management and scientific authorities, and these vary in respect of exports and imports.
My Lords, I should like, if I may, to deal briefly with the Bill before us. As successive Governments have said repeatedly over the last year, fresh legislation to enable us to implement the Convention is not necessary. This remains the position. I hope my noble friend will not be offended if I say that I see this Bill, as I think he does, as being intended more as a spur to Government action, than as being necessarily the vehicle through which we implement the Convention.
The Government have always taken the view that although the existing powers are sufficient to implement the Convention, a new Government measure consolidating the relevant provisions and tailored specifically to match the Convention would be desirable at some stage. It was felt right to give priority to working out the means of implementing the Convention. But I frankly acknowledge that

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my noble friend's persistence with his Bill has prompted us to make preparation for a new Government Bill rather earlier than we might otherwise have done. The preparations for that Bill are very well advanced and, indeed, if the pressure of the Parliamentary timetable had not been so severe, it would have been introduced before now. I hope that introduction will not be long delayed.
Before a noble Lord rises to suggest that a Government Bill will not be needed if the Government will support, and possibly put forward Amendments to, my noble friend's Bill, perhaps I can explain very briefly why that is not practical. The legislation that is required here must provide for the fulfilment of the Government's obligations under an international Convention. With all respect to my noble friend, these are not matters which are really appropriate to a Private Member's Bill. The measure which we have in mind, and which I have indicated is in an advanced state of preparation, will be tailored to fit the import and export licensing controls that have been evolved between all the Departments concerned and in consultation with the trading and other interests. They are not simple matters to deal with and they must mesh closely with the existing powers of Customs and Excise.
I must advise the House that my noble friend's Bill, while sensible in itself, is simply not the measure that is needed. Nor, I am afraid, is it susceptible to simple amendment. It would be necessary to replace most, if not all, of its provisions and the Government cannot undertake to do that at this time.
I regret to say that I have more apparently gloomy news for your Lordships; because I am not yet in a position to announce a date on which we intend to ratify the Convention. There are still some problems outstanding. These relate in part to our Dependent Territories. It is not yet clear whether they will all have the legal powers they need before they are included with the United Kingdom in our Instrument of Ratification. The other reason is that we are still discussing the timing of ratification with our EEC partners. Clearly there would be great benefit if all nine member States were to ratify together. This would give a very considerable boost to the Convention
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and greatly enhance its effectiveness. We are doing all we can to bring this about.
So far, nine countries have ratified the Convention. Last week when I answered a Question on this matter I was two behind a noble Lord who said that nine countries had ratified. I said that I knew only of seven. I now gather that I am two ahead of my noble friend. The countries which have ratified are the USA, Sweden, Tunisia, Cyprus, Switzerland, Nigeria, Chile, Ecuador and the United Arab Emirates. It appears, incidentally, that some inaccurate information has been circulating about the position of the German Federal Republic. My understanding is that they have enacted the legislation they need but that, like the United Kingdom, they have not yet ratified. The next country to ratify will be the tenth, and this will bring the Convention into force. Some noble Lords may say that we ought to be that tenth country. But, my Lords, we are not trying to make a name for ourselves in ratifying, but trying to stop the deplorable trade in the most endangered species of wildlife.
At the heart of the Convention is the need for co-operation between exporting and importing States. We are aware, from experience of the controls we have been operating for years on the import of certain live animals and birds and of some products, such as furskins, that endangered species can be fully protected only through effective international co-operation. In some cases only control by both the exporting and the importing countries will stamp out indiscriminate slaughter or smuggling. We will do more good by working towards early ratification by all Nine Member States of the EEC than we will by going it alone. It is by no means certain that all EEC countries will be able to ratify together. But we consider that it is important to aim for coordinated ratification, particularly as this need not, and will not, stop us implementing the Convention.
My Lords, I am not surprised that my noble friend should be upset at the time it is taking us to implement the Convention. However, I believe that the work we have done on the many issues involved will enable us to operate the Convention as effectively and completely as possible. That is very important. In the time that

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has elapsed since we signed the Convention we have worked out a system of import and export licensing which will enable us to do a thorough job fully in accord with the spirit of the Convention. At least one other country has expressed its admiration for the system we have evolved and others who are not so far ahead as we are have indicated that they may use it as a basis for their own system. That is rewarding, because, as I have said, the more countries who can operate the Convention effectively, the better for the endangered species that we all wish to safeguard.
It is not sufficient for our licensing system simply to restrict trade in endangered species. It must also not restrict legitimate trade, and the control system has had to be designed in a way that allows proper trade to continue un- hampered with the minimum of paper work. We have had to take a great deal of care to safeguard legitimate trade. This is both to avoid putting United Kingdom traders at a disadvantage in relation to their overseas competitors, and to avoid unnecessarily affecting people's livelihoods and employment. That has not been easy, because it is necessary to control not only whole specimens of all the species in both Appendices to the Convention, but a considerable number of their parts and derivatives which enter into trade. We are required to control only readily recognisable parts, but this still presents very considerable problems. For example, the Indian, but not the African, elephant is protected by the Convention and we think it important to make our contribution to stopping the trade in Indian elephant ivory. But when cut it cannot readily be distinguished from the ivory of the African elephant, or from the tusks of the walrus or wild boar. There are, of course, many examples of this kind that can be quoted.
We believe we have devised a system which meets fully the needs of the Convention, while allowing trade in those species we are not seeking to restrict to continue unimpeded. We have put our proposals to the trade associations concerned and I am glad to say they find them generally acceptable.
For species listed in Appendix I of the Convention, importers will have to
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apply for an import licence, an authenticated copy of which is required by the exporting authorities in the country of origin before they will issue an export permit. Similarly, United Kingdom exporters will need to obtain a copy of the import licence from the importing country before receiving our licence to export, although this will apply in practice mainly to re-
exports because few species indigenous to the United Kingdom are included in Appendix I.
For Appendix II species, the Convention requires only export permits. In the United Kingdom, however, importers will be required to apply for an import licence also. In this case we are going beyond the requirements of the Convention in order to facilitate swift handling of imports by customs officers. For some parts and derivatives we shall again impose wider controls than those strictly required by the Convention. Because some species are so seriously endangered and yet their parts and derivatives are not readily recognisable, we have decided that controls must be operated for all ivory, including the tusks and teeth of all animals, for all reptile skins and for all spotted furskins, although, of course, for the nonendangered species licences will be readily given.
Our new licensing controls will be operated initially under the Import, Export Customs Powers (Defence) Act 1939. This Act, which is already used for conservation purposes in controlling the import of certain whale products and certain furskins and bird plumage, provides all the powers necessary. Instruments will be made under that Act to control the import and export of all the species listed in the Convention. I should like, if I may, to stress that point. We intend to control all the species listed in the Convention. Noble Lords may like to know that a copy of the Convention is available in the Library.
We have also reached decisions on other requirements for implementing the Convention. One of these is the designation of management authorities. The Department of the Environment will be the principal management authority, responsible for policy on the Convention and for contacts with the International Secretariat. Subject to agreement on final arrangements, I hope that the

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Department of the Environment will issue import and export licences under the Convention, although discussions are still continuing about the best arrangements for Northern Ireland. I know that many noble Lords and my noble friend would welcome a rationalisation of Departmental responsibilities of this kind. This will ensure that the policy decisions and the practical implementation will go hand-in-hand and that the system will operate smoothly and speedily. Other Departments will have responsibilities under the Convention which fit in with their existing activities, although it may not be necessary to designate them formally as management authorities.
We shall also appoint one or more Scientific Authorities to advise the Department of the Environment, as principal management authority, on all applications to import or export endangered species and on the other matters to which the Convention refers. We have not yet decided on the exact form that the Scientific Authority or Authorities should take. But we are in the fortunate position in this country of having a wealth of expert advice on which we can draw.
The Secretary of State does not require specific powers to appoint Scientific Authorities. He frequently appoints bodies to advise him and there is no need to provide for this in legislation. As a result of the progress we have made, I am glad to be able to say that we intend to start operating the controls in the United Kingdom this year—indeed, we hope to introduce them in the autumn. That will just about give us time to set up the necessary administrative arrangements.
My Lords, I am sorry to have detained your Lordships for so long, but I feel it is necessary to set out in some detail exactly what the Government are proposing to do. I cannot conclude without paying tribute to the deeply felt concern my noble friend, and others, have expressed that this country should do all it can to help save the endangered species of the world, a concern that I fully share. I should also like to pay tribute to the patience and the tenacity with which my noble friend has pursued the purpose of his Bill; it is a purpose that I fully share.
I hope that I have said enough this afternoon to show that we are now on the
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brink of implementing the Convention, and that our intention to start implementing the Convention this year is a firm one. My Lords, I have said before that the Convention raises complex problems. It has needed a very great deal of hard and dedicated work by officials at the Department of the Environment for us to get as far as we have. I hope all noble Lords will agree with me in paying tribute to the work that has been done, and to the spirit in which it has been done.
As noble Lords know, it is much easier to ratify an International Convention than really to carry it out in the spirit intended when it was drawn up. I believe that we shall implement the Washington Convention in spirit as well as in letter; that we shall stop the trade in and out of this country of truly endangered species; that our action will serve as a model for other countries and that our action in this respect will be something of which we can be justifiably proud.
4.0 p.m.
Lord MOWBRAY and STOURTON: My Lords, may I add my congratulations to those of the Minister and thank the noble Lord, Lord WynneJones, for the full and excellent way in which he has explained the purposes of this Bill to the House. He has explained that this Bill will enable us to ratify the Convention on the international trade in endangered species of flora and fauna.
I am also grateful to the noble Lord, Lord Melchett, for the detailed way in which, both in principle and in detail, he accepts the Convention. I am delighted to hear that we are to ratify the Convention this year, and we shall be grateful to the Government for doing so. At the same time, may I express disappointment that the Government have not found time to introduce a Bill of their own; I feel that they could have done so, despite the reasons which the noble Lord gave to the House. In the absence of this other Bill, may I suggest that the Endangered Species Bill has flexibility. Clause 3 of this Bill is particularly adaptable, because the Secretary of State has power to add or subtract from that list of species, as he thinks fit. I totally accept the Government's contention that to have two forms of ivory trade, one allowed and one not allowed, would be extremely hard on the Customs

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and Excise officers. That is a point on which, if they were interested, the Government could amend the Bill with which we are dealing.
The Garden of Eden, into which our first ancestors were born, has changed considerably. We would all agree that the species which has most increased and which has looked after itself is homo sapiens. I do not know how cleverly it has done so. In our ever increasing desire to ratify ourselves we have in the past, perhaps inadvertently, done enormous injury not only to the fauna but to the flora of the world. I suppose it is obvious to us all that towns and cultivation do not go so easily with woods and forests which are populated by wild-life. However, it is only in this century that scientists have been able to measure the number of various kinds of wildlife, whether there is an increase or a decrease; and, in particular, whether mankind has been hastening the decrease to near extinction of certain species.
The book to which the noble Lord, Lord Wynne Jones, referred is so well known and accepted that it seems unnecessary to mention it. However, living in a highly industrialised and cultivated island like ours, it is easy for us to read about these matters, forget about them and turn to more local news in our newspapers. But now that this internationally sponsored body, the International Union for the Conservation of Nature and Natural Resources, has been able to list the various species which are under the threat of extinction, the action recommended to Governments by the Washington Convention will—when agreed to by all the countries concerned—give teeth to it. I accept that the Government are giving effect to this Convention, and I wonder whether, to take the words out of the mouth of the noble Lord, Lord Melchett, in the absence of their own Bill they might be wise to accept this Bill, amended as they see fit, so that it may act as a spur to themselves. Occasionally, we all go into retreat to decide whether we are leading our lives in the way that we should, and whether we can improve them. Perhaps this Bill will act as a spur to the Government. At least, it has the advantage of giving power to a single Secretary of Slate. It
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would remove the subject from the three Ministries which the noble Lord has indicated is a cause of confusion.
Lord MELCHETT: My Lords, I am sorry to interrupt the noble Lord, but I think this point ought to be clarified. I have said that the Government have made a policy decision, in that the Department of the Environment will be the management authority responsible for implementing the Convention.
Lord MOWBRAY and STOURTON: My Lords, I accept what the Minister has said. However, I imagined that, until they had passed their own Bill into law, despite the Government's ratifying the Convention, there would be the confusion of three Ministries, because they would not have had Parliamentary action. However, I will take the noble Lord's word about that. It is in the wider field that we must think about this matter. As both noble Lords have said, unless there is more international agreement on these matters the danger of extinction and the rapid rundown of species will continue. An example is the heavy over fishing of salmon off the coast of Greenland. Most of the countries concerned agreed to limit their fishing; but one or two countries did not do so, with disastrous results. Similarly, although the noble Lord, Lord Wynne-Jones would publicly proclaim that a spoonful of rhinohorn powder in your Lordships' tea would not do you much good, so long as other countries continue to believe that a little rhinohorn powder in their tea or a little sherbert will do them good Conventions like this will continue to do less good than they would if Conventions of this kind were adopted more widely.
Lord WYNNE-JONES: My Lords, if I may add to the comments of the noble Lord, I believe that tigers' whiskers are equally efficacious.
Lord MOWBRAY and STOURTON: My Lords, I am most grateful to the noble Lord for his intervention. Countries which have tigers must be brought into this Convention! May I add that the rhinoceros is a rather interesting creature. There are several species of rhinoceros and the Schedule lists several of them. We remember that nearly ninety years ago it was thought to be extinct but now, in Natal, Zululand and South Africa,

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thanks to the excellent work done by the wardens of the game reserves, and thanks also to their fencing in, the white rhino is plentiful and is no longer in any danger of extinction. Therefore, there are checks and balances in these matters which have to be taken into account.
May I repeat that what I like about this Bill is its flexibility, so that if, and when, certain species become plentiful they can be removed from the Schedule. I am glad to see that the various measures to deal with the various flora and fauna will be advertised by the Government to as many people in the world as possible. The noble Lord, Lord Melchett, said that it is only by setting an example by not trading in these parts of the animal or plant world which are in danger, because of our desire to gratify our desires and so on, that we shall get uninterested parties in the world to accept codes, and get other countries agreeing to protect flora and fauna as a matter of great importance. I was sad not to see, in the list which the noble Lord read out to us, more of the countries concerned in this trading. If we play our part in this world, as the Government intend, it will help the conservation of wild life and the preservation of nature throughout the world. These things are so finely balanced that it is important that mankind should do no further harm than has already been done.
In view of the Government's attitude towards this Bill, I am personally a little puzzled about what to do. My own feeling is to welcome the Bill and to let the Government amend it later, if they wish to do so. I do not wish to vote against this Bill, because it is a good little Bill which does no harm, and I think I must leave it to others to support it or to do it down. I myself welcome it as far as it goes.
4.12 p.m.
Lord FISHER: My Lords, I should like to congratulate the noble Lord, Lord Wynne-Jones, on introducing this Bill. Obviously it is a necessary Bill, because a number of Bills at present cover this subject, as the noble Lord has said; and this Bill consolidates them into one. I am very much involved with wildlife and think it is sad that apparently the Government are not supporting this Bill. With the political situation as it is, and as a devotee of wildlife, I hope that the Gov-
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ernment may not remain in power long enough to implement their own intentions! It is particularly important for us to ratify this Convention and to set up proper machinery so as to be seen to be putting ratification into effect, because of the stimulus that it will give to the different countries abroad. I am particularly interested in the Latin American countries, who, in their newfound strength, in many cases have created some very strict laws controlling their own fauna.
Lord MELCHETT: My Lords, I am sorry to interrupt the noble Lord, but he did say it was important for us to ratify the Convention and then set up the necessary authorities and controls. What I said to your Lordships was, that while we cannot as yet give a firm date for ratification, we are in a position to go ahead and set up the necessary authorities and controls to implement the Convention. I hope the noble Lord will agree with me that this will be very important for the countries he is referring to.
Lord FISHER: My Lords, I agree absolutely with the noble Lord. It may be too hopeful to try to get the whole of the EEC to agree to it at the same time, but even if we cannot get full agreement immediately, perhaps we might ratify the Convention independently within a reasonable period of time. The main difficulty is that the aeroplane has overtaken events and, particularly in Latin America, has made very easy the shipment of these animals in enormous quantities. Matters now seem to have come to a head, and there are now only perhaps two countries in the whole of South America which do not physically control the export of their animals and the internal trade of their animals. In Brazil, for example, I visited a pet shop, and the owners were proud because they had one African parrot and the remaining birds in the pet shop were chickens, pheasants, some baby turkeys and, I think, a French partridge or two.
I should like to draw attention to one particular animal. It is not in itself mentioned in the Schedule to this Bill, but parts of it are mentioned. We are told that present legislation will control the dealings in animals, alive and dead, and also parts of animals. To my certain knowledge, cloth of vicuna wool is on offer in two places in London—at least it

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was some six weeks ago. There is a loop-hole in present legislation which I understand enables the made-up cloth to be imported. The vicuna is an extremely rare animal and when the new Bill is introduced, I hope such a loophole will be closed.
I am in two minds as to what to do about this Bill. I would have hoped that it might have been put through, since it is a simple Bill, but it seems that we are not going to be allowed to approve it. I hope that the Government and the noble Lord, Lord Melchett, will see that a Bill replacing the present legislation will be passed very soon.
Lord MELCHETT: My Lords, before the noble Lord sits down, may I say very clearly that I did not ask anyone to deny this Bill a Second Reading. It has already been passed twice by your Lordships' House and it would be quite improper for me—though this is obviously a matter for your Lordships—to attempt to deny the Bill a Second Reading today.
Lord FISHER: My Lords, I am grateful to the noble Lord.
4.18 p.m.
Lord HALE: My Lords, I am grateful to the noble Lord for what he has said. In view of what the noble Lord, Lord Melchett, has just said—of course, he can speak only for one side of the House—and in view of the speech made by the noble Lord, Lord Mowbray and Stourton, which I heard with great interest and pleasure, I do not think I need detain your Lordships very long. I am not sure whether I have any right whatever to detain your Lordships, for no one would deny that there are problems connected with this Bill. Promises have been given from the Government side and they are at least hopeful. The noble Lord, Lord Melchett, has more or less accepted that. Some of the points he made are familiar ones, and some might be made on Third Reading, when the Government have made up their minds more clearly and are prepared to give more details of what is to be done.
I remember that the noble Lord, Lord Morrison of Lambeth used to say:
"We watch the political pointers, but they never all point in the same direction."
I should have thought that the spirit of this Bill is something with which almost
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everybody would agree. The surge of interest in the preservation of animal life, in nature conservancy, the work of the county trusts in so rapidly improving provision for nature conservancy in this country is a matter for some gratitude. It provides a new interest for youth; it provides a moral impetus and it also provides fields for valuable international co-operation.
The noble Lord, Lord Mowbray and Stourtoo, referred to the white rhinoceros, and the success in Natal in preserving these creatures. After very difficult and arduous work, preservation of the species has succeeded so well that the white rhinoceros have increased and are now being supplied to National Parks, with special instructions for their care. The battle to save the Arabian oryx was astonishing. There was great co-operation between Dubai and California. The work on preservation has saved the Arabian oryx. Israel has to her credit the saving of the ilex. We in Britain had something to do with the extermination of the dodo and the great auk, but that was rather a long time ago.
My Lords, this is a most fruitful field, and one of intense interest to world agriculture, to world development and to world economy of land, because some of the great disasters that have occurred in the last few years have been caused by a disturbance in the ecology of nature before one knew just what would happen. In the precincts of this House I was asked facetiously whether we wanted to preserve the last rat. I prefer to sacrifice that particular species before any other, because due very largely to an imbalance in ecology, the rat has spread to the extent that it prevents all plans for economic control in tropical countries where it exists. It is the most damaging of all animals, the great spreader of disease. The damage it does runs into millions and millions of pounds. Therefore, it is with some pleasure that I call the attention of your Lordships to one of the birds which has exercised considerable control over rats in this country, the owl, which is in the Schedule to this Act, with the other wonderful species, the falcons, once the most educated birds in the world, perhaps not for the most noble purposes. I am told a falcon could be trained to perform minor miracles in the time of Louis XIII. This species includes

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the falcons, the kites, the eagles, the harriers and so on. I think it also includes the giant condor.
The United States has ratified this Convention and has passed an endangered species Act, which I have not had the opportunity of reading. This is a very considerable and significant event. I implore your Lordships not to divide against the Bill. I do so with less emotion than I should otherwise display because I gather that it is not the intention to divide. I am perfectly certain that the Committee stage of this Bill could provide an opportunity for your Lordships to show a much keener interest than we have been able to show on a brief Second Reading. I hope that we can examine these problems with benefit to everyone, including ourselves.
4.25 p.m.
Lord FORBES: My Lords, I wish to support the aim of this Bill, which is an endeavour to protect endangered species. Once a species dies out, it does so for ever; it does not just disappear and then reappear some years later. If this Bill is not to be enacted, I am very sorry that the Government have not come forward with their own Bill. I wish to speak briefly, and say why I believe a Bill is needed urgently to protect the endangered species, especially those in East Africa where valiant efforts are being made to protect many species from extinction by poachers, many of whom have been born and bred to kill wild animals for their existence. They now find themselves forced to take up other pursuits such as cattle ranching so that Kenya can develop tourism, which is to a large extent dependent on wild life, which includes some of the endangered species. Game wardens such as Mr. Bill Woodley and Mr. David Sheldrick are doing a splendid job in the cause of wild life, including endangered species, not just for Kenya but for the benefit of mankind the world over. Our thanks go out to them.
My Lords, game wardens, backed by their staffs of rangers, are engaged much of the time on anti-poaching duties, and have many successes. Nevertheless, they are fighting an uphill battle. The poachers are not just hunting for food, but are also hunting for money. The game wardens desperately need more equipment such as light aircraft, helicopters,
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wirelesses and so on to make their efforts more effective in dealing with poaching, which unfortunately is not only wasteful but cruel and highly profitable. Unfortunately, the man who really makes the money is usually the middle man or, perhaps more accurately, I should say the middle person, because sometimes it is the female of the species. In all this it is our duty to do anything we can to help the game wardens with their all important task, and not to hinder them.
My Lords, it is criminal to think that while the game wardens in Kenya are working 365 days a year combating poaching, we in this country have failed to discourage the sale of skins of certain endangered species, such as the magnificent cats, the leopard, and the tiger of India. The Sunday Times recently reported that in 1973 Britain imported 900 leopard skins; in 1974 the figure was 2,121. What a pathetic answer to the world wildlife problems! Of course, the first loophole is in the Animals (Restriction of Importation) Act 1964, which unfortunately dealt only with the traffic in live animals and did not refer to skins. The next omission comes from the fact that although the Department of Trade and Industry has the power to stop the import of many products, as often happens the power is only used like the Fire Brigade, to stop something that has happened and not to prevent it from happening. The Department of Trade and Industry in fact banned the import of tiger and certain leopard skins, but unfortunately the ban was on the raw skins and failed to cover skins made into coats.
What is wanted is that either this Bill should be enacted, or for the Government to bring in their own Bill immediately, so that the sale of skins of certain endangered species will no longer be legal. The Bill must not only afford protection to the endangered species of today but it must also be flexible so that the Secretary of State can add from time to time other endangered species, or delete the ones that come off the endangered list.
My Lords, wildlife provides a practical balance of nature which is very important to the survival of man. Furthermore, without wildlife our lives would be immeasurably poorer. We must protect it. Unfortunately, as often happens, man

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is irresponsible. He is often his own worst enemy. As he himself increases in number, so does the area of concrete covering the land, with the result that while man and the accompanying concrete increase, wildlife is pressed into smaller and smaller areas where it becomes further endangered.
My Lords, we should not forget the message that was given to us by His Majesty King George VI, who said :
" The wildlife of today is not ours to dispose of as we please. We have it in trust. We must account for it to those who come after."
Wildlife, which is part of our heritage, must be seen not only by our children but by their children and their children's children. In fact, wildlife must go on as long as man goes on on this earth.
The only doubt I have about any law dealing with endangered species is whether we can ensure its implementation. It is much easier to make laws than it is to ensure that they are enforced. We should all do well to remember that those who are responsible for enforcing the law need our support. We must not stand by idly on the touchline, or, worse still, encourage evasion of the law, whether we like it or not. Possibly the greatest protection that could be afforded to endangered species is public opinion. Thank goodness leopard skin and tiger-skin coats are out of fashion! Thank goodness the interest shown by the public in wildlife and its preservation is growing daily, due, first, to the famous naturalists, and now to the really wonderful wildlife films which can be seen by millions on television!
Finally, my Lords, I am very grateful to the noble Lord, Lord Wynne-Jones, for introducing this Bill and bringing pressure on the Government to take steps to preserve wildlife, our heritage. I support the Bill. If it is not to be enacted, I only hope Her Majesty's Government will act quickly, as endangered species will not wait for Governments, not even this unique two-sided Government!
4.32 p.m.
Lord HAWKE: My Lords, the usual channels seem to have been under the delusion that I intended to make a speech today. I had not, but as they are under that delusion I shall endeavour to oblige with a few sentences, and I must apolo-
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gise for not having been present to do so when they thought I ought to have been here.
I must say that I take a very pessimistic view about the future of animal species in the world. We are rather unique as a people, because we love animals, and so on, but there are not many other people who do. Whether or not, eventually, the Africans and the Asians will learn to take the same kind of view as we do, I do not know; but it seems to me that it will take generations to arrive at such a state of mind. When one considers how Africa has been filled up with sophisticated weapons for political reasons, one cannot help thinking that these will be used upon animals in so-called poaching or sporting efforts.
Of course, there is another side to this question. There is not only the question of people who poach game for profit, but there is also the question of crop protection. When the noble Lord was deploring the disappearance of the Bengal tiger, I was wondering what the Bengalis thought about it; because, after all, when there were 20,000 tigers roaming the jungles of Bengal, they had to be fed on something, and it was generally the villagers' flocks and herds. Now that they are down to 800 or so, I have no doubt that the cattle and goats have a much better chance of survival, to say nothing of the occasional man-eater who was eating Bengalis as well.
When one comes to consider Africa, just consider the case of the poor peasant in a country where there is no social security whatsoever. He has his patch of crops and that kind of thing, and suddenly a herd of elephants comes down and destroys the lot. What does he do? There arc baboons, and there is every conceivable form of livestock which can come and destroy his living overnight, and threaten the life of himself and his family. So one cannot altogether blame some of these people when they perhaps break the law of their country and endeavour to take the law into their own hands. We can only hope that eventually education will lead them to realise that they are destroying their greatest asset.
4.35 p.m.
Lord MELCHETT: My Lords, I wonder whether I may, by leave of your Lordships, answer a couple of points

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that have been raised during the debate which I think would probably be better answered by me than by my noble friend, because they really arose on what I said in my speech.
The noble Lord, Lord Mowbray and Stourton, mentioned ivory. I should like to re-emphasise, so that we have got it absolutely straight, that the Government are intending to go well beyond the Convention and control all raw ivory, because, as the noble Lord said, it is very difficult to tell one type from another. That is an instance of where we are going well beyond the Convention because of this difficulty. The noble Lord, Lord Fisher, mentioned the vicuna. I hope I have the pronunciation right. As I understand it, the hair and skin has been banned since October 1970 under our existing powers. But the problem arises where the wool is made up into cloth of one kind or another; it is, I am advised, impossible for customs officers to tell when this cloth contains vicuna wool. If the noble Lord has any further information or any new information on this matter, it is something we will be happy to have another look at.
The noble Lord, Lord Forbes, mentioned fur, and particularly the big cats, and he also regretted the fact that there is no Government Bill in the offing. As I said, we are able to implement the Convention with our existing powers. There is no need for a new Government Bill to implement the Convention. As I have no doubt the noble Lord knows, the Convention lists in the Appendix at least 15 species. I have just totted it up; I hope I have the right families, because it is all in Latin and I am not an expert on big cats. Therefore, when we implement it, we shall be controlling all those species and the recognisable derivatives of them.
Lord FORBES: My Lords, I quite agree that this is all coming in the future. What I was complaining about was that there is nothing at the moment on the Statute Book dealing with this matter.
Lord MELCHETT: My Lords, the noble Lord says " in the future ", and I have said that we are at a very advanced stage so far as implementation is concerned. In fact we aim to implement the Convention by the autumn. That just
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gives us enough time to set up the necessary Scientific Authorities and management authorities. So I think the noble Lord is being a little uncharitable, if I may say so. We are moving as fast as we possibly can. Indeed, I am going a long way by saying that we shall set this up by the autumn, because that only just gives us enough time. As I say, we can do it under our existing powers and no further legislation is necessary.
4.38 p.m.
Lord WYNNE-JONES: My Lords, I wish to thank all those noble Lords who have taken part in this debate. Perhaps I may specially refer to the noble Lord, Lord Forbes, who spoke with extreme knowledge and understanding of the whole problem; not that others did not speak with equal understanding, but I felt that the noble Lord was able to put a point of view which was of great importance. As one who is not himself an expert in this field, I particularly welcomed it, because three people have been absent today who wished to be present and who would have added notably to the discussion in your Lordships' House. I refer to the noble Earl, Lord Cranbrook, who, unfortunately, is in hospital, the noble Lord, Lord Craigton, and the noble Lord, Lord Chelwood, all of whom had hoped to be present.
I am certainly grateful to my noble friend Lord Melchett for the remarks he made this afternoon. I hope that the Government may find that as the Bill goes on they may be able to do something with it. Apart from that, I think the noble Lord has shown very clearly his intention of ensuring that the implementation of the purposes of this Bill will be carried out by the autumn, and that the actual ratification of the Convention will be before the end of the year. These are statements which are extremely welcome, and I thank my noble friend for conveying to us the intention of Her Majesty's Government. What my noble friend Lord Melchett said about those in his Department who have been working on this is echoed by all of those who are interested in this matter. We know that they have worked very hard and we should like it to be known that we regard them as valuable allies in the fight to ensure that endangered species are not obliterated, and we hope that they will

913
continue their good work. One welcomes all that is being done, and one reflects on these lines:
" But at my back I always hear,
Time's winged chariot drawing near,
And yonder all before us lie,
Deserts of vast eternity."
I therefore hope that urgency will remain in this whole matter.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MALTA REPUBLIC BILL [H.L.]
4.41 p.m.
Lord GORONWY-ROBERTS: My Lords, I beg to move that this Bill be now read a second time. Similar Bills have been introduced when other Commonwealth countries have made a similar constitutional change. The most recent legislation of this kind is the Republic of Sri Lanka Act, 1972. The present Bill, like the others, is short and, I feel sure, uncontroversial. It is a piece of legislation which is needed in consequence of Malta's adoption on 13th December 1974, of a new Constitution under which Malta became a Republic but has remained within the Commonwealth. Following the lines of previous legislation in parallel cases, it makes the necessary adjustments in our own law consequent upon this constitutional change in Malta. It provides that the operation of the law of the United Kingdom, the Channel Islands and the Isle of Man existing on 13th December in relation to Malta and to persons and things belonging to, or connected with, Malta is not affected by the fact that Malta has now become a Republic. The reason why it is desirable to make such provision is that much of our existing law relating to Commonwealth countries still dates from the time when all such countries were under the Queen's sovereignty. One therefore finds in it, for example, expressions such as " Parts of Her Majesty's Dominions " which, in the absence of this Bill, would no longer cover Malta now that it is a Republic. The Bill will also have the same effect on the law of dependent territories of the United Kingdom in so far as their law consists of Acts of the United Kingdom Parliament extending to them and of Orders in Council extending such Acts to
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them. This is desirable since the local Legislatures in the dependencies would not themselves be competent to make the necessary provision.
Malta asked the other Commonwealth Governments to agree that she should remain within the Commonwealth. Her continuing membership of the Commonwealth was welcomed by all the Commonwealth Governments, including the British Government, and Malta has accordingly joined the ranks of those Commonwealth countries which have become Republics. The first President of the new Republic is the former Governor-General, Sir Anthony Mamo, and Mr. Mintoff continues in the Office of Prime Minister. Messages of goodwill towards the new Republic were sent by Her Majesty the Queen, the Prime Minister and the Foreign and Commonwealth Secretary on 13th December, when the Republic came into being. I am sure that all noble Lords will join with me in extending to the President, the Government and the people of Malta our best wishes for the prosperity and success of the new Republic. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(Lord Goronwy-Roberts.)
4.45 p.m.
Earl COWLEY: My Lords, the whole House will feel extremely grateful to the noble Lord, Lord Goronwy-Roberts, for explaining so fully the contents of this Bill and its purpose. I agree that this piece of legislation is perfectly straight-forward; it takes account only of the altered status of Malta to that of a Republic within our own existing legislation and this decision to become a Republic is with the consent of the people of Malta. We on this side of the House wish to concur in and be associated with the remarks made by the noble Lord concerning the people of Malta and the messages of goodwill sent to that country by the Government.
The friendship that has existed between Malta and Britain has been flourishing for many years, through thick and thin. We hope that this friendship will long continue, especially in the light of Malta's associated status with the European Economic Community. The whole House will be pleased that Malta has decided to remain as a member of the Commonwealth and will thus continue

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to take a full part in the important deliberations of that worthwhile grouping of countries. For this reason, and in view of the British Government's decision to withdraw our forces from Malta between 1977 and 1979, when the current Malta Facilities Agreement comes to an end, we hope that Malta will also decide to remain within the ambit of NATO. It is only right that this Bill should be given a speedy passage through this House, and my noble friends and I will not make any attempts to delay it. We wish the Malta people well as they embark on their role as a new Republic.
4.47 p.m.
BARONESS VICKERS: My Lords, I wish to say a few words about Malta, which I know well. The saying " Small is beautiful " applies very much to Malta, and I should like to add my good wishes to her people for the future and to congratulate them on the part they are playing in World Architectural Year, which will be most beneficial for future generations. When we remember the discussions that took place in another place, and probably here, too, about whether Malta should be integrated into our Parliament—in other words, that Malta should send three MPs to Westminster; when we remember how Malta became independent in 1964, and when we ponder on the fact that Malta is now a Republic, we see that a great deal has happened within a very few years. And when we reflect on the fantastic devastation that took place there during the war—and I was there during 1944 and 1945—we must congratulate them on the way in which they have built up their country. I echo the hope that Malta's becoming a Republic will not affect our friendship in the future.
There are a few questions I should like answered at this stage. What will be the position of Maltese who come here? They have had a very special relationship with us in the past, and Malta was allowed to send more people here to work on a special basis than were some other countries. I hope, especially when the people of Malta read in the Official Report what is being said about them, that they will wish to continue to play a part at Strasbourg. They have been somewhat criticised there, particularly over the manner in which they ran their elections. I spoke in support of them
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because I felt that a great many people did not understand the conditions in that country. It is valuable that they should continue to hold conferences in Strasbourg, which they do very well, not only for us but for the people of Malta— because it is an island—who have an opportunity of meeting people from the other 17 countries in Europe.
The Minister mentioned that the defence arrangements will cease between 1977 and 1979. What will happen to the pensions of the people who served us so well? Now they are part of a Republic, will they get the same advantages as they might have had had Malta still been independent within the Commonwealth and not become a Republic? This is important because over the years many of them, in the Navy, in the dockyards and in other Services, have given marvellous and faithful service to this country. So I should like to wish them very good luck in their new role. We have, as the noble Lord, Lord Goronwy-Roberts, has said, examples of other countries which have been successful as Republics-among them Sri Lanka and India—and we hope that Malta will be equally so and will enjoy the role that it can play in the Commonwealth of Nations.
4.50 p.m.
Lord GORONWY-ROBERTS: My Lords, I should like to thank the House for the expressions of good will which have come from all parts for the new Republic, which has elected of its own free will to apply for continued membership of the Commonwealth—an application which was unanimously granted. I should also like to pay special respect to the admirable speech which we have just heard from the noble Baroness, Lady Vickers, whose interventions in another place I recall with great pleasure. The noble Baroness raised one or two important points, as did the noble Earl, Lord Cowley.
My Lords, Malta's change of status does not in any way alter the position of Maltese citizens in regard to immigration and nationality. Entry to the United Kingdom is still governed by the current immigration arrangements for Commonwealth countries, nor is there any change involved in this legislation in the matter of pensions. I entirely agree on the other points raised by the noble Baroness, and

917
hope very much that the practical contribution by Malta which she described and which some of us have experienced will continue. I have no doubt that it will. On the defence point, this is of course a question that has been decided in agreement with the Maltese Government. They wanted this. We shall continue to discharge the 1972 commitment until 1979 when it would normally end, and the Maltese Government concurs in that. On the note that the whole House wishes the Maltese people—the people of the George Cross Island—the very best good fortune and happiness in the future as a member of the Commonwealth, I once more thank your Lordships' House for its support for this Bill.
On Question, Bill read 2a and committed to a Committee of the Whole House.

ROYAL ASSENT
The LORD CHANCELLOR: My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Consolidated Fund (No. 2) Act,

Unsolicited Goods and Services (Amendment) Act,

Social Security Act, Social Security (Northern Ireland) Act,

Industrial Injuries and Diseases (Old Cases) Act,

Industrial Injuries and Diseases (Northern Ireland Old Cases) Act,

Social Security (Consequential Provisions) Act,

Pier and Harbour (Fishguard and Goodwick Harbour) Confirmation Act.

INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) BILL [H.L.]
4.54 p.m.
The LORD CHANCELLOR: My Lords, I beg to move the Second Reading of this Bill, which implements a Report of the Law Commission and is designed to make important reforms in the law of family provision on death. I should like
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once again to acknowledge the debt which we owe to the Law Commission for their carefully argued recommendations and for their admirable habit of accompanying their Reports with draft Bills, which so happily smooth the path of legislation.
My Lords, the law of England and Wales has for a long time past adopted the general principle that a person is free to dispose of his property by will as he or, indeed, she thinks fit. I describe that as the general principle, because some features of the old and more restrictive property law, such as the widow's right of dower—that is, the life estate in one-third of her husband's real property— and the widower's corresponding right of curtesy, lingered on until they were finally abolished by the property legislation of 1925. After that legislation in 1925, it was possible for a person to give all his property by will to a charity or to individuals outside his family. For example, he could give it to a cats' home or to a mistress—not that I have anything against cats!—and to leave his surviving spouse and children totally destitute. Until 1938, the law gave no remedy to the family in those circumstances.
However, in 1938, the Inheritance (Family Provision) Act introduced a new principle. Without overruling the terms of the will, it gave the surviving spouse and the dependent children the right to apply to the court for maintenance out of a deceased person's estate. These rights are discretionary and they are also temporary. They last only until the surviving spouse remarries or dies and the children cease to qualify as dependent. Thereafter, the provisions of the will are restored to their full authority, although the value of the estate may have been depleted where an order for maintenance has taken the form of a lump sum payment.
Over the years since 1938, the law has been developed by amending legislation and gives greater protection to the family and to dependents. For example, since 1952 the courts' powers have applied also to cases of intestacy, where the law of intestate succession has failed to make adequate provision for the family. In 1958, the right to apply for maintenance out of a deceased's estate was extended to a former spouse who had not remarried, and in 1969 an illegitimate child was given the same rights as

919
a legitimate child to apply for maintenance from the parent's estate. On these and other points, the system has been improved, but its scope still remains limited in a number of very important respects.
My Lords, the Law Commission started its review of the law on family property by asking whether the existing law adopts the right approach. In a comprehensive working paper published in 1971, they considered, among other things, whether the law of family provision should be replaced or supplemented by fixed rights of inheritance, whereby perhaps one-third or one-half of the estate would pass automatically to the surviving spouse and a further proportion to the children. They also considered the principle under which the spouses would share some, or all, of their assets on marriage or, in the case of " deferred community", have defined rights in those assets when the marriage ends in death or divorce. Each of those systems is found, as your Lordships will know, in other countries.
The Law Commission concluded, however, in the light of their usual wide consultation, that neither of these principles should be adopted in England and Wales, except that the matrimonial home should normally be subject to co-ownership between the spouses, and they have promised us a further report on that. They proposed, instead, that the law of family provision should be retained and improved in important respects. It is the purpose of this Bill to make the improvements which the Law Commission have recommended, and to collect the law into a single Statute.
There are four principal changes effected by this Bill. First, it raises the standard of provision which can be made for a surviving spouse and equates it more closely to that which can be made for a divorced spouse in matrimonial proceedings. It was indeed a central part of the Law Commission's thinking that the court's powers over a deceased person's estate should be assimilated, so far as practicable, with its powers over the family assets on divorce. Secondly, it enlarges the class of persons who may apply for maintenance from the estate, to include all children of the deceased (and not only those who through age or disability were dependent on him) and to
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bring in any person who was dependent on the deceased, whether or not related to him. This will remove the hardship which can arise under the existing law whereby no provision can be made for a distant relative, or a non-relative who may have looked after the deceased for year,s often without reward, and has become financially dependent upon him but derives no benefit under his will.
Thirdly, the Bill gives the court wider powers to make whatever order may be appropriate in the circumstances, whether in the form of periodical payments, a lump sum, a transfer or settlement of property, or variation of a previous settlement. Fourthly, to make these wider powers effective, the Bill makes additional property available for the purposes of financial provision: for example property which the deecased owned jointly with others, and property which the deceased had disposed of in his lifetime with intent to defeat claims for family provision. Those are the central features of the Bill. The basic theme is that the courts should have a wide discretion to deal with each case on its merits, freed from many of the restrictions which the existing law contains. This discretion is to be exercised with the help of some extensive guidelines contained in the Bill.
I turn now briefly to the clauses. Clause 1 specifies the persons who may apply to the court for financial provision from a deceased person's estate— and they are: a surviving spouse ; a former spouse who has not remarried ; any child of the deceased, and any person treated by the deceased as a child of his family ; and any person who was wholly or partly maintained by him at the time of his death. Those persons can apply to the court on the grounds that the will or law of intestacy (or a combination of both, where the deceased died intestate as to part of his property) does not make reasonable financial provision for them. Subsection (2) explains that in the case of a surviving spouse the court can make such financial provision as it would be reasonable for that spouse to receive in the circumstances, and in all other cases can award whatever is necessary for the applicant's maintenance. Remarriage will not automatically terminate a provision made for a surviving spouse, as it does under the 1938 Act, but this might

921
give rise to an application to vary or discharge the order.
Clause 2 sets out the various types of order which the court can make, where it is satisfied that the application is well founded, in exercise of the wider powers whch I have already described. Clause 3 contains extensive guidelines for the exercise of the courts' discretionary powers in the various situations which may have to be considered. Subsection (1) sets out the matters which will generally be relevant, and subsections (2), (3) and (4) provide for additional matters to be considered in particular cases—for example, in the case of a surviving spouse, the duration of the marriage and the contribution made by the applicant to the welfare of the family ; in the case of a child any educational commitments and prospects; in the case of a dependent outside the immediate family the basis upon which the deceased assumed responsibility for that person's maintenance. Clause 4 sets a time limit of six months as the normal period during which applications must be made, but gives the court power to extend it. Clause 5 enables interim orders to be made in cases of financial need.
Clause 6 enables an order for periodical payments to be varied or discharged on the application of any of the persons listed in subsection (5)—that is to say, any person who did, or could have, made an application to the court, the personal representatives, the trustees of any property and anyone benefically interested in the estate. Clause 7 provides for lump sums to be made payable by instalments and enables those instalments to be varied as required. Clause 8 enlarges the definition of the deceased's ; " net estate " by including in it property which he has nominated in favour of any person under any of the enactments (such as those relating to National Savings) which provide for such nomination and property which he has disposed of by a donatio mortis causa, which, as all noble Lords will know, is a conditional gift made by the donor in contemplation of his own death. Clause 9 includes the deceased's severable share of property held on a joint tenancy.
Clauses 10 to 13 contain the new powers which I have already mentioned, to recall, for the purposes of financial
922
provision, property disposed of by the deceased without full valuable consideration and with the intention of defeating claims for family provision. Similar powers already exist in matrimonial cases, and the Law Commission recommend that the principle should be extended into this field. The questionable transactions may be either outright dispositions made within six years of his death or, as sometimes occur, contracts to leave property to a certain person in his will. Clauses 14 to 18 contain special provisions for cases where the deceased's marriage has been the subject of matrimonial proceedings in which the courts have made or approved financial arrangements between the parties and enable the court to review the position. I do not think that any point of principle arises in these clauses, but we can discuss them in Committee if there are any points arising upon them.
The remaining Clauses 19 to 26 are miscellaneous and supplementary. Clause 25 introduces the Schedule, which repeals the existing law on family provision and leaves this Bill as a self-contained code of law. This is in itself a substantial benefit, flowing from the Law Commission's labours for which we are grateful— quite apart from the reforms I have mentioned which are embodied in the Bill. I believe that this Bill will make the law more flexible and better able to meet with justice and with compassion the financial responsibilities which the deceased has failed to discharge towards his dependants. My Lords, that is the outline of the Bill. I commend it to your Lordships as a useful measure of law reform, and of codification, and 1 beg to move.
Moved, That the Bill be now read 2a —(The Lord Chancellor.)
5.9 p.m.
The Earl of MANSFIELD: My Lords, as the noble and learned Lord observed, this Bill gives the courts very much greater and wider powers in relation to those who, on the death of a testator, or somebody who has left no will, feel they have not been left, so far as their future is concerned, in as advantageous a position as they might have been. As such, it is a matter which is considerably less contentious than those we dealt with last week and to which, I fear, we shall come back next week.

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Speaking entirely for myself, it is a pleasure to debate something which is of interest and comparatively non-controversial. As the noble and learned Lord observed, the effects of this Bill will enable the courts to give relief, if that is the word, to a very much wider class of persons than any previous enactment has provided. In fact the matter goes further than that. The courts will, when this Bill becomes law, make provisions which are very much wider in character than ever before; and an illustration of that might be provided, perhaps, in Clause 2(1) of the Bill, where, in fact, orders in effect for a settlement to be set up or for the transfer of property may be made by the court.
One is bound to observe that the class of those who can seek relief in Clause 1 is now very wide indeed. For instance, it now includes step-children, as I understand it, and perhaps that is quite right; and it also includes in subsection (3) a person who has been maintained by the deceased either wholly or partly. One of the evening newspapers, when this Bill was first contemplated, described it as a "mistress's charter". The noble and learned Lord was careful not to say that all the world loves a lover; but, so far as this Bill is concerned, lovers are given a much fairer crack of a whip than ever before. I appreciate that the behaviour of such persons has, in fact, been taken into account in Clause 3(l)(g) and I shall come to that in a few minutes.
One matter, which might be a Committee point, I feel should be pointed out. There is no fetter on the powers of the court so far as children are concerned as regards an upper age limit. As I read the Bill, it would be perfectly in order for a court to order the maintenance of step-children well past the age of adulthood for as long as it considered fit provided they suffered from some disability. That would be excellent; but one feels in a way that it might have been an idea to have specified an upper age limit, at least for the maintenance of children who are not directly children of the deceased.
My Lords, I come now, shortly I hope, to the reasonableness, or lack of it, of the provisions which exist before the making of the application, to people who seek relief. Bearing in mind that people who make provision for those who come after them, as I suggest, usually wish
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to do the best by those to whom they are going to leave their money, I, for one, was a little disappointed by Clause 21 of the Bill which the noble and learned Lord—I certainly do not say this in any criticism—went through very quickly. In a way, I should have preferred Section 1(7) of the old 1938 Act which, as it were, stated perfectly plainly that the court shall have regard to the deceased's reasons for doing or not doing what he did. That is a matter to which perhaps we may return at the Committee stage of the Bill.
The next matter that I wish to deal with concerns Clauses 10 and 11. As noble Lords will be aware, these relate to the powers of the court in relation to transactions intended to defeat applications for financial provision; and the period of time in which the court can, as it were, reverse previous gifts or settlements is six years. The matter was considered by the Law Commissioners and at Paragraph 200 they gave it as a provisional view that there should be no time limit on the transactions which could be investigated but the presumption would apply only to transactions within three years before the death. It is fair to say that the Commissioners eventually reconsidered that in the next paragraph ; but I should have thought, with respect, that that was a better and fairer period than the three years. One can illustrate the matter, perhaps, by saying that, for instance, somebody who owns a farm or land of some kind might, well before his death, want to get everything settled so that the farm could continue to be managed properly by his son. It would be a possible act of injustice if, let us say, five years after he had passed his property on to his son, on his death some other relative or person who comes within the class of Clause 1 were to come along and seek to upset all the arrangements which had been made, bearing in mind that it may be difficult for the donee in such circumstances to realise enough capital (if there were to be an order for that kind of settlement) to pay it.
The only matter that I would ask about —and I scarcely dare refer to it—is the capital transfer tax. If I may postulate the situation I described before, it may be that the deceased (as I shall call him)

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five years before his death makes provision for his son, gives his son the farm, pays the capital transfer tax which will now be payable when the gift is made, and leaves him with enough working capital to run the farm as his business. Under the amelioration, as I should call it, of the provisions which were enacted in another place, certain fairly complicated rules for the working out of this tax were enacted. If a settlement is made by a court five years later, then, as I understand the position (and it may be that I have not understood it correctly) the whole of the computation may be at risk. One wonders whether, as in the old Act, some reference should not be made to that state of affairs. Subject to what I hope may be described as these probing points rather than criticisms, perhaps I can venture diffidently to give this Bill a welcome.
5.18 p.m.
Lord SIMON of GLAISDALE: My Lords, may I venture to say a few words in welcome of this Bill and to congratulate the Government on having introduced it so rapidly. It is an instalment, and only a first instalment, of a much-needed reform of our law of family property. The more important parts are still to come. To a certain extent, this Bill codifies the existing law. I think that in doing so, it clarifies it in a valuable way and, speaking for myself, such changes as it makes seem to me to be improvements almost entirely. Your Lordships will probably gratefully accept it for what it is and for what it does, and as a precursor of the more important reforms which are still to come.
Your Lordships will remember the striking passage at the opening of Aldous Huxley's famous novel, ironically entitled, Drove New World, where one goes into a laboratory and sees all the children in test tubes being treated so that they are differentiated into the various grades where they will be required in society. Our own society depends on the family for the engendering and upbringing of children, and that has important economic as well as social effects. It involves a division of labour between husband and wife. The wife bears the children and generally plays the main part in rearing the children during their early childhood. That divi-
926
sion of labour therefore impairs the wife's economic capacity and releases the husband for his own economic advancement.
My Lords, a functional division of co-operative labour of that sort calls in justice for the sharing of the rewards of the labour. The breadwinner is morally bound to share the loaf that he has been freed to gain. He is bound during his lifetime, and he is bound if he makes accumulation after his death. Our own law has been woefully defective in vindicating the wife's right—and when I speak of a " right " that is not an abstract right; it is a right arising from the very nature of the functional division of labour.
Again, the children do not ask to be brought into the world and their upbringing is necessary for the continuity of society. Our law has been woefully defective in vindicating the children's right in the realm of property. It was not always so. There was a time when our law was similar to that in Scotland, when the property of a deceased was divided into three parts— the wife's part, the bairns' part and the dead's part, as it was called, and it was only that third part of which he was free to dispose freely, as is still the case in Scotland as I understand. But about the 17th century we lost that system gradually and entirely, and substituted for some centuries a system of unbridled testamentary licence. The noble and learned Lord on the Woolsack mentioned the cats' home. I must be very careful, because I can remember once using that very phrase in dictating an address on this subject and I noticed my secretary stopped taking down what I was saying, because she thought it was entirely reasonable that a cats' home should be supported by testamentary bounty. Nevertheless, even the greatest animal lover would think, I suggest, that the first duty was to the family.
Then, as the noble and learned Lord said, in this century—first in the Commonwealth and then, belatedly, in this country—we put some curb on the testamentary licence by a system of discretionary provision. That has been extended in the way that the noble and learned Lord explained so clearly. Nevertheless, the system still has very serious faults, some of which the noble and learned Lord described and which are put right by this Bill, as I think beneficially. One which

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he did not mention is the fact that there are two Divisions of the High Court which, up till now, have been concerned with this law—the Chancery Division under the 1938 Act, and the Family Division under the postwar legislation relating to divorced spouses. That is particularly anomalous in that where there is a divorced wife and children, the wife goes to the Family Division and the children have to go to the Chancery Division, so you have two separate courts dealing with one estate. The Law Commission recommended that all applications under this Bill when it is enacted should be to the same Division— namely, the Family Division— and I respectfully agree with that. That matter is not, so far as I can see, dealt with by the Bill. I imagine it will be dealt with by Rules of Court and I should be very grateful if the noble and learned Lord on the Woolsack could tell us whether that is the intention.
My Lords, I mentioned that the reform of family property is urgent. It is all the more urgent because of divorce reform. This is not a suitable occasion to debate those issues, which arouse considerable controversy. But what is beyond question is that the recent divorce reform brought into our law for the first time a system whereby a man could take advantage of his own wrong to cause hardship to another person—a woman, his wife—and the law would lend him assistance. Obviously that was unacceptable, unless something was done about matrimonial property, and something was done; although the law still cannot assist a married woman who is solely relying on her husband's pension, which she has enabled him to earn by her share of the functional division of labour. It can assist her only if the loss of that pension would cause not merely hardship but grave hardship, and not always then. Nevertheless, substantial reforms were made in the law of property on divorce; but the effect of that was to make the position of a divorced wife far more favourable than the position of a wife of a subsisting marriage. That makes this Bill very necessary, and the ensuing Bill dealing with the actual property during the lifetime of the spouses and the subsistence of the marriage. I confess that I am still in favour of community of property, although I would very readily accept a division of joint ownership of the matrimonial home
928
and its contents, which I believe would cover about 90 per cent, of the cases that would fall for consideration, and, at any rate, as the first instalment.
I venture to echo what the noble and learned Lord on the Woolsack said about the Law Commission. Its establishment was a brilliant stroke of statesmanship. It has made very valuable contributions to the development of the law. Its first incursions into family law were, perhaps, not particularly felicitous, largely because of an ideological imbalance in the Law Commission, which has now been rectified. This project seems to me to be wholly beneficial. We are very greatly in the debt of the Law Commission, and I should like to welcome this Bill.
5.31 p.m.
Lord JANNER: My Lords, I am sure that your Lordships will be, as I am, very grateful to the noble and learned Lord the Lord Chancellor for the manner in which he so fully described the provisions of this Bill. He was lucid and clear, and I am sure that both lawyers and laymen will be indebted to him. I should also like to thank the noble Earl for his contribution, together with that of another old friend, if I may say so, the noble and learned Lord, Lord Simon of Glaisdale.
This is a very interesting Bill, not merely because of its provisions but because of the depth of its purport, particularly relating to family relationships. I speak as a solicitor. The Law Society and the members of my own Committee in Parliament, the Solicitors' Group, welcome this Bill for reasons which may not be entirely obvious to those noble Lords who have spoken but which, nevertheless, lie at the root of what we are discussing.
In the course of over 50 years' experience in that branch of the profession, I have seen many changes. At one time we were the profession to whom the whole family came for advice: a solicitor was consulted by families practically from the cradle to the grave, and he was able to give them advice. Solicitors were able to give guidance in respect of the matters we are discussing today. It is interesting for me—and no doubt also for my colleagues in that profession—to see how the Law Commission has grasped what we have experienced year in and year

929
out while, after very careful consideration of all the circumstances, giving advice which has been sought in a solicitor's office on how clients should arrange for the disposal of their estate, after death.
Much of what has been set down in this Bill has been discussed with such clients. It is a very human problem and I would entirely agree that it is a family matter. People would come into a solicitor's office and ask: "What are we to do about this? "They would ask for advice on matters concerning not only their own children or wives but very often concerning children by a previous marriage, illegitimate children and other relatives. They would contemplate for a very long time what they were to do in respect of the division of whatever they were to leave when they died. I have known people change their wills 10, 11 or 12 times in an attempt to be fair. On the other hand, one has come across people who have been vindictive and determined that some members of their families should not be supported, because of some offence which may have been given to the testator in the course of their life. It has sometimes been a difficult task to try to persuade such clients— not in a sense of exerting undue or unreasonable influence but by using arguments of a reasonable nature— not to disregard the means of relatives against whom they may have a dislike, although sometimes even based on proper reactions but which, nevertheless, overlook the fact which has been so well pointed out during this debate, that the family is responsible for its members. Often it is not the family members who have produced the difficulties, but the parents who have produced children and others in the family who have contributed towards general bad family relationshps.
Therefore those who have experienced this kind of matter will be grateful to the Law Commission, which has given such excellent service generally on these and other matters, for their consideration of these problems and for the conclusions they have reached. I should like to say quite categorically that from conversations I have had with fellow practitioners and with persons in the Law Society, it is clear that they feel this Bill is an excellent Bill which—with, perhaps, some Amendments which may emerge in
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Committee— commends itself to the whole House.
I should like to refer to two aspects of the matter. I want once again to endorse what the noble and learned Lord, Lord Simon of Glaisdale, has said about the necessity for a Bill of this nature, as it were, codifying the law as it now stands. This will be very valuable not only to the practitioner but to the man in the street if, for the benefit of the latter, the Government will produce a document similar to those produced for example in respect of the rent acts, explaining the provisions of the Bill. In the case of a Bill of this nature, which I am sure will ultimately become an Act, it is most important that the public should know exactly what are its provisions, because then they can form their own judgment about how they wish to distribute the assets which are left when they die.
I do not wish to detain the House any longer, although there is a great deal which could be said about this Bill. I am glad, of course, that, for the reasons which I have explained, the law itself is now to be included in one Bill. In passing, perhaps I should say that I am very proud of the fact that one of the Commissioners happens to have been an articled clerk of mine some years ago. Perhaps I ought to declare an interest in that regard! But speaking seriously, we are greatly indebted to the Commissioners. Although I have not had time to consider some of the points which have been made by the noble Earl and by the noble and learned Lord, Lord Simon of Glaisdale, I am sure that the country will be pleased to know that these provisions are being made and that special regard has been paid to the human aspect which is so very important in these matters.
5.41 p.m.
Baroness WARD of NORTH TYNE-SIDE: My Lords, I apologise for not having indicated that I should like to take part in this debate. What I have to say has nothing to do with the legal side; I speak because I feel that a tribute ought to be paid to the originator of the 1938 Act. I am not a lawyer; therefore, I would not dream of trying to make any comments on the points of view which have been put forward by noble and learned Lords this afternoon. However,

931
having been in the House of Commons for a very long time, I feel that tribute ought to be paid to Eleanor Rathbone who in 1938, when the first Bill was introduced, was arguing—because in those days women Members of Parliament had to argue very hard indeed—for that Bill. Today we have been discussing the Acts which followed her original one. As it is International Women's Year, it would be a great pity if the name of Eleanor Rathbone was not mentioned in this very important debate. When one introduces new Bills, one wishes to pay tribute to those who thought out the first idea. It is a long time ago now; 1938 is over 30 years ago. Although my memory is a little rusty now, I still remember Eleanor fighting so hard for her view which was eventually adopted and reached the Statute Book.
Another point which I should like to make is that when a new idea—and Eleanor Rathbone's idea really was new at the time—becomes the law of the land, the first Bill, since it is dealing with a new idea, does not foresee all the repercussions ; nor, indeed, when it is first introduced does a new idea embody in law all the improvements needed after the Law Lords have had time to consider all the implications, and after the legal profession has had experience of putting a new Act and a new creative idea into operation. One of the advantages of our democratic system is that finally we get a firstclass Bill, after all the best brains in the legal profession have had an opportunity to look at its operation both on the human and on the legal side.
I regret that it has taken so long to introduce this new Bill, which I am sure the legal profession will be proud to place on the Statute Book. It is a little sad that a Bill of this kind, which vitally affects so many men, women, children and relatives over a very wide field, should have taken over 30 years to reach this House. When I heard the noble and learned Lord, Lord Simon, say that this is only the beginning of dealing with the property issue, I thought to myself, "I do not suppose I shall be alive to see another Bill dealing with this matter come into operation ".
However, I have risen to my feet only to say that, had she still been alive, Eleanor Rathbone would have been fasci-
932
nated and would have approved of the development of her idea into the best kind of Bill which the Law Lords and all the great people of the legal world could have produced. I thought it would have been unfair— partly because I have lived so long—if Eleanor Rathbone's name had not been mentioned. I dare say that Members of your Lordships' House today hardly remember her name, but because we like to pay tribute to those who are progressive and who have ideas which make for better conditions for a very large number of people, I believe it is right that her name should be remembered. I thought that Peers would not mind if I paid tribute to Eleanor Rathbone. I am delighted that on this occasion her idea has developed so far and that in a new law everybody is trying to make the best legal definition of her idea, for which she had to fight so many years ago.
5.49 p.m.
Lord WILBERFORCE: My Lords, may I beg the pardon of the noble and learned Lord for not putting my name on the list. I was not going to speak until I saw the flood of law reform flowing so torrentially that I felt a word of caution might not be out of place. If one is concerned with the right of a man to dispose of his property by will, there are two main approaches which the law can take. One approach, which is quite a respectable one and which has been in our law for many years, is to say that, on the whole, a man is the best judge of where his property should go. I am always a little surprised to find people who are in favour of reform buttressing that argument by saying, "Oh, well, the family is the great unit in social life; we must buttress the family " and at the same time seeming to say that a man is not the best judge of how his property should go to his family. However, there is the other view, that a man is not to be trusted not to leave his property outside his family— to a cats' home, or to a mistress— and that the law must paternalistically intervene.
If one is taking that line, then for my part I have always thought that there is a great deal to be said for both the Scottish and the French systems which intervene, and quite firmly say that a proportion is to go to the wife, a fixed proportion to the children and so on.

933
That makes for uniformity, avoids disputes and, on the whole, it works exceedingly well. In English law we have departed from both those systems. We are interfering with the freedom of testamentary disposition. We are not yet ready to adopt a fixed system similar to the French or the Scottish. We have gone for a typical English compromise, such as the one found in the 1938 Act, and now to be found in this new Bill, under which we leave it to the courts to decide what it is fair, right and reasonable to make by way of financial provision for a man's family. Of course, all that sounds very nice, and one can use the words "fair and reasonable" and "financial provision"; and you can set out a list of considerations. But I should like to assure your Lordships that it is not all so easy as that.
I am speaking as one—I think the only one here—who has actually administered the 1938 Act, and who has sat in court trying to decide cases under it. It really is a very difficult jurisdiction. In the first place, it has the disadvantage that it places a premium upon those persons who can go to good legal advisers, prepare a good legal case and make a good presentation before the court. It certainly encourages disputes between families. It is also a very difficult jurisdiction for the judge to exercise.
We are given in Clause 3 of this Bill a whole list of considerations which are meant to guide the judge. But I can assure your Lordships that when one is sitting there and trying to make up one's mind what is fair and right for a particular man, of whose life history one knows little, what it is fair and right to do as regards his divorced wife, his widow, a possible mistress, illegitimate children—to decide how to distribute the merits and demerits between these people is painful and exceedingly difficult. I am by no means certain that one is able, in many cases, to reach the right result. All one can do is to do one's best and hope that the result is what it should be. But it is not an ideal solution. It is not made ideal by using words such as "fair", "reasonable", "just", and so on. The difficulty of bringing about a good result remains very intense.
My Lords, having legislation such as we had in 1938, of course I am in favour
934
of bringing it up to date and putting it all in one Bill. But I just want to make one or two points about this Bill. One other consequence of legislating in this way, from 1938, to intestacy in 1952 to other cases here, is that one tends to build up too complicated a structure— another example (of which we have so many and about which we are always complaining in this House) of over-legislation. I feel that in this Bill there is a measure of over-legislation.
We have here Clause 10 and onwards which devote page after page to dealing with evasions— again, a theme which is always being developed in this House. The moment something happens, we begin to think of people finding a way round and we enact three enormous clauses designed to stop people making dispositions with the intent of defeating applications. We have a whole clause, if you please, dealing with contracts for leaving property by will— a very rare type of transaction, of which there are few cases in the books. There was one a few years ago, and that is what has prompted this clause, again a form of legislation which I deprecate; that is, legislating by reference to a particular case. Do we really need one and a half pages dealing with contracts for leaving property by wills?—the rarest form of transaction known to the law, I should have thought. Then there are Clauses 10, 11 and 12 which are the difficult clauses in that context.
Finally, there is the point which I would think to be very important, which was mentioned by the noble Earl; that is, Clause 21 which makes certain documents admissible. It surely is extremely important and a matter of principle, not a matter of detail, that the court should have express power to take into account any wishes expressed by the deceased— something which in the 1938 Act was extremely beneficial for the court tried to decide what was the right thing to do. I agree with the noble Earl about not finding it in this Bill. I do not see it in Clause 3, and I do not think it is in Clause 21. If its omission has the effect of giving a wider, more general unfettered and undirected discretion to the courts, it is a pity and I hope we shall put it back. I venture to say this because it seems the pace is getting rather furious in these matters.

935
I hope we shall look at the Bill rather critically, and see whether it does not over-legislate in some respects, but by all means let us give it a welcome. We have this jurisdiction and the Government have done well to bring it up to date and give us one single piece of legislation. In that sense, I am very willing and glad to give the Bill my support.
5.56 p.m.
The LORD CHANCELLOR: My Lords, I am grateful for the support which noble Lords and the noble Baroness have given to this Bill, muted as the support was by the noble and learned Lord, Lord Wilberforce, in certain passages of his speech. A number of probing points were raised by the noble Earl, Lord Mansfield, which I will deal with in Committee, including the interesting reference to the implications of the capital transfer tax, which I know he will forgive me for not developing at this stage.
The noble Earl made a reference to the possibility of this Bill going down to posterity as a mistress's charter. However, it is not a charter for promiscuity. Noble Lords will have observed that, in Clause 3(1)0?) of the Bill, the court, in dealing with an application for financial provision, is entitled—indeed, is required —to take into consideration the conduct of the applicant. In its Report, the Law Commission, in dealing with how that matter should be considered by the court, took the view that there should be much the same approach in interpreting that part of the Bill as there is in considering the nature of the conduct which will be relevant in matrimonial proceedings. They expressed the view that the test which ought to be applied in determining the relevance of conduct is, to quote the words of the noble and learned Lord, Lord Denning, whether
"… it would be repugnant to anyone's sense of justice"
to make an order for financial provision. Applying that test, it is unlikely, therefore, that this would be a charter for promiscuity.
My Lords, as my noble friend Lord Janner indicated from the breadth of his long experience as a solicitor, there have been a large number of cases of devoted women who have looked after men of
936
property, and men with certainly property to leave, for year after year, where the emotional link between them was marginal, and yet they are left totally unprovided for on the death of the person for whom they have been, in many cases, the devoted and willing slave. Of course, that has been one of the many defective features in the law up till now, It is right that the noble Baroness, Lady Ward, should have paid tribute, as she has done so eloquently, to Eleanor Rathbone. I am delighted, if I may say so, to see that the translation from another place to this House has in no way diminished her enthusiasm. I have before me the Hansard report of Eleanor Rathbone's speech in 1937 on the Family Provision Bill, where she referred to the then existing state of the law as a long-standing evil, as indeed it was. As the noble Baroness has pointed out, it has taken a long time for Parliament and the Law to catch up with the need for reform.
I am happy, at any rate, that this Government, and, if I may say so, the Government in which the noble and learned Lord, Lord Hailsham of Saint Marylebone, was the Lord Chancellor have not made the mistake of simply putting the recommendations and reports of the Law Commission into a pigeon hole and doing nothing about them. I hope that I shall follow the practice of the noble and learned Lord, Lord Hailsham, and of the noble and learned Lord, Lord Gardiner, who preceded him, in pressing upon the Government the need to implement the invaluable reports of the Law Commission.
As the noble and learned Lord, Lord Simon of Glaisdale, has said, this is really the first instalment of the reform of the law of family property, and while I certainly note the warning sounds from the noble and learned Lord, Lord Wilberforce, that we must not over-legislate, frankly, I think there are decades of reform to catch up on in this field. I know he, while being astute to see that we do not overdo it, will welcome the further instalments that we hope to obtain from the Law Commission.
As the noble and learned Lord, Lord Simon, has said, the law has been woe-fully defective in vindicating the rights of the wife, but if he will allow me to say so. the husband's rights are not entirely irrelevant cither. In the context of a

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propertied wife, it is right that the husband's rights should also receive reasonable consideration, if I may venture to make so bold as to say that in this important year.
My Lords, so far as the paramountcy of considering the interests of the family is concerned, I think the House as a whole has welcomed that as a basic principle. I venture to say, bearing in mind the warning note of the noble and learned Lord, Lord Simon, that I have absolutely nothing against cats; on the contrary I like them very much; but it was wrong that they should have everthing and the deceased's wife and children nothing. I hope I shall not infuriate the animal lobby by that dangerous assertion.
The points in regard to Clause 21 we shall certainly consider in Committee, and I am very willing to look at whether Clauses 10, 11 and 12 are really necessary, because we certainly do not want to clutter up the Statute Book with the unnecessary. But it is the case, as my noble friend Lord Janner said, that an element of malice and spite, alas!, too often enters into testamentary dispositions, with most elaborate and divers methods—if there is no provision against it—for dodging the law's provision. At the moment I am not disposed to the view that the provisions in the Bill to prevent dispositions intended to defeat applications for financial provision are super-fluous and unnecessary. However, to these matters we can come in detail when we come to the Committee stage of the Bill. As I say, I am grateful for the support the House has given to it.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

EXPORT GUARANTEES AMENDMENT BILL
6.5 p.m.
Lord WINTERBOTTOM: My Lords, I beg to move the Second Reading of the Export Guarantees (Amendment) Bill. I hope your Lordships will forgive me if my Second Reading speech seems somewhat long, but I think it is important that this rather important measure is put on the Record in a form which has been slightly modified as a result of discussions
938
in another place. Those who believe, and I am one, that the activity of exporting is the basis on which all other policies must be built, will agree on the importance of this measure. For that reason I very much welcome the opportunity to say something about the Export Credits Guarantee Department, whose activities are not very often debated by this House. I believe that other noble Lords will also welcome this opportunity.
The Bill before us is a significant one. It has three purposes. First, it proposes that ECGD should be empowered to make loans and grants for specified purposes connected with exports. Second, it proposes that ECGD should be empowered to make arrangements for the purpose of encouraging trade with other countries for making payments related to certain cost increases in respect of export contracts. Third, it proposes that the two limits on the Department's commitments set out in the Export Guarantees Acts should be combined and be subject to increase by order.
This debate comes at a time when we face a rapidly changing international trading scene. The terms of trade and the balance of economic and trading power are changing, and it is essential that ECGD continues to be able to provide effective support for British exporters. Indeed, a theme to which I shall no doubt return is the need for the ECGD to have the statutory powers, the resources and the flexibility, to be able to offer to our exporters a package of facilities which stands comparison with that available from similar institutions in any of our overseas competitors. I confirm to noble Lords that it remains Government policy that this should be the case.
Another theme which I have no doubt other noble Lords will wish to discuss is the need to avoid any escalation of an export credit war. It is for this reason that the ECGD is playing a full and active part in negotiations in various fora to try to negotiate a basis between the major exporting countries to rationalise the terms of export credit giving. It would, however, be wrong to underestimate the difficulties which these negotiations face.
The Bill before us is a technical one— indeed, the whole field of ECGD operations is technical, and it may, therefore,

939
be useful to noble Lords if, before discussing the proposals in the Bill in any detail, I briefly distinguish between ECGD's credit insurance operations and its refinancing operations.
In its credit insurance operations ECGD receives premium from exporters from which it pays its administration costs, meets current claims and makes provision against future claims. As noble Lords know, the Department in its credit insurance operations is required to break even taking one year with another and thus, over time, to operate at no net cost to the Consolidated Fund. The ECGD has throughout the years met this obligation. However, the present cash flow basis of ECGD's accounts has led some to suggest that ECGD is making too much money! This is misleading. Not only is ECGD faced with rising costs, but the risks it accepts are increasing as both individual buyers overseas and whole markets are hit by inflation and by the general uncertainties which have flowed in the wake of the oil price rises. The Department expects these increased risks to be reflected in the pattern and level of its claims payments. Let me take one example: Claims paid on private buyer insolvency and default under ECGDs Section 1 commercial underwriting account were in the financial years 1971–72 and 1972–73 between £8 million and £9 million in each year. In the last financial year they rose sharply to over £16 million. In addition, where long credit is involved, ECGD will have commitments at risk on its books for many years to come for which it will receive no additional premiums. In a rapidly changing world, the premium originally charged by the Department may not fully reflect the deteriorating situation.
It is perhaps against this kind of back-ground that the increases in ECGD short-term premium rates announced last autumn, and which come into effect on 1st April, should best be viewed. The increases are in fact put into perspective when I tell noble Lords that the changes still leave premiums lower than they were 10 years ago. Even including the increases, an average rate would be less than a third of the rate which applied in the late 1940s, when the form of cover available to exporters was much more restricted. I am sure that the whole House will agree
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that this fact reflects great credit on the conduct of the affairs of the Export Credit Guarantee Department. Its standing as a Department is high and, indeed, I have heard it said by someone whose judgment I trust that the Department provides the cheapest and best cover available to any exporting nation.
In operating its commercial or Section 1 credit insurance facilities, the ECGD is much helped by the Export Guarantees Advisory Council. I am sure that noble Lords would not wish this debate to pass without me placing on record the Government's continuing appreciation of the very valuable work carried out by this body, whose members are drawn from business and the City. Their skills and experience are of very great importance in enabling the Department to continue to adapt positively to the difficulties of the changing exporting world. I should, perhaps, stress that ECGD's premium income is in no way affected by, or related to, the refinancing operations of ECGD. These refinancing arrangements are a distinct function from the credit insurance operations and are accounted for quite separately. There cannot, therefore, for example, be any question of premiums having been raised or needing to be raised because of the cost of operating the refinancing arrangements.
It has been the policy of successive Administrations to ensure that, in general terms, British exporters are not placed at a disadvantage with their over-seas competitors as regards export credit and export finance. This remains our policy. Export finance in this country has traditionally been supplied by the clearing banks. The ECGD has facilitated the provision of such finance by its guarantees to banks and its support of buyer credit operations. Most major exporting countries operate a system of some kind to provide fixed rate finance for their exporters. In recent years these export rates have not kept pace with other interest rates. Unless our exports were to be placed at a significant disadvantage, our rates have to be kept broadly in line with the rates of others. As noble Lords will appreciate, this is not, of course, a cost-free exercise, and neither would it have been reasonable or realistic to expect the commercial banks to provide fixed rate lending for exports at rates below commercial market rates.

941
It is against this background that the refinancing arrangements were worked out in 1972 between the then Government and the banks. Details of the arrangements were, of course, published. As part of the refinancing arrangements, the clearing banks agreed to provide finance for exports sold on two years' credit or longer and for home shipbuilding at fixed rates. In return, each bank participating in the refinancing scheme was to receive refinancing loans from the ECGD when its fixed rate lending exceeded 18 per cent. of its current account balances. In addition, the bank would receive an agreed rate of return based on commercial rates on fixed rate lending it did not refinance. In very general terms, this scheme represented—and still represents —one aspect of the cost of keeping British exports competitive. It was hoped that the interest supplement due to the banks in respect of the difference between the fixed rate and the agreed rate would be offset by adjusting the interest due from the banks on the refinancing loans. In practice, however, this has not happened.
There are two main reasons for this. In the first place, the unprecedented rise in commercial interest rates and the continuing need to keep fixed export rates generally in line with our overseas competitors, meant that the gap between the fixed rate and the agreed rate widened. At the same time the banks' current account balances increased faster than expected so that the amount of fixed rate lending required to reach the 18 per cent. threshold was higher than anticipated. Thus, smaller amounts became eligible for refinancing, while the agreed rate of return was earned on a larger volume of lending. Inevitably, therefore, the interest supplement payable to the banks from the ECGD exceeded the amount of interest due from them to the ECGD on the refinancing loans. As the ECGD does not have the necessary statutory powers to make grants to the banks, substantial arrears of interest supplement accrued. By October, 1974 these had built up to approximately £86 million.
In the light of this developing situation, a review of the fixed rate scheme was commenced early in 1974. Following negotiations between the Government and the banks, modifications to the scheme

942
came into effect on 17th October, 1974. The modified scheme has broadly the same framework as the previous one in that the banks will continue to finance exports at fixed rates set by the Government, but with the important difference that when commercial rates are at a high level, the agreed rate of return which the banks receive on their unrefinanced lending will be subject to a taper. The precise effect of this taper will depend on a range of factors, such as future levels of interest rates, the level, size and profile of future exports and the total amount of current account deposits. It is possible, however, that if interest rates remain at their present level, the financial benefit to the Government of the modified arrangements over the next three years will be of the order of £30 million. Provision was made in the Winter Supplementary Estimates to pay the banks the arrears and they have now been paid.
Initially the purpose of the Bill was, therefore, to provide the ECGD with the necessary powers to operate this scheme more effectively. One is the power to make grants in respect of the interest supplement. This will enable us to ensure that arrears do not accumulate. The other is to enable the ECGD to make loans to refinance part of the banks' fixed rate lending. The ECGD has until now been providing refinancing loans under existing powers, but these powers are not wholly satisfactory. The Bill will thus provide a more satisfactory basis on which to operate refinancing. However—and this is a most important point—the grant powers have another purpose. In 1970 the ECGD sought specific powers to enable it to assist United Kingdom exporters in competing with unusual credit terms offered by foreign competitors. The need arose because of the use by some over-seas competitors of a mixture of commercial credit and so-called aid which led to an overall softening of the credit terms for some contracts. The United Kingdom has always opposed these arrangements, since it believes that aid and commercial credit are two separate matters, that these should be kept separate and that this separation is in the interest of both the recipient countries and the aid-giving countries. In any case, the ECGD and commercial credit are not suitable vehicles for aid giving.
However, efforts to persuade other countries to drop these measures failed

943
and so, in order to ensure that United Kingdom exporters were able to compete with these terms if necessary, the ECGD sought powers to match this competition by providing grants in respect of interest payable in connection with export contracts. The 1970 Act does not in fact provide satisfactory powers and thus the grant-making powers in this Bill are wide enough to cover this use as well. We shall no doubt consider this point in greater detail in Committee. I should perhaps stress that the existing powers have never had to be used and confirm that it re-remains Government policy that these powers will be used only sparingly, and only when there is a clear national interest in doing so. The new powers do not in any sense represent an escalation in the international credit race. Clause 3 will enable ECGD to provide some measure of protection to major capital goods exporters by partially covering them against unpredictable price increases. This is an important new measure which should help to alleviate the difficulties at present facing many such exporters.
The decision to introduce this kind of arrangement is not one which the Government have taken lightly. British exporters of major capital goods have been at an increasing disadvantage compared with those who enjoy some measure of protection from their Governments against unpredictable levels of price changes. Successive British Governments have long tried internationally to persuade others to discontinue their practice of indemnifying their exporters against rises in costs. Despite making clear in these representations that we might otherwise have to give British firms some similar support, I regret to say that these efforts met with little real success. The Government feel, therefore, that the time has come to provide assistance to those United Kingdom exporters facing the most serious problems.
Clause 3 enables the Secretary of State to make arrangements for making payments to persons carrying on business in the United Kingdom who have entered into export contracts. The payments will relate to such increases in the cost of labour materials or other matters as may be specified by or under the arrangements. These arrangements must be for the purpose of encouraging trade with other
944
countries and can only be made with the consent of the Treasury.
As has been announced in another place, the scheme will apply to major capital goods contracts with an individual value of £2 million or more with manufacturing period of two years or more. Exporters will have to bear or pass on to buyers at least the first 10 per cent. per annum of increased costs but the Government will then cover 85 per cent. of eligible cost increases within a 10 per cent. per annum band above that minimum level. In the case of cash contracts this protection will be increased to 90 per cent. within a 15 per cent. per annum band.
We shall no doubt consider further details of the scheme—perhaps on Third Reading, since this is a Money Bill and has been certified as such by Mr. Speaker —but it is the Government's intention that it should provide some incentive to exporters to try to control their costs and to go for cash contracts, which not only produce a quicker return to the balance of payments but also avoid the need to provide fixed rate finance at the special export rate. The fact that the threshold can float above a minimum level will give the exporter a further incentive to pass on the maximum possible amount of cost increase to overseas buyers. A premium of 1 per cent. per annum will be charged for this facility.
It is almost impossible to estimate with any precision what the cost of the scheme will be. Much will turn on how much industry's costs do in fact escalate over the next few years, on the form of cover taken by exporters and, above all, on the success of the scheme in encouraging additional exports. However, as we have stated in the Explanatory and Financial Memorandum, for the moment provision has been made for expenditure of £50 million in 1977–78, which is the first year in which additional public expenditure will arise, except of course on administration. It must be borne in mind, however, that this figure is based on a number of assumptions; for example, that the value of business covered by the scheme would be of the same order as the business which ECGD underwrote in 1974 and which would have met the guidelines of the new scheme. Noble Lords will appreciate

945
therefore, that this is a very uncertain figure, but I want to stress that the scheme will be accounted for quite separately from ECGD's other operations and payments under it will not, therefore, affect ECGD's reserves or the premium which the users of its other facilities have to pay.
Although cost escalation facilities have existed in other countries for many years, it was inevitable that our own scheme should have produced some adverse international reactions. In particular there has been Press speculation that this move might jeopardise the success of negotiations which have been going on for nearly 18 months for a gentleman's agreement regulating export credit competition— negotiations in which we have played, and continue to play, a very active and positive role and in which we have been and remain prepared to meet the other parties half way, and more than half way, to achieve a successful outcome.
Following recent meetings between the EEC Members and the USA and Japan, we remain hopeful of ultimate success in securing agreement on appropriate minimum levels of interest rates and maximum lengths of credit, although there are difficult problems still to be overcome on important matters of substance. If there is a breakdown now, it will not be because all outstanding points of difference would have been resolved but for the introduction of our cost escalation scheme; it will be because it has not been possible to agree a package on all these differences which meets the national interest of all participants.
This scheme is an important development. It is designed to reduce an unpredictable risk and in a way which will share the costs and benefits between exporters, buyers and the scheme. It represents a positive response to the many and urgent representations made by industry. The final point I should perhaps stress to noble Lords is that this scheme is not seen as a self-balancing one, nor is it the Government's intention that it should become part of ECGD's normal facilities and services. Indeed, our firm intention is that it will not be retained for any longer than is absolutely necessary.
The recent history of ECGD has been
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characterised by the continuing rise in business. This is the main reason for the provision of the Bill; namely, the need to adjust ECGD's statutory limits. The increase in business has not only reflected the rise in United Kingdom exports, but also represents an increase in the proportion of exports covered by the Department. In the first six months of this financial year, ECGD covered £3,081 million of United Kingdom exports representing 37 per cent. of the total. This was a 40 per cent. increase on the volume of business covered in the same six months last year. Most of the increase was in the short-term field. This has been of particular benefit to the balance of payments and illustrates the competitiveness of United Kingdom export prices. Because of the rise in the volume of the Department's business, it would have been necessary to seek an increase this year in one of the two existing statutory limits on the amount of liability that the Department may undertake. This would in itself have necessitated further legislation.
The two limits on ECGD's liabilities are, first, £6,200 million in respect of Section 1 business—that is, commercial business undertaken with the advice of the Export Guarantees Advisory Council. The other limit is £6,000 million for Section 2 business which is underwritten in the national interest. Although these are revolving limits against which only live liabilities are counted, new liabilities have built up faster than old ones have run off. It now seems clear that the Section 1 limit will be reached this year.
Both limits have been increased at fairly regular intervals in the past by legislation. However, it has nearly always been the case that limits which were expected to last five years have needed to be increased after only some three years. Inflation makes this all the more likely to be so. Therefore, the third proposal in the Bill is that the two limits should be combined into one of £12,200 million. This of course represents the total of the two existing limits and no increase in this limit is thus proposed. The combined limit will also include commitments incurred by ECGD under the Cost Escalation Scheme which I have already mentioned.
The Bill also provides that increases may be made by Affirmative Resolution

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laid before Parliament up to a total not exceeding £21,200 million. Although this may seem a high figure, it represents a volume of business which could well arise over the next five years. Fears have been expressed in another place that the combination of the Section 1 and Section 2 limits has some sinister purpose. I can state quite categoricaly that this is not the case. The proposal is one designed to save Parliamentary time and to enable ECGD to react flexibly and positively to changing circumstances. It will not in any sense change the way ECGD under-writes business, nor the relationship between ECGD and Ministers, or between ECGD and Parliament. The other clauses of the Bill contain certain technical amendments to the ECGD Acts. These are the necessary consequential changes following from the taking of the specific loan and grant powers in Clause 1 and cost escalation powers in Clause 3.
One theme to which I have returned throughout this speech has been the speed and fundamental nature of the changes taking place in the exporting world. In a mass of uncertainties, the one certainty I should isolate would be that these changes will produce challenges for ECGD. Risks will become more difficult to assess, new facilities and forms of cover will be sought, and the increasing pressure for export markets cannot but throw great strain on international discussions to rationalise export credit giving. The shadow of the "beggar my neighbour" policies of the 'thirties hovers in the background. However, I believe that many noble Lords will agree with me when I say that the history and development of ECGD gives cause for some confidence that the challenges will be met by positive responses. ECGD would not, I know, claim to be perfect. Mistakes and delays do occur—but it is constantly reviewing its procedures to try to ensure that the needs of exporters will be met as quickly as possible. The new computer which should be in service by 1977 should speed up decisions on individual overseas buyers.
The Department certainly does not feel that its facilities cannot be improved or extended—indeed, a number of new facilities are currently under review, including assistance to enable exporters to raise the performance bonds which are increasingly required for large projects overseas. We

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must continue to seek a better balance in export credit through international agreement. Competition must be rationalised so as to restore some proper emphasis on quality, price and delivery. Any reliance on excessive and cheap credit is, in anything but the short run, in no one's interests—either buyer or seller. Similarly, if other countries are prepared to consider stopping their cost escalation scheme we shall later be prepared to consider doing the same. However, our aim at all times must be to ensure that our export interest is not harmed. It is vital, therefore, that any moves to rationalise export support should be carried out on a multilateral basis, and not by the United Kingdom alone.
However, in all these areas there remains the difficult but inescapable problem of drawing a balance between promoting and supporting British exports and the cost of doing this. Both the refinancing and the cost escalation schemes throw this problem into sharp focus. In these and other contexts there will always be room for dispute over whether the balance is perfect. I do not think that this kind of precision can be obtained. However, we believe that in both cases the balance between costs and benefits is about right and we shall certainly keep the position under review, not least because of the public expenditure implications. I assert that Britain needs exports and exporters need ECGD facilities. I wonder whether either statement can ever have had more force than it has today? The Bill before your Lordships' House is designed to give ECGD the powers it needs to continue flexibly, imaginatively and positively to fulfil the important role it will have to play in the difficult years ahead. Its Statutes already make clear that it exists to encourage trade with other countries. All of its efforts and activities are directed to this end. It has, I think, proved that it can do the job. It now needs new statutory tools! I beg to move.
Moved, That the Bill be now read 2a— (Lord Winterbottom.)
6.33 p.m.
Lord BELSTEAD: My Lords, when this Bill was introduced into another place the main purposes of it, as the noble Lord, Lord Winterbottom, has explained, were to amend the refinancing

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arrangements between the Government and the clearing banks, and to increase the limits on the Export Credits Guarantee Department's possible commitments. But it then became clear that Clause 4 —which is the one which increases the limits—has some elements of controversy in it. In addition, on Report in another place, the Government moved Clause 3 into the Bill, giving the new power to the Government for the payment of grants to exporters in respect of cost increases, which the noble Lord has also explained. I am therefore grateful to the noble Lord, Lord Winterbottom, for his explanation of a Bill which is certainly not without its complications. May I also express my regret that the list of speakers has been so arranged that I am speaking before the noble Lord, Lord Kissin. I have a feeling that if the speaking order were reversed I might, with the benefit of having heard the noble Lord, be able to make a rather better speech. I am aware that the noble Lord comes to the House with very wide financial experience and, with other noble Lords present, I greatly look forward to hearing him speak.
My Lords, the trade figures issued last week showed two things—first, that this country is making every effort to maintain our export trade at its highest possible level. In saying this, may I join with the noble Lord in recognising the vital part played by the ECGD and by the Export Guarantees Advisory Council. But the figures also show that we remain in a most critical balance of payments position, and therefore anything which can be done—anything which this Bill can do—to improve our foreign trade position in real terms must be of primary importance to the future of all of us.
May I turn immediately to the Bill and to the speech made by the noble Lord, Lord Winterbottom? Clause 1 provides power for the ECGD to make grants in respect of the interest supplement, which the noble Lord has explained, and which has been built up in the past two years until, in October, it stood at £86 million. May I ask how the Government see the need for this grant-making power developing? The noble Lord said that the Government felt that it would mean an improvement, from the Government's point of view, of £30 million. Am I right in thinking that this means 30 million
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taken away from £86 million? Rather more generally, I wonder how the Government see this interest supplement going as this year, and perhaps next year, go by?—although I realise that here the noble Lord's reply must depend on factors which are very difficult to forecast. Even though the new general grant power—which is also in Clause 1—is to be used, as the noble Lord said, sparingly, I cannot help but wonder whether it may not be a temptation for us to join in the acceleration of international credit rates. However, this is a matter about which I feel I am not competent to speak. The noble Lord who is to speak later may wish to allude to it and, if he does, I will certainly listen with the greatest interest.
My Lords, I should like to ask the noble Lord about Clause 3—the new grant-making power to assist exporters with a 10 per cent. or 15 per cent. band of their cost increases. There is no doubt that this provision will be of considerable encouragement for exporters. But Government assistance with the costs of inflation is really no cure for inflation itself. The two costs specifically mentioned in the clause are labour and materials. They are both costs which are governed by wage inflation—the former wholly and the later partly so. Thus, in this Bill we find yet another compelling reason for the Government to find a policy which they are prepared to stand by, to reduce the really appalling inflationary levels which we are feeling in this country at present.
The noble Lord said that Government support under this clause may run at something in excess of £50 million per annum initially, but, naturally, the Government do not know for certain what the figure will be. I trust that when the noble Lord replies he will join with me in expressing the hope that the need for Clause 3 will not last very long, and that he may have something constructive to say about our current national rate of inflation. I have one specific question to ask on this clause. I gather that under Clause 3(2) premiums are to be charged for the services of this scheme and, as I understood the debate in another place, the premiums will be at 1 per cent. Perhaps the noble Lord can tell me, in writing if he is not able to answer now, of what is it to be 1 per cent. Is it to

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be 1 per cent. of the contract price, or 1 per cent. of the cover which the Government will be giving? After all, the amounts will differ very considerably, according to what the answer is.
In another place, a Government spokesman said that those of our exporters who are going to avail themselves of the terms of the recent Russian agreement will be able to take advantage of the cost escalation scheme which is set out in this clause. I accept that the Government are unwilling to give more details of this trade agreement, and I am not asking the noble Lord for any statistics on this subject. But I am sure that it must be common ground among all your Lordships to want to see the promotion of our export trade, on a basis which is genuinely profitable for this country.
The question I should like to put is this. Have the credit terms which have been offered under the Russian agreement any trigger mechanism within them? I have understood from what I have read that about £1 billion credit is going to be available to the Russians to be taken up during a five-year period at un-disclosed interest rates. I am not asking questions about that. I am asking this. If the credit terms for a contract were not to start until, say, 1980, taking up the credit at the end of a five-year period, and then the credit does not begin to run until the completion of the contract, another three years, it could be 1983 before the credit facilities agreed by the Prime Minister in 1975 actually become operative for dealing with the Russians. What will be the level of commercial credit by 1983, no one can possibly say. Therefore, without asking the Government what is the percentage of credit offered or the length of the credit allowed, may I ask whether there is a trigger mechanism in the credit agreement under this main agreement to insure us against violent movements in world interest rates in the years ahead?
There was one important Amendment moved in another place (col. 706 of the Official Report) which I should like to refer to even though this is a Second Reading debate. It would seem to be an Amendment which was designed to help substantially with our balance of payments. It became clear that both sides in another place did not realise that this was a Money Bill and was not going
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to have a Committee stage in this House. If the noble Lord will forgive me, I will refer to it. In essence this Amendment would have given ECGD power to give guarantees in currencies other than sterling for loans being made by the banks. I regret that I am no expert on this subject, but even to me one thing appears obvious. At a time when sterling is weak, surely we could gain very considerable amounts of foreign exchange if loans are made in certain foreign currencies; whereas at the moment it is the fact that we are liable to lose many millions of pounds for precisely the same reason.
I have asked before I came to the House this afternoon whether buyers from, say, West Germany do not take into account that a loan in sterling is liable to depreciate against the Deutschmark and that buyers in West Germany under those circumstances do not jump at British contracts for that reason. My information is that this is by no means so; and that usually overseas buyers disregard the long-term advantage to them of the weakness of sterling as far as the take-up of loans is concerned. Therefore it drives me to this conclusion. It seems that this country is not on any count gaining by having our loans guaranteed in sterling. They do not in themselves attract greater business apparently, and when business is gained there is a liability of considerable loss because of the weakness of our currency. The proposal in that Amendment in another place to give ECGD power to make its guarantees in currencies other than sterling would in no way oblige the Department to do this. It would leave the Department to make its choice. There is little doubt that it would be a power which would be of advantage to exporters and of benefit to our balance of payments. I hope the Government will look carefully at this matter again in the near future.
Finally, I turn to Clause 4. Obviously there is a need to increase the limits on ECGD commitments for the reasons the noble Lord has explained. But the problem posed by the Bill's provisions in Clause 4 to amalgamate the two limits is that Parliamentary control over this very substantial public expenditure is being reduced. That is by no means the end of the story. Under Clause 4(2), the ECGD commitments made by Affirmative

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Order are further increased to the really astronomical total of £21,000 million. As, presumably, the increased grant-making expenditure under Clause 3 will fall within the Clause 4 limits, I have no doubt that the ECGD will be making use of these new commitment limits in the near future.
This House would have no control over this increased expenditure. I do not question that. The important point is that neither will another place. No longer will there be any need to distinguish between what was called Section 1 business and Section 2 business, which was included in the 1968 Act because it was considered right that there should be this check on the activities of the Government. By the mere presentation of three Orders the Government are going to be able to increase by about 75 per cent. the level of the Department's commitments. This cannot be wise. It removes almost completely the proper Parliamentary control which previous legislation has afforded.
Although I am critical on this point, and I think many other noble Lords would be, too, I welcome the announcement made in another place (but I do not think the noble Lord referred to it) that henceforward the London head-quarters of the Department is to devolve many business decisions to their new regional centres. I am an East Anglian. In my own area, with its close trading links through the East Coast ports with Europe—a matter which I am sure the Minister of Trade will be delighted to hear about—our exporters and potential exporters will welcome the new arrangements which will give the Department more local knowledge of the potential and the problems of the regions. This is a necessary Bill coming at a crucial time. I regret the inclusion of Clause 4 but, otherwise, may I give the Bill my support.
6.48 p.m.
Lord KISSIN: My Lords, I thank the noble Lord, Lord Belstead, for his very generous and kind remarks. After his remarks I do not think I need disclose my interest in the Bill before the House. I will in the tradition of maiden speeches abstain from commenting on those parts of the Bill which I think are controversial. In the first place, I am sure that
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any steps that Her Majesty's Government can take to improve our competitiveness in the field of export credits must have our unreserved support. I particularly welcome the clauses of the Bill which increase the flexibility of the Export Credits Guarantee Department. One has to remember that it was the United Kingdom which after the war was leading the international community in the development of the export system. Our export credit philosophy was universally accepted in Europe and overseas and our experts were called to many parts of the world to introduce the export credit concept.
In recent years, however, every exporter and every banker in this country concerned with international business has been very conscious of the competitive edge which other countries seem to have over us in the matter of export terms. It is true that we have had a number of international agreements. We started at Berne and we have had agreement after agreement and, finally, the "mini-agreement" at Washington in October, 1974, limiting competition in interest rates and credit periods. In spite of assurances made in another place and here tonight that we are continuing our discussions with other countries in order to end the international credit war in the export trade, I cannot share the optimism of Her Majesty's Ministers in regard to the outcome of these discussions. My experience goes back over too long a period to be optimistic.
Nevertheless, one must be glad that the system of the French credit mixte, in other words, the provision of export credit allied to Government-to-Government loans, has now been recognised in this Bill. Such Government-to-Government loans have always posed special competitive problems, and the power taken by this Bill for ECGD to be able to match these facilities is one which I hope will not be neglected. I have every confidence that, when utilised, these powers will be handled selectively and prudently and in the interest of maximising the benefits that this can give to the country.
There are many other problems in the direct and indirect export trade which we have to face in our effort to be competi-

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tive. In recent years, it has always been some other country which has introduced credit terms which we have then tried to match. While we are discussing this new Amendment to our Export Credits Guarantee Bill today, France announced yesterday her intention to extend the terms of its credit arrangements for exporters and its credit support, and I believe that it is essential that we should not, as we have in this particular case, wait until other countries have scooped the market before we come out with our so-called matching efforts.
We have many grave problems to face in exports. Exports begin very often long before the export shipment takes place. They begin with the expenditure on the feasibility studies many years or months before the shipment. They involve investment in know-how, in machinery, in the purchase of raw materials, in manpower and in all other kinds of expenditure. For this the exporter needs support, and this support he gets from the Treasury, the Department of Industry and the Department of Trade. They are all involved in this problem. This is particularly important at the present time, when there are massive opportunities for our capital goods exporters to sell in the oil producing countries. But these countries have adopted very stringent methods.
To take a case in point, Iran is not only seeking fixed price contracts, but is demanding bid and tender bonds and performance bonds from suppliers. I am glad to know that ECGD is planning to give help to exporters to hold their prices and this can make a critical difference to our success in that area. I was equally delighted to know that ECGD is planning to provide performance bonds in appropriate cases, although I regret that the Minister in another place appeared to indicate that these facilities are limited only to the largest contracts. I think the Minister said the same thing tonight. In this event, I do not think our action can be quite as significant as it could be if we were a little more flexible.
In these circumstances, I wonder whether the concept of export credit guarantees that we developed some thirty years ago is still as valid as it was immediately after the war. Competition is very strong indeed. Strong competition, as the Minister has indicated, comes
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from France where the Banque de France is intensely involved in the Coface problems. Strong competition comes from the EXIM Bank in the United States and the most serious competition comes from Japan, which has been one of the most successful exporting countries in the last 25 years. Japan and London are buying rubber from the same origin, and yet Japan today is in a position to sell rubber to certain third countries on credit terms at cheaper prices than we can sell from London on cash terms. The Japanese have evolved a new and comprehensive mechanism in order to be competitive in international trade. Their export insurance is provided by the Japanese Government through the Trade and Development Bureau of a special Ministry of International Trade and Industry.
I think I am correct in reminding your Lordships that before the war we had a Department for Overseas Trade. After the war this Department became a Division of the Board of Trade, and the Board of Trade was responsible for the Export Credits Guarantee Department. Today, the Export Credits Guarantee Department is part of the Department of Trade, but, as I have stressed before, many other Departments have contributions to make in solving the increasingly sophisticated problems that are faced by the exporter of today. I should like to put it to the Government that the time may have come once more to set up a separate and autonomous Department for International Trade, which co-ordinates the functions of the Treasury, the Department of Industry, the Department of Trade, so far as the direct and indirect export trade of this country is concerned, and would take over the functions of the Export Council and the Advisory Council to the ECGD.
I am not in any way criticising the enormous contribution which the Export Credits Guarantee Department has made to our export performance. This Department has provided excellent service to the exporter; but the functions of the Department, dependent as they are increasingly on other Ministeries, have less flexibility and are of necessity, on large-scale contracts, slower than they need or should be in support of the exporter's efforts. I suggest that this is an appropriate time to review the structure of our Export Credits Guarantee

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Department in relation to the other international organisations with which it has to compete; to consider whether our postwar concept is still as valid now as it was in the past, or whether we need today a more authoritative Department that would represent the export problem even in Cabinet, and embody all the functions and have all the powers that are required to give the exporter the maximum support that he needs to achieve the position that this country is striving for.
My Lords, I have been trying to be non-controversial in the circumstances, but I hold strong views on the subject because I feel that we are in danger of falling behind when great opportunities exist. I feel now that time is of the essence. We required a new approach to the totality of the problem that we are trying at the present moment to meet by Bill after Bill, by Amendment after Amendment, in 1968, 1970 and 1974. Our efforts must do justice to the potential that I consider is within our grasp.
6.58 p.m.
Lord WINTERBOTTOM: My Lords, if this Bill needs any further justification, it is that it has tempted the noble Lord, Lord Kissin, to make his maiden speech. He speaks with such authority that I am sure we all hope to hear him more frequently on this and related matters where his counsel can be of great value. He may also be tempted to mention the Arts, and I dare say this will be the case.
May I first of all try to answer some of the points made by the noble Lord, Lord Belstead. I wish to thank him for his very constructive attitude to the Bill. Before answering his questions, may I thank him for touching on the point which I failed to mention in welcoming the decentralisation of the operations of the ECGD throughout the country, and also the proposal to set up a computer system in Cardiff, which will enable information to be fed much more quickly into the regional offices than is the case at the moment. This is not going to entail an increase in manpower. I think the public service clause in the Explanatory Memorandum indicates that only 13 additional staff are required for the cost escalation scheme, which must mean, with the increased business forecast, a very substantial increased productivity of the staff of the ECGD as a whole.
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May I quickly try to answer the various points made by the noble Lord, Lord Belstead. If I find I have missed any points, I will make an addendum and we shall have a further opportunity to discuss them when we come to the Third Reading of the Bill. May I first touch on the point on the use made of interest supplement grants over the next few years and how he has tried to make me peer into the future to see how the supplement would move. I am finding this somewhat difficult, because there are so many elements one cannot estimate, as, for example, the future level of United Kingdom exports— which of course we all hope will rise. Another factor is the future trends in world interest rates, which of course we hope will fall; and also there is the future level of banks' current account balances. In none of these areas can one say with certainty that we can foresee fixed figures. The £30 million saving that we foresee depends on all these factors and I hope the noble Lord will not tie me down to anything more exact. This is the best guess we can make at the present time.
The cost escalation scheme I found very interesting, but, as the noble Lord has said, these are not in any way a cure for inflation. All we can do is to try to mitigate the disease of inflation, which is accepted as one of the major economic dangers we are now facing. I completely agree that here, as elsewhere, it is the duty of the Government to combat inflation by every possible means.
Turning to Clause 3(2), the 1 per cent. mentioned is 1 per cent. of the eligible cover and not 1 per cent. of the contract price. The noble Lord also asked about the Russian credit proposals. With his permission, I should like to try to comment on that at a later stage of the Bill: I may say I know very little about this particular matter. The noble Lord particularly asked whether there was a built-in trigger mechanism, and I will try to satisfy him on this point.
The noble Lord later touched upon the use of foreign currency for guaranteeing overseas business and expressed the belief that other countries might be sceptical about sterling in relation to guaranteeing currency. May I tell him that the ECGD can guarantee contracts which are expressed in foreign currency: indeed it does this. What it cannot do is to give

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foreign exchange cover—but there has been no real pressure apparently for this to be done. In fact exporters normally obtain foreign exchange cover from the forward exchange market although I believe from my own experience that there are certain currencies (such as the Saudi Real) in which no form of cover is possible as yet. Perhaps that is a matter which the noble Lord, Lord Kissin, could confirm for us.
Lord KISSIN: That is so, my Lords.
Lord BELSTEAD: My Lords, before the noble Lord continues, would he give me an undertaking that he will at least draw this matter to the attention of his right honourable friend? I apologise to your Lordships for bringing it up, and I am no expert in these matters, but I know there are many people, including my honourable friend who raised this on Report in another place, who feel keenly about it. So when the noble Lord says there is no real pressure for it, may I say there is some pressure in another place and I would ask the Department concerned whether they would be so kind as at least to negotiate and conduct discussions upon this point. If the noble Lord could give me that undertaking, I should be content.
Lord WINTERBOTTOM: My Lords, I undertake to say something positive about this during Third Reading. Turning to limits, and a feared loss of Parliamentary control over expenditure, the figures seem astronomical, but I suppose we should really welcome the fact that such figures are possible, since they represent goods exported from this country which are being guaranteed. Really, the higher the figure goes, the better we should like it. But of course the figures do seem astronomical, and while I accept the fact that your Lordships' House has no power even to comment upon this during the procedure of Affirmative Orders which will be laid in another place, nevertheless what goes on in another place will not go on unnoticed by your Lordships. However, the facts will not be obscured or lost in a sort of omnium gatherum set of figures.
May I stress what I said earlier; namely, that the combination of existing limits into one list does not involve any
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changes in the Department's underwriting practice. Here I can give the noble Lord an undertaking: separate returns will be published for Section 1 and Section 2 business. They will not be lumped together but will be clear to see. Separate accounts will be prepared and published, and separate estimates will still be made: so there will be no "coverup" operation in putting these two types of credit in one lump sum. The build-up of the final figure will be open to anyone to examine and the only reason why the step has to be taken at the appropriate stage of the Bill is that Section 1 is nearly up to its limit, but Section 2 is very far from being used to its limit. Bringing them together is simply a convenience in the use of Parliamentary time. The facts will always be available to both Houses of Parliament.
Turning now to some points made by the noble Lord, Lord Kissin, in his most stimulating and provocative speech, he seems slightly sceptical about our capacity as a country to move as fast as our competitors—and I must say that judging by some of the things they do we have to move very fast indeed. He mentioned the credit mixte which is really, in cricketing terms, something of a "bumper"; but we have in this Bill powers to match it.
One of the things I have noticed in my studies leading up to the presentation of this Bill is the way in which the ECGD is trying to develop flexibility and the capability of quick reactions. The computerisation of information, which is there as part of the machinery, enables the Department to react more quickly to information given by firms exporting overseas and indeed by its own organisations.
The noble Lord made one extremely interesting point, which I will bring to the notice of my right honourable friend, He posed the basic question: is the concept of the ECGD still valid? I think his argument was that because of the strength and nature of the competition particularly from Japan, the ECGD— because it is not really a major Department but a body responsible to and sponsored by the Department of Trade—is not able to react quickly and immediately but must have some sort of bureaucratic brake upon its speed of reaction. For this

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reason, as I see it—and I hope the noble Lord will confirm that I have correctly understood him—what he would like to see is an autonomous department for over-seas trade co-ordinating all the Departments who are linked with exporting, and presumably possessing powers of decision greater than those at present possessed by the ECGD, so that when reports are coming in from overseas posts and decisions need to be taken rapidly, such decisions can be taken rapidly and need not depend on going through the machine, however much it is buffed up and improved.
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The noble Lord says that this is an appropriate time for review. I have tried to put to your Lordships the drive that exists within ECGD to achieve flexibility and speed of action and its determination to give the British exporter the same support and terms which will enable the British exporter to compete successfully with his very aggressive opponents. It is for this reason that I commend the Bill to your Lordships' House.
On Question, Bill read 2a: Committee negatived.
House adjourned at twelve minutes past seven o'clock.