Lords Sitting of 1 May 1975

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.
Viscount Maughan—Took the Oath.

NORTHERN IRELAND: WORKER PARTICIPATION
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 proposals have been made for workers' participation in the Harland and Wolff shipyards in East Belfast and the Ben Sherman shirt factory in Londonderry following the takeover of the majority of the shareholdings.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge): My Lords, the noble Lord may have seen the discussion paper on worker participation in Harland and Wolff, which my right honourable friend the Minister of State at the Northern Ireland Office published in March. It was widely distributed throughout the workforce, and I am glad to say it has been
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well received. The Minister has since invited concrete proposals from the yard's joint consultative council to be put to him within two or three months. The board of Ben Sherman (1975) Limited is at present engaged in a severe programme of rationalisation, involving factory closures. The workforce has been consulted, but there are no proposals at present for any formal structure of worker participation, though there have been informal discussions about it in the company.
Lord BROCKWAY: My Lords, I thank the Minister for that very full reply. May I ask him, first, whether the radical proposals made in the discussion paper for Harland and Wolff, including trade union elections to the board, represent the view of the board regarding workers' participation generally? Secondly, may I ask him whether the extension of these proposals for industrial democracy would assist the Northern Ireland TUC in their encouragement of a policy against violence and leading towards co-operation between the communities?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I can certainly answer the second question in the affirmative. There is no doubt that if something constructive comes out of these discussions it will help the very difficult situation over there. As regards the more radical suggestions, particularly trade union elections, to which my noble friend referred, I do not think we are at a stage where we can comment. The

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workforce has been asked to put forward proposals based on a discussion of this paper, and I think we must await what it has to say. I must stress that this is a policy which is being applied to Harland and Wolff, and it has not been adopted generally for the United Kingdom as a whole.
The EARL of LONGFORD: My Lords, in view of the unhappy record of Harland and Wolff over religious discrimination, which is not disputed, may I ask what steps the Minister has in mind to prevent this recurring in the future?
Lord DONALDSON of KINGSBRIDGE: My Lords, this is perhaps a little outside the terms of the Question, but I can give the noble Earl two quick replies. First, there is some hope in recruiting and training people taken from a wide area. This is going on and we are very hopeful about it. Secondly, there is a "mix" of people in Harland and Wolff, and there is considerable hope that if this kind of worker participation comes about it will help to ease the general religious problem.
Lord POPPLEWELL: My Lords, can my noble friend give any information to the House as to the progress made towards, and the plans envisaged for, the discussions in connection with this paper, which, if successful, could have such a great influence on the situation over there?
Lord DONALDSON of KINGSBRIDGE: Yes, my Lords. I have already said that my colleague the Minister of State has asked the workforce to submit proposals to him based on this paper within a month or two.
Viscount MONCK: My Lords, does the noble Lord agree that the position he has described to us regarding the Ben Sherman shirt factory is completely opposite to the policy of his right honourable friends the Ministers for Trade and Industry?
Lord DONALDSON of KINGSBRIDGE: My Lords, it seems to me that it is in line with that policy, but perhaps I have not fully understood the noble Viscount.

UNITED STATES' BICENTENNIAL
3.12 p.m.
Lord MONTAGU of BEAULIEU: 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 contribution of a permanent nature they are proposing to give to the United States of America in recognition of their bicentennial in 1976.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH AFFAIRS (Lord Goronwy-Roberts): My Lords, the British Bicentennial Liaison Committee, under the chairmanship of the noble Marquess, Lord Lothian, have already made proposals for a contribution by Her Majesty's Government to the commemoration of the bicentennial, on which decisions will soon be taken. Those decisions will be announced in due course.
Lord MONTAGU of BEAULIEU: My Lords, does the noble Lord not agree that this is an excellent occasion for the British people to present the people of the United States with something of a more permanent nature—perhaps an exhibition or something which would permanently commemorate our common heritage and cultural heritage?
Lord GORONWY-ROBERTS: My Lords, I take full note of what the noble Lord has said. I agree that our contribution must surely be worthy of the occasion.
Lord MAYBRAY-KING: My Lords, as many of the best speeches in favour of American Independence were made at the time of the revolutionary war by Members of the British Parliament, would it not be very appropriate that the British Parliament itself should celebrate this momentous bicentenary?
Lord GORONWY-ROBERTS: My Lords, that is another most worthy suggestion. At this stage I cannot anticipate what the Committee will report to my right honourable friend. At the moment he is considering a number of very interesting proposals.
Lord BOOTHBY: My Lords, will the noble Lord bear in mind that we are not at present in a position to give any money to the United States of America?
Lord GORONWY-ROBERTS: My Lords, on these occasions there are some gifts more valuable than money.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that Thomas Jefferson, who was born in Glyncorrwg and was a fellow Welshman, wrote part of the Declaration of Independence; and that at that time of the revolution British Peers were judicious and wise enough to recognise that, when Americans were throwing off the incubus of imperialism, they were not to be called "Commies"?
Lord GORONWY-ROBERTS: Yes, my Lords; actually Thomas Jefferson was born in Caernarvon and not in Glyncorrwg. But I join my noble friend in his enthusiastic greeting of this commemoration. America was, after all, the first example of a successful, although forced, British policy of decolonisation.
Lord TREVELYAN: My Lords, is the Minster aware that there will be an exhibition in the British Museum to celebrate the bicentennial?
Lord GORONWY-ROBERTS: My Lords, I must add still one more interesting proposal to the long list now before my right honourable friend.
Lord MONTAGU of BEAULIEU: My Lords, may I ask the noble Lord whether Her Majesty's Government will be advising Her Majesty the Queen to send Members of the Royal Family to take part in some celebrations?
Lord GORONWY-ROBERTS: My Lords, I have no doubt that that suggestion is under consideration.
Lord WYNNE-JONES: My Lords, will my noble friend bear in mind that another Welshman, Elihu Yale, was the founder of Yale University, and surely we ought to recognise the important part that Wales played in helping the first country that broke away from the British Empire?
Lord GORONWY-ROBERTS: My Lords, a great many countries took part in the formation of the United States, including Wales. I like to think that
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the Welsh contribution was a fairly considerable and valuable one.

POSTAL SERVICES AND SCOTLAND
Lord CAMPBELL of CROY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the finnancial position of the Post Office Corporation and its effects on modernisation and services in Scotland.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, the financial position of the Post Office Corporation is not satisfactory. There is no reason to believe that the effect on Scotland will differ from that on any other part of the United Kingdom.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for that Answer. Can he confirm or correct reports in the Press earlier this week that a recent reassessment had shown a much larger deficit for this year than had previously been budgeted for?
Lord BESWICK: Yes, my Lords; it appears that an updating of information indicates that the deficit will be larger than that originally thought. The exact amount is not known for certain, but I think that it will not be of the order mentioned in the Press. Discussions about this and what to do about it are now taking place.
Lord CAMPBELL of CROY: My Lords, can the noble Lord give any indication as to whether it is intended to meet this higher deficit either by higher charges or by reduction in services?
Lord BESWICK: Not at the moment, my Lords. So far as the subsidy is concerned, in view of the experience we had under the previous Administration when deficits were met by subsidies and problems mounted up, I should have thought we had to learn from that experience and I hope we shall not lightly go back to it.
Viscount MASSEREENE and FERRARD: My Lords, can the noble Lord say whether this deficit will be reduced by greater efficiency in the Post

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Office? Is the noble Lord aware that, in the last fortnight, letters in the newspapers have given several instances of very great inefficiency?
Lord BESWICK: My Lords, I am not sure whether the noble Viscount was here last week, but I referred then to inquiries which have been held into the workings of the Post Office and which indicated that the state of efficiency was not that to which the noble Viscount refers.

MENTAL HEALTH (AMENDMENT) BILL
Read 3a, and passed.

LIMITATION BILL [H.L.]
3.19 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. In 1971 the Law Reform Committee were asked by my predecessor, the noble and learned Lord, Lord Hailsham of Saint Marylebone, to consider what changes in the law of limitation were in their opinion desirable, and in 1972 to give priority to limitation in personal injury claims. The Bill now before the House is the result of the interim report of the Committee in answer to that request. I should like to express my gratitude, which I know the House will share, to Lord Justice Orr and to other members of the Law Reform Committee for their carefully considered recommendations whose results are now embodied in this Bill. Before dealing with the Bill, it may be convenient for me to summarise briefly the law in this field.
The Limitation Act 1939 contained a period of limitation of six years for all actions in tort, including actions for personal injuries. After the war, the six-year period was criticised as too long for actions for personal injury, because the evidence of eye witnesses, given six years or more after the injury may have been caused, was thought to be of little probative value. In 1954, therefore, the limitation period was reduced in personal injury actions to three years.
Events were soon to show that both six years and three years could be too short in certain classes of personal injury
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action. Where a claim lies in tort—and this is usually the case where the claim is in respect of personal injury—the position is that the cause of action accrues at the time injury is first suffered. The ordinary rules work well enough when the victim of the accident suffers external injuries which are immediately apparent. But the cases over the last 25 years show that very serious injuries—sometimes even fatal injuries—may be sustained not as a result of an accident, but as a result of exposure to dangerous conditions or substances which cause an insidious disease. Words like pneumoconiosis are now, alas, well-known to us. For those of us who were brought up in industrial South Wales, its crippling and often deadly presence was a grim feature of every mining valley.
The cause of action in such a case accrues when the disease is first contracted, when there may be no symptoms by which its victim would have warning of its presence. I myself encountered many such cases, often of a most distressing character, when I was in practice at the Bar, and that, I know, is the experience of other noble Lords who are present today. Clearly, the law of limitation should provide for such cases, and the recent developments in the law in this field have been largely concerned with the search for an answer to this problem.
The problem of the plaintiff who could have had no knowledge of his injury was highlighted in the case of Cartledge and others v. Jopling in 1961. The plaintiffs in that case had contracted pneumoconiosis and could not reasonably have found this out within the fixed period. It was clearly wrong that these plaintiffs should have no remedy, but the courts—including your Lordships' House—could not do anything to help. They had to apply the law laid down by Parliament.
In 1961, a Committee was appointed under the chairmanship of the noble and learned Lord, Lord Edmund-Davies, to consider this problem. I am delighted to note that he is to make his maiden speech today. I am certain that the House will be looking forward to hearing his views, knowing the great expertise and experience which he brings to bear upon this as upon kindred subjects. That Committee recommended in 1962 that the plaintiff should not be debarred if he started proceedings in respect of his

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injury within 12 months of his "date of knowledge "; that is, within 12 months of the earliest date on which he could reasonably have been expected to discover the existence of his injury and its cause.
These recommendations were implemented in the Limitation Act 1963. Corresponding provisions were made for claims which were made after an injured person's death on behalf of his dependants. The 1963 Act has caused difficulty, and has been criticised in the courts, in part because of its drafting and its complexity, but also because of the substance of its provisions. The 12 months' period from discovery of the material facts was found to allow insufficient time to bring proceedings, and the provisions for fatal accident cases were found to cause injustice; for example, to the widow who could not have known of the cause of her husband's death for more than a year after it had occurred. To deal with these problems, Part I of the Law Reform (Miscellaneous Provisions) Act 1971 extended the period from an injured person's date of knowledge "to three years, and in fatal cases allowed three years from the death—or from the date of knowledge of the dependant concerned—for bringing proceedings.
One further problem remained; that is, what amount or sort of knowledge on the part of the injured person it is that starts time running against him. In the case off Central Asbestos Co. Ltd. v. Dodd, your Lordships' House considered this problem. Their analysis of this question suggests that the knowledge of the plaintiff can, under the existing law, be defined in three ways. First, it may be knowledge that his injury resulted from something which the defendant did, or did not do; this is a simple, factual issue of cause and effect. Secondly, the plaintiff may have that knowledge and also knowledge that the defendant was in some way at fault. Thirdly, the plaintiff may have knowledge of the act or omission and of "fault" and knowledge that the defendant is likely to be held liable in law to pay him damages. This last state of knowledge is usually referred to as knowledge by the plaintiff that he has "a worthwhile cause of action" against the defendant.
The courts have been much exercised in recent years by the question whether the
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present Statute Law enables them to apply the "worthwhile cause of action" test. There have been differing decisions on the point, and all I can say is that the interpretation of the 1963 Act is uncertain. But the House has now to consider this question not in its judicial but in its legislative capacity. I hope your Lordships will rejoice with me that this matter can now be considered as a question of principle, and that a new approach can be followed. This, indeed, is the essential function of Parliament in relation to the law when it becomes evident that the intervention of Parliament is needed.
The Bill now before the House tackles the problem of the hidden injury or disease in two ways. First, it defines the "date of knowledge" test afresh. Secondly, it confers a discretion on the court to extend time in proper cases. I should make it clear that I envisage no resulting change for cases of apparent and known accidental injury—which are the vast majority of personal injury cases. Where the plaintiff can show no reason for delay, but has merely been dilatory, the ordinary period of limitation of three years will, no doubt, apply. In this connection, I should observe that there are cogent arguments in favour of the proposition that in personal injury claims there should be no period of limitation. The Law Reform Committee gave very careful consideration to them and recommended against any such solution. They pointed out that stale actions involve weak evidence and make it harder to arrive at a just conclusion; that plaintiffs and their advisers should in general be given some impulse to get on with their proceedings; that to abandon limitation completely in personal injury cases would lead to difficulty with insurance; and that defendants should not be exposed to the nuisance value of stale claims. After careful thought, and taking into account the proposed discretion that the Bill will allow to extend time in proper cases (which is itself a major change), the Government have decided to adopt their recommendations.
As I have said, the "date of knowledge" test is now reformulated in subsection (6) in the middle of page 2 of the Bill. The "worthwhile cause of action" test will clearly not apply. In this respect, the Law Reform Committee and the Government have accepted the

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view of the majority of your Lordships' House in the case of Dodd. But, and this in a sense is the quid pro quo to meet the difficulty that an earlier date of knowledge could cause hardship in some cases, the Bill confers on the court power to extend time in appropriate cases. The general discretion thus to extend time is the greatest change in the law which is made by the present Bill. The result should be that there will no longer be any impulse to put a strained interpretation on the "date of knowlege" provisions, while at the same time it should be possible for the courts to develop a sensible and humane code for dealing with those cases in which a strict application of the rules would cause injustice. In short, no deserving plaintiff who can persuade the court that justice between the parties requires the claim to proceed will be turned away without a trial on the merits of the case.
I should mention briefly the form of the Bill. It inserts new sections into the Act of 1939. Provisions for fatal accident as well as personal injury actions are for the first time included in the 1939 Act. This is an economical method of achieving the desired result, and brings into one place the two limitation codes applying both to personal injury actions and to fatal accidents claims. I hope this may be found to be convenient in practice.
I turn now to the provisions of the Bill. The new Section 2A inserted into the 1939 Act by Clause 1 of the Bill, provides for the time limits in personal injury actions. The existing period of three years is preserved unchanged, as is the general rule that this period runs from the date on which the cause of action accrued, which in the case of an action in tort for personal injury is the date on which the injury is suffered. New Section 2A makes provision also for the less common case (but the case which causes, as I have indicated, the most difficulty) in which the plaintiff is ignorant of his injury or of its cause for some time after suffering it. Under the new "date of knowledge" test recommended by the Committee, time is to run from the date when the plaintiff first knew his injury was "significant" and was attributable to an
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act or omission on the part of the defendant; but knowledge whether or not he has a cause of action is irrelevant. The new Section 2B provides for limitation periods in actions under the Fatal Accidents Acts. Again, the existing law is largely preserved: proceedings under the Fatal Accidents Acts are barred if the deceased was himself out of time to brine proceedings for personal injury when he died, and the period of limitation remains at three years, which is to run either from the date of death or the "date of knowledge" of the dependant for whose benefit the action is brought, whichever is the later.
New Section 2D provides that the court shall have a general discretion to override time limits if to do so would be fair as between the plaintiff and the defendant. The court must consider all the circumstances of the case; but guidelines are given in the Bill, specifying the matters to which the court should have particular regard. These include the length of the plaintiff's delay, and the reasons for it; the conduct of the defendant; disability suffered by the plaintiff after his injury; and the nature of any expert advice given to him, whether sound or whether misleading. This might include advice about his prospects of success in proceedings, so there is some similarity between this consideration and the "worthwhile cause of action" test; but here it will not by itself determine the plaintiff's success or failure on the limitation issue; it is only one of the factors the court will take into account in assessing whether it would be equitable, in the broadest sense of the meaning of that word, to override the limitation defence, having regard to the prejudice to the plaintiff if he is not allowed to proceed, and to the defendant if he is.
The Bill makes two other important changes in the law. It abolishes both the preliminary application for leave to bring proceedings out of time and the rule under which time runs against a person under disability if he is in the custody of a parent. The application for leave was introduced in 1963 to act as a filter to stop hopeless cases at the very outset. But experience has shown that hopeless cases are in practice weeded out at the earlier stage of advice by the intended plaintiff's solicitor or counsel, and when an application is made it usually

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succeeds. The procedure is burdensome, expensive and largely unnecessary. Its abolition, as recommended by the Law Reform Committee, which will, I think, be welcome to trade unions and to solicitors representing prospective plaintiffs, is achieved by the repeal of Sections 1 to 3B of the Limitation Act 1963.
There is a rule—usually called the "custody of a parent "rule—which concerns the case in which a child or other person under disability suffers injury. In the ordinary way, time does not start to run against a child until he comes of age. But if at the time of his injury he is in the custody of a parent, time starts to run at once, as soon as the child is injured. This rule first appeared in the Limitation Act 1939 and applied only to proceedings against public authorities because of the vulnerability of local authorities then thought to exist to claims arising from accidents to schoolchildren, which under the usual rule might be made after the child had attained the age of 21, perhaps many years after the injury. In 1954, when Parliament abolished the special protection of public authorities, the "custody of a parent" rule was extended to all personal injury actions. The Law Reform Committee found this rule to be unsatisfactory in operation. Having weighed the choice between rationalisation and abolition, they recommended abolition. Clause 2 of the Bill gives effect to this by replacing Section 22(2) of the 1939 Act with a provision which does not contain the "custody of a parent" rule.
On one issue the Law Reform Committee were unable to reach a unanimous conclusion; this concerned the running of time in cases where knowledge of the cause of injury can be acquired only with expert advice. They offered alternative solutions to this question, which they styled the strict" and the "liberal" approaches. On 28th of June last year when I announced that the Government accepted the recommendations of the Law Reform Committee, I stated our view that, on the question which divided the Committee, the law should provide that a plaintiff should not lose his right to an extension of time if he had taken reasonable steps to obtain and act on expert advice, but had, nevertheless, not acquired the necessary knowledge.
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The point arises where the injured person cannot be expected to discover the cause of his disease without advice, whether medical or legal or of any other kind. The Government accept the view that a man should not be fixed with knowledge of a fact if he has taken every reasonable step, by way of taking expert advice or otherwise, to ascertain it but has failed to do so, and that time should not run against a man who has been given wrong advice, albeit by a doctor, or even by a lawyer—it is sometimes known that they do occasionally, but rarely, give wrong advice—as a result of which he fails to ascertain facts by which he would know that his disease was caused by an act or omission of the defendant. This view is reflected in subsection (8) on pages 2 and 3 of the Bill. I hope that this account—I fear it has taken a long time—explains the more important provisions of this Bill. I believe that it both clarifies and improves the law of limitation in this difficult area. It will give the courts the means to deal fairly with hard cases and will greatly reduce the risk of those involved in those cases being unable to obtain redress. It is accordingly a useful means of law reform. I commend it to the House, and beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3.42 p.m.
The Earl of MANSFIELD: My Lords, this is a Bill which will be generally welcomed in all parts of your Lordships' House. I feel that it will also command general support, representing as it does a measure of law reform which some might say was well overdue. It is also perhaps in order to offer the Government a measure of congratulation for having found time to present this Bill during what is already turning out to be an overcrowded Session. Certainly we are grateful to the noble and learned Lord the Lord Chancellor for the attractive and understandable way in which he outlined the terms of the Bill this afternoon.
My Lords, this is not a sphere which attracts controversy of a Party political nature, although certainly a note of controversy, or at least dissension, was detectable among some of the speeches of the noble and learned Lords on the Cross-Benches when the cases discussed in the

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Twentieth Report came before your Lordships' House on various occasions. Speaking personally for a moment, I first came upon some of the difficulties and injustices with regard to limitations of action when I was a pupil in what were then the chambers of the noble and learned Lord, Lord Stow-Hill. Thereafter I devilled in those chambers for a junior who had an enormous practice in personal injury cases, mostly of what I may describe as the running-down or Factory Act variety. Out of the hundreds of pleadings and opinions which I drafted for him, I do not suppose there were more than a handful—certainly a tiny proportion—of cases where the question of limitation came into the matter at all. Nevertheless, when the question did arise, it seemed to cause a great sense of unfairness and, indeed, resentment on the part of the lay client, the would-be plaintiff.
Not least was this caused by the arbitrary nature of the law as it then stood, and the fact that the plaintiff, as it were, could be shut out in circumstances in which he was not in any degree at fault himself. I say this because, as a humble, erstwhile practitioner, I welcome the approach of the Committee, and the course they have steered between what I might call the extreme view, on the one hand, that there should be no limitation period in personal injury claims, and the over-rigid view, at the other end of the spectrum in this sphere. It seems an eminently sensible recommendation of the Committee in effect to retain the limitation period in normal cases of three years, but to extend the period if the plaintiff in certain circumstances is ignorant of his rights, or of his condition, or is under a disability. Above all, the Court now has a discretion to override the defence of limitation in circumstances when it would be just to do so. It is by way of summary right, in effect, for a plaintiff to have a right of action irrespective of the time element, unless he has caused, or perhaps contributed to, the delay, or unless it would be unjust in certain circumstances to a defendant.
My Lords, I do not think I need further detain your Lordships' House. I am sure that I am speaking for all when I say we are looking forward with keen anticipation to the speech of the noble and learned Lord, Lord Edmund-Davies, and
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the feast of expertise which will fall from his lips. It is sufficient for me to give this Bill a warm welcome.
3.46 p.m.
Lord EDMUND-DAVIES: My Lords, I count myself doubly fortunate this afternoon, first in being privileged to address this distinguished assembly for the first time and, secondly, because this debate relates to a matter which has absorbed a substantial part of my long life in the law. Fortunately for this House, convention rightly dictates that though I would willingly range widely, I may properly range for a period barely sufficient to enable a lawyer to emerge with composure even from a parenthesis. I shall do my best. As my comments on this Bill are commendatory and only in one respect slightly cautionary, I hope to avoid overtaxing the established generosity of this House towards a new Member.
My Lords, a man is injured by the act or omission of another. If his injury is significant and the wrongful nature of the other's conduct is clear, he must sue the wrongdoer within three years of sustaining his injury. So if a pedestrian is knocked down by his neighbour's car, he must sue him within three years if he is to avoid becoming Statute barred. But what of the man who lacks knowledge that he has been injured? What, for example, of the workman who knows only too well when he has chronic chest trouble, but 10 years go by before he realises it was caused by bad working conditions, which his employers could and should have put right? Should the gates of justice be slammed in his face because he was seven years too late in seeking to pass through its portals?
Some noble Lords may think that I have begun on a regrettably emotive note. If so, it is well to recall that such was the quite clear question considered by the Judicial Committee of this House 12 years ago. The law was then such that this House was obliged to hold that the door must, indeed, be slammed in the face of the suppliant. Small wonder that the noble and learned and recently lamented Lord Reid said that,
"… some amendment of the law is urgently necessary".
In the light of severe strictures made earlier by the Court of Appeal, the Committee of the noble and learned Lord the

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Lord Chancellor had already been set up to examine the law. Purely by way of establishing my credentials, I mention in passing that I had the honour to be its Chairman.
My distinguished colleagues and I had to make a leap into the unknown. We had to conduct a delicate balancing operation. Of course, if you postulate a villainous employer ruthlessly regardless of the welfare of his employees, you may well ask, "Why should he ever be protected by the passing of time?". But what of the decent employer who has done his best to safeguard his employees, and yet is suddenly confronted by a stale and suspect claim, a claim which he has difficulty in meeting because essential witnesses have died or disappeared, and relevant records have been destroyed? In other words, my Lords, what if the suppliants for justice are to be found on both sides of the portals? Confronted by that acute dilemma, my 1962 Committee—and I use the possessive with pride—adopted what I am led to believe is a politically familiar formula; in other words, we compromised. We and the 1963 Act said that the three years should not begin to run until the injured party learned, or ought reasonably to have learned, what were called "material facts of a decisive character" in relation to his claim.
My Lords, with that I turn to the first of the three topics upon which, with your leave, I want to make brief comments. It is also the most difficult of the problems dealt with by this Bill. It can be expressed in the single question: when should the three years begin? Should it be with the workman's knowledge of his increasingly bad chest? Well, for years he has had good reason to know all about that. With knowledge of his working conditions? Well, he probably has known all about them also for a long time. But what he might well not know is that his bad chest was caused by his had working conditions. Nevertheless, ought he reasonably to have known this and so sued his employers within time? In seeking a just answer to that question, the 1963 Act imposed what practice has proved to be an excessively elaborate test. My Lords, if this Bill does no more, it will have done a great deal if it removes that particular ambiguity.
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On the other hand, in favour of the potential defendant, the Bill rejects the view that time does not run against the plaintiff until he knows or ought to know that he has a worthwhile cause of action. Instead, it provides that the time begins to run when the injured party first knows (a) that he has sustained a significant injury, and (b) that it was attributable in some measure to the act or omission of the defendant. But—and here I turn to my second topic—what about the odd case? For example, what about the injured party who, bewildered by his sudden affliction, wisely seeks advice, but is unwisely and inaccurately told that he has no remedy, even though the three-year period has not yet expired, so he lets the years go by until better advice informs him that he has indeed a good cause of action? In 1962 my Committee regretfully concluded that such a man could not be helped, and in the light of the information then available, I think, with modesty, that we were right.
But this Bill provides a compromise. It enacts that if the court considers it equitable to both parties, the action may proceed, even though the three-year period has expired. It would be foolish to lose sight of the great delicacy of the task entrusted to the court by that novel provision. Indeed, in their valuable Report the Law Reform Committee, headed by Lord Justice Orr, said this:
" In suggesting this solution, we have not overlooked the difficulties which would face a judge in weighing the hardships on one side or the other, or the fact that even a measure of discretion erodes certainty in this field."
That the Committee has done its best to solve this virtually intractable problem is beyond doubt. Whether it has succeeded is a question that remains to be tested. There have been moments when I have wondered whether the resultant uncertainty is too big a price to pay, but reflection has, on balance, led me to the firm conclusion that the provision makes for justice, and I respectfully recommend its acceptance.
A brief comment, if I may, about the third and final matter. My Committee thought it desirable to prevent cases which seemed unmeritorious as well as stale from going to trial and then failing because the plaintiff could not bring himself within any of the escape clauses. We

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therefore recommended that out-of-time plaintiffs must first obtain the leave of a judge before pursuing an action for damages, and the 1963 Act embodied that recommendation. I see no reason to think that either we or the Legislature were then mistaken, for, as I have already said, we were exploring unknown territory. But we learn from experience. The Welsh no less than the Romans have a proverb which says so, and you could want no better proof than that. The lesson taught by experience in this particular field is clearly summarised in this last Report. It has convinced me, at least, that the precautionary procedure of securing leave may now properly be abandoned, and the Bill so provides. My Lords, I respectfully recommend acceptance of the Bill by this House, to which I am greatly indebted for its indulgence in hearing me out so patiently.
3.57 p.m.
Lord WIGODER: My Lords, there is no maiden speech to which I would sooner have the privilege of paying tribute than the maiden speech of the noble and learned Lord, Lord Edmund-Davies. He is, if he will permit me to say so, a tried and trusted mentor. His appointment as a Lord of Appeal was greeted with universal acclamation by the whole of the legal profession. He speaks, as your Lordships now know, as a great authority on this particular branch of the law. I know that your Lordships will accept it from me that he is of equal authority on a large number of other aspects of the law, and your Lordships, therefore, will look forward with the greatest pleasure and anticipation to hearing him on many future occasions.
My Lords, any slight value that might have been attached to any observations that I will make has been substantially diminished by the fact that the noble and learned Lord has already spoken, and may indeed be removed altogether by the fact that I am about to be followed by two other noble and learned Lords. In extending a welcome to this Bill, I only wish to say that I am pleased that it has been seen fit to follow the detailed proposals of the Law Reform Committee, and in particular that the Bill ends the difficult doctrine of worthwhile cause of
20
action and replaces it by the provisions as to date of knowledge which are set out in the new Section 2A(6). I welcome also the fact that on the one issue upon which fact that on the one issue upon which the Law Reform Committee found itself in some difficulty the Government have seen fit to adopt what the Law Reform Committee referred to—without any political connotation—as the liberal approach", rather than the strict approach.
The only doubts that I have to express are three in number, and they are perhaps minor ones. First, the proposals in Clause 1 of the Bill are intended to give effect to the recommendations in paragraph 69 of the Law Reform Committee's Report. I cannot help thinking, on re-reading those recommendations, that they are expressed in simpler and more felicitous language than the equivalent provisions in this Bill. I say that aware, as I am, of the necessary constraints under which Parliamentary draftsmen toil, which of course do not operate upon members of a Committee. It may be that the noble and learned Lord on the Woolsack will consider it desirable to take one final glance at the recommendations as they are expressed in the Law Reform Committee's proposals, to see whether the structure of the Bill might by that means be made a little more clear.
Secondly, I welcome the proposal that will rid us of the necessity for making applications for leave, but I share, if I may respectfully say so, the doubts expressed by the noble and learned Lord, Lord Edmund-Davies, as to the difficulties that will face courts in future in interpreting in Section 2D, the words
"… that it would be equitable to allow an action to proceed "
in certain circumstances. The difficulty arises where companies or firms may be sued, perhaps 10, 20 or even more years after some event, with the result that there are no witnesses available and there may be no documents available. To assess in these circumstances the equity of allowing proceedings to be taken against such a firm or company will clearly pose substantial difficulties to the courts.
The third observation that I would make arises directly out of the probable operation of this Bill, and it concerns the difficult problem of the assessment of

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damages in fatal accident cases in a period of substantial inflation. Your Lordships will know that the present position is that the dependency of the widow is assessed as from the date of the death. That figure is multiplied by the appropriate number of years, various allowances are then made and a global figure is reached. No allowance is made for the possibility that a widow might remarry, and no allowance is made for the possible effects of inflation, because they are no doubt regarded as being too uncertain to enable any precise answer to be reached.
The effect of this Bill, even though it is perhaps somewhat limited by Section 2B(3)(b), which limits an action under the Fatal Accidents Act to a period of three years from
" the date of knowledge of the person for whose benefit the action is brought ',
is that it will make it easier for Fatal Accidents Act cases to be brought again, it may be 10 to 15 years after the date of the accident. As I understand it, a court that is in such a case assessing damages will not be acting upon hypotheses. It will know the figures, it will know the precise dependency, the precise loss sustained after 10 or 15 years of, it may be, very considerable inflation. The result may well be that in those circumstances damages will be awarded of an extremely substantial nature, which will be far greater than the damages that would have been awarded had the plaintiff been able to bring his, or her, action more promptly.
This is a difficulty which seems to me to arise inevitably out of the operation of a Bill of this nature. I do not regard that as an objection to this Bill nor, so far as I can see, is it a matter that could in any way be dealt with by amendment to this Bill. But I venture to suggest that it is an urgent matter to which the noble and learned Lord on the Woolsack, if he ever has an idle moment, might seek properly to pay attention in the near future. With those observations I also venture to support this Bill.
4.6 p.m.
Lord MORRIS of BORTH-Y-GEST: My Lords, I should like to join with other noble Lords in expressing a warm welcome to this Bill. In doing so, may I be allowed to add my felicitations to
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the noble and learned Lord, Lord Edmund-Davies, on his notable maiden speech. I add my congratulations with the utmost pleasure, not only because of a valued personal friendship extending over many years, but because of my knowledge of the distinction with which, before he came to your Lordships' House, he discharged his duties both as a judge and as a Lord Justice. I am sure that your Lordships would feel that it was fitting and happy that he should have addressed your Lordships for the first time on a subject in regard to which he has made a considerable contribution, as one of the many ways in which he has rendered public service on committees of great importance.
I should like to thank the noble and learned Lord the Lord Chancellor for his exposition of this Bill and for his explanation of the background which makes it, as I think, necessary that this Bill should be introduced. I should also like to join in appreciation of the Report of the Committee under Lord Justice Orr. I read that Report with great interest. I thought that it marshalled all the considerations in a balanced way and in the result, as I think, arrived at very wise and satisfactory solutions. I am sure that it is necessary to have this Bill, and I say that as one among many who has had to grapple in the past with considering the provisions of Section 7(3) of the 1963 Act.
I do not wish to say a word in criticism of the drafting, because I have sufficient experience to know that drafting, particularly in regard to a subject of this nature, is extremely difficult. That having been said, it is to be remembered that every judge who had to apply his mind to the meaning of Section 7(3) found great difficulty. The noble and learned Lord the Lord Chancellor referred to Central Asbestos v. Dodd, which came to this House, and I sat on that case with the late Lord Reid, and the noble and learned Lords, Lord Pearson, Lord Simon of Glaisdale, and Lord Salmon. Try as we best could, we were not able to arrive at any unanimity which would give clear and helpful guidance to the courts as to what exactly that section had laid down. The Court of Appeal at various times shared the difficulty which we then experienced. I am therefore quite sure that it was very desirable to

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have the investigation of the Committee under Lord Justice Orr and, in the result, to have this Bill.
Today in your Lordships' House we are differently placed from those of us who sat judicially to interpret Section 7(3); w can today be concerned with policy. The whole subject of limitation of actions is beset with difficulties. Should we have any period at all? If a plaintiff is in a position to prove his case and if he does prove his case—for it is really only if he is in a position to prove his case that the defence of Statute of Limitation is needed by a defendant and only in that situation does a defendant put it forward—is it, it may be asked, fair to have any period at all? I have no doubt that the conclusion reached by the Committee under Lord Justice Orr was the correct answer to that question. It must be unfair in many cases to a defendant who, owing to the lapse of time, is either not able to command the presence of witnesses or, if witnesses arrive, they have but faded and jaded memories. Thus I am sure that it is necessary to have some periods of limitation.
It might be thought a strange feature of our limitation law that an Act should say that an action shall not be brought "after the expiration of such-and-such a period yet the court need have regard to that provision only if the defendant relies upon it. But that again I think works fairly and reasonable. It is, under our system, not necessary for the court to take action, even though there are those rather formidable words action shall not be brought." But from the point of view of a plaintiff who can prove his case, who can prove that in law the defendant should pay him, there can surely be no more agonising words than the words "too late". So in this field it is essential that there must be some balancing process, and I thought the Committee expressed themselves very well when in paragraph 38 of the Report they said:
"… it is apparent that we have not been able to find any solution to our problem which is entirely satisfactory. This is not surprising; limitation inevitably involves a compromise between conflicting interests and no such compromise can do complete justice to both plaintiff and defendant in every case."
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I agree with other noble Lords in thinking Sat the Committee arrived at a very sensible result in saying that the three-year period should run from the date the cause of action accrued or a date, if later, of the plaintiff's knowledge. A plaintiff might be asked the question: "Why did you not bring your action sooner?" Supposing he says, "I did not know within the time that I had suffered injury." I think we should all agree that in those circumstances a plaintiff ought to be allowed to proceed. Similarly, if he says, "I did not know within the time that the injury, although I knew I had some injury, was significant." Again, I should have thought it eminently reasonable that he should be allowed to proceed. The third answer he might give is, "I did not know that my injury was attributable, in whole or in part, to any act or omission of the defendant." That is the difficult case. The Committee under Lord Justice Orr thought that there would be little difficulty in coming to conclusions in regard to those matters, and they said in paragraph 55:
" We turn, therefore, to the third possible date of knowledge, namely the date when the plaintiff has knowledge, actual or constructive, both of his injured condition and of its having been caused by acts or omissions of the defendant. We are satisfied that this is a date capable of precise definition and not presenting any particular difficulties of proof …"
I think they are a little optimistic there. I think the word "attributable" is not an easy word and that the word "omission" is not easy, either. Does "omission" merely mean that something was not done, or does it mean, or might it mean, that something was not done that ought to have been done? In studying the words of the Bill I do not think these difficulties will arise, and I think provision is made to assist a plaintiff if he, so to speak, cannot be criticised for not having brought his action earlier.
I take this sort of case: somebody in a factory suffers either some injury or illness. He is conscious of it but he just does not know why it has happened. Supposing he consults an expert and tells the expert to go to the factory to see whether there was something wrong there—were the employers doing something wrong or failing to provide some equipment. Supposing the expert comes back and says, "I have examined the factory but I can find nothing wrong at all", and the man takes

25
no action. Supposing some years later he goes to another expert and that expert looks at the factory, the conditions being the same, and says, "I think there was something wrong. There was something positively wrong, and there was an omission to provide something that ought to have been provided." Much time may have gone by, but as I read the Bill the plaintiff will not in those circumstances be prejudiced because he has taken all reasonable steps to employ an expert and to consult him.
A similar result under the Bill I think follows if the man whom I have postulated went to his doctor and said, "I have this condition, these complaints, and I think there was something wrong in the factory". Supposing the doctor says to him, "Those injuries from which you are suffering, that complaint of yours, cannot be attributable to what you tell me". On that the man takes no action. Supposing some years later he goes to another doctor who says, "I think what you are suffering from can be attributed to the conditions of which you tell me". Time may have passed, but as I read the Bill again such a man will not be debarred from bringing his action.
Whether it is different in the case of the lawyer will depend upon a consideration of Section 2A(6) of the Bill:
"… knowledge that any acts or omissions did or did not, as a matter of law, involve nuisance, negligence or breach of duty is irrelevant."
That may mean this, that one goes to one's lawyer who says, "Though there was an act or omission, it was not a negligent act or negligent omission ", and one may go to a lawyer some time later on who gives different advice. It may be that the time will run from the date when one went to the first lawyer. This problem may arise. Even if that were the situation, as I read the Bill, that situation could still be covered by the application to the court for the discretion of the court to proceed, despite the fact that the time limit has gone by. I welcome this provision in Section 2D. I welcome giving discretion to the court to say that the case may proceed despite the fact that the time has gone by. The Bill uses the word "equitable". In the context that simply means "fair". Is it fair in all the circumstances?
I can see objections to this provision. It will be said that there is some uncer-
26
tainty. It will be said that probably there would be no appeal because, if the judge had weighed all the considerations and did not express himself as having considered something that he ought not to have considered, it might well be that it would be difficult to appeal against any ruling of the judge. It might well be that the judges will not entirely welcome having this rather difficult duty imposed upon them. But, having said all that, I still think it a reasonable course to follow. I believe it is the fair way to deal with this difficult situation.
For my part, I would trust the judges in matters of this kind. They are given the guidelines; they must assess all the difficulties on either side and then finally say, "Is it fair or unfair for the plaintiff not to be bound in this case by the time limit? "I would trust the judges. Their whole training and experience is, first, training to ascertain the facts and, having ascertained them, to assess them. Having learned, weighed and assessed the facts, then, in the light of everything, it is their duty to decide what is fair both to plaintiff and to defendant. I think that that is the reasonable way out. I would have confidence that Her Majesty's judges, being presented with this somewhat difficult decision, which they might not welcome having to discharge, nevertheless will discharge it faithfully and well, and, in a difficult situation, this was about the best result that could have been achieved.
4.24 p.m.
Lord JANNER: My Lords, I feel some temerity in entering this debate after so many eminent, learned and highly interesting personalities have taken part. I should like to offer, as a member of the more humble solicitors' profession, my congratulations to the noble and learned Lord the Lord Chancellor for the manner in which he introduced the Bill, and also to the other noble Lords who have spoken. In particular, may I say how impressed I was by the speech of my noble and learned friend Lord Edmund-Davies whom I have had the honour and privilege of knowing for many years and whom I have always regarded with the greatest respect and admiration. That respect and admiration has been even more increased this afternoon. Having heard his speech, I am

27
sure that we shall all look forward with considerable pleasure to hearing him on many future ocassions. We are grateful to him for having addressed us today.
I do not propose to take much time. We have had an explanation of the Bill. We have heard those who have been engaged in making decisions on many of the points which have been raised today. I think your Lordships will understand that when, in the first instance, a person inquires as to what are his chances of success, he comes to those in the solicitors' profession, and often we find considerable difficulty in weighing up what is likely to be the result, particularly when expert medical opinion, and sometimes even expert legal opinion, is involved. There would be no cases at all if everyone thought that the medical and legal evidence was absolutely undeniable on one side or the other. Yet cases go through courts, higher courts and right up to the highest law courts to the learned judges themselves, these eminent persons. Indeed, as was shown in the deliberations which have taken place and which eventually produced this Bill, there are differences and, ultimately, it is left to a court to decide which was right and which was wrong.
I have had experience myself of different medical opinions being given on a number of occasions to persons who have applied for damages. Sometimes it has been considerably difficult to give a real opinion. You have to weigh up what the court will decide when it hears the evidence on both sides of the case. I say this because it shows that there is a great element of chance in many cases which are brought before the courts. Consequently, it is perfectly clear that a person might have been advised quite wrongly—nevertheless in good faith—by the medical person whom he has consulted, and, possibly, by the lawyers to whom he has gone, who decided that, on that evidence, he ought not to proceed. But, later, there may be cases in which what he was advised as being right or wrong is contradicted by the decisions given in similar circumstances by a court.
For that reason my own profession welcomes this Bill, because it realises that it is essential for justice to be done to a person who has been placed in a
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position, the severity of which he ascertains only after a certain period. I do not say that the profession accepts the Bill in its entirety. Probably at Committee stage some suggestions will be made and we hope, possibly, that the noble and learned Lord the Lord Chancellor will accept them; but, in principle, I think it is extremely important that we should accept the Bill, because it is clearing up what has been an injustice for a considerable time in a fair number of cases. I do not imply many cases. Therefore, I should like to add my personal commendation for the acceptance of the Second Reading.
4.30 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, before the noble Lord the Lord Chancellor replies, I should like to say a couple of words. I do not want to detain the House, but I should like to thank the noble and learned Lord for his reference to myself at the outset. I was not in the Chamber at the time, but it has been reported to me and I am grateful for it. My real purpose in rising is to do two or three things which can be done in as many brief sentences. In the first place, I should like to add to the welcome especially from these Benches to the noble and learned Lord, Lord Edmund-Davies, who made his maiden speech. Like other noble Lords who have spoken, I have known him for very many years. I remember being against him at the Bar and, in the first of the cases which I remember most vividly, he won. He was then the energetic and strenuous Leader of the Welsh Circuit. I have appeared before him as counsel in the Court of Appeal and once, indeed, I was hauled up before him as a malefactor when some ass wanted to send me to prison. Mercifully, he released me without, I hope, a stain upon my character. Since the noble and learned Lord has been appointed, I had the great pleasure of sitting beside him in the Appellate Committee and all these experiences, from first to last, have been of the most enjoyable character. To listen to the noble Lord's maiden speech this afternoon has been as enjoyable as any of them.
My Lords, I should like to say a word or two about some of the mechanics of

29
the Bill. One of the predecessors of the noble and learned Lord and myself as Lord Chancellor was the famous Lord Campbell, who wrote the lives of the other Lord Chancellors in a most readable but highly malicious frame of mind. He said that law reform is either by consent or not at all. I believe that that is the first thing to know about it. The strains on Parliamentary time being what they are, one must acquire a measure of consensus before one starts. Naturally, that takes time. That leads me to an observation by another among our predecessors, Lord Haldane, who said that important law reforms take three successive Lord Chancellors to carry through. That, too, is very largely true. Lord Haldane claimed—I think with reason—to be the progenitor of the law of property legislation, which was first initiated in Parliament by the Earl of Birkenhead and finally carried into law by Lord Cave. That again is due to the fact that law reform is difficult to initiate under the British Parliamentary and legislative system. The present reform has taken only two Lord Chancellors from the time when I set up the Committee to the time when the noble and learned Lord introduced the Bill this afternoon. I hope that he may be spared—unless, happily, this Government disappears—to see the Bill pass into law at a later stage.
It is an odd thing that, from 1623 to the time when I went to the Bar and up to 1939, we got on very well with a six-year period of limitation, but since then we have been doing nothing but tinker with the law. I believe that that is due to the great problem of personal injuries and fatal accidents—problems upon which the discussions this afternoon have largely centred. However, the problem basically arose—from the first for technical reasons and, at the last, for practical reasons—from the difficulty of obtaining testimony about an incident which has taken place some time before it comes to be tried in court. When, under James I, the first of the Limitation Acts was passed, it was the law, strangely enough, that nobody who was in the least interested in the case was allowed to give evidence at all. This was because it was thought terrible to imperil the immortal soul of a witness by a temptation to commit perjury. Of course the result was that perjured witnesses abounded. Thus we had the Limitation
30
Act of 1623 and also the Statute of Frauds in 1677 in order to protect unfortunate defendants from plaintiffs who produced these hired and perjured witnesses. A great deal of the law of evidence as it now exists revovles around this rather absurd rule which our ancestors observed.
However, by the time we reached 1939, the difficulty was of a practical kind. It was found that in a great number of accident cases six years was too long a period for a defendant to be able either to recollect or to acquire evidence about incidents taking place so long before. I believe that that was touched on by the noble Lord, Lord Wigoder. So we introduced the three year period after the War and we thought that we had really solved the problem. But then it was discovered that particularly miners and certain other workers suffered from complaints of which neither would the symptoms appear within the three year period nor was the cause known, sometimes until many years after the injury or illness had occurred. This was because medical science was advancing fast and discovered that many diseases, which in the past had been thought to be nobody's fault, were due to various types of poisonous dust in either factories or mines. So again we had to introduce the amendment to the three-year period to which reference has been made.
My Lords, this leads up to a point which I think it is important to make. It is not just an historical discursion. Valuable as law reform is, it is important that the law should have a certain durability. Our ancestors thought it permanent and believed that it should never be changed or should be changed very seldom. We know that to be false but, if law is to be respected, it is right that it should not constantly be tinkered with. I believe that we have tinkered a little too much with this subject lately. I hope that when the Bill becomes law—as I trust it will—it will put a quietus on tinkering with the law of limitation for quite a long time. I am not saying that the Bill is perfect. It is an improvement on what has gone before and, for that, thanks are due to the Committee and to the earlier Committee presided over by the noble and learned Lord, Lord Edmund-Davies. I hope that we shall turn to other subjects of law reform and

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that limitation will for a time be given the "go-by" after the Royal Assent has been obtained.
4.39 p.m.
Lord DOUGLAS of BARLOCH: My Lords, I do not want to say anything about the merits of the Bill. They have been very adequately explained by my noble and learned friend on the Woolsack, by the noble and learned Lord, Lord Edmund-Davies, whom I congratulate on his maiden speech, and by others. I merely want to raise one point. The Bill, as drafted, is amending the Act of 1939 by substituting or adding to it various provisions. The object of that, no doubt, is that one Statute will contain the whole of the law on this subject. What I should like to know is whether any provision will be made for Her Majesty's Stationery Office to produce altered copies of the Act after the Bill has become law, so that one can purchase a single document instead of having to buy two or three in order to find out what is the law.
4.40 p.m.
The LORD CHANCELLOR: My Lords, may I first express my gratitude for the fact that the Bill has received the commendation of no fewer than seven noble Lords, all of authority and many of great distinction in the field of the law. May I also join in the congratulations that have been extended to the noble and learned Lord, Lord Edmund-Davies. We have been friends over the years. I appeared with him many times and then we always won. I appeared against him many times and then I always lost. That apparently was also the experience of the noble and learned Lord, Lord Hailsham of Saint Marylebone. I am not at all surprised that the noble and learned Lord, Lord Edmund-Davis, has again shown that authority, clarity and intellectual vigour which I have always known to radiate from him. The House is a stronger and a wiser place for his presence, and I hope that we shall hear him frequently.
The noble Lord, Lord Wigoder, raised some questions, more perhaps by way of seeking elucidation than by way of criticism, in relation to one or two aspects of the Bill. He invited me to look again in particular at the structure of Clause 1 and he wondered whether the language
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of the draftsman was perhaps more obscure than the language of the Report. In fact the Bill follows the recommendations of the Report very closely indeed and in many places word for word. Where it differs from the recommendations it does so, I think, in general, either because of the need to make provision for fatal accidents or because of a need to insert the provisions into the existing framework of the 1939 Limitation Act. I will certainly look at the point raised by the noble Lord, Lord Douglas of Barloch, about subsequent republication.
He also raised a question—and this is fundamental in considering the value of the discretionary provision in the Bill to which a number of noble Lords have referred. I was greatly comforted by the conclusion of the noble and learned Lord, Lord Morris of Borth-y-Gest—applying his vast authority and experience to this problem—that he found the language of the Bill satisfactory. In considering the test that the court will apply—whether to allow the case to continue would be equitable or not—I apprehend that the court will give the widest meaning, as is intended, to the word "equitable ", and give it the same construction that Lord Goddard gave to it in the case of the Queen v. the Minister of Housing and Local Government, ex parte Finchley, when he said that he thought that "equitable" meant "fair and reasonable ". I notice that the noble and learned Lord, Lord Morris, used the word fair ". Perhaps it is right to add the word reasonable "—not that one would expect any of our judges to be unreasonable in the application of the principle of fairness. But what I have pointed out is certainly what is intended.
The noble and learned Lord, Lord Morris of Borth-y-Gest, said: "Trust the judges ". It is a doctrine and trumpet call in which I am very willing to join myself, even though it does not always receive the universal echo that perhaps it should receive. But it may be in relation to the somewhat tormented history of this matter, to which the noble and learned Lord, Lord Hailsham, referred, that the trouble has been this: if it had been left to the Common Law to sort it out I expect that long before now the judges would have sorted it out. But the difficulty was that the imposition of Statute Law upon the scene complicated the position. I

33
have greater authority than my own in saying that, when Lord Reid—whose passing we mourn—said in Cartledge v. Joplin; what I have just intimated; that but for Statute, the Common Law would have reached a solution to this problem a long time ago. That was not allowed to come to pass, and this Bill today is a measure to put the position right.
The noble Lord, Lord Wigoder, in respect of the damages aspect that arises in this field of litigation, referred to the difficulty of quantifying damages in a period of limitation—I should say "inflation "; I seem to have got "limitation" on my mind. I think that all of us who are connected with litigation are very conscious of this serious problem. It is not within the scope of the Bill, but it is clearly a problem of difficulty: for instance, in respect of assessment by a court of loss of future earnings, which is very important—indeed, it is absolutely crucial as an element in the assessment of damages—the award will be based on the level of present earnings. This is clearly a matter to which Parliament will have to apply its mind.
Other matters were raised in some detail in the close examination which the noble and learned Lord, Lord Morris of Borth-y-Gest, gave the Bill. He posed the questions and it was a great relief to me to hear him answering them himself, and answering them in a direction which gave him reasonable confidence in the provisions of the Bill. He raised the question whether there would be a possibility of appeal under the provisions of Section 2D in relation to possible appeals against a ruling of the court that it would be equitable to allow a case to proceed. I should think that an appeal on that ruling would be difficult, but I apprehend not impossible. Any substantial departure from the intention and spirit of what he rightly described as the guidelines would presumably call for correction by a higher court.
The noble and learned Lord, Lord Edmund-Davies, rightly said that the effectiveness of this general provision of the discretion will have to be judged by experience of the cases as they proceed, but I venture to hope that the guidelines which are contained in the Bill will enable the court to establish a consistent and humane code of decision which will be of guidance in all coming proceedings.
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My Lords, I conclude by once again thanking the House for giving a fair wind to this Bill. As the noble and learned Lord has said, it is a matter of some gratification that in the so far short term that he and I have been on the Woolsack we have been able to proceed not only with this but with other measures, some of which were anticipated by other Lord Chancellors before us. The momentum of law reform will be maintained—that assurance I can give to the House. I am glad that this is a valuable step on that progress.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

LOTTERIES BILL
Brought from the Commons; read 1a, and to be printed.

EVIDENCE (PROCEEDINGS IN OTHER JURISDICTIONS) BILL
Baroness ELLES: My Lords, I beg to move that this Bill be now read a second time. It comes to your Lordships' House from another place, where it was introduced by a Private Member who had been successful in the ballot for Private Members' Bills. It was welcomed by Her Majesty's Government as a useful contribution to law reform, although it is a modest Bill and does not seek to make great modification in the present law. It is necessary from time to time to obtain evidence from a witness who is outside the jurisdiction of the court where the evidence is needed. The 1968 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters facilitates the taking of such evidence, and the United Kingdom signed this Convention in 1970. At the present time the powers of the United Kingdom courts to obtain evidence for foreign courts are regulated by the Foreign Tribunals (Evidence) Act of 1856 and they do not meet in all respects with the requirements of the Convention. As my noble and learned friend Lord Hailsham said, one should not tinker too much with the law and encourage too much law reform too quickly. But even he, I think, will agree that the period that has elapsed since 1856 has given us time for thought; and

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it is time that some modification was made.
The purpose of this Bill is to introduce into our municipal law the necessary modifications which will enable us to ratify the Convention. It is therefore advisable to repeal the 1856 Act as well as two Acts of 1859 and 1885 which regulate the obtaining of evidence for Commonwealth countries, and replace them by a new, comprehensive code which will embody all the requirements of the Convention and enable us to meet our obligations under that Convention. The Bill is technical, necessarily so; therefore I will try to confine my comments merely to those changes to the existing law which are introduced by this Bill.
Clause 1(b) will enable evidence to be taken on request not only for cases which are pending before a foreign court, but those which are merely contemplated, in accordance with Article 1 of the Convention. Clause 2(2) lists the orders a court may make as to the forms of evidence. The power to order the examination of witnesses and the production of documents is now extended under this subsection to include other forms of evidence which may be provided, including the inspection of property and the medical examination of any person. It should be observed that subsection (3) provides that no step can be required to be taken if it is not already possible to do so for the purpose of civil proceedings in the court making the order. The only modification is in compliance with frequent requests from foreign courts that evidence should not be on oath, so that this will now be possible. It should be observed that under Article 12 of the Convention a court must comply with the request if it has the power to do so, even though the request relates to proceedings of a kind in which an order would not be made in an English court, such as a request for blood samples. On the other hand, the Scottish courts would not be able to comply with such a request for blood tests since they have not the power in any circumstances to do so.
Subsection (4) is a protection against what are known as "fishing expeditions" relative to the discovery of documents or other material. Article 23 of the Convention provides for a State to declare
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its refusal to execute letters of request which are issued for the purpose of obtaining pre-trial discovery. I understand the United Kingdom has the intention of making this declaration on ratification under the relevant Article, and I should be grateful if the noble and learned Lord would confirm this, as anxiety has been expressed on this point. Clause 3 regulates the privileges available to a person and the circumstances in which he can be compelled to provide the evidence requested. A new provision is introduced in subsection (4) according the witness the privilege of refusing to give evidence required if he could not be compelled to do so in civil proceedings in the territory of the foreign court making the request. This was not possible before.
Clause 4 is designed to avoid separate applications from a foreign court for each part of the United Kingdom where there are the different jurisdictions of Scotland, England, Wales and Northern Ireland. Under this clause, United Kingdom courts will be able to order witnesses who are outside the courts' jurisdiction to submit to examination so that evidence can be taken before an examiner, including one who is outside the jurisdiction of the court. Consequential on the repeal of the earlier Acts and also Section 24 of the Extradition Act 1870 which covered evidence in criminal proceedings in Scotland, it has been necessary to provide for such evidence in this Bill. No changes are contemplated in existing provisions. They therefore do not coincide with the new provisions for civil or commercial proceedings. It is not considered essential that evidence for criminal proceedings should necessarily follow the same rules as for civil or commercial proceedings.
Clause 6 provides for evidence for international proceedings, these proceedings being defined in subsection (3). The definition is widely drawn, but necessarily so, in order apparently to cover the kind of tribunals set up under treaties to which the United Kingdom may not be a party. These proceedings will take effect only where there has been an Order in Council, and it is with great discretion that these Orders in Council are executed. Clause 7 finally grants the powers to make rules of court. That is the outline of a Bill designed to enable us to co-operate more fully in international judicial proceedings and which at the same time

37
should result in protecting the rights and interests of the individual. I therefore commend the Bill to the House and beg to move that it be now read a second time.
Moved, That the Bill be now read 2a.—(Baroness Elles.)
4.57 p.m.
Lord WILBERFORCE: My Lords, I venture to make a few observations on this Bill partly in recognition of its subject matter which, although perhaps not quite so passionately interesting as limitation of actions, is nevertheless of some interest and practical importance; and also out of recognition to the noble Baroness who put the provisions of it so clearly and attractively before us. I should like to make two observations. One is of a general character and one of a particular character. The general one is this: this subject of evidence as regards other jurisdictions is part of what one may call international procedural law in which are included a number of other subjects, as for example service of process abroad, enforcement of foreign judgments, recognition of arbitration agreements, enforcement of arbitration awards, and extradition and fugitive offenders. All these are matters as to which convention and legislation is proceeding from time to time in a leisurely way covering different areas, sometimes the area of the European Economic Communities, sometimes the Council of Europe, sometimes a limited area as between this country and another country such as the United States.
My plea as to this is two-fold. First, we really should get on rather more rapidly than we are able to at present with the progress on these matters. It is depressing how long it takes to get a convention agreed as to any of these subjects. There then has to be legislation here and we have to persuade other countries to act on the same lines. There are too many tired waves vainly breaking in relation to these subjects. I know I am pressing at an open door in asking the Government, through the noble and learned Lord who sits on the Woolsack, to bend their efforts towards an acceleration of progress in these subjects, and perhaps one may invite the noble Baroness who is so influential in European matters to urge upon her colleagues in European organs the need for greater speed and activity in getting these brought up to
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date. They are lawyers' law, very much so, and are enshrouded in technicalities. Therefore laymen rather tend to shun and shrink from them and leave them to the lawyers. I think that the laymen are mistaken on that, because they are all greatly interested in the practical working out of agreements on these subjects and I feel that the democratic assemblies which exist have a great interest in speeding up the lawyers to make progress.
As an appendix to that, one might look a little more ambitiously towards the future and consider whether the time is approaching when we might aim at having a comprehensive code of international procedure which would cover all these matters. They are not so difficult; it seems ridiculous that there should be this delay and complication about simple matters like enforcing judgments, arbitrations and so on, and that one should deal with them piecemeal. As one advances on one front, others are left behind and then, in a jagged way, we have to catch up on those left behind. Within the area of Europe, where we share common legal systems and thinking, it ought to be possible to have a simple, comprehensive and generally accepted code dealing with these practical matters. I should like to raise a gentle voice in urging those who have influence to think on those lines.
The point which I particularly wish to mention has been adverted to by the noble Baroness, Lady Elles. It arises in Clause 6 of the Bill, which enables an Order in Council to be made in relation to international proceedings. Subsection (1) says:
"… shall have effect in relation to international proceedings of any description specified in the order."
Then one looks at subsection (3) and sees that it is widely drafted. It refers to
"… any other court, tribunal, commission, body or authority (whether consisting of one or more persons)"
which, under a whole lot of arrangements or international agreements—maybe an agreement between any two States, between Utopia and Ruritania, or any resolution of the United Nations—exercises any functions of a very wide character including conciliation or inquiry. One can see that there might be a number of bodies set up by various means to perform functions which would fall within

39
those words to which we in the United Kingdom might not be anxious to extend the process of our courts. As the noble Baroness said, Orders in Council under this section ought to be made circumspectly.
I wonder whether the power in subsection (1) is sufficiently clearly given, so as to enable a distinction to be made between the different bodies and methods by which these tribunals may be set up. It says:
proceedings of any description."
That might be read as meaning civil proceedings, criminal proceedings, matrimonial proceedings, et cetera. I am not sure that "any description is the right phrase to enable discrimination to be exercised under subsection (3). To put it clearly, one would like to see wide powers given regarding established bodies, such as the International Court of Justice, the European Court at Luxembourg, the European Court of Human Rights and the European Commission of Human Rights. Bodies of that sort should automatically be brought within the provisions of this clause. Otherwise, there should be an ad hoc exercise of the power by Order in Council to extend the rest of the provisions of this Bill to them. I hope the wording is appropriate for that purpose and that the noble and learned Lord on the Woolsack will agree that a rather careful look will be taken at each case for extending the provisions of the Bill. With those observations, I am happy to support the Bill and hope that it may be rapidly passed.
5.4 p.m.
The LORD CHANCELLOR: My Lords, it is a very great pleasure for me to welcome this Bill on behalf of the Government, and to express my gratitude, and the gratitude of the Government, to the noble Baroness, Lady Elles, for finding time in her very busy schedule to undertake the responsibility of guiding this Bill through the House. Like the noble and learned Lord, Lord Wilberforce, I should like to compliment her on the admirable and clear way in which she explained the Bill, thereby making it unnecessary for me to repeat the operation.
As the noble Baroness has explained, the motivation for this Bill is the need
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to ratify the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters which the United Kingdom signed as long ago as 1970. The Convention is already in force between Denmark, France, Norway and the United States of America. It is in our interest that the Convention should receive the widest possible acceptance, and I agree we should accordingly ratify it as soon as possible. It is our intention to do this. I share the feeling of impatience at the gap in time between the signing of these Conventions and their ratification and putting into legal effect. But it is only fair to say—and I hope I am not being unduly vainglorious about this—that when this country gives its signature to a Convention it really intends not only in the fullness of time—and perhaps the time is too full—to ratify them, but, what is more important, to give effect to them. Without being too critical of others, there is sometimes detected in international conferences a ready willingness to sign but a great reluctance to give effect in due course to the Convention agreed upon.
As the noble Baroness has said, this Bill introduces the relatively minor changes in our law which are necessary before we can ratify the Convention. It gives to the courts the additional powers which the noble Baroness has described, but, as she has also explained, the powers are accompanied by appropriate safeguards. Apart from introducing the changes in the law which have been described, the opportunity has been taken in the Bill to codify most of our law on the subject of taking evidence on behalf of courts outside the jurisdiction, including the taking of evidence as between different parts of the United Kingdom. This has the useful advantage of reducing the burden of looking in different places for one law. The Bill is accordingly a valuable one. It meets with the entire approval of my colleagues, the Ministers responsible for these matters in Scotland and Northern Ireland, whose Departments have had a chance to examine it closely. The Bill will provide a welcome codification of a comparatively technical but, nevertheless, useful branch of legal procedure. It will enable the United Kingdom to ratify the Hague Convention. As I have said, it is our intention to do so quickly.

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In relation to the question raised by the noble Baroness, we intend to make the declaration permitted by Article 23 of the Convention in due course on ratification. Perhaps I should also refer to the point that was raised by the noble and learned Lord, Lord Wilberforce, as to the language of Clause 6 which is, admittedly, in very wide terms. I will certainly examine again the appropriateness of the wide language of "international proceedings of any description ". What is intended is that there should be covered in the term "international proceedings ", proceedings before the International Court of Justice or any other court, tribunal, commission, body or authority set up under any international agreement or any resolution of the General Assembly of the United Nations. The definition has been widely drawn so as to cover international tribunals exercising functions under treaties to which the United Kingdom is not a party. But, no doubt, when Orders in Council are made under subsection (1), care will be taken that bodies that are not clearly contemplated by the general concept of such international proceedings will not be included. We will look at the point in case we are opening the doors too wide in the language that has been used in Clause 6 of the Bill.
The conclusion that I hope the House will reach, in agreement with the noble Baroness, is that we should proceed to give a fair wind to this Bill. We believe it will be part of our duties in the field of international comity to do so, but in addition I believe that litigants in this country will gain benefits on a reciprocal basis similar to those in other countries, and they will be able to get a lot more assistance from foreign courts in collecting the evidence they need for proceedings in this country. Accordingly, I commend the Bill to the House.
5.11 p.m.
Baroness ELLES: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor very much for his comments on the Bill. I would also thank the noble and learned Lord, Lord Wilberforce, for what he said. I am
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delighted, incidentally, to welcome him back to the House after his illness, and am sure your Lordships will share in my pleasure.
I think we all share the wish to see the development of law between nations becoming easier rather than more difficult. I certainly endorse the hopes and wishes expressed by the noble and learned Lord, Lord Wilberforce, that there will be closer integration, at any rate in Europe, so far as procedural law is concerned and indeed in many aspects of substantive law, which should make the understanding of commercial practice and general transmission of goods, capital and persons very much easier throughout Western Europe. I know that all of us who are in Europe see this happening gradually—of course it is a very slow process—but we have to respect the laws of other Member States who may move at a speed different from our own. This has to be taken into account. Those of us who are in the European Parliament certainly will try to play our part in giving our views and in proposing new methods and procedures which will promote closer integration between peoples, particularly with regard to legal procedures, so enabling litigants in any country to avoid becoming quite so frustrated and also to avoid some of the expense involved in going to court. I therefore welcome the wise comments of the noble and learned Lord, Lord Wilberforce.
I am also most grateful to the noble and learned Lord the Lord Chancellor for having confirmed what I put to him about Article 23 on the declaration. I know he will look at this question of Orders in Council with regard to international proceedings. When those of us who have served in the United Nations, see the words, "Resolution of the General Assembly ", we sometimes have a question mark in our minds as to the validity or even the sense of it but when an Order in Council is contemplated, I know this will be taken into account in giving effect to the provisions of this Bill. I commend this Bill to your Lordships.
On Question, Bill read 28, and committed to a Committee of the Whole House.

RECREATION (NORTHERN IRELAND) ORDER 1975
5.14 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Recreation (Northern Ireland) Order 1975, laid before the House on 25th March, be approved. The noble Lord said: My Lords, the main purpose of this Order is to give district councils powers of compulsory acquisition of land required for recreation facilities. It also seeks provision for the Department of Education for Northern Ireland to offer financial assistance to voluntary groups providing local community facilities, and for the appointment and remuneration of a Vice-Chairman of the Sports Council for Northern Ireland. These provisions bring the law in Northern Ireland into line with that in Great Britain.
The main provision of the Order is in Article 3, which restores to local authorities the power to acquire land compulsorily for recreational purposes. This power was inadvertently removed from district councils in the course of the reorganisation of local government in Northern Ireland in 1973.
Article 4 of the Draft Order seeks to give the Department of Education the necessary powers to enable it to assist voluntary bodies with the cost of providing certain facilities. Under present legislation, the Department may pay grants to district councils to assist the provision of facilities for recreational, social, physical and cultural activities, and to voluntary bodies in respect of facilities for recreation, sport and the youth service. This Order proposes to extend these powers to include assistance to voluntary bodies for a wider range of social and community facilities. Noble Lords will want to know that in practice it is intended that grants to voluntary groups will still normally be paid by district councils. The Government are anxious that district councils should become much more deeply involved in helping community groups; and the Department of Education has already asked the district councils to act as the main channel for grants and advice to community groups. The planning of this system is well advanced. The powers which the Department of Education
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would be given by this amendment are being sought only in order to give the Department freedom of action should any alterations prove necessary in future to the arrangements now being worked out with the district councils.
Article 5 deals with the appointment of a Vice-Chairman of the Sports Council for Northern Ireland. Unlike its counterparts in England, Scotland and Wales, which were established by Royal Charters, the Sports Council for Northern Ireland was set up under the Recreation and Youth Service (Northern Ireland) Order 1973, which makes provision for the appointment and remuneration of a Chairman, but not a Vice-Chairman. Article 5 seeks to regularise this position by making provision for the appointment of a Vice-Chairman. It also enables the Council, subject to the approval of the Department, to pay the Vice-Chairman a salary.
In conclusion, may I emphasise that this Draft Order seeks to provide powers for district councils and the Department of Education to further the present efforts in the field of recreational and community services to create an improved quality of life for the people of the Province. We take the view that the provision of such facilities is of the greatest importance. My Lords, I beg to move.
Moved, That the Draft Recreation (Northern Ireland) Order 1975, laid before the House on 25th March, be approved.—(Lord Donaldson of Kingsbridge.)
5.18 p.m.
Lord BELSTEAD: My Lords, following the noble Lord's very thorough explanation of this Order, for which I am grateful, may I say that I am not quite sure whether the compulsory purchase powers were left out by mistake in 1973. I cordially dislike compulsory purchase powers and I should like still to see them omitted, but I am not prepared to argue the matter in order to hold up an Order of which I otherwise thoroughly approve.
May I say three things to the noble Lord—and I must apologise to him for the fact that none of them is a question. First, speaking for this side of the House I am delighted that the work of the Sports Council has grown to such an extent that the Chairman now needs a

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Vice-Chairman. This is absolutely excellent. We had always hoped that the Department's work in this important field of recreation and sport which, as the noble Lord so rightly said, is central to Northern Ireland, would be a success. It would seem that it has been so. Secondly, I agree with the noble Lord that the policy concerning money given to voluntary organisations is right. Thirdly, may I express the personal hope that this kind of Order will soon he ended so far as this House is concerned. I am sure we all hope that the Elections which are taking place today in Northern Ireland will soon lead to the Province once again dealing with this kind of measure in Belfast.
Lord DONALDSON of KINGSBRIDGE: My Lords, I thank the noble Lord for his reception of this Order. I heartily endorse his final remarks and I hope that he is not too optimistic. Regarding the compulsory purchase powers, which the noble Lord does not like, we have them here and they are an essential corollary of the fact that the local councils are under a statutory obligation to provide recreational facilities. If you give them that obligation, you must give them the power to do what is necessary. The Sports Council and the various facilities which the Party opposite, when they were in power, very largely began are, I think, making a very real contribution to what we hope will be more peaceful arrangements in Northern Ireland. I am grateful for the noble Lord's support.
On Question, Motion agreed to.

SHIPBUILDING INDUSTRY (NORTHERN IRELAND) ORDER 1975
5.20 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Shipbuilding Industry (Northern Ireland) Order 1975, laid before the House on 21st April, be approved. The noble Lord said: My Lords, this Order, which the House is now asked to approve, has been laid under the provisions of the Northern Ireland Act 1974. Noble Lords will see that it provides for further Government finance for the Belfast shipbuilding firm of Harland and Wolff, which the Company needs if it is to con-
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tinue trading and providing employment—at present running at just over 10,000 jobs. The background to this measure was set out in a Statement made last month in another place by my right honourable friend the Minister of State for Northern Ireland in which he indicated the grave situation facing the shipyard.
Noble Lords will recall that a recent review of the company's affairs, carried out by a project team appointed in 1974 by the Secretary of State, revealed the need for a massive increase in the provision for estimated prospective losses on the present order book. Against this, a major programme for modernising the shipyard's facilities, costing in the region of £35 million and largely financed from public funds, is nearing completion. The company is the largest single industrial employer in Northern Ireland, and has a full order book. The Government have therefore decided that Harland and Wolff must be given a further chance of survival.
In order to facilitate the financial reconstruction of the company and other changes which the Government believe to be necessary, it is our intention to lay before this House and another place proposals for taking the company into full public ownership. We hope to lay in the near future the necessary Order-in-Council for transferring to Government the shares presently in private hands. In the meantime, as I have indicated, Harland and Wolff needs funds to continue trading. The draft Order now before us, which we envisage will soon be subsumed into the second Order to which I have just referred, is essentially an interim measure to provide for this finance.
Because we cannot yet be sure how the interim situation will develop it is necessary, pending completion of the necessarily complex arrangements for the company's longer-term future, for us to be able to respond quickly and effectively to whatever may turn out to be the company's exact short-term needs. It is for this reason that the present interim Order has been widely drawn as regards powers, duration and financial limits; although I must make it clear that many of the powers in this interim Order are not in fact intended to be exercised until the Government own the company. Noble Lords will note that the Order authorises

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the Department of Commerce for Northern Ireland, with the approval of the Department of Finance, to provide financial assistance to Harland and Wolff by various means, up to a limit of £40 million. The limit of £40 million may be raised by the Department by Order, with the consent of the Department of Finance, on not more than two occasions and by an amount not exceeding £5 million each time.
This is a very substantial sum of money, coming as it will on top of previous Government assistance to the company. It is clearly important, therefore, that this assistance should be used to restore the company, if at all possible, to commercial viability. My right honourable friend in another place will be maintaining a very close oversight of the operation of Harland and Wolff and will be paying particular attention to the establishment of appropriate procedures for monitoring the company's affairs and for safeguarding the proper use of the funds to be provided.
The Order itself is concerned with the provision of additional funds to Harland and Wolff, but there are other related issues including the appointment of a new Managing Director. This post has been advertised, but we do not intend to allow ourselves to be rushed into making a decision. The important thing is to get the right man, even if this means waiting longer than we might otherwise wish. Equally important is that all who work in the yard, at every level, should be fully identified with making a success of the company. It is in pursuit of this objective that the Government have published a discussion paper on worker participation in the shipyard (which we discussed at Question Time this afternoon) and have called for concrete proposals for the introduction of industrial democracy in the company. Important as these different aspects are, they are not the main consideration. The overriding consideration must be whether shipbuilding in Northern Ireland has an economic future.
The proposed further financial assistance under this Order will provide Harland and Wolff with a much-needed breathing space and enable the shipyard to continue in operation in the short term. But it will not, and cannot, in itself secure survival in the long term. Moreover, it
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must be made clear that there is not a bottomless pit of public money available to keep the yard in existence regardless of performance. These funds can be made available only so long as there is some reason to believe that the company can achieve a viable future and that genuine efforts are being made by all who work at Harland and Wolff to secure this objective. It is on the effort and resolve of everyone in the company that its future now depends. Clearly no one could guarantee success or expect it to be guaranteed, but if this Order is approved we shall be giving management and workers an opportunity to show what they can do. My Lords, I beg to move.
Moved, That the Draft Shipbuilding Industry (Northern Ireland) Order 1975, laid before the House on 21st April, be approved.—(Lord Donaldson of Kingsbridge.)
5.27 p.m.
Lord BELSTEAD: My Lords, as the noble Lord has explained, this Order provides for further Government finance for Harland and Wolff and this is to be done, as Article 3 of the Order states,
"to provide, maintain or safeguard employment in Northern Ireland."
As the noble Lord said, on 26th March the Northern Ireland Department of Commerce published a Discussion Paper. Industrial Democracy, and it stated:
"The Government have stated that they cannot go on pouring money into Harland and Wolff indefinitely ".
I agree with the noble Lord, Lord Donaldson, that this is undoubtedly a fact—a fact underlined by the present economic state of the United Kingdom.
This Order, therefore, marks a serious step for Northern Ireland, and the noble Lord's closing words underlined that fact. It is also a serious matter for the Government which is, after all, through the Northern Ireland Department of Commerce, to acquire Harland and Wolff share capital, to take on the enormous prospective losses of Harland and Wolff's existing contracts, and to shoulder the responsibility of ensuring that in future Harland and Wolff will be run at a profit. Even though this historic yard, extensively modernised, has, as the noble Lord told the House, a full order book, these responsibilities will require a willingness to face facts in the running of industry

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and employment which I have not discerned in Government policy in Great Britain hitherto. But the immediate responsibilities under this Order will be Northern Ireland ones. I hope that a sense of realism and determination may imbue the Department of Commerce in Northern Ireland—and, of course, at the moment this is a responsibility through the Northern Ireland Office—and that this will see Harland and Wolff through to a better future.
May I ask the noble Lord three questions. First, would it be premature to ask him what is the basis of compensation so far as the value of Harland and Wolff shares to be acquired is concerned? In any event, what is the percentage of shares which remain to be acquired in the company? Secondly, what effect will this expenditure have on the rest of the Northern Ireland Budget for the near future? In the discussion paper, I think the Secretary of State said that he would shortly be publishing a White Paper on Public Expenditure in Northern Ireland for the years up to 1978–79. Are the Government yet ready to say what effect the Harland and Wolff decision will have on other Northern Ireland public expenditure?
The discussion paper of 26th March was mainly concerned with outlining ways in which there could be worker participation at the yard. In that paper this was said:
"The vital question is, who makes the decisions and do the workers themselves want the responsibility of making the yard a success? "
It may be that some very difficult decisions will have to be taken concerning productivity and manning, although so far as manning is concerned it is obviously the hope of everybody that the future of Harland and Wolff will be a future of expansion. My third question, therefore, is this: have the unions yet agreed that they wish to be involved in decisions of this kind, decisions which are going to be essential for the future of the yard and ultimately for the prospects of employment within the yard? Of itself, this Order solves nothing; but with realism and goodwill the future of Harland and Wolff, which is so essential to the economy of Northern Ireland, may be assured.
5.31 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am grateful for the speech of the noble Lord in which he has accepted this rather difficult Order. As he has said, it is a very serious matter. It would be absurd to pretend that it is not. I can answer his three questions fairly quickly and simply. I need hardly tell your Lordships that the answer to his first question, namely, whether it is premature to ask for the basis of compensation, is Yes, it is premature. This matter will have to be settled in the next Order which will complete the take-over of the firm. It is a fairly complicated procedure and it cannot happen at once; therefore it would be quite wrong of me to make any suggestions. The Secretary of State spoke at one stage about the value of shares, which does not necessarily mean the price of shares. This will have to be worked out. I am afraid, therefore, that the answer to the first question of the noble Lord is that it would be premature to ask for the basis of compensation, and I do not propose to attempt to give it.
The noble Lord also asked about the percentage of capital which is already held by the Government. The answer is that at present the Department of Commerce owns 47·6 per cent. of the issued ordinary stock. In itself, this represents 33 per cent. of the total authorised capital. In other words, a proportion of the stock is not issued. Of the remainder of the total, some 58 per cent. is in private hands, either as ordinary stock or as preference stock, and some 9 per cent. of the ordinary shares remains unissued. I think this is a reasonably accurate answer. In broad terms, at present the Department of Commerce owns 47 per cent. of the issued ordinary stock; 53 per cent. remains to be acquired.
The effect on the Northern Ireland economy of pumping this money into Harland and Wolff will unquestionably be direct, but not necessarily total. There is no doubt that every time this kind of transfer is made the general plans for expenditure in Northern Ireland have to be cut. I do not say that they are always cut by the total percentage; there are possibilities of help from this side of the water. Basically, however, any extra

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expenditure on one project must be met by savings elsewhere.
The noble Lord asked whether the unions have agreed to participate in essential plans for the future of the yard. The answer to his question is that there can be no future plans unless they have the approval and support of the employees, and that is what the company is working on now. Since the Government announced last July their intention of providing financial support, wage negotiations have been focused on productivity targets, and a manpower resources plan is being produced. Therefore the answer is not a straight "Yes" to the question asked by the noble Lord. In fact, I may say to him that I am perfectly certain that we shall obtain union co-operation in keeping the company going and giving it another opportunity to pull itself round.
Baroness HORNSBY-SMITH: My Lords, could the noble Lord tell us how much money, under successive Governments, has already been poured into this company? It is a matter of concern to me that we are told that Harland and Wolff have a full order book. If they have a full order book and still are not making their way, it is a matter of deep concern that again we should be pouring public money into this company. Could the noble Lord say to what extent any effort has been made to find out whether there is overmanning? It is asking a great deal of today's very hard-pressed taxpayers that they should continue to pour money into a company which, according to the statement of the noble Lord, has a full order book and should, presumably, be building its ships at an economic and reasonable price.
Lord DONALDSON of KINGSBRIDGE: My Lords, if I may speak again by leave of the House, I will answer the question of the noble Baroness regarding quantities. In one way and another, by 31st March, 1975, a figure of just under £60 million of special assistance had been put into the company. In addition, this company, like all other companies, has received a certain amount of standard assistance, and there was another £22 million of that kind of assistance. The second question of the noble Baroness related
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to the order book. It is not one that I can answer in detail. Roughly speaking, the position is that we appointed a project team to examine the matter. One of the results was that four orders were cancelled, because it was found to be cheaper not to fulfil those orders than to fulfil them. The kind of trouble that the company has run into is the kind of trouble which many companies have experienced—that they accepted fixed price orders and inflation has gone against them. Also, productivity failed to rise as had been planned, and there were a number of difficulties. We are not saying that necessarily the company is going to succeed: nobody can guarantee that. We are saying that this injection of money is, in our opinion, worth while and that the reward of success will be very great indeed. I think that is about as far as I can take the question which has been asked by the noble Baroness.
On Question, Motion agreed to.

THE HOVERCRAFT INDUSTRY
5.38 p.m.
The Earl of KINNOULL The Earl of KINNOULL rose to ask Her Majesty's Government what current support is being given to the British hovercraft industry in their research and development, what future prospects there are for civil and military home and export markets, what monitoring is made of the experience of operators; and how they see the industry's progress in relation to the development of the hovercraft industry abroad. The noble Earl said: My Lords, I believe that the last occasion that the House considered the British hovercraft industry was in July 1973. In that debate the noble Lord, Lord Beswick, lent his moral support to it in an unusually short, sharp and effective speech which was recorded in Hansard in no few r, or no more than 11 lines. At that stage, he urged my noble friend Lord Drumalbyn that, if his prepared speech reacted unfavourably upon the general tenor of the debate, he should lay it aside and deliver another one. I hope that the noble Lord will not need to heed the wise advice that he gave then and, indeed, that today he will come with a hopeful reply.
May I say how grateful I am to the other noble Lords who have indicated that they intend to take part in this debate, and also how sorry I am that the noble Earl, Lord Halsbury, cannot take part in it. He is somewhat of a godfather to hovercraft. I regret, too, that the noble Lord, Lord Kings Norton, is unable to take part in the debate. However, I am grateful to see that we have a Liberal spokesman in the guise of the noble Earl, Lord Kimberley. I rather feared that, after the experience of the Leader of his Party in his interrupted assault on the beaches of Devon during the last Election, Liberal views may have been somewhat jaundiced towards hovercraft!
The Question on the Order Paper is framed in a fairly wide form and I hope that the noble Lord, Lord Beswick, and his advisers have appreciated that its purpose is to seek an up-to-date report on the continuing development of what some people feel will be a very great industry. The most intriguing part of hovercraft undoubtedly is its numerous applications, from the very large passenger-carrying craft across the Channel to the leisure "fun" craft across the Serpentine; from the industrial platforms, moving oil-platforms and tanks over water and ice floes and deserts, to the little medical hoverbed designed for treatment for badly burned patients. Looking back over the debate two years ago, I think it is true to say that at that time the industry faced a bleak future. It seemed then that the Government of the day were showing signs of a certain increasing indifference to the industry. There was evidence that the hard-won technical know-how of this industry was beginning to slip away from the grasp of Britain and to move across the water, indeed to move across not only to France but to America and Japan.
When one looks back to the time of the invention of the hovercraft by Sir Christopher Cockerell one obviously hopes that it will not join the long and shameful list of British inventions wantonly and wastefully thrown away for other countries to exploit. What has happened in the last two years to this industry? Abroad we see that there has been a continuing growth of investment in hovercraft research. I am advised that in the United States of America the re-
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search programme up to 1975 has now grown to some 206·9 million dollars, all principally involved with defence. For the 1976 Budget, the Department of Defence is requesting, I understand, some 38 million dollars together with an amphibious assault craft programme amounting to some 20 million dollars. That is a very substantial programme and we know that in France the Government is supporting the N 500 craft which, when it goes into service—if it goes into service—will he a direct competitor across the Channel of the SRN 4. We know that in Canada there is another Government programme for tackling operations in the Arctic. Finally, of course, we know that Japan is very interested in hovercraft and its development, and is building hovercraft under licence. Perhaps when the noble Lord, Lord Beswick, replies to the debate, he will be able to give us more information on what is really happening abroad.
At home in the last two years, I suggest that the industry has had somewhat mixed fortunes. I think it is fair to say that in Whitehall the industry has not been viewed with much enthusiasm. In 1973 the industry was given what many people may have thought was a Mafia type kiss of goodbye by being given its terminal grant to be used up by 1974 to develop existing craft. At the same time the hovercraft directorate within the DTI was abandoned. But perhaps worst of all was the publication of the White Paper on the Channel Tunnel project which gave only four lines to the hovercraft and its potential, despite the fact that, at that time, five hovercraft were taking some 30 per cent. of the traffic across the Channel.
The noble Lord, Lord Beswick, may say "Ah, but that took place in the previous Administration ", but I regret to tell him that things have not improved with the present Government. In January of this year the Government were asked in another place for information on the current hovercraft exports and support, and they gave the figures as being 0·9 million in 1972, 2·3 million in 1973 and 1·5 million in 1974. When one looks at only one hovercraft company, namely BHC, one sees that, in fact, these figures are not accurate. Again, I hope that the noble Lord will be able to clarify the position, and, indeed, the position

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with regard to the research and development programme, which again was challenged by the industry.
The main purpose of my short speech now is not necessarily to bring up these old points but really to ask the Government whether they will recognise the very important part they need to play in the hovercraft industry. I think few would disagree that the industry is still facing—indeed even more so—very challenging competition from abroad. We know, as well, that the original patents protecting this British invention have now a fast-diminishing life-span before being open and unfettered in the world markets. I believe the Government cannot afford to adopt a policy of inaction and indifference to this industry if it is to thrive as a British industry. The role of the Government in industry and the part it can play, not just in the funding of research and development but also by information and credit assistance, and indeed by purchasing craft, is something which should be examined. I should like to suggest to the noble Lord that an independent committee should be set up by the Government to investigate and study the hovercraft industry. Perhaps the study could be made by the Centre of Transport Studies at Cranfield. Evidence could be drawn from manufacturers, from operators and from consumers and consultants, to examine not only the potential of the industry, its employment, its export earnings, but also the vital role between Government and the industry.
My Lords, what has the industry achieved in the last two years? I say two years because it was two years ago when we had our last debate. I believe that its achievements, and indeed its future, appear much more heartening. The result of its exports we have seen with the Hover Marine Company in Southampton, which employs some 150 people; they have exported no fewer than 30 passenger-carrying craft to 14 different countries. We have seen the British Hovercraft Corporation—the largest manufacturer, employing 2,000 people at Cowes—again with a good record of exports, mainly in the military field at the present time. Indeed, I believe it exports some 74 per cent. of its production and it was awarded the Queen's Award for Industry only a
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couple of weeks ago. One also has Vosper Thorneycraft, a highly independent and profitable company, which as we know has been developing a large military craft but now faces the uncertainty of nationalisation. I hope the noble Lord will be able to say what the Government intend to do to maintain the hovercraft division within Vosper Thorneycraft.
But there is one other factor which has been a major encouragement to the industry, and that, of course, was the cancellation of the Channel Tunnel project. This obviously involves the large SRN 4 craft. The Channel at the moment has only five craft operating between two operators—Hoverlloyd and Seaspeed. I understand that Hoverlloyd has shown a profit for three years and Seaspeed certainly showed a profit in 1973. The position of the Channel crossing and the SRN 4 is quite clear to the noble Lord, I have no doubt, but perhaps it is worth emphasising that there are two issues facing the industry and the Government at the moment. The first is that the Government—or initially British Rail—should give the go-ahead for a stretched version of the existing SRN aircraft to offer an additional 50 per cent. capacity. The second decision is, of course, the second generation of the SRN 4 to give a better operational performance and one which, I understand from the manufacturers, could lead to a fuel saving of some 60 per cent.
We know that looming large in this decision is the French craft, the N 500, and we know that, if no decision is taken in the reasonably near future, the French craft could become more and more competitive. If one assumes that Seaspeed can persuade its parent company, British Rail, to proceed with, and ask the Government to give the go-ahead to, the stretched hovercraft, I hope the noble Lord will be able to give us an assurance that the approval of the Government to any such application will be as speedy as possible, and approval will not be linked with some other Railways Board requests. It is vitally important that any hovercraft policy by Seaspeed should be judged individually on its merits. The importance of the timing of the decision of the Government and the Railways Board has been reinforced

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by the joint trade unions at the British Hovercraft Corporation, as well as by the management. I hope the, noble Lord will be able to say something firm on this.
My Lords, turning to the next generation of the SRN 4, I hope the noble Lord will be able to say whether the Government are encouraging both operators and manufacturers to get together to hammer out an agreed specification. With reference to the smaller craft of hovercraft, I know the noble Lord, Lord Selsdon, will be dealing with this particular aspect and, indeed, with other funding problems. I should like to ask the noble Lord three specific questions on this and other applications of the hovercraft.
My first question involves the industrial hover-transporters. I believe there are a number of very successful small companies in this sphere which have won large export orders. I should like to have an assurance that the Government are giving support to these companies, if asked, not only with funds, but with credit facilities and even better, information from embassies about the markets abroad. My second question refers to the hoverpad for crashed vehicles at airports. This matter was raised in 1973. I do not know whether there are plans for any of the airports—or, indeed, whether Heathrow has plans—to have a hoverpad available to lift off any aircraft requiring it.
My Lords, the third matter concerns the hoverbed. As the noble Lord, Lord Beswick, will recall, this bed was heralded with some acclaim five or six years ago when it first was introduced at the Mount Vernon Hospital. I do not think much has been said about it recently. It would be interesting to know whether the medical world have proved its application, and whether the Government is continuing with research. The hovercraft industry is still a young industry. It is very virile, fascinating, and totally opposite to a lame duck. For some years its potential has been somewhat marred, I believe, by a degree of overenthusiasm and by extravagant claims. I hope that it is now passing through its puberty stage, and that its passenger-carrying capability has been proved viable. Competition is increasing from abroad, and our technical lead will not long remain.
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Unless the Government show their resolution and support, I am sure that the hovercraft industry will be lost from our grasp.
5.54 p.m.
The Earl of KIMBERLEY: My Lords, as the noble Earl, Lord Kinnoull, said, the Liberal Party has been involved very intimately in the past with hovercraft, and even if not in every sense satisfactorily, still with enough faith to continue in praise of them. The noble Earl explained very eloquently about the SRN 4 and about cutting it in half to make a stretched version. However, I have been led to understand that, if this is to go ahead, it is very important that the order for the first one should be given by July, as, otherwise, it will make life very difficult for the British hovercraft factory.
There is a further point worth raising on this matter; namely, that the French N 500 already referred to is Government subsidised. I have been led to understand, and knowing the French it is probably true, that they will be delighted if they can drive our hovercraft off the Channel. The British Hovercraft Corporation, unlike many firms today, is not asking for any money from the Government. The Corporation has a large labour force. If it cannot find a more certain future, it may be possible that this will lead unnecessarily—and I hope that it would not—to redundancies, as well as putting into jeopardy the whole future development of the hovercraft industry in this country.
As your Lordships will know, this is a British invention. It would be tragic if the United States of America—and, in particular, France—took the lead in this industry, despite the British pioneering that we have done. It may interest some of your Lordships to know that, if you add 48 ft. by cutting an SRN 4 in half, you increase the capacity from 30 to 54 cars, and from 254 to 394 passengers. This machine, then, would compare more than favourably with the French N 500 which carries 65 cars and 385 passengers. The SRN 4 has proved it is commercially competitive in service. If it can get the order to stretch one of these, it would give great incentive to the British hovercraft industry to enlarge itself, and to

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keep well ahead of any foreign competition.
It is an interesting point that, since 1966, the Government have put only £9 million into the British Hovercraft Corporation. I have been led to believe that the Government have spent money elsewhere, but not with the British Hovercraft Corporation. The total figure for research and development is £15 million. That has mostly been funded by private investment. Each year, the hovercraft grows more efficient—the power/weight ratios improve, the service reliability gets better, the seaworthiness and seakeeping in bad weather improve. In the new generation craft, it has been worked out that fuel consumption would be 15 per cent. less than ships per unit of payload. It may be coincidental that many aircraft seem to work better when stretched. This seems to work also with the hovercraft. All these points really need no new total technology.
My Lords, I repeat that the British Hovercraft Corporation is not asking the Government for more money. If possible, it would like an endorsement by British Rail, which would be, of course, subject to Department of the Environment and Treasury approval, hovercraft. That is a possible reason I should like to mention. During the last few years, I believe no fewer than seven Ministers have held responsibility for hovercraft. That is a possible reason why we do not have a rather more concerted policy. Perhaps the noble Lord, Lord Beswick, can give this matter some active consideration—possibly in consultation with the right honourable gentleman the Minister for Transport—to allow a publicly-owned sector of the operating industry to undertake freedom of choice in its routes and commercial judgments, and to rid it of the fetters of the British Railways Board.
My Lords, my last question to the noble Lord, Lord Beswick, stems from the fact that I believe the United Nations have published a book entitled Air Cushion Vehicles for Developing Countries. This book is being published in English, French and Spanish. I should like to know whether our commercial attachés in each of the developing countries are in possession of this publication. It contains much information about
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the use of hovercraft. Most of these are British by reason of our lead in the technology. It seems slightly curious that successive United Kingdom Governments have done so little to publicise the potential for hovercraft in the developing countries. It is to the credit of the United Nations that they have undertaken this work.
6 p.m.
Lord SELSDON: My Lords, my noble friend Lord Kinnoull and I are to some extent in cahoots in this debate, not really as Back-Bench Conservatives, but, I hope, more as patriots. I shall speak on a fairly wide-ranging theme, with no intention at all of criticising or attacking the policy of the present Government or the last Government or previous Administrations since the hovercraft industry began. I think there is one point of concern. It is a fairly true statement that if the right steps are not taken now, yet again Britain will fail to take advantage of turning her technology into good export orders and dominating an industry which we founded. The question I ask is, does the United Kingdom want to have a hovercraft industry? Is there any reason why she should?
I am not making a plea on behalf of the industry to pump yet more public funds into a Selsdon lame duck, nor am I suggesting that we need any other legislation or change of organisation from what exists already in the hovercraft industry. The hovercraft industry at the moment is not an ailing industry, it is a fledgling industry. It has a turnover of £10 million, £11 million, or £12 million; it employs under 2.000 people. and is divided roughly into three areas: the large manufacturers of large craft which sell at a price of £4 million or £5 million upwards; the manufacturers of platforms which do not have prime movers, which means they have to be towed or moved about for oil rigs or drilling operations, and which sell for up to half a million pounds; and the manufacturers of the smaller craft, going right down to tiny operations which sell for as little as £1,500.
It is not an industry which needs vast amounts of capital. It is not an industry in which vast amounts of capital have now to be spent on technological development. I believe that the public funds pumped into the industry since it began

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total something around £16½ million, and indirectly the Government have already received back something between £2 and £2½ million. We are not saying to the Government, "Find large amounts of public funds "; but what we are saying is that if there is not the right cooperation between Government, the industry and the potential purchasers in overseas markets, then our industry again will be upstaged.
I must declare an interest in this. It is a rather roundabout interest, in that the group with whom I work did have an investment in one of the operators of hovercraft, a rather disastrous investment which we sold not so long ago. We also, in one of the other companies in our group, insure hovercraft in various areas. When I suddenly, about six months ago, thought that there must be a future for the hovercraft industry, I started to take an indirect commercial interest. I found to my surprise that many of the smaller companies were in dire financial difficulties; that few of them could finance any major orders or contracts which they might receive; that much of the expenditure which was needed to turn the technology into money could not be met.
The Americans often have an appropriate phrase. The word "know-how" is the magic phrase for converting commonsense into cash. We have the development in the industry. We have virtually all the technological development that we could require, so much so that the rest of the world acknowledges this quite readily, but with a certain amount of cynicism, because again they believe that yet another British invention will help to make money for another country, and that we will be funding the technological development on behalf of our international competitors.
As your Lordships may know, or as I believe is the case, in five years' time many of the patents expire. The American industry is sitting waiting for this to happen, waiting for all the problems to be ironed out, with plans to move in and take over the hovercraft industry and make a profit, as it has done so often with other British inventions. The Japanese, who are past masters at using other people's technology to develop their own exports, are doing the same. They have licences, but they have been buying
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British hovercraft; some are being taken to bits, and in due course throughout the South-East Asian market and other areas Japanese hovercraft will appear with Japanese engines, with wonderful service and no problems, and with great reliability. The French are perhaps more cunning than many others, because they take a much longer and broader view. They are sitting on the other side of the Channel with this hovercraft. It is not just a hovercraft; it is the start of the French hovercraft industry. If they can get their hovercraft on the Channel route, it becomes the showroom of the world; everyone will be taken to look at it. We know the efforts the French are making in the Third World to sell their technology and know-how and to obtain funds for recycling in French industry. If that hovercraft is operating on the Channel route, then we have very little hope of selling any of ours when the French become involved.
These are three competitors, and for the moment the world cannot afford four hovercraft industries. It is going to be a medium to long-term potential, and although the potential lies to some extent in certain areas of transportation within Western Europe, the bulk of the potential lies in the Third World, in the developing countries, where the principles of the hovercraft and the hoverplatform offer considerable advantages. I have made these inquiries myself as I have been round the Middle East and some of the developing countries in recent times, and it is sad to find a lack of knowledge of what the hovercra t can do, a little misunderstanding of the concept. But some people—I speak of the French again, and I have spoken with them of the future which lies in all sorts of areas—have said to me that the hovercraft is the first means whereby war could be made in mid-winter in the Arctic, where from Soviet Russia major attacks could be made on Scandinavia in the middle of the night, at high speed in warm comfort. I myself never thought that a hovercraft would go running over ice. We look at the Alaskan pipeline, where one of the British companies has just sold £1 million worth of hoverplatforms and is well respected and regarded by the Americans. This same company was forecasting that in this year it would have a turnover of just £1 million, but it has already

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exceeded that in the first quarter. We have some of the smaller people who in developing countries, whether it be Zaire or Indonesia or parts of Africa, have the inquiries, not necessarily the orders. The smaller craft are selling at low prices and make up only a very small section of the industry.
My Lords, I have spent 17 years working in the international field, often in a marketing role. I often regret the way that we British have never been capable of selling or delivering many of our products abroad. We are continually being upstaged. The hovercraft is more than just an invention; it is an emotional thing, it is a prestige thing. Those of your Lordships who know the realities of that sale to Iran by BAC realise the power and feeling that has been given to the Iranians for the future of their activities in the Gulf. The other Arab countries all have interests in hovercraft, often again for emotional reasons. We know that the Americans and the Japanese are waiting to exploit these as time goes by. I was saying earlier that we do not ask the Government to "fork out" large amounts of money for the industry. What we ask would be the ideal here of the mixed economy: of Government with industry, with the private sector, and also within the context of the European Community. In all of these things there has to be some form of co-ordination and some form of centre.
It is not an industry that the Government would wish to nationalise; nor would it be wise to do so, because it is a fledgling industry, not a developed one. It is not an industry which in the next two or three years is going to offer large job opportunities; nor is it an industry which can produce vast export orders immediately. But it is an industry which, within a period of five years, could became the subject of a major world operation. If we took the right steps now, we could put ourselves so far ahead of the rest of the world that they could not afford the investment to catch up. As your Lordships know, there are areas of the private sector where Government involvement through NRDC has been very helpful in providing money for technological development, improvement of innova-
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tions, et cetera. Many of the hovercraft currently manfactured may not be up to standard; there are technical faults.
There are criticisms of the "meccano and glue brigade ", who have sold things in certain parts of the world which did not work, and which perhaps put people against the hovecraft principle as a whole. There are criticisms of, "A bunch of Spitfire pilots who do not know a thing about money and just want to go flying around over water and land ". That may have been the case a few years ago, because every industry of this sort takes a generation to develop, a further generation to make a lot of money, and it then seems to take another generation to fade away and die. I do not think particularly of the motor industry, but there are others where this technological development has a certain life period. One of these definitely lies in the developing world.
The applications are legion if people can apply their thoughts to it. The people back at home cannot understand the applications to which a hovercraft can be put unless they have been out in, say, Indonesia and have seen a road being topped up and sinking continuously into the marshes, and costing thousands of pounds each year to rebuild, when a hovercraft could carry people over quite happily. Then there is the 90 day or 100 day demurrage in the major ports where people cannot get their cargoes unloaded, and have suggested to me that dumb lighters on the hovercraft principle which could go straight up the beach could easily be used, and could recover their costs within a period of months. Then, in the Middle East, the Arabs have said to me, "Will you run a hovercraft service from Jedda across the Red Sea?" Others have said, "We need things for pilgrims," and for all forms and areas of activity which I have never thought of before.
We tend in this country to be almost too Western orientated, and to think in terms of Western economics. In the past, perhaps, we looked down on the developing world as somewhere where we should provide aid, but hardly ever thought of it as an area for marketing opportunities. The hovercraft industry, in itself, cannot afford to launch the major campaign

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which is needed to educate people throughout the world. Nor should it do so, if the markets and opportunities are to fall into the hands of the Japanese, the French, or the Americans. There are some possibilities, and I think it is always better to try to be constructive even if, at times, you may tread on people's toes. The hovercraft industry is obviously against being nationalised in the big league. It is certainly wrong that the hovercraft division of Vosper should be completely in national control. I will not go into the reasons why, but when you have a fledgling industry which depends upon entrepreneurial feel and drive, it is totally different from a developed industry.
I have spoken with the various hovercraft companies over the past two months. I have spoken with other people from other countries when I have been at the Council of Europe, or elsewhere abroad, on this subject. The admiration which is expressed for the potential of the hovercraft is considerable. The backbiting which used to exist within the industry seems to have disappeared and faded away. There appears to be one common sense of purpose, and a willingness to try to co-operate with the Government—preferably at arm's length and as far away as possible, but certainly to co-operate.
I should like to suggest that one gives some consideration, not to rationalisation because that is an emotive word, but to co-ordination within the industry within existing legislation, which might help it to take better advantage of the potential which will lie abroad. We have to look at the sources of finance for the industry. There are Government funds in this country, where large amounts—not large by national standards, but certainly large by private company standards—have already gone in, and more funds are available to develop and improve the industry. In many cases the industry would accept that what has been done by the Government in this area was good and right. There are criticisms that money may not have been provided for a certain project, or someone employing one man may feel that he should have £3,000 today to help him do something else. So there is the British Government as a source of funds.
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Then there is the private sector, which covers the companies themselves, or, one could say, our financial institutions and the individual entrepreneur. The economic climate makes it very difficult to raise any funds for new development from the private sector at the moment. In times of high taxation, the individual entrepreneur was willing to take some risks, but in times of exorbitant taxation he would rather not have any money at all. It is wrong to think that we could rely on the private sector to try to finance, in the short term, a fledgeling industry where the potential return is two or three years away.
There are other things that we often do not think of. Hovercraft technology is regarded within the EEC as an EEC asset. Thinking that I might be able to do something to help, I went off to see the European Investment Bank in Luxembourg. I asked them, Will you provide funds for companies in the hovercraft industry? "They said, after some discussion, "In principle, yes, provided the British Government would approve, because it meets the criteria which we have laid down, and of course the United Kingdom is not asking for as much as we would be willing to give ". I said, "May I tell the industry that?" and they replied, "Yes. The application has to be made in the right way. We will not put up less than £1 million."
It does seem to fit very well, but if you consider the industry as a whole, it meets the criteria in that there is one company in an assisted area, it is high technology, it is connected with energy and transport, and it is without doubt in the interests of the EEC. I would hate to have to argue that with them, but it is within the interests of the EEC. If we can upstage the French by getting EIB to support our industry first, it will be a political move. It will also be a good thing at this time, as a pro-Marketeer, to encourage funds to come from the EEC, because this may give the British the feeling that money is available to help our industries—which indeed it is.
In order to do all these things on the financial side and to bring in the private sector, I went further. When I was out in developing countries I said to people, "If and when, as it will, the British hovercraft industry becomes powerful, is

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it the sort of thing in which you would like to have an investment? "Some of these countries, some with funds in the Arab world, said, "Yes, because this has an application in our country, and it would appeal to us." I then came to the conclusion that with the right approach, adequate funds could be made available. These funds are not for technological development, because the NRDC can provide them. They are really to help finance the industry when it needs financing, and to help with a co-ordinated marketing programme to produce hovercraft on a worldwide basis.
Then I asked what other sources of money could be made available under current legislation. I was told that under Section 7 of the Industry Act money could be made available to an assisted area. One of the companies is in an assisted area. I was told that under Section 8 it might be possible, if there were some reorganisation of the industry, to obtain funds. I thought that it would be totally wrong in these hard times to announce to the country that the Government ought to put millions of pounds into an industry which employs only 2,000 people. Then I thought we ought to see how, and in what way, all of this could be co-ordinated. As your Lordships will know, within the NRDC there is a company, Hovercraft Development Limited, which has done a lot for the industry. But the NRDC function tends to be technological, when the problems now are really marketing, rationalisation of production and, when the craft are in operation, servicing and the provision of spares.
First, one has the role of selling the hovercraft concept. It so happens that by pure coincidence the different companies within the industry do not really compete with each other to a very large extent. There is overlap, but all of them have found a narrow sector where they believe there is a market of their own. I should like to suggest to the Government that they consider giving Hovercraft Development Ltd. a slightly less Government "feel" and a slightly more independent attitude. We should try to use Hovercraft Development Ltd. as a vehicle not only for channelling technological resources, but also for co-ordinating marketing, and perhaps production, and bringing the industry together. I should
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also like, as a Conservative, to suggest that in due course the Government might consider spinning off Hovercraft Development Ltd. into the private sector, which could be a possibility if we were looking for funds in the future.
I have spoken with companies in the industry, and all of them seem to believe that there is a need for some form of co-ordination. I believe that the first stage should be some form of promotional and co-ordinated research programme. Under current legislation of the BOTB, the Government offer to provide a large proportion of the cost of a research project. It could be a worldwide research project, costing a fair amount of money. This, again, could help the industry, because in doing research there is the selling of the principle as well. Rather than necessarily charging off, as individual companies, to major air fairs with major expenditure in far-flung parts of the world, would it not be better to bring the people here?
You cannot sell hovercraft unless someone has seen one, or so I submit. It is expensive to ship a hovercraft or a collection of hovercraft to Indonesia, but under the Inward Mission Scheme of the BOTB the Government could be willing to accommodate missions from countries where the potential lies. This leads one to suggest that we should perhaps have a common demonstration area within the country, probably on the Solent where most of the industry is concentrated. One is led to suggest: why do we not do this now, this year, without a great deal of expenditure? Perhaps one could suggest, too, that Cowes Week would be an appropriate time to get the industry together and to invite potential purchasers from the developing countries.
The hovercraft principle definitely has a potential. That I think everybody will accept. People may criticise the application of that potential. One may say that it could apply only for military purposes; that small hovercraft have no potential. Others may say that it is best for hoverplatforms, and that hovercraft should never try to compete with ships. But whatever it is, there is a potential. The question I have for the Government is: Do they believe there is a potential for a British hovercraft industry? I know that the Americans believe there is a

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potential for theirs, while the French and Japanese wish to develop their own. I suggest, too, that we give consideration to co-operation within the Commonwealth on this basis, because the Canadian hovercraft industry is in similar straits to our own and is wondering in which direction it should go. If the British should fail, the Canadians may wish to co-operate with the Americans. But co-operation with us would surely be more beneficial, particularly in view of the vast Canadian market, developments in Alaska and the need to move into Latin America as well. I know that the noble Lord, Lord Beswick, will be sympathetic to the industry as a whole. I hope that he may give consideration to some of the suggestions I have made. I hope that in three years' time we may see in this country a thriving hovercraft industry which is no longer a fledgling.
6.22 p.m.
Lord WYNNE-JONES: My Lords, after listening to the speeches of the noble Earls, Lord Kinnoull and Lord Kimberley, and also the noble Lord, Lord Selsdon, I feel that I have little of technical importance to contribute, because they have already exhibited very clearly the technical significance of hovercraft. However, there is something to which I must refer. It was in 1968 that the noble Earl, Lord Kinnoull, asked in your Lordships' House a similar Question about hovercraft. On that occasion I took part in the discussion. On balance, I was opposed to any idea of the development of hovercraft. The noble Lord, Lord Selsdon, has given us a wide-ranging account of hovercraft. At that time in 1968, having had a pleasant lunch at Cowes with the Hovercraft Company, I had returned convinced that hovercraft had no future, because it seemed to me that they were developing along lines which could not possibly lead to anything useful economically. I should explain that at that time they had built the SRN 5 and the SRN 6—for some peculiar logic the SRN 4 came later—and the SRN 6 was considerably smaller than the present SRN 4, which is used across the Channel. I travelled on the SRN 6 to Cowes. It was a bumpy, noisy and unpleasant ride. It seemed to me that when you took into account the cost of building that version, it was not worth while.
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Perhaps your Lordships may forgive me if I indulge in some minor statistics on this matter. There are various ways in estimating the capital cost of transport, but I think I am right in saying that when you are discussing hovercraft you have to compare it on the one hand with an aeroplane and on the other with a surface ship. I am not now referring to certain devices for going across swamps but for travelling across open water. If you do this, then there seems to be little doubt—I am not sneaking as an expert but as someone who has studied the expert evidence—that the appropriate way of discussing it is in talking about ton-knots; that is to say, the number of tons that you can transport at a certain speed of one knot. Going back to the time I am talking about, eight years ago, one finds, in making this comparison, that the cost per ton-knot of the SRN 6 then was about 30 per cent. more than the cost of a Boeing 707. It was something like three times as much as the cost of a surface ship. That seemed to me—I may have been wrong—to exclude the hovercraft as a possible means of transporting people or vehicles across the open seas, such as the Channel.
Since then the SRN 4 has been built. Its cost has dropped per ton-knot. I think I am right in saying that the cost of the SRN 4 is now just about the same as the cost of a Boeing 707 and about twice as much as the cost of a surface vessel. This means that the SRN 4 is at least competitive with an aircraft, but not competitive with a surface ship. So it begins to come into a range at which one might think of its potential. Since that time I have had another lunch with the Hovercraft people. I must admit my indebtedness to them and say that undoubtedly they have influenced me: the first time they influenced me against them; the second time I listened to them carefully. I have taken their figures and have looked at them carefully. I have the figures here as I do not wish to quote just from memory. What I now find is that, whereas the cost of the original SRN 4 at the present time is £500 per ton-knot, which is about the same as the Boeing, the stretched SRN 4, cut in half and in which is inserted another section, or alternatively built as an entirely new vessel of equivalent capacity,

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is £200 per ton-knot. That is practically the same as the cost of a surface ship.
This is a sensational improvement. I am, of course, relying entirely on figures given to me, but if they are correct it seems that the economic position has changed dramatically in the last few years. As I said, I took part in the debate which was initiated by the noble Earl, Lord Kinnoull, on 26th March 1968 and on that occasion I was highly critical of hovercraft development. Looking at the matter afresh, I have changed my opinion and I now feel that there is a very good case for looking at the SRN 4 in its stretched version and for going ahead with it.
This case is reinforced by the fact that we have, in my opinion correctly, decided that the building of the Channel Tunnel would be a ludicrous piece of prestigious nonsense. Instead, we have decided to rely on other means of transport, surface and air. The capital cost per ton, knot would be less for hovercraft than for aircraft and it would he virtually identical with surface craft. This seems to me to mean, when one considers the flexibility of hovercraft, that we should go ahead with this form of transport. I say that because for surface vessels one must have ports at both ends, as it were, because one must have the capacity to get on and off ships. This is not the case with hovercraft. One must, of course, have something, but not ports of the conventional type. In other words, one produces flexibility of transport, and in my view this is highly significant.
The time has come for us to look at this matter from a totally different point of view from that when we considered it, and rightly so, eight or ten years ago. The industry has reached the point when it can do this job in a sensible way. I am not fully satisfied that it has necessarily produced the right means of production, but I recall that when I saw hovercraft being produced some years ago I was shocked at its hand-made construction aspect, the way buoyancy tanks were being bolted together, something totally different from the operation involved in making aircraft. I thought at the time that if the Americans got in quickly they would be able to do it much more efficiently than us. But we
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now seem to have reached the point where we can do the job properly, and I hope that we will give every encouragement to our industry to go ahead and do that job.
Like my noble friend Lord Beswick, I was an advocate back in 1964 of what was then called "white hot technology." I am still an unrepentant advocate of white hot technology, because the one thing that could destroy this country is the mentality that we should make only things like fruit machines, soda water syphons or can openers. That will not save us. It is only by making technological advance, in which this country can excel, that we stand any hope of going ahead. I therefore feel, years after my first speech on this subject, that I must now support the idea of the hovercraft.
6.36 p.m.
Baroness WARD of NORTH TYNESIDE: My Lords, I have no technical knowledge of hovercraft, but after having been in another place for 38 years representing two constituencies in the North of England I think I can modestly claim to have some experience of helping forward the Government machine when we want action, and that is why I speak today. I have always been interested in developments with which this country can be connected and, as I say, I have always been interested in finding out how the Parliamentary machine, whether in another place or, now that I am a Member of your Lordships' House, in this place, can be moved.
I have no idea how sympathetic or otherwise the Minister is towards this subject, but I listened with interest to the tremendously interesting speech of the noble Lord, Lord Selsdon. Though I have been in your Lordships' House for only a short time, I have managed to extract details of the grants of one kind or another which have come to the United Kingdom from the EEC. I have been grateful for these details and I was therefore particularly interested to hear the noble Lord, Lord Selsdon, speak of having been to Luxembourg where, I understood him to say, he received a reasonably satisfactory reply. That does not surprise me, in view of the vast number of grants that have been given over a very wide field of development, some

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of which will presumably be successful. Suffice it to say that we have had great success from Europe in this respect, and I was therefore delighted to learn that the noble Lord had make his mark there.
I am equally sure that the Minister is delighted with the number of grants and support that we have received from Europe, and I see no reason why, providing he can get a satisfactory basis with the EEC for going forward, a grant should not be made available from the same source for this purpose. After all, we do not live in a world in which we can afford to let anything go by that has a possibility for development in the future, and I am sure, from the speeches made on this subject today, that a good opportunity lies here.
One thing the noble Lord, Lord Selsdon, mentioned was the problem of getting people to see the hovercraft. I hope that those who are so interested in it will forgive me for saying that, so far as my part of the world is concerned, we are absolutely delighted that we are at last going forward with the Seahorse engine for merchant navy work. I have only fairly recently received an invitation from the three firms on the North-East coast which are to have an open demonstration of the engine so that they can show it off. In a way, I should have thought—devoted though I am to the Seahorse engine, and proud as I feel of our efforts—that the hovercraft would be more interesting than the Seahorse engine for such a demonstration.
As I say, although I can make no technical contribution, I was very interested in what the noble Lord, Lord Wynne-Jones, said when he admitted that he had changed his mind. I think that that is absolutely marvellous. I believe that we ought to change our minds when reasonable evidence comes forward which enables us to do so. I believe we have a marvellous opportunity now to go ahead with the development of the hovercraft. Once again, I refer to the fact that we have had such marvellous grants from the EEC. I believe that that ought to have a great impact in making the United Kingdom answer "Yes" to the referendum, because, at least in my part of the world, if we know that we are benefiting we are much more inclined to put our
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weight behind whatever is available for us to put our weight behind.
I think it would be extraordinary if the noble Lord, Lord Beswick, were to give us an unhappy reply, though I do not imagine that he will do so. I believe he will give an exciting reply and will say that we should get on with it and should do everything we can. I should like to put forward all the matters included in the Written Answer which I received to my Question and which appears in Hansard for last Thursday. They have had great success. There could not he a "No" from the noble Lord; it would not be reasonable. I know that all politicians like to think they are reasonable people, and, though quite often people have hit me down, I always pop up again.
I should like to ask my noble friend Lord Selsdon whether this particular matter has ever been brought before the All-Party Parliamentary Scientific Committee. That Committee ran very successfully for many years while I was in another place. It was there that I became enthusiastic about the Seahorse. I remember very well when my own Party was in Government, when the Secretary of State in question said that the money could not be found, even though the whole development had been financed out of private capital. He said that he had to be quite certain that it would be a great success in terms of export orders.
My Lords, here we are with an old new development or possibly a new old development. I cannot see that any of us in this House would not be in favour of that development. We must have everything we can which will be technologically successful in this modern age. I have been delighted to hear the arguments which have been put forward. As I say, the only contribution that I can make is that I can, in my own way, be rather a bother to Governments if I start arguing for something I think worth while and I do not receive a reasonable answer. I do not think that I need say that, because I feel sure that the noble Lords who have spoken today will get a sympathetic answer. The thing is to try to get as much as we can from a European commitment which would welcome the opportunity of helping us to go forward with this hovercraft service. That is all I have to say. I am very excited and I

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hope we shall have a happy and constructive reply from the Minister.
6.46 p.m.
Earl FERRERS: My Lords, I am glad that my noble friend is excited by the prospect of the hovercraft. I rather gathered that from the tenor of her remarks. I believe that the whole House is indebted to my noble friend Lord Kinnoull for having produced a further example of the knowledge, expertise and initiative in relation to yet another specialist subject which we have come to expect from him. Up to the present moment, I have found the whole debate to be quite fascinating. I thought that the speech of my noble friend Lord Selsdon was very remarkable for its knowledge, wisdom and common sense and it was all done without a note. I believe that it will contribute very greatly to the consideration of the subject.
My noble friend has this evening asked a Question which I find both interesting and important. It is interesting because it asks a number of specific questions of the Government, which I have no doubt the noble Lord, Lord eswick, will answer with his customary precision. What future prospects do the Government think there are for civil and military craft both at home and overseas? That is quite a question, and it is a very important one. I look forward to hearing what the noble Lord says, and I hope that he will be able to give the House a perfectly frank answer and will not feel inhibited about giving too open a recognition of the value of the hovercraft for fear that that might lead to pressure on the Government to participate in the industry either as a major purchaser or as the provider of financial incentives. I hasten to add that by "participate" I do not mean the somewhat bizarre activities of participation by the Government in spheres which have recently been mentioned in the newspapers. As in almost every sphere of life, the Government, even if they do not actively participate, are inevitably involved. Their attitude influences matters, and I hope that that influence will be helpful and constructive, and will be neither destructive nor even an attitude of passive indifference.
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The other part of my noble friend's Question which I think to be of particular interest is how the Government see the industry's progress in relation to the hovercraft industry abroad. I should have liked to add a further question which is how the Government see the future in relation to other forms of travel. All these questions are interesting because we have in the hovercraft a relatively young, new and different industry, which could and should do well, but which could and might well fail. One is bound to ask the question: should it be allowed to fail? Clearly if, as a method of transport, it has no reasonable place in the future, then it should be allowed to fail; but if it has a place in the future, then it should not be allowed to do so. I want to make it perfectly clear that I am not talking about the financial position of any company because I do not know the financial position of any company in the hovercraft business: I am talking merely about the method of mobility with which the hovercraft industry, by its very nature, is involved. If there is a place for this type of travel or mobility in the future, it should not be allowed to fail simply because of lack of initiative to buy, or lack of encouragement, or because of general lethargy, whether by Government or by business. Nor should it be allowed to fail simply because ab initio there is not worldwide clamour for its products.
I thought that my noble friend Lord Selsdon was so right when he said that it takes a generation to develop a product and a generation for it to make money. Of course, you cannot get to the second generation without having first gone through the first generation. If you want to sell any new product you have to test the market and see whether it is required; then make the product; and then go out and sell it. That is fine if the product consists of tins of cat food selling at 30 pence each, though I daresay that the cat food manufacturers would tell you that it is a very dicey business, fraught with appalling financial risks. But when you are trying to sell a totally new concept of travel and propulsion, where you have to make inroads into methods of propulsion that are universally accepted and proven and which have stood the test of time right across the board, and where the unit cost is not 30 pence but £2

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million or £5 million each, you are on to a very different kind of ball game.
One has merely to look right at the other end of the spectrum—at Concorde—to appreciate the point. The tough part of commercial business life can be appreciated when one realises that the first contract for the SRN 4 which the British Hovercraft Company had was for the second craft it built, not the first. The company had to make the first craft "on spec." in order to achieve the guaranteed contract for the second one. Therefore there is obviously a substantial element of risk in this type of enterprise. I am no maritime expert, but it has always seemed to me that through the whole of life on this earth the one limiting factor to the speed of ships has been—one thing, friction; the friction of the water. To have overcome this resistance by, as it were, taking the boat out of the water and resting it on a cushion of air, making it theoretically resistant-less, is, at the same time, so simple, yet something which has defied human beings until just the other day.
I venture to think that the system must have a part to play in transport in the future, though I am not certain exactly where that part will be or how large it will be. Let us be clear, the invention of the system is a British one and we are the leaders of the world in it. My noble friend Lord Kinnoull said that we must not let it become another wonderful British invention to be dropped. I agree with him. Nor do we want to see the axe swinging over it as we see it swinging over some other new enterprises. As I sat on the Bench this afternoon I could not help thinking wryly that whenever there is a really exciting invention—particularly if it is something that moves—that is likely to come into trouble, it is the noble Lord, Lord Beswick, who always has to sit there and answer the case for the Government. He always does it well and with his heart in the right place and we hope that he will show both those qualities this evening.
My Lords, I have had the advantage of travelling in a hovercraft on only two occasions, once going to France and once coming back. I came away with two totally divergent opinions. On the first occasion it was a beautifully sunny day, the sea was calm, we whistled across the Channel and arrived in 35 minutes.
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My heart swelled with pride and I thought how wonderful it was to see this superb British invention. On the way back it was a choppy day—not a rough day. The machine crashed into the troughs of the waves and then shot up, rather like a golf ball. It was a very frightening experience, and it reminded one of being in something which was a cross between a scenic railway and a high-speed lift. It was not only a disagreeable experience, but an extremely frightening one. We were all holding on to the bars in front with the whites of our knuckles showing, when all of a sudden a piece of the ceiling fell down, just for good measure. I can assure your Lordships that nobody was talking at all. All of a sudden a little boy piped up from the seat behind me, to break the verbal silence. There was a lack of mechanical silence but there was considerable verbal silence. The boy said in a succinct way, as only the innocence of youth, with youth's pristine clarity, could "Daddy, I don't like this." He voiced the thoughts of all of us.
Those were the early days of hovercraft travel, and that was just one occasion. Things have altered. That was on the route where the future for this initial stage of hovercraft commercial development will take place. Traffic between this country and the Continent is bound to increase, whatever results this wretched referendum produces. Now that the Channel Tunnel project has been abandoned, as the noble Lord, Lord Wynne-Jones, said, this must mean that all the traffic which would otherwise have gone through that tunnel in the future will now go either by air or by sea. It follows that there should be scope not only for more ships but also for more hovercraft. If one accepts that, there are two important points here. Not only is there now more scope for hovercraft to operate on the Channel routes and thereby enable more craft to be built, but—far more important—the industry will be given a chance to develop as an industry.
If the hovercraft principle has a place in the future, it has to develop somewhere. It must be given an opportunity to develop. It must be helped to develop. The opportunity for it to develop is given as a result of the abandoning of the Channel Tunnel. Whether it will be helped or

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allowed to develop depends upon whether the cross-Channel operators will purchase, or be allowed to purchase, new craft. Here the tough commercial world of market forces comes into play. This I would not seek to eliminate, other than to stress that here lies what could be the seed-bed on which the industry, and the principle on which the industry is founded, can be allowed to develop.
Research and development going on at the moment indicates that future craft could operate at speeds of 55 to 60 knots, as opposed to speeds of 50 knots, which would require 40 per cent. less power. This in turn would mean a fuel consumption of 60 per cent. less than that used on current craft, and this would be a fuel consumption of 15 per cent. less than ship ferries. These are bright and exciting possibilities. If these possibilities are realised, who knows what effect there could be on overseas sales and methods of travel. It may be that it is pie in the sky, but I do not think so. Rather it is something we ought to encourage.
My guess is that there is a good place in the future for this industry and for the method of propulsion which it adopts. My fear is that if we do not get over the hump of what might be called the "post-prototype era ", that place will never become a reality. My guess is that the hovercraft business is fraught with financial anxieties. My hope is that those anxieties will prove to have been worth bearing, because we need the principle. But, my Lords, the industry needs nurturing.
7.0 p.m.
Lord BESWICK: My Lords, as the noble Earl, Lord Kinnoull, has reminded us, he has raised this subject before. If I may say so, he is more helpful each time he speaks about the hovercraft. I congratulate him on the way he raised the matter today and on the support that he has managed to assemble in the House. Despite world economic uncertainties the fact is that the outlook for this industry is better now than on the last occasion when the noble Earl raised the subject. The whole atmosphere appears to be improving since the days when the noble Earl, Lord Ferrers, was hit on the head by a falling ceiling and I hope that the young boy to whom he referred will
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be now as eager a convert as my noble friend Lord Wynne-Jones. There is a much wider acceptance of a steadily increasing variety of hovercraft as a possible solution to particular transport problems or the use of the principle to solve difficult engineering problems.
This has not come about overnight and I pay tribute to the industry and, with respect, I would say to the noble Lord, Lord Selsdon, that he probably unintentionally underestimated the efforts made by the industry and, maybe, underestimates the efforts they can still make and I have no doubt will make. This technical lead can be maintained only by research and development, which leads me to the first part of the noble Earl's Question. In the current financial year support for the industry is expected to amount to £1·4 million. It is not possible to break this figure down into its constituent items as it includes military commitments.
Apart from military commitments, it includes funds provided by the National Research Development Corporation and by the Department of Industry under the Science and Technology Act, including payments under contracts under the special £2 million assistance made available in 1972 and under contracts that pre-date that time. When the £2 million special assistance was announced it was said that in future the industry would not receive special treatment, but for R and D purposes would be treated as any other industry. This left two channels of assistance open—the NRDC, whose assistance had been available previously, and the Ship and Marine Technology Requirements Board. Since the announcement of the special assistance there has been little interest shown by firms in taking advantage of these arrangements until recently. From recent comments quoted in the Press it would seem that there is some misunderstanding of the NRDC's role in providing assistance to the industry. It may be useful if I say a word about that.
It is part of NRDC's job to take risks; but it took courage in 1950 to back Sir Christopher Cockerell's invention, and I am glad that the noble Earl, Lord Kinnoull, paid tribute to the contribution made by the noble Earl, Lord Halsbury, managing director of the Corporation at that time. NRDC's subsidiary company,

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Hovercraft Development Limited, usually known as HDL, is not only responsible for the worldwide licensing of important patents but it also provides to manufacturers and operators advice and other technical services from its office in Hythe. HDL is also the company through which NRDC normally channels its funds to industry in support of industry's own R and D projects. Typical of the projects assisted by NRDC is the recently announced development by Hovermarine Transport Limited of a 200-seater side-wall craft, designated HM5, to whose development costs the corporation has agreed to contribute about £500,000.
It is essentially a matter for the Corporation to decide which projects it supports, but I am pleased to say that NRDC seems to be in a healthy financial state—unlike many of us around here at the moment—and is prepared to consider the provision of financial assistance for development programmes in the hovercraft field. NRDC does not make grants, but will share with a company, usually on a fifty-fifty basis, the cost of developing a new product if, in the Corporation's opinion, there are reasonable prospects that the project will be a technical and commercial success. If the project is successful, NRDC will expect a financial return on its investment—and I hope that this is acceptable even within the philosophy of the noble Earl, Lord Ferrers.
The assistance of the character described by the noble Lord, Lord Selsdon, would seem to be somewhat different. It seems difficult to justify promotional activities, especially if for only a selected number of firms; but if there is an element of restructuring, if the company of whom he is thinking could put forward a scheme of merger or strengthening by coming together in some way, then there should be a possibility of assistance under Section 8 of the Industry Act and it might be possible for the noble Earl to recommend that something of that kind be more closely considered. I know that he has done a great deal already. Similarly about the EIB: if anyone puts a proposal to them or sees me and asks how to present such a proposal we should be glad to give assistance. Until there is something definite, I am afraid it is impossible to say that we support them.
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I should also say that the Ship and Marine Technology Requirements Board are prepared to consider proposals for assistance towards research projects. I hope—and my feeling is that this particular Requirements Board also hopes—that some proposal will be made. The initiative must come from the companies concerned. Before leaving R and D, I would pay tribute to the companies who are using their own money to invest in the future. It will be clear from the description I gave of how NRDC works that Hovermarine Transport will be providing substantial funds for the development of the HM5. Similarly, I know that the British Hovercraft Corporation are working on developments with the objective of halving operating costs, which would be of tremendous benefit.
Several noble Lords referred to the cancellation of the Channel Tunnel. Obviously, this has been a most significant factor in the new situation. British Rail have gained a good deal of experience on their services although they are still not as reliable as British Rail would wish. However, they make an important contribution to carrying the cross-Channel traffic and with competitors, as the noble Earl has said, on some of the routes, they have about 30 per cent. of the passenger traffic. In the light of this situation British Rail are considering their requirements. The Board are re-examining the whole of their plans for re-investment in the Channel crossing. Hovercraft clearly have economic attractions because of their speed and effective capacity in a given day. The decision is one for British Rail, and preliminary assessment of their investment needs in this new situation shows considerable potential for hovercraft. The Department of the Environment have not yet received proposals from British Rail, but they and British Rail themselves are aware of the urgency of a decision if the craft are to be in operation by the summer of next year.
On the military side, the most important event is the Navy's investigations into the role of hovercraft as mine countermeasures craft. The Royal Navy's Hovercraft Trials Unit, which succeeded the old Inter-Services Hovercraft Unit, was commissioned at Lee-on-Solent on January 17th and its work will be directed towards this end. Any successful outcome of that could open up an important

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market for the industry. As a number of noble Lords have said, exports have always provided a good market for the industry; and this continues to be the case. On the civil side, in the United Kingdom we have a well-established transport system, so that the introduction of hovercraft had particular difficulties in competition with existing facilities. But abroad there are much greater opportunities, as the noble Earl said, where existing competition is not so well organised, or where conditions are met in which the unique advantages of the hovercraft give it an edge.
Hovermarine Transport have been particularly successful in their marketing of their HM2 craft. I gather some 30 are operating in different countries. They now have craft operating in a number of countries overseas and have recently sold four to Hong Kong and another to Bolivia. The manufacturers of the smaller craft look mainly to overseas markets and here there have been some notable successes, although I understand the financial problems which face some of them and to which the noble Earl referred.
Whereas Hovermarine Transport have been successful on the civil side, the British Hovercraft Corporation have experienced more success with military craft and there are good prospects for them, particularly in the Middle East where they have already made good sales. Like the noble Earl, I offer my congratulations to them for their achievement in obtaining the Queen's Award for Industry.
The Earl of KINNOULL: My Lords, I should not like to mislead the House. I believe Hovermarine, although of British origin, is an American-owned company at the moment. That is a point which would demonstrate some of the efficiency of the American system of marketing abroad.
Lord BESWICK: My Lords, I am going on to say something else which might support that point of view. One important overseas contract that the British Hovercraft Corporation have won is that for development of the bow seal for the United States 2,000-ton surface effect ship development programme. It
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was suggested by the noble Earl that the figures given in another place for exports were inaccurate. I do not think that is the case. They were possibly misleading, because they referred to civil exports and not total exports. I gather the military exports are listed under warships and do not appear in the export figures. That is the reason for the apparent discrepancies.
Before leaving the sales prospects, I wonder whether I may mention what was described as an intriguing side of the industry, and, in terms of potential, as important as the other; namely, industrial applications. It has been part of the education process that industry is at last becoming aware of the possibilities in the field of materials handling offered by the air cushion principle. These range, as the noble Earl said, from the small hoverpallets to large hoverplatforms and include perhaps the most remarkable of all—the movement of large oil storage tanks in one piece without the need to dismantle them. Air Cushion Equipment, the company which pioneered this method of moving tanks, have recently made a breakthrough in the United States where the potential is great. After successfully demonstrating the method, they have now gone into partnership with a large American company for the exploitation of the method in that country.
The main markets for the hoverplatforms appear to be overseas, where there is a need to work in an inhospitable terrain, to which the noble Earl referred, or where there are particularly difficult work or transport problems. Among their successes Mackley-Ace Limited have built two 750 ton air cushion transporters specifically for us in the Persian Gulf and have just obtained an important order for two transporters to be used on the Alaska pipeline. Hovertrailers International Limited have developed a range of air cushion vehicles capable of working on undeveloped ground such as marshes. These have been sold in a number of countries. The British Hovercraft Corporation in co-operation with the CEGB have developed a system for reducing the axle loading on transporters which makes a great contribution to reducing the expense of moving extremely heavy loads which in the past have required the strengthening of bridges and roads. I am told that over the past few

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years this transporter has saved the Board £1,250,000.
I was asked by the noble Earl, Lord Kinnoull, about the position regarding the hoverbed. I find that the burns unit at Mount Vernon hospital, with its equipment which was partly financed by NRDC and by the Department of Health, was opened in February 1974. I believe that a second special burns unit is being commissioned this week at a Belfast hospital, and the company concerned have also received several inquiries from abroad.
To give wider publicity to the achievements of these companies and, it is hoped, to encourage other firms both at home and overseas to make use of the techniques they have to offer, the Department of Industry have commissioned a film produced by the Central Office of Information entitled, At Work on a Cushion of Air and I am told it is a good film. A film can be more persuasive than many of us in this Chamber, and maybe we might arrange for it to be shown in the Palace of Westminster if it is felt there will be a demand for that.
I was asked about the practical relationship of the Government with industry. In so far as Her Majesty's Government are an operator—mainly through the Royal Navy Hovercraft Trials Unit—there is close co-operation with the manufacturing companies. We know, too, that the manufacturers keep in close touch with the operators of their craft. A new development which promises well for the future is that the two cross-Channel hovercraft operators, Seaspeed and Hoverlloyd, are having discussions with the HDL to consider specifications for the successors to the SRN 4 series of hovercraft. The first meeting was held last week. This, I should have thought, was a hopeful sign; it is the operating companies who know what they want and if we get these two sides working together it should be a constructive, co-operative exercise.
It has been a long educative process, as the noble Lord, Lord Selsdon, said, in achieving this wider acceptance of hovercraft; and with this wider interest, as I said earlier, it is inevitable we shall get competition from abroad. I was asked by the noble Earl, Lord Kinnoull, about this. Potential competition comes mainly from developments in the United States
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and in France. A vast amount of money is being spent in the United States on development of the 2,000-ton surface effect ship for the US Navy. We cannot hope to match the Americans in what they spend on defence, but although there is bound to be spin-off for any civil developments, the United States effort so far is still directed towards establishing whether the next step should be a 2,000-ton ship or something smaller. Most other American developments have been in the military field and at present there is no direct competition with our companies. We were given a warning by noble Lords opposite about French activity in this field, and we should not underrate the SEDAM N 500; but, at the same time, it would be a mistake at the present stage to think they have anything which is necessarily more successful economically than either a stretched hovercraft in use on the cross-Channel service or the new craft which is being considered. So far as Japanese competition is concerned, they produce craft under licence from this country, and Russia, which at one time was thought to be a great competitor, now gives first place to hydrofoils.
As to industrial applications, it is perhaps significant that the United States are seeking the assistance of our companies. I hope, although sometimes we think we give away too much, that this is a development which could he very promising. I agree with the noble Lord, Lord Selsdon, who modestly said that this industry was not a Selsdon lame duck, and I agree with other noble Lords that this is an industry to which we should give support. At the same time, I do not think it is necessarily the best way of giving support if we think simply in terms of grants and finance. I have said what the limitations are there; I have indicated the possibilities. I hope those possibilities will be utilised, and if there is anything more I can do to help—for instance, by bringing together various parties—then certainly I shall be very glad to do anything I am asked to do. In the meantime, I again congratulate the noble Earl for having brought this subject before us.

JAMES HUGH MAXWELL (NATURALISATION) BILL [H.L.]
Reported with amendments.