Lords Sitting of 8 December 1977

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Saint Albans
The Earl of Winchilsea and Nottingham—Sat first in Parliament after the death of his father.

FRANCO-CANADIAN RELATIONS
The Earl of SELKIRK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have made any representations to the Government of France on the manner in which they have recently conducted relations with Canada.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): No, my Lords.
The Earl of SELKIRK: My Lords, is it not a little disagreeable for members of the European Community when one of their number gratuitously and officially behaves with a degree of discourtesy to a country with which the European Community is bound by treaty? Is it possibly the noble Lord's view that this would fall under Article 5, which enjoins all members of the Community to avoid jeopardising the purposes of the Community?
Lord GORONWY-ROBERTS: Yes, my Lords, the noble Earl has correctly interpreted Article 5; but I see nothing in the exchanges in Paris between the French President and the Quebec Premier that would have the effect that the noble Earl fears. His original Question was as to whether Her Majesty's Government would intervene. This is of course an internal matter for the Canadian Government, Parliament and people, and I have absolutely every confidence that they will deal with it in the right way.

PETROLEUM REVENUE TAX
3.8 p.m.
The Earl of LAUDERDALE: 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 will consider easing the burden of petroleum revenue tax on deliveries of light, low sulphur, crude oils.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, petroleum revenue tax is charged on profits from winning oil and gas from the United Kingdom and its Continental Shelf, and it would not be appropriate to give special tax treatment to any particular type of oil.
The Earl of LAUDERDALE: My Lords, in thanking the noble Baroness for that reply—and perhaps I may be allowed to congratulate her on her homework about it—may I ask her whether she does not agree that it is, as it were, the top slice of any production which provides the profit to the entrepreneur; that the recent slump in the prices of light crude oils has meant that that top slice has become very small; and that the effect of the Government "take" threatens to remove profit altogether?
Baroness BIRK: My Lords, with great respect, I do not think the noble Earl is quite right about that. Oil is valued for tax purposes on the basis of its open market price. If the price falls, the tax falls, too. Light, low sulphur crude oil is worth more than heavy, high sulphur crude oil, and this would be reflected in its value for tax purposes; but it does not follow that these oils are less profitable to produce because the tax is greater. Where the tax is greater so is the profit. Petroleum revenue tax does not penalise higher profits; it is pro rata.
The Earl of LAUDERDALE: My Lords, I am much obliged to the noble Baroness for that reply, but could she

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ask her Department whether they would look at this again, because the costs of production are relatively constant. It is constant overheads—even though they are under the water—which determine the real price of the oil, and this variable tax pro rata can in fact turn into a disincentive to its production.
Baroness BIRK: My Lords, I shall certainly go back and discuss it and write to the noble Earl, but I must also point out that we have no evidence that the level of petroleum revenue tax is adversely affecting production. We have not heard anything from any company. In fact, most of the comments have been on the other side; that is, that a higher rate of tax ought probably to be taken for the good of the community.
Lord CAMPBELL of CROY: My Lords, was not one of the defects of this tax that a prolific field which was easy to operate could make a large profit and not be taxed in the way it would have been under the excess profits tax legislation, whereas a marginal field may well not be developed at all? Have not the Government indicated that they will waive the petroleum revenue tax completely in order to encourage some fields to be developed at all?
Baroness BIRK: No, my Lords; it is not quite like that. There are several reliefs from petroleum revenue tax designed to prevent it bearing too harshly on marginal fields, but we are not aware of any development which is not being carried out because of tax problems. This is not one of the matters which have been put before us. If there is any evidence, I will gladly try to get it acted upon, but there just is not the evidence.
Lord WYNNE-JONES: My Lords, can my noble friend say how many companies have gone out of business, in the way in which they threatened to do years ago, because of the petroleum revenue tax?
Baroness BIRK: My Lords, I do not know of any at all. In addition to what I have already said in reply, I would also point out that there is a safeguard which prevents petroleum revenue tax being payable at all if profits fall below 30 per cent. of the historic capital costs; so I
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would have thought that every safeguard was taken.
The EARL of LAUDERDALE: My Lords, would the noble Baroness look at the point—I will not put any further questions to her—that, if the spot price falls from 14 dollars to 13.85, that immediately reduces the profitability to the entrepreneur, whereas the Government's stake remains the same?
Baroness BIRK: No, it does not remain the same, my Lords, because if the profit falls then the tax falls as well.

MOZAMBIQUE: MISS JUDITH HART'S VISIT
Lord ORR-EWING: 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 there was any Press release on Mrs. Judith Hart's visit to the capital of Mozambique and whether the cost of this journey was charged to public funds.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, an official Press release was issued on 18th October announcing the signature of a £5 million loan agreement in Mozambique that day by the Minister for Overseas Development. The cost of the journey was charged to public funds.
Lord ORR-EWING: My Lords, is the noble Baroness aware that that Press release was not available in the Library of the House of Commons? I should not have put down the Question if I had had that. Is it really sensible, at a time when the Government are claiming to be the paramount Power in Rhodesia, to give aid, succour and finance to the Marxist Government in Mozambique while they are murdering both black and white Rhodesians?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, this Question is about a visit and a Press release. I am sorry that the Press release was not available in the Library of the House of

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Commons, but for that I am scarcely responsible. The rest of the noble Lord's supplementary question I think I need not answer, but I will do so because I think it is essential that noble Lords opposite should reflect on the fact that the Government of Mozambique is showing an increasing wish for non-alignment and to come closer to the Western nations. I think it very, very unfortunate that remarks of the kind that sometimes come from the Benches opposite could only push Mozambique, in extremity, to others who will help them.
Baroness ELLES: My Lords, while accepting the statement by the noble Baroness, may I refer to a letter written by the Minister, Mrs. Judith Hart, to my honourable friend Richard Luce in which it is stated—if I am allowed to quote from the Guardian of today:
"We have no evidence to suggest any fundamental abuse of human rights in Mozambique"?
May I suggest that the noble Baroness takes further evidence from those people who have been imprisoned and released and who have suffered in Mozambique? And, my Lords, this has to do with the Question.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, this is another Question, but may I suggest that the noble Baroness and some of her colleagues should visit Mozambique and not complain when the Minister for Overseas Development does visit Mozambique.
Lord LEE of NEWTON: My Lords, could my noble friend say whether the lack of publicity for Mrs. Hart's visit to the Marxist Government in Mozambique has not been more than overcompensated by the huge publicity given to Mrs. Thatcher's visit to the Marxist Government of Yugoslavia and her opinion that much of the industrial organisation in the Communist world was better than ours?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, such a visit can only have done good.
Lord ALPORT: My Lords, may I ask whether it is not true that her honourable friend is an honorary member of the
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Frelimo Party and whether it is Government policy that Ministers should belong to Parties in foreign countries?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I have absolutely no knowledge of what the noble Lord has just said.
Lord PAGET of NORTHAMPTON: My Lords, could the noble Baroness tell us something about Parliamentary responsibility in this? Is it not a little alarming to find a lady of somewhat extreme views spending £5 million of our money to finance the murder of people for whom we claim responsibility? Is it not rather a shock?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I am deeply resentful of every suggestion that my noble friend—if I am supposed to call him so—has made. The British Government have given no money to assist in the murder of anybody. The original£5 million loan has gone on textile machinery and on all sorts of equipment which has nothing to do with war. We have sent food; and even the food that we sent has gone to the northern part of Mozambique and not to the areas devastated by the Southern Rhodesians in the South of Mozambique.
Lord INGLEWOOD: My Lords, could the noble Baroness say whether this £5 million is additional to the £15 million which we discussed in this House some time ago?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, it is. It was announced in July this year and was in response to an appeal by the United Nations for international organisations and nations of the world to come to the assistance of Mozambique.
Lord ORR-EWING: My Lords, could the noble Baroness bear in mind that we have given £20 million to Mozambique? Could we not withhold giving the other £20 million, announced in the recent Budget, to that country until it is proved that that country is really coming away from the dictatorship State which has been set up in the last year?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, in the first place,

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we have not given £20 million; we have only announced grants and loans spread over a number of years. They are grants which are interest-free, but we shall get the money back in due course. We do not want to wait for proof of good conduct where people are starving and without houses and schools, partly as a result of attacks from outside, and where the relief has been in response to an appeal from the United Nations itself.
Lord HALE: My Lords, would the noble Baroness, who by her answers today has moved many of our hearts and obtained a substantial measure of agreement, not make a further forthright statement that to lay down political conditions on the relief of poverty—to take the suggestions that have been made from the other side today—would be wholly to undermine the whole of the labours, and most noble labours, that have been undertaken in an attempt to fight world poverty? You just cannot lay an embargo on Mozambique or, if you like, on the empire of Central Africa.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I am grateful to my noble friend for his support. May I again remind the House that the Question was about a Press release?
Lord LOVAT: My Lords, is the noble Baroness aware that the use of Land-Rovers in Mozambique is their principal form of transport for taking troops up to the Rhodesian frontiers? That is surely an instrument of war.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, indeed I am. The aid which the Government are giving are bus chassis and spare parts for them.
Lord BOURNE: My Lords, is it the normal practice to succour our enemy? We might as well have succoured the Germans in the last war.
Lord ELTON: My Lords, may I—
The LORD PRIVY SEAL (Lord Peart): My Lords, I think we have gone on for a long time on this Question.

EL SALVADOR: MILITARY EQUIPMENT SALES
3.20 p.m.
Lord CHITNIS: 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 human rights considerations were taken into account when the decision was made, as reported in The Times newspaper of 17th November, to sell armoured vehicles and other military equipment to the Government of El Salvador.
Lord GORONWY-ROBERTS: My Lords, all relevant considerations were taken into account when this decision was made.
Lord CHITNIS: My Lords, I thank the noble Lord for that reply. If human rights considerations had not been sufficient to cancel this deal, despite the extraordinary brutality of the regime in E1 Salvador, even by worldwide standards, could not Her Majesty's Government take national self interests into account? They have only an assurance, which must be unenforceable, that the Government of El Salvador will not use these vehicles should the occasion require to help Guatemala in any action that they may take against the British garrison in Belize.
Lord GORONWY-ROBERTS: My Lords, I can assure the noble Lord and the House that we have that assurance. I will restate it: that the Salvadorian Government have assured Her Majesty's Government that the vehicles will in no circumstances be used against British troops in Belize. As to the consideration of human rights, I would ask my noble friend—whose concern about these important matters I fully share, and whose activity in this regard I deeply respect—to consider that the Government of E1 Salvador has a really difficult internal situation in which acts of terrorism from both Right and Left extremists are common occurrences. President Romero has not been in office more than about five months; but I think that it is fair to say that already he has given proof of his desire to engage in internal reforms and

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to moderate internal tensions. It would be wrong to condemn out of hand the new Government under President Romero. It would be most discouraging if we had not made this comparatively small sale to them of cars and equipment which, after all, are surplus to our own requirements in this country.
Lord BYERS: My Lords, I wonder whether the noble Lord could answer the other question which was asked? What is the value of this assurance if it cannot be policed?
Lord GORONWY-ROBERTS: My Lords, there is very clear value in the undertaking that none of this equipment will be used against our troops in Belize. If it is, our own troops in Belize will know what to do. I do not think it is necessary to police this, if I understand the noble Lord rightly. We accept the assurances given by the Salvadorian Government. We can only wait and see. I have every confidence that they will stand by their word as given to us.
The LORD BISHOP of SAINT ALBANS: My Lords, is the Minister aware that vehicles of precisely this character have been used by the security forces in the past six months in brutally repressive acts against peasant communities, as witnessed and reported by churchmen? Can any guarantees be secured that these vehicles will not be so used?
Lord GORONWY-ROBERTS: My Lords, I can only repeat the terms of the assurance given to my honourable friend the Minister who deals with these matters, with which I am fully conversant myself, and say that I am confident that that guarantee will be implemented. The right reverend Prelate raised an important matter relating to the position of the Church. In this case, it is almost entirely the Roman Catholic Church—but, nevertheless, it is the Church. We believe that under President Romero's Administration there has been an improvement in relations between the Church and the Government. It is undoubtedly true that members of the Salvadorian security and other armed forces have acted with very great severity. I believe there are commissions now for the ventilation of the Church's grievances with the Government. This is an Administration,
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which is some five months old, operating in conditions of very grave difficulty and internal danger. On the whole, it would be best for us to continue our encouragement to the Romero Administration. So far they have given a number of indications that they are embarked on a somewhat different policy from that of their predecessors.
Viscount MONTGOMERY of ALAMEIN: My Lords, in thanking the noble Lord for his reply to the original Question, may I ask him whether or not he would agree that if negotiations were reopened at this stage, it would place doubts on the credibility of the United Kingdom as a supplier of capital goods?
Lord GORONWY-ROBERTS: My Lords, that would be so. It is fair however to the noble Lord, Lord Byers, to say that we have had very much in mind the size and nature of this contract relative to the considerations which he and the noble Lord, Lord Chitnis, advanced. It was only after very careful consideration, as I said in my original Answer, that we decided to go ahead. We are of course doing other things to help the forces of moderation and of constructive reform in El Salvador. I will not delay the House unduly, but noble Lords will wish to know that we provide a very effective technical assistance programme. I see that the noble Viscount knows about this. This is not only helpful to the sons and daughters of the less well-off in E1 Salvador, especially in the agricultural and related technical fields; it is also an encouragement to the present Government in E1 Salvador to follow constructive programmes of reform linked to procedures aimed at moderating tensions internally.
Lord BROCKWAY: My Lords, as the right reverend Prelate has put a question on behalf of the peasants, may I put a question on behalf of the Church? Is it not the case that the Church in E1 Salvador has been brutally suppressed? Many of its priests and deacons have been killed. In confirmation of that, is the Minister aware that our Foreign Secretary, Dr. Owen, wrote in a letter to the noble Lord, Lord Avebury, (whose absence abroad I regret) that the Government of El Salvador's attempts to,
"cow the Church into submission justifiably attracted condemnation in Britain and elsewhere"?

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While one welcomes the return of President Romero, would it not be better to wait on the results of his Administration, as President Carter has done, rather than make this presentation now?
Lord GORONWY-ROBERTS: I do not think so, my Lords. I think good intentions, especially as backed up by initial evidence of good performance, need to be encouraged. This is the position in E1 Salvador. To my noble friend's support of the Church, I say that of course the Church is accustomed to using good men for its purpose.

GOVERNMENT STATEMENTS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. this afternoon, my noble and learned friend the Lord Chancellor will repeat a Statement on the Crown Agents. That Statement will be followed by a Statement on the Fire Service dispute repeated by my noble friend Lord Harris of Greenwich.

PROCEDURE OF THE HOUSE
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord Lee of Newton be appointed to the Select Committee on Procedure of the House in the place of the Lord Ardwick.—(Lord Aberdare.)
On Question, Motion agreed to.

STATUTORY INSTRUMENTS
Lord ABERDARE: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, on behalf of the Committee of Selection, That the Lord Janner be appointed to the Joint Committee on Statutory Instruments in the place of the Lord Darling of Hillsborough.—(Lord Aberdare.)
On Question, Motion agreed to.

ELECTRICITY SERVICE (FINANCE) (NORTHERN IRELAND) ORDER 1977
3.31 p.m.
The MINISTER of STATE, NORTHERN IRELAND OFFICE (Lord Melchett)The MINISTER of STATE, NORTHERN IRELAND OFFICE (Lord Melchett) rose to move, That the draft Electricity Service (Finance) (Northern Ireland) Order 1977, laid before the House on 9th November, be approved. The noble Lord said: My Lords, I beg to move that the draft Electricity Service (Finance) (Northern Ireland) Order 1977 be approved. The order provides for a major reconstruction of the finances of the Northern Ireland Electricity Service, and it provides for grants to be made to the Service which will enable it to reduce its tariffs to the larger industrial and commercial consumers to about the same levels as apply in Great Britain.
These measures are needed because of two key problems which, in the space of four years, have caused Northern Ireland electricity tariffs to rise from about the United Kingdom average to 20 per cent. higher than that average for domestic consumers and as much as 50 per cent to 70 per cent. more for industry and commerce. The first major problem has been the upsurge in the world price of oil. Some 90 per cent. of Northern Ireland's total distributed electricity comes from oil-fired generating capacity compared with 15 per cent. in Great Britain. It is estimated that this difference accounts for 30 per cent. of the extra cost of generation in Northern Ireland.
Secondly, the Northern Ireland Electricity Service has had to finance the cost of a major new power station which is at an advanced stage of construction at Kilroot on Belfast Lough. The new station will have a capacity of 1200 megawatts and it will increase Northern Ireland's total capacity by no less that 60 per cent. Although the projected rate of growth in demand for electricity that formed the basis for the decision to build the new station has not materialised, intensive investigation has confirmed that there would be no financial advantage in cancelling or deferring part of the new station. In the meantime, the capital cost of the project, some £300 million, has to be met entirely from borrowing—much of it at a time of very high interest

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rates—because the NIES had no financial reserves. Interest on borrowing amounted to almost £38 million at 31st March this year and, in the absence of this order before the House, will absorb about half the total revenue of the Service by 1980–81.
Despite having the highest tariffs in the United Kingdom, the accounts of the Service for 1976–77 showed an accumulated deficit of £26.3 million. Further tariff increases on the scale needed to keep pace with increasing costs, including interest charges, would have been self-defeating because they would have extinguished all prospect of further growth in demand. Ever-higher tariffs would be a major blow to domestic consumers, particularly as Northern Ireland has the lowest income per head of any region in the United Kingdom.
My right honourable friend the Secretary of State is also particularly concerned about the growing pressure on industrial costs which were threatening to undermine the Government's whole industrial strategy, which is designed to secure the investment which Northern Ireland so desperately needs to stem and reverse the appallingly high unemployment, now standing at 11·5 per cent.
This order will allow the Northern Ireland Department of Finance to reduce the amount owed by the NIES to the Government Loans Fund by about £250 million, thus relieving it of interest charges amounting to about £32 million per annum. The order also provides for payments to be made to the Service to extinguish the accumulated deficit of £26·3 million which I mentioned earlier. These two measures should enable the Service to stabilise all its tariffs, including its domestic charges, so that the accelerating move away from Great Britain rates is effectively halted.
The order does more than this for the main industrial and commercial tariffs. It provides for special payments of up to £100 million over the next five years, which should allow the Service actually to reduce these tariffs to about the Great Britain average. This will mean that electricity costs will no longer be a potential obstacle to the vital new industrial investment we need to attract to Northern Ireland. I beg to move.
Moved, That the draft Electricity Service (Finance) (Northern Ireland) Order 1977, laid before the House on 9th November, be approved.—(Lord Melchett.)

THE CROWN AGENTS: INQUIRY
3.37 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, if it is the wish of your Lordships, I will now read the Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:
"The Government have taken due note of the general feeling expressed by the House on Monday last that there should be a public inquiry in the light of the facts disclosed by the Fay Report on the Crown Agents. The Government have decided to respond to this view and will place proposals for a public inquiry before honourable Members as soon as possible.
"The Government have carefully considered the form of the inquiry and have taken into account the various proposals contained in the Report of the Royal Commission on Tribunals under Lord Justice Salmon in 1966. The Government's conclusion is that the most appropriate form of inquiry in this case would be a tribunal set up under the 1921 Act. The tribunal must identify those responsible for these deplorable events. It should, however, also seek to find a way to safeguard the legitimate rights of innocent people to have their reputations protected from public allegations which may well prove to be unfounded.
"The House will be aware that the appointment of a tribunal will effectively prevent criminal proceedings being taken in the future against any witness and civil proceedings might be affected. The tribunal will have the necessary statutory powers to compel witnesses to attend and give evidence and it would ensure a judicial hearing for those who are subject to criticism. Its terms of reference will need careful consideration not only to achieve its main purpose but, if possible, to avoid it having to start afresh and duplicate all the work of the Fay Committee. The Government will make a further Statement about this

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and the necessary Resolutions embodying the proposed terms of reference will be tabled, for the approval of both Houses, as soon as possible."
My Lords, that concludes the Statement.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I know that the House will be grateful to the noble and learned Lord for having repeated this Statement and would also wish me to say that there is no intention whatever, in any criticisms I make, to make any Party political points about it. But I am a little disturbed about the course which this matter has taken. When I read the Fay Report, which I did immediately after the Statement proposing the private inquiry by Sir Carl Aarvold, I could not help wondering: what do we need a further inquiry for?
Surely the next step must be a series of criminal prosecutions, if they are justified, followed by appropriate sentences and a series of writs in the civil courts to try to claw back any of the money which may prove to be recoverable. I gather from the Statement which has just been made that the inquiry, when and if it is set up, will have to choose between not calling any of those against whom criminal proceedings are probable, or thought likely, and giving them effective immunity—in other words, not prosecuting them at all—and that the same may be true in relation to civil proceedings. If that really is the choice, I am bound to say, without any attempt to speak on behalf of my noble friends in my Party, that I do not approve of it.
I remember that at the same time as the Poulson public inquiry in bankruptcy there was exactly this pressure to have a public inquiry—the public's right to know. I fought it with all my might and main, because the real deterrence for corruption is a course of law, followed by appropriate penalties and appropriate judgments; and you stultify and impede the course of justice if you hold inquiries which prevent the courts from being brought into effect. That is the first point that I want to make.
The second point that I want to put to the noble and learned Lord is this. What good did the Government think could come of the proposed Aarvold inquiry? He has referred in his Statement to the findings of the Salmon Commission, to
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which I want to add a word in a moment. But one of the most important findings of that Commission was No. 6, which said:
"No Government should in future set up a tribunal of the type adopted in the Profumo case to investigate any matter causing nation-wide public concern".
As far as I can see, looking back on the paragraphs of the report to which that conclusion refers, the Aarvold inquiry would have been precisely of the type of the unfortunate Denning inquiry in the Profumo case, and I wish to reiterate my opinion, which is also, I believe, that of the noble and learned Lord, Lord Denning, and certainly of the noble and learned Lord, Lord Salmon, that no such inquiry should ever in any circumstances be held again.
The third thing I want to say is this—and again it is not at all a Party point that I am making. I must have known of 15 or 20 occasions during my public life in which there has been this enormous pressure for a tribunal of inquiry to be held in public, and in more cases than not Governments have yielded to it. But when the report has come out, there has been an equally violent public outcry against the injustices which such a type of inquiry invariably brings about. In February 1966, the then Labour Government was sufficiently seized of this to appoint the Salmon Commission, and it reported in November 1966 with a number of very important recommendations to prevent that kind of injustice. In 1973 the Heath Government said that it was going to legislate. So both the Wilson and the Heath Governments had hardly rushed into premature legislation after November 1966; neither has this Government, because none of those things has ever been done. Now, 11 years after Salmon, we are solemnly told that we are to have a 1921-type tribunal, none of the necessary legislative steps having been taken, but we are informed that the Government will take into account what the tribunal decided 11 years ago ought to be the subject of legislation.
In my opinion, it is most unsatisfactory. Both Parties are to blame, and therefore I am not pointing a pistol of any kind at the noble and learned Lord. But I hope that the noble and learned Lord will undertake to bring to his colleagues, as I shall certainly bring to mine, the view

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which I hold, which is that it is high time that some of those Salmon proposals were put into effect legislatively.
Lord TANLAW: My Lords, while thanking the noble and learned Lord for his Statement, I, too, wish to follow the noble and learned Lord, Lord Hailsham, by saying that he has put, with all the power of his knowledge and wisdom of the law, a case for reconsideration of this public inquiry. But now that it has been decided in another place that we are to have a public inquiry, I certainly feel that it is quite incorrect to suggest otherwise. But I, too, agree with what has been said this afternoon, that we should ask ourselves whether such a court of inquiry will bring about the information that we need to prevent a future problem of this kind in another Government Department.
I should like to ask the noble and learned Lord if he can tell us whether the terms of reference of such an inquiry will include a thorough investigation into the Auditor-General's Department, its workings and its communication with Ministers and, indeed, with the Public Accounts Commitee. If the inquiry is to go ahead and be of benefit to this country, I feel that it is the internal workings of the accountancy section of the Executive that should be investigated more clearly, and made much more efficient than has been the case so far.
3.45 p.m.
The LORD CHANCELLOR: My Lords, if I may say so, it soon became apparent that the noble and learned Lord, Lord Hailsham, was not reflecting the views largely expressed in another place by his right honourable and honourable friends, who brought great pressure upon the Government to have a public inquiry and, in particular, to have an inquiry under the 1921 Act. So, if I may say so with great respect, I am not surprised that he was not seeking to make political capital out of his intervention.
But coming to the matters which he has raised, the view has been expressed both stridently, if I may say so, in the Press and eloquently in another place, that here there has been a gigantic cover-up. There was no satisfaction, surprisingly, with the Fay Report and its conclusions,
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and there was a demand that there should now be a public hearing traversing the grounds of the circumstances which led to the immense loss of over £200 million of taxpayer's money. That was the pressure which has been brought to bear and it is felt that, outstandingly able as the Fay Report was, there are still a number of matters which need to be investigated and need to be ventilated, so that there should be called to account all those who were responsible for the deplorable course of events which took place. Presumably, that will include all individuals concerned, including any who may have been thought responsible in the Auditor-General's Department and elsewhere.
I, of course, appreciate that a price must be paid for calling in aid the tribunal of inquiry procedure, and it will have the consequence, as the Statement of my right honourable friend the Prime Minister indicated, that it will effectively prevent criminal proceedings from being taken against witnesses, and indeed civil proceedings might also be adversely affected. That is the price that must be paid for this procedure.
But a matter of, perhaps, greater concern to which the noble and learned Lord, Lord Hailsham, has pointed, and with which, of course, I am in very full sympathy, is the extent to which these proceedings can be used without causing damage to the legitimate rights of persons who may be publicly defamed during the course of the proceedings when, at the end of it all, it is found that they are completely innocent. What I can say about that is that, although it is true that no statutory effect has been given to the six cardinal principles, as they were called, by the Salmon Commission, actual effect in the conduct of the proceedings will be given to them. If your Lordships will allow me to quote from the Salmon Report on this, because I know that it is a matter of concern to us all, it stated,
"The following cardinal principles … should be observed to minimise the risk of personal hurt and injustice to any person involved in the inquiries".
Then they are listed:

"(i) Before any person becomes involved … the Tribunal must be satisfied that there are circumstances which affect him and which the Tribunal proposes to investigate.

(ii) Before any person who is involved in an inquiry is called as a witness, he should be

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informed in advance of allegations against him and the substance of the evidence in support of them.

(iii)

(a) He should have adequate opportunity of preparing his case and of being assisted by legal advisers.

(b) His legal expenses should normally be met out of public funds.

(iv) He should have the opportunity of being examined by his own solicitor or counsel and of stating his case in public at the inquiry.

(v) Any material witnesses he wishes called at the inquiry should, if reasonably practicable, be heard.

(vi) He should have the opportunity of testing by cross-examination conducted by his own solicitor or counsel any evidence which may affect him".

I have every confidence that the tribunal, which will be presided over by a judicial personality, will ensure that, so far as possible—I can put it no higher than that—those safeguards will be provided. There is no comparison between what the Government originally contemplated—what has been called the Aarvold inquiry—and the totally private procedure carried out by the noble and learned Lord, Lord Denning, in another matter. However, as the decision has now been made not to proceed with a private inquiry—the privacy of which was intended to prevent the very risks to which the noble and learned Lord has been pointing—because of the pressure of the House of Commons, the Press and public opinion, the Government have decided instead to embark upon this course. As I say, I shall endeavour to do all that I can, and I am sure that those conducting the tribunal of inquiry will do the same, to ensure that it is conducted with minimum damage to innocent persons.
3.52 p.m.
Lord SHINWELL: My Lords, in the course of a conversation the other day with a prominent member of Her Majesty's Government in another place, I suggested that on no account should the Government yield to the clamour for a public inquiry, on this ground: that at a public inquiry we shall not have a revelation of the truth, the whole truth and nothing but the truth because of fear of public prosecution. On the other hand, at a private inquiry it is possible to reveal the whole of the facts without any fear of being subject to prosecution. Why the Government should have yielded to this clamour I
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cannot understand. I do not suppose that they will change their mind, but I believe their decision to be a mistake.
The LORD CHANCELLOR: My Lords, the Government have met a tremendous onslaught, an avalanche of opinion, to the contrary of what my noble friend has mentioned. We live in a political world and a Government cannot ignore these kind of expressions of public opinion, both in the Press and in the House of Commons. I am afraid that this was something that the Government, owing a responsibility to Parliament, could not in the circumstances reasonably run away from.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I do not want to persist too much, and again I must repeat that I am not seeking to make a purely Party point of it. I do not believe that the noble and learned Lord is quite right in detecting a divergence between me and, for instance, my right honourable and learned friend Sir Michael Havers. However, does not the evil stem from this, that instead of stating plainly that the results of the Fay Report really demanded that guilty people should be punished and that persons who had had public money should pay it back, they had this ridiculous private inquiry and the whole debate then got off on the wrong foot? It got off on the wrong foot because the public and the House of Commons were led to believe that what they were choosing between was a cover-up and a public demonstration of the facts, when they ought to have been told, and told plainly, that by having a public inquiry the guilty would get off scot-free, in both the criminal and the civil courts.
The LORD CHANCELLOR: My Lords, those facts were plainly stated in another place and I am afraid that we cannot cover that ground again. The private inquiry which was contemplated would not have had the consequences that the tribunal of inquiry proceeding will have in inhibiting prosecutions or civil proceedings. That is one of the reasons why a private inquiry was initially favoured. But this decision has now been made. As I have said, we shall do all that we can to explore those matters which have not been explored to find out the responsibility of individuals across the range of those

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involved in these deplorable events and we shall seek to minimise any damage to the innocent. I cannot repeat the matter more than twice with any benefit to your Lordships.

FIRE SERVICE DISPUTE
3.55 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"My right honourable friend the Prime Minister held a meeting with the Executive Council of the Fire Brigades' Union on 29th November. At that meeting he explained the reasons for the Government's pay policy which made it impossible to meet the union's claim for a very large pay increase in the current year. He indicated that the Government would be ready to encourage the employers and the union to work out together a formula for determining Fire Service pay in the future. He said that if agreement could be reached the Government would consider how it might underwrite the settlement.
"The establishment of a formula is a matter for negotiation by the two sides in the National Joint Council for Local Authorities' Fire Brigades, but the Government have been considering what guidance might be offered on the framework within which an agreement might be reached which could be underwritten by the Government. I have today given guidance to the National Joint Council in the following terms:
'The Government accept that a formula for the proper remuneration of the Fire Service should be established to determine for the future appropriate rates of pay. The establishment of such a formula is a matter for negotiation in the NJC, but the Government for their part would be prepared to see a defined relationship between the pay of the qualified fireman and that of other workers. Because of the need to reduce inflation the Government cannot agree to an increase in the year
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beginning 7th November 1977 beyond the 10 per cent. already offered, but they would be prepared to agree to the full implementation of the formula agreed by two approximately equal stages in November 1978 and November 1979. The Government would be prepared to contribute through the rate support grant their share of the cost of a settlement on this basis and would, exceptionally, guarantee that the phasing in would not be thwarted by some unforeseen adverse change in economic circumstances.
'The Government hope that negotiations will also continue in the NJC on the reduction of the 48-hour week. If a shorter week is to be introduced without loss of pay this would have to be on the basis of more productive working routines which permitted a more cost-effective use of the time not spent on firefighting'.
"Agreement within this framework, underwritten by the Government, will provide a sound means of settling the proper remuneration of the Fire Service for many years to come. It will not give the firemen all they want immediately; but the overriding need is to reduce inflation and it is not possible in the present round to go beyond the 10 per cent. increase which the employers have already offered. On the other hand, it will give them an agreed and assured basis for their pay in the longer term.
"It is the view of the Government that the 10 per cent. increase already on offer, coupled with agreement on a future pay formula guaranteed by the Government, and the prospect of a shorter working week to be introduced without loss of pay, provide an honourable basis for settling the present damaging dispute.
"I have emphasised to both sides of the NJC the importance which the Government attach to pressing ahead with negotiations with the utmost urgency and discussions are already in progress".
My Lords, that is the end of the Statement.
3.58 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, as this affects a

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matter which is obviously very delicate, I am sure that the House will not expect me to say very much by way of criticism of what has now been repeated. If I confine myself to questions designed at elucidation, I hope it will be realised that we are none the less very grateful to the Government for keeping us informed of what is going on. The mere fact that we show a certain amount of restraint in questioning the Government does not mean that we do not want to continue to be kept informed.
May I ask the noble Lord this question to begin with, by way of elucidation. One has only had this Statement in one's hands for a very few minutes, so the answer may be obvious. However, as I read it, what is proposed in the guidelines is this: First, the present offer of 10 per cent. stands. It is not in substitution for the 10 per cent.; it is in addition to the 10 per cent. What is proposed is that in two stages, beginning respectively in November 1978 and November 1979, if a formula is agreed by means of the negotiations referred to, the firemen's wages might be effectively indexed in relation to other workers, whatever that phrase may mean. May I ask whether that is a right reading of what the noble Lord has said?
Does the noble Lord not think that, in return for indexation, it would be reasonable to ask for some kind of "no strike" guarantee from the union? The public are of course vastly involved in this and many of us feel that it is a situation which ought not to have been allowed to reach its present stage. However, where the safety of the nation is involved—and it is obvious from the Statement that the Government are fully aware of the intensity of feeling among the firemen—is it not right that in return for indexation (which seems to be a reasonable proposal in principle, if I may be allowed one comment) something should be given? What prospects does the noble Lord think could be attached to such a proposal?
4.1 p.m.
Lord ROCHESTER: My Lords, we on these Benches would also like to thank the noble Lord, Lord Harris of Greenwich, for having repeated the Statement. We welcome the principle which appears to underlie this new Government initiative since it seems to offer to firemen as
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essential public servants a fairer and more rational way in which their wages and conditions can be determined in future than has been the case in the past.
We strongly support the intention expressed in the Statement that in any settlement that may now be negotiated the Government's present pay guidelines should on no account be breached, for, if they are, there will be plenty of people employed in other parts of the public sector ready to exploit that breakthrough. As it seems to us from a quick reading of the Statement, this appears to apply more particularly to that part of the Statement which refers to the introduction of a shorter working week. It seems to us essential that if by this is meant some productivity bargain—and perhaps the noble Lord would be kind enough to confirm that this is indeed the intention—then any such bargain should demonstrably be self-financing.
I should like to ask two questions, one of which is in endorsement of what the noble and learned Lord, Lord Hailsham of Saint Marylebone, has already asked—namely, whether it is the intention that the firemen in turn should be invited to enter into any commitments, such as that they should in future refrain from withdrawing their labour. The second is this: whether it is proposed to apply similar treatment to that referred to in this Statement to any people employed in other essential services who are not now so treated.
4.4 p.m.
Lord HARRIS of GREENWICH: My Lords, I very much welcome what the noble and learned Lord, Lord Hailsham, and the noble Lord, Lord Rochester, have said and indeed I would confirm—and the noble Lord, Lord Rochester put this matter to me quite fairly—that the announcement I have made today makes it clear that the Government are standing absolutely firm so far as the 10 per cent. pay guidelines are concerned. It is manifestly in the national interest that we should maintain an extremely firm posture in this matter, and we have done so. Nevertheless, as the Statement makes clear, we are obviously anxious to bring this damaging dispute to an end without sacrificing our general policy so far as the pay guidelines are concerned.

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The noble and learned Lord, Lord Hailsham, put a question to me which really amounted to asking for confirmation that what he was saying was broadly speaking accurate, and indeed of course it was. He put a second point to me—namely, could I give any undertaking that the Government would at least consider the possibility of raising the question of getting some form of guarantee that there would not be strikes in future. I can well understand the reasons that motivated the noble and learned Lord in putting that question to me, but I really do not think that it would be helpful to raise this particular issue at the moment. My right honourable friend has put a particular issue to the National Joint Council in terms which I have set out to the House today; I think that this additional issue could easily prolong the dispute and therefore I do not think that it would be appropriate to do so.
The noble Lord, Lord Rochester, raised the question as to whether the announcement which my right honourable friend has made in another place today would extend to any other group of workers in what I think he referred to as the "essential services". No, it extends to nobody other than the firemen, because that is in fact the only matter on which I am making an announcement today.
Baroness PHILLIPS: My Lords, I wish to ask one simple question which I do not think anyone else has touched upon. I noticed that the Minister referred in the Statement to the firemen being "more productive". I am not quite clear how firemen can be more productive. It seems rather like funeral furnishers. Perhaps the Minister would like to elaborate on that.
Lord HARRIS of GREENWICH: My Lords, I think it might be as well if I were simply to repeat the last two sentences of the guidance which was today given by my right honourable friend to the National Joint Council. That is the point which my noble friend has raised, and I will repeat it:
"The Government hope negotiations will also continue in the National Joint Council on the reduction of the 48-hour week. If a shorter week is to be introduced without loss of pay it would have to be on the basis of more productive working routines which permitted a more cost-effective use of the time not spent on Eire-fighting".

ELECTRICITY SERVICE (FINANCE) (NORTHERN IRELAND) ORDER 1977
Debate resumed.
4.8 p.m.
Lord BELSTEAD: My Lords, before the two Statements were made I think the noble Lord, Lord Melchett, explained quite clearly to your Lordships the load of debt on the Northern Ireland Electricity Service and the resulting burden upon industry and commerce in Northern Ireland, and I shall not weary your Lordships by going over that ground again. However, I wish to make two brief observations. Before this order goes through, I think it should be said that, as the Shepherd Report on the financial position of the Northern Ireland Electricity Service of last year made clear, the position in which the Service found itself and the escalation in costs was due to factors which were really outside the control of the Service. I feel that that should be repeated as being understood on this side of the House.
The other point I wish to make is that the Shepherd Report concluded that there were five factors which would be critical in determining the financial performance of the Northern Ireland Electricity Service: they were, the growth in sales, the cost-structure, the level of capital spending, the structure of long-term capital debt and inflation; and from what the noble Lord has said in his explanation of the order, I think the measures which this order is taking go to meet all those factors except, I suppose, for the factor of inflation, which is an unknown one and in which we are all in the same boat in the United Kingdom.
I should like to ask one question. From what the noble Lord said I did not detect any forecast about the future financial performance of the NIES. The noble Lord touched on the way in which it was hoped that tariffs would move—tariffs for both the private consumer and for industry and commerce—but I do not think he gave any financial forecasts. If the noble Lord will turn to paragraph 9(3) of the Shepherd Report, he will recall that it recommended that the Government

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should, after discussion with the NIES, set a financial target for the operations of the Service and, within that framework, the Service should be free, subject to the Price Code, to fix its own prices, and I am wondering whether anything of that kind has been done.
It may sound rather a draconian suggestion coming from this particular Bench, but I really think that the Northern Ireland Electricity Service is in a special position. It is a comparatively small undertaking and it has fuel costs which are over SO per cent. more expensive than in England and Wales. The Service has additional costs with regard to keeping its plant secure from terrorism, costs which are not to be found in the United Kingdom. Thirdly, it has just received this enormous injection of public funds. I would, therefore, think it right that the Northern Ireland Electricity Service should voluntarily set limits on its expenditure, in agreement with the Government, particularly on capital expenditure, and on their side the Government should confine themselves to expecting only a modest return on the Service's operations, at least for the foreseeable future. It would appear that these constraints will be achieved only if the recommendation of paragraph 9(3) of the Shepherd Report is followed. Therefore, although I support the passing of this order, I thought I ought to raise this question at this time.
Viscount BROOKEBOROUGH: My Lords, I should like to reinforce what my noble friend says about making it clear that these enormous financial problems were not of the Electricity Service's own making. Above all, one of the most important decisions, which was a global United Kingdom decision made many years ago, was that Northern Ireland electricity should in fact depend on oil, that being the most sensible allocation of fuels for the United Kingdom as a whole. We shall go on paying the escalating costs of oil, and that is something which future Governments as well as the present Government will have to deal with. I should like to welcome most warmly the noble Lord's statement, and say that everybody in Northern Ireland will be very pleased with it. I suppose one must declare an interest; I certainly use a lot of
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electricity. I should like to emphasise that the people in charge of decisions in the past could not possibly have forecast the situation in which we find ourselves.
4.13 p.m.
Lord MELCHETT: My Lords, I am grateful to both noble Lords who have spoken for their welcome to the order, and certainly I entirely agree with them about the cause of the difficulties which the Northern Ireland Electricity Service has had to meet. I did make this clear in my opening remarks, some time ago now. Clearly, the world problem we have faced over the price of oil and the world economic problems, which have led to a decrease in demand for electricity, have worked together to exacerbate the problems. They have left the Northern Ireland Electricity Service facing greatly decreased demand for electricity, and with a very large project at Kilroot which will increase their capacity by no less than 60 per cent., entirely financed out of borrowing at a time when interest rates have been particularly high.
As to the future of the tariffs, and the financial performance of the Service, I do not have here any projected targets, but if any discussions on this have taken place I will let the noble Lord, Lord Belstead, know. The hope of the Government and the Service is that the subsidy which will be given to commercial and industrial users over the next five years, which will put the tariffs to those users on the same basis, more or less, as exists in Great Britain, will lead to an increase in demand, which will make better use of the capital investment at Kilroot than would otherwise have been the case. It is quite clear that the Government's view is that this massive wiping off of debt, coupled with the subsidy for industrial and commercial users, will allow the Northern Ireland Electricity Service to stabilise its prices. It will not lead to a reduction in prices for domestic consumers, but it should certainly prevent the very steep increases in prices which would inevitably have been necessary had we not been able to bring about this financial restructuring.
On Question, Motion agreed to.

APPROPRIATION (NO. 3) (NORTHERN IRELAND) ORDER 1977
4.15 p.m.
Lord MELCHETT: My Lords, I beg to move that the Appropriation (No. 3) (Northern Ireland) Order 1977 be approved. This order authorises the appropriation out of the Northern Ireland Consolidated Fund of supply requirements set out in the autumn Supplementary Estimates, and it is the second Northern Ireland Appropriation Order to come before the House during the current financial year.
The order will provide £109·6 million, and will bring the total Estimates provision to date for 1977–78 to some £1,254 million, an increase of £106 million over the total Estimates for 1976–77. The schedule to the order details the services for which extra provision is required, and further information is contained in the volume of autumn Supplementary Estimates which has been placed in the Library. The most important items are £46.3 million for assistance to the Northern Ireland Electricity Service; £19·8 million to cover extension of the Meat Industry Employment Scheme until the end of the calendar year 1977; £10·5 million to meet the increased cost of Supplementary Benefits, and £9 million to provide for the extension of the temporary Employment Subsidy to 31st March 1978. My Lords, I beg to move.
Moved, That the draft Appropriation (No. 3) (Northern Ireland) Order 1977, laid before the House on 9th November, be approved.—(Lord Melchett.)
Lord BELSTEAD: My Lords, we are taking four Northern Ireland orders, and in case noble Lords who are waiting for the important debate which is to come think that there will be long debates on these orders, may I say that this is the third slice of the Northern Ireland Budget, as it were, for the current financial year; therefore I should like to say a word on this order, although on the other two orders I would not wish to say anything at all.
The cost of electricity in Northern Ireland, which was the subject of the previous order, must have caused many
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businesses to hesitate as to whether they were going to invest there. Now that the electricity problem is going to begin to recede, I should like to look at this appropriation order in relation to possibilities for expansion of the Northern Ireland economy, within the policies of the Government, and, so far as I can persuade the noble Lord that I am doing so, within the scope of the order. When the Quigley Report was published in 1976—which was a report on the Northern Ireland economy by senior civil servants in Northern Ireland—it concluded that there were really only three options for Northern Ireland for the immediate future. One was to have a competitive industrial strategy generating its own growth; the second option was to have a heavily subsidised economy; and the third option was to have a deteriorating economy.
The report concluded that only the second option was realistic, although it recognised that State support could lead to industrial growth. I think it is important, for reasons which I will explain in a moment, that we should make our position clear. I think that that analysis, in the special circumstances of Northern Ireland at that time, was right. But I am absolutely convinced that the record of new orders which are being won in the Province—through the efforts of Ministers as well as of businessmen—shows that the objective of Government assistance should be for industry and commerce in the Province ultimately to stand on their own feet, as they are very well capable of doing if they are given the chance.
If I may demonstrate what I mean from the example of the traditional textile industry, at the moment there are six major companies in Northern Ireland, employing something above 20,000 people. Despite the difficulties of the textile industry in the United Kingdom in the last few years, despite the constant security problems, these companies have remained in the Province. I am sure that they would be the first to agree that Government support for certain capital and recurrent costs has made Northern Ireland an attractive place in which to invest. On the 1st August the Secretary of State announced a new initiative. He announced a package of grants for industry, which included higher grants on buildings

1769
and plant in the worst areas of unemployment, new grants on R and D costs for new products, and some improvements for existing incentives. It has been very encouraging to hear that, not very long afterwards, Dupont, who are involved in textiles in Londonderry, announced that they were to undertake a major expansion and modernisation scheme, despite the cruel murder of their managing director Mr. Agate some time ago, despite the textile recession, and despite the Londonderry security situation.
From this general scene one question arises. I wonder whether experience is proving that it is wise to offer differential grants in order to attract firms to areas of the highest unemployment. It is noticeable that Dupont has already been involved in Northern Ireland textiles for some years, and although I support the continuation of Government assistance for investment in the Province I am not convinced that soundly based firms, some of them large multinational companies and many of them already operating in Northern Ireland, should have their commercial judgment influenced as to where to locate their operations in this way. This is not my own view. It was the Quigley Report which drew attention to the danger of high rates of assistance which may attract the unstable firm which later collapses.
The order refers to the operations of the manpower services, which is why I bring these remarks under the scope of the order. If unemployment in most of Northern Ireland were running at an acceptable level with only one or two bad areas with high numbers out of work, I should not be making the suggestion I am. But, with unemployment running at over 10 per cent., I should have thought that there was a case for concentrating new investment on growth centres, attracting it by the best flat rates of grant within the available budget which it is possible to give.
Turning to another aspect of the order, this order appropriates funds for the work of the Department of Manpower Services and I should like to ask the Government three questions about employment prospects in the Province. First, I understand that there is a delay of about three months on payment of
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the Selective Employment Premium, which has been retained in Northern Ireland although of course it has been ended in Great Britain. I wonder whether this delay is wise. It would presumably assist firms' cash flows and their willingness to take on employees if payments could be made promptly, and it strikes me that, if it is the Government's view that, as a matter of policy, it is right to continue the SEP in Northern Ireland, it should if possible be paid promptly.
Secondly, I was grateful to the noble Lord for mentioning the meat industry employment scheme which is specifically mentioned under meat processing in the first item in this order. When I raised this subject regarding the future of the meat industry employment scheme on the occasion of the last appropriation order which we took in March, the noble Lord said that his right honourable friend the Secretary of State intended to make an announcement about the future of the scheme as soon as possible. As far as I know, this is the first news which has followed that, and the noble Lord was good enough to tell me in his remarks that the monies in the order will take the scheme up to the end of the year. Are we waiting until the green pound is to be revalued in the United Kingdom? Do not let us run away from the fact that the problem of the meat processing industry in Northern Ireland derives considerably from the differential in the value of the green pound in the United Kingdom. I am not asking the noble Lord to commit himself by saying whether my apprehension is right. Is this really the problem? If it is, then I shall wait impatiently for a revaluation of the green pound, which, for other reasons as well as the problems of the meat industry in Northern Ireland, I think is well overdue.
My third question is whether Harland and Wolff have had the opportunity to take any share in the Polish shipbuilding order? When the Aircraft and Shipbuilding Industries Act was going through your Lordships' House last year, Section 48 was written into it, not least by the efforts of my noble friend Lord Brooke-borough. It laid on British Shipbuilders and British Aerospace the requirement to have full regard to the need to consult and, wherever possible, to co-ordinate their activities with those of any company

1771
incorporated in Northern Ireland and engaged in shipbuilding or aerospace, if that company was at least one-third under State ownership. That certainly includes Harland and Wolff.
This is not the time to debate the merits of the Polish shipbuilding order and I have no intention of doing so, but it is the moment to ask whether British Shipbuilders considered Section 48 in allocating this contract, and, if not, why not. The relationship between British Shipbuilders and Harland and Wolff, which is operating in the area of worst unemployment in the United Kingdom, is a very serious matter for this particular shipbuilding yard. I hope that the noble Lord can throw some light on that relationship, particularly as regards the future position of Northern Ireland in shipbuilding and aerospace. Finally, the key to future investment in Northern Ireland remains the security situation, and, with the end of the year just approaching, I give my best wishes to the Government that they may perhaps bring peace to Northern Ireland during 1978.
4.26 p.m.
Viscount BROOKEBOROUGH: My Lords, first of all, I should like to welcome this appropriation order. It is a clear case of the Government showing their determination to maintain the economic structure of Northern Ireland that we have now in this House authorised the payment of £1,200 million for the running of Northern Ireland. It is an enormous burden which is carried by the United Kingdom. I was going to ask the noble Lord, Lord Melchett, whether at a later date, perhaps early in the new year, he would agree to having a debate on the future government of Northern Ireland rather than bringing it into the present question of appropriation.
What is not known so widely here is that local government matters—very mundane matters which are dealt with by county councils, district councils and urban councils—were transferred to the legislative assembly at Stormont just before the Government of Northern Ireland was abolished. Today the position is that nobody can be made accountable for even the most minor matters in the ordinary affairs of Northern
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Ireland, such as a pothole in a village street. Technically the accountability lies in Westminster. I do not think that is a very satisfactory state of affairs. It is not satisfactory from the point of view of civil servants, nor from the point of view of the ordinary citizens of the country.
The fact that present Ministers work extremely hard, and do their best to see that a legislative anomaly of what we call the "Macrory Gap" exists, is a great credit to them. But it is certainly not a position which can go on for very long. I am slightly worried that the Secretary of State in his present negotiations with political Parties, in the event of his failing to get agreement on a legislative body, appears to be ruling out the possibility of what I will call a higher tier of local government, which is vital if we are to continue with direct rule. I should be grateful if the noble Lord would help us with a debate early after we come back from the Christmas Recess.
I should like to refer to Class 1 of the appropriation, on which the noble Lord referred to help for the meat industry. I do not intend to go into that any further because my noble friend Lord Belstead has very eloquently and comprehensively dealt with that and many other problems. I have a great worry about the milk industry. Under EEC regulations, on 1st January the ordinary milk producer in Northern Ireland is going to suffer a direct cut in price of 7p a gallon. That is an enormous reduction in price and I know that the Government are doing their best and are not in the least complacent about it. Can the noble Lord give the processors and producers—the milk processing industry is an important part of the community—an undertaking that this cut will not take place?
The next question is on Class 3. My noble friend Lord Belstead referred to the question of availability of grants to industry in Northern Ireland, to encourage firms who would not normally go there to do so, and also for companies which are in Northern Ireland to expand. For a long time these grants were a great incentive to industry and by 1968–69 industry was flocking in and the Province was assuming an air of prosperity, unemployment was being combated and technical industries were getting a broad base.

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Gradually, as more and more areas in the United Kingdom are declared development areas, the edges of these particular types of grant are being blunted. While they are still most effective for any industry that is already there, it appears to me to be clear that they are no longer effective in bringing new industry—original industry—into the Province in the way that they used to be.
In the 1970 Development Programme and, indeed in the Quigley Report, the question of increasing grants beyond a certain level was highlighted. The opinion was formed—it was certainly formed by the Northern Ireland Government at that time—that there comes a stage when it is unwise to increase a grant beyond a certain point. In our neighbouring Irish Republic there is an incentive that appears to be drawing industry in a very large way, and the sort of industry that we want—that is, export orientated industry. It is called the "tax holiday".
I think that the time has come for the Government to look seriously at the question of the tax holiday. At present there is a committee in Brussels examining the whole question of whether the tax holiday which exists in Southern Ireland is within the terms of the Treaty of Rome. In the event of the EEC Committee reporting that it is within the terms of the EEC, and if it in fact is, will the Government give an undertaking to look seriously at the matter with a view to establishing it in Northern Ireland, because all grants distort commercial decisions? They all disturb the pattern of industry, and this grant or this particular incentive of a tax free holiday in the South of Ireland, which also has grants, appears to have done the trick. The future of Northern Ireland will definitely rest on having an industry which is prosperous and up to date. Therefore, I welcome the order.
4.33 p.m.
Lord MELCHETT: My Lords, once again I should like to thank the two noble Lords who have spoken for their support for the order, which, as both noble Lords have made clear, contains some extremely important allocations of money for Northern Ireland. Both noble Lords touched on the position of industry and industrial incentives. I think that they
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both acknowledge the fact that the Government have attached the greatest possible priority, first of all, to keeping firms that are already in Northern Ireland there, and keeping as many people as possible employed by those firms. Secondly, the Government have attached the greatest possible priority to attracting new investment to Northern Ireland from whatever source we thought we might be able to attract such investment. Indeed my right honourable friend the Secretary of State and my honourable friend the Minister of State have both in recent weeks and months been trotting the globe searching for jobs and looking for increased opportunities. In that process they have secured the greatest possible support from the trade union movement, the CBI and industrialists in Northern Ireland. In that respect it has been an extremely worthwhile and effective team effort.
I do not think that it is fair for the noble Viscount, Lord Brookeborough, to suggest that the incentives are now no longer attractive enough to encourage outside investors to come to Northern Ireland. I do not think that that accords with the experience of those people who have been talking to potential investors overseas. I do not think that that view is borne out by the extent of interest that has been shown by new investors in Northern Ireland in recent months.
There are, of course, always much better incentives over the hill somewhere or other which it is possible to say the Government should be offering. Indeed, the Government continually keep under review both the level and the type of incentives. However, there is a great deal of flexibility in what we are able to offer at present as well as a great deal of flexibility in the extent to which we can offer individual companies particular packages which suit their own financial circumstances, particular types of investment and so on. I do not think that we have found that our existing powers and financial resources have been a major constraint. There are many other constraints in attracting investors to Northern Ireland. I do not think that this has been one, although, as I have said, we anxiously keep the package under review to see how we can improve it whenever possible.
The noble Lord, Lord Belstead, referred to the new investment by Dupont in

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Londonderry. That is extremely welcome. However, it points to one continuing difficulty which we must face in Northern Ireland. Although that particular investment keeps Dupont in Londonderry it will in the long run lead to a reduction in jobs, but not to a loss of all the jobs which would have been the case if the new investment had not taken place. However, there is a massive number of jobs to replace over the coming years in Northern Ireland, let alone attracting sufficient extra jobs to reduce the level of unemployment, which both noble Lords have acknowledged is appallingly high.
Therefore, although the noble Lord, Lord Belstead, says that our aim must be to attract viable industry which will, in the long run, having had the benefit of incentives and grants, be able to stand on its own feet and make a profit—because that is where the future of the industrial infrastructure of Northern Ireland must lie—we must face the fact that for some years to come there will be a continuing need for public funds both to attract industry and to help in other ways, as the selective employment premium does, to reduce the loss of jobs and increase the number of new jobs which are created.
The noble Lord, Lord Belstead, also asked about the differential rates of grant available in Northern Ireland. It is true that there is a differential rate of grant between mainly Belfast and some of the growth areas like Ballymena and Craigavon, and many of the areas where unemployment is worse—for example, Londonderry and Strabane; indeed, now West Belfast has been included in that third category. I do not think that the differential rates are sufficiently different to mean that a company that would have invested in a growth area where the rate of grant may be slightly lower than in others, would be discouraged from investing in Northern Ireland at all. The package as a whole is sufficiently flexible for us to prevent that from happening. I am not aware of any examples where that has been the case.
It is a fact that unemployment is a great deal worse in some areas in Northern Ireland—for example, parts of Belfast and much of the West of Northern Ireland—than it is in other areas where the unemployment is possibly comparable to some
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of the worst in Great Britain. The Government have a continuing duty to do everything we can to get new jobs into those areas where male unemployment may be running in some small localities at 30 per cent. or more. Indeed, not to make a special and extra effort for those areas would be extremely difficult to defend.
Both noble Lords referred to Harland and Wolff and the noble Lord, Lord Belstead, asked about the Polish order. As he knows, the question of placing the Polish order is a matter for British Shipbuilders, but there has certainly been contact with Harland and Wolff. It would be fair to say that, although, in the present state of the shipbuilding industry, any order for any yard must be looked at and is almost always to be welcomed, the fact is that the size and type of vessels of which the Polish order consists are not ideal for Harland and Wolff. Harland and Wolff currently has a considerable number of orders under way which must be completed by 1980 and they consist almost entirely of very large ships: two large crude carriers of 333,000 tonnes dead weight; a bulk carrier of 119,000 tonnes dead weight; and it recently secured two LPGs of 50,000 tonnes dead weight and two product carriers of 66,000 tonnes dead weight. The Polish ships are 16,000 and 4,000 tonnes dead weight. There are two types of ship in the order, but they are a great deal smaller than the bulk of the order book at Harland and Wolff. I certainly agree with the noble Lord—this was implicit in his remarks—that Harland and Wolff still desparately need more orders. The Government, in conjunction with British Shipbuilders and Harland and Wolff, are continuing to do all they can to secure the extra orders that the yard will need over the coming years.
The noble Lord, Lord Belstead, asked about Selective Employment Premium and the delay in payment. As far as I am aware, once it has been agreed that a Selective Employment Premium will be paid, claims are settled within a very short period of time—three or four days. It is true that each SEP claim covers a 13-week period, but the advice that I have is that to try to reduce the period for which each claim is settled would produce an intolerable administrative burden. There are

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a very large number of establishments—2,300—currently in receipt of SEP, and approximately 160 claims, averaging £1,800 per claim, are received each week. I think that any speeding up of the process would probably lead to a great deal more administrative work, both for the Government and for the firms themselves. If the noble Lord has any particular problem in mind, I shall be happy to look into it.
Finally, I turn to the agricultural questions. We always seem to manage to debate orders of this sort at a time when Statements are imminent, rather than just after they have been made. As I have made clear on previous occasions, the Government are very well aware of the problems that face the meat industry in Northern Ireland, and a recent visit by my honourable friend the Minister of State at the Ministry of Agriculture, Fisheries and Food has shown that we are making great efforts to impress on all our colleagues in the Government the particular problems that will face Northern Ireland. The noble Viscount, Lord Brooke-borough, mentioned the price of milk in the coming months. Once again, a further announcement on the Meat Industry Employment Scheme is expected very shortly. As I say, the timing of your Lordships' debates is not always ideal. However, we are continuing to keep the need for that scheme and any other assistance to Northern Ireland's agriculture under review. I rest on the fact that our record to date has shown that we are prepared to implement these good intentions with substantial financial assistance.
On Question, Motion agreed to.

ROAD RACES (NORTHERN IRELAND) ORDER 1977
4.42 p.m.
Lord MELCHETT Lord MELCHETT rose to move, That the draft Road Races (Northern Ireland) Order 1977, laid before the House on 10th November, be approved. The noble Lord said: My Lords, this order consolidates the Road Races Act (Northern Ireland) 1970 and related enactments and it is purely a consolidation measure. I beg to move.
Moved, That the draft Road Races (Northern Ireland) Order 1977, laid before the House on 10th November, be approved —(Lord Melchett).
On Question, Motion agreed to.

DEVELOPMENT OF TOURIST TRAFFIC (NORTHERN IRELAND) ORDER 1977
4.43 p.m.
Lord MELCHETT Lord MELCHETT rose to move, That the draft Development of Tourist Traffic (Northern Ireland) order 1977, laid before the House on 10th November, be approved. The noble Lord said: My Lords, this Order is designed to encourage the development of the tourist industry in Northern Ireland. This industry has, understandably, suffered more from the violence and uncertain future than almost any other. Hotels have been a frequent target for attacks and trade has been depressed by the natural reluctance of tourists to visit Northern Ireland. There has been a corresponding reluctance to invest in modernised and expanded facilities with the result that accommodation stocks are very much reduced and standards have declined. However, there are now some signs that things are improving. Following a major campaign by the Northern Ireland Tourist Board in 1976, holidays to Northern Ireland were placed on sale in over 3,000 European travel outlets, and the response this year—in particular the demand for cruising and sea angling holidays—has been encouraging.
It is against this improving background that the proposals in the order have been drawn up. The order will enable the Department of Commerce to extend its Accommodation Grants Scheme to include the increasingly popular self-catering establishments, such as holiday chalets. It will also give a useful boost to the Department's efforts to maintain and improve existing bedroom accommodation by enabling it to give grants for repairs and renewals to catering establishments. Finally, this order will make provision for the payment of salaries to members of the Northern Ireland Tourist Board.
I am confident that, as more peaceful conditions return to Northern Ireland the

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tourist industry will have an increasingly important contribution to make to Northern Ireland's economic development, and I am also confident that this order will provide the vital assistance that the industry needs. I beg to move.
Moved, That the draft Development of Tourist Traffic (Northern Ireland) Order 1977, laid before the House on 10th November, be approved.—(Lord Melchett.)
Viscount BROOKEBOROUGH: My Lords, I do not want to detain the House any further on Northern Ireland, but this is a most important order about a most important industry in Northern Ireland. I think that it would be wrong if some of us on this side of the House did not warmly welcome the order, because it will provide a much needed boost to the tourist industry. Anybody who has been there will know how deplorable is the state of the hotel industry as regards shortage of beds. One cannot sell package holidays unless one has hotel accommodation, and without this hotel accommodation the Tourist Board is being crippled. Therefore, I welcome the order most sincerely. I have been involved in the tourist industry in County Fermanagh for the last 30 years, so I welcome the order with all my heart.
On Question, Motion agreed to.

FINANCE (INCOME TAX RELIEF) BILL
4.45 p.m.
Baroness BIRK: My Lords, I beg to move that this Bill be now read a second time. This short Bill implements the fiscal proposals announced in the Chancellor's Statement on the economic situation of 26th October. It was clearly right to take advantage of the substantial headroom below the ceiling set for the PSBR this year. An immediate further significant reduction in income tax, effected by this Bill, is a quick-acting measure which should help to keep down unemployment and to strengthen the Government's attack on inflation.
This is the third occasion this year on which income tax has been significantly reduced. First, following the spring Budget, allowances were increased and
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higher rate thresholds raised. Second, in July, following the Government's decision to accept the principle of Amendments made in Committee in another place, allowances were again increased and the basic rate of tax cut by 1p. Now, this Bill brings a further increase of the basic personal allowances. This is an important further step towards achieving two of the Government's tax objectives: one is reducing the burden of direct taxation; and the other, giving priority to raising tax allowances in real terms.
If I may, I shall deal briefly, first, with the second clause of the Bill. This clause provides for the exemption from tax for 1977–78 only of the increases in social security benefits which came into effect on 14th November. This exemption saved the Inland Revenue a good deal of work in issuing new PAYE codes to take account of the pension and other increases. It was the only way to make administrative room for the extra work involved in giving effect to the increases in personal allowances. The justification for this is solely administrative necessity and it is not a precedent for future years.
Nevertheless, it is a welcome benefit—in addition to the other tax reliefs and the £10 Christmas bonus—for some 2½ million taxpaying pensioners. The increases exempted for the rest of 1977–78 are £44 for a single pensioner and £70 for married couples. The tax saving is some £15 and £24 respectively, which is a useful additional relief for pensioners over the coming winter months.
The main clause of the Bill, Clause 1, gives further increases in the main personal allowances for 1977–78 over and above the levels fixed by the 1977 Finance Act. These increases for 1977–78 anticipate those required for 1978–79 under the indexation provisions of this year's main Finance Act. Allowances are all increased by 12 per cent., with the exception of the additional personal allowance. This goes up by a slightly higher percentage so that the single parent continues to get the same allowances as a married couple.
The reliefs have effect for the full financial year. They give substantial refunds of tax paid to date—that is, about £21 for a single person and £35 for a married man. In addition, taxpayers will be paying less tax week by week until

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April 1978. The weekly reduction in tax for the rest of 1977–78 is 65p for a single person and £1·05 for a married man, equivalent to increases in gross pay before tax and National Insurance contribution of £1·08 for a single person and £1·74 for a married man.
This Bill, together with the two earlier reductions in income tax this year, means that a single worker on average earnings is getting over £2 a week more in his or her pay packet, and a married man over £3 more. It is essential that these very real increases in take-home pay are borne in mind by all pay negotiators in this critical pay round.
Some people argue that more should have been done. I do not agree. The Chancellor made it clear that he was leaving himself freedom of manoeuvre for further changes in the Budget depending on the way the economy develops. If economic and financial circumstances permit, he has stated his firm intention to make some further reduction in the burden of tax. How far he will be able to go depends on how the critical current pay round goes. My Lords, I hope the House will recognise that this brief Bill is worthwhile and significant. I beg to move.
Moved, That the Bill be now read 2a.—(Baroness Birk.)
4.51 p.m.
Lord CARR of HADLEY: My Lords, may I first of all apologise for the absence of my noble friend Lord Gowrie, whose name appears on the list of speakers today. He is, unfortunately, at the last moment unable to be here and asked me whether I would deputise for him, so I am afraid your Lordships have to put up with me instead. However, I shall not detain you very long.
As we have already made clear from this side of the House, we welcome the income tax reductions contained in this Bill, but we want again to take the opportunity to underline the need, as we see it, for these income tax reductions to go very much further. In order to reduce the total real burden of income tax to what it was at the time of the last Conservative Budget in 1973 it is still necessary for the Chancellor to make a further reduction of no less than £4,000 million a year in the
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tax he is levying at current money values. This demonstrates the huge scale of the income tax increases which have occurred under the Labour Government since 1974.
Mr. Healey now admits that there is a direct connection between the level of income tax, the level of activity in our economy and the level of unemployment. Indeed, the noble Baroness, in introducing the Bill a moment ago, referred to these tax reductions as "quick acting measures to cut down unemployment." I am bound to ask—and I do not want to be too controversial about this—why, if these really are quick acting measures to cut down unemployment, the country has had to wait so long for them?
We welcome Mr. Healey's conversion, but an awful lot of damage has been done during a period of almost four years when, far from reducing income tax, Mr. Healey has put up income tax, and put it up so much that, if I may repeat myself, it still needs further reductions of £4 billion a year to bring the income tax burden in this country down to what it was in 1973. Even in 1973, it was unduly high by comparison with other major industrial countries with whom we have to compete.
We cannot too strongly stress our view that we shall not really get our industry and our small businesses—our entrepreneurial activity and all the activity that we need to get our real economy moving again — until further major reductions have been made in our income tax burden in this country, because this is where we really are out of line with other countries. We are not so much out of line in the total burden of our taxation but we are very seriously out of line so far as the burden of income tax on individuals is concerned.
I understand that traditionally, a debate on the Second Reading of a Finance Bill in your Lordships' House provides an opportunity to raise and debate matters of general economic policy. I certainly do not wish to stage any full scale economic debate today. I am sure that that would by inappropriate, but I wish briefly to raise three matters. The first is the Government's pay policy. May I begin be emphasising our support from this side of the House for the Government's insistence on the need for pay restraint? We agree that it is vital if we are to continue the downward move of inflation

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and to keep it down. But I want to raise a number of questions about the way the Government are actually conducting their pay restraint policy.
We are, or at least we were supposed to be in this current year from August 1977 to August 1978, in a transitional stage in which we were moving back to free collective bargaining. But, in the last week or two, both the Chancellor and the Prime Minister have given strong indications to the contrary. Far from being in a transitional stage and moving towards a return to free collective bargaining, we appear to be moving towards a Stage 4 and, so far as I can gather, a Stage 5, a Stage 6 and a Stage 7 of an incomes policy of the future.
What is the truth? Are we still moving towards a return to free collective bargaining? Are we in a pause before we return to a form of incomes policy of a much stricter and more rigid kind, whether it be voluntary or statutory? I think that the present statements and counter-statements by the Government cause a state of confusion (which is not surprising) in the minds and feelings of both employers and trade unions throughout this country. I really do not believe that this vacillation between moving towards free collective bargaining and apparently moving back again is conducive to the atmosphere we want in pay bargaining in this country. I think that that is a point which the Government must clarify for the country. But let me say that in raising that point I am not in any way detracting from our support for the need for pay restraint.
Secondly, on pay policy, we were supposed in this year's Stage 3 to be allowing an opportunity for much more flexibility; an opportunity to put right some of the distortions which a rigid policy inevitably imposes. Overall earnings for each group of employees under this policy must, according to the Government, increase by a maximum of 10 per cent. But in the early days of introducing this policy the Chancellor went out of his way to say that this meant, that on average, increases in wage rates ought to be not more than 5 to 6 per cent. I should certainly agree with him, from my experience of this matter, that unless you keep the basic increases to 5 per cent.
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to 6 per cent. it would almost certainly be impossible to keep the increase in earnings to the 10 per cent. which he said was absolutely essential and the maximum that could be allowed. But as we have gone on since last August that seems to have been slipping. We hear much less about the 5 per cent. or 6 per cent. and much more about the 10 per cent.
This has two dangers in it. First, it means that if all are going to settle for 10 per cent. then, whatever it may look like on paper, at the end of the year the average increase in earnings will be much more than 10 per cent. and we shall not achieve our inflationary targets, which I think we all agree are the most vital targets this country ought to achieve at present. The difficulty and the danger is greater than that because 10 per cent. has now become a norm; it has become a maximum and a minimum. Far from reducing some of that inflexibility, which is one of the ill effects of a more rigid pay policy, we are compounding it, particularly in the public service. This is again exactly contrary to what the Government said the policy was to be last August.
Again, I must ask the Government, what do they want? What do they mean? They say one thing, and practise another. Again it is not surprising that this vacillation in purpose is causing dismay and confusion, uncertainty, frustration and resentment among both employers and employees throughout British industry and British employment generally.
The second subject I want to raise is that of industrial relations. The present state of affairs in our industrial relations is of very great gravity. In the first 10 months of this year we have had no fewer than 2,309 recorded strikes. That, of course, takes no account of all the ensuing stoppages which occur resulting from a stoppage in one place. The figures specifically exclude consequential stoppages which the primary stoppage in one place causes elsewhere. That means that, on average, 11 new strikes have been starting every working day throughout this year. I think that your Lordships in all parts of the House must agree that this is an appalling state of affairs. We have had in the first 10 months of 1977 as many strikes as we had in the whole of 1968.
Yet the Labour Government in 1968 thought that the record that year was so

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damaging to the national interest that they said that it was essential, in the national interest, to take immediate, urgent, and radical action to correct, or to improve, the situation. It was because of that, as your Lordships will know, that the then Labour Government introduced their White Paper, In Place of Strife. I do not want to go over all those debates, but the Labour Government eventually dropped their proposals for In Place of Strife in return for a solemn and binding undertaking by the trade unions that they would take their own action, in lieu of not having In Place of Strife to set about improving the position.
Here we are in 1977 with the position worse than it was in 1968 when the Labour Government of the day said that it was so bad that the national interest demanded that radical, immediate, and urgent action be taken to improve it. So we must ask the Government what do they now propose to do? I think it was only two days ago—certainly some time this week—when Mr. Jack Jones, in the Dimbleby Lecture, referred to the need, which I have heard him refer to on other occasions, to discover in this country how to "talk in" rather than to "walk out".
Of course, this is what we all ought to be doing. What I want to know, and what the country wants to know, is what are we going to do in practice, what initiative are the Government to take, what are the trade unions to do, what are the employers to do, separately and together, to develop what Mr. Jack Jones himself described as the urgent need to learn in this country to "talk in" rather than to "walk out". I appreciate that the noble Baroness may not be able to answer that question today, but I hope that she will convey it to her right honourable and honourable friends in the Government. I believe that this is one of the major national problems, and until it is tackled with some success we shall not really be prosperous in this country.
The third subject I want to mention, very briefly, is one we have heard much about previously; namely, the training of skilled workers. This is vital to the future growth of our economy, and it is vital to reducing unemployment. The Government repeatedly say how much importance they attach to this subject, and, in fact, they back their words with
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the grants of increasing sums of public money. Speaking for myself, I do not begrudge extra public money spent on the vital subject of increasing training in this country.
But are the Government satisfied with the results that are being obtained? I ask this because even now, with 1½ million unemployed, there are production bottlenecks because skilled vacancies cannot be filled. Only two or three weeks ago, the BBC, in its television programme "The Money Programme", turned the spotlight on the city of Sheffield. The picture painted in that programme was alarming in the extreme. It showed that there were chronic, substantial shortages of skilled engineers now holding back capital investment schemes and current production in some of Sheffield's most important industries. I am sure that what is true in Sheffield is true in other places as well.
Surely this is a paradox that we cannot go on suffering. We must bring our training efforts in this country up to the level of comparable industrial countries. Despite all that successive Governments have tried to do, we are not yet doing this. Despite all the verbal importance which the Government give to this subject, despite the extra public expenditure with which they are backing their words, we are still falling down in this objective. I believe that until we stop falling down on it, we are looking at another problem which, until it is tackled successfully, will prevent us becoming really prosperous once again.
The three matters which I have raised are all vital to the revival and performance of British industry. I think that we all agree with, and welcome, the fact that the financial state of Britain has been transformed for the better in the past 12 months. I think we also all agree with, and all deplore, the fact that the underlying state of the real economy, the industrial economy, is still, frankly, deplorable. There is stagnating production, the rate of inflation is still significantly higher than that in other major industrial countries, and there is a level of unemployment, which in my view is wholly unacceptable and quite intolerable; and it will not be easy to get it down. Unless we take action in the three fields I have mentioned today, I do not believe that we will get it down within the next decade. We believe that

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if we are to improve the real economy, action must be taken with urgency in those three fields.
5.5 p.m.
Lord VAIZEY: My Lords, I apologise that I did not put down my name to speak in this debate, but I did not realise that I would be present, and I particularly apologise to my noble friend on the Front Bench. However, I have only one point to make. I see there my noble friend Lord Amory, who told me yesterday to address the House as a public meeting, but I hope that your Lordships will excuse me if I remain in my usual rather confidential, though not competent, tones. I share with the noble Lord, Lord Carr of Hadley, the satisfaction of the House that the economic tide at last seems to have turned, and I believe that we must congratulate my right honourable friend in another place on his efforts over the past few years. Perhaps at last the country may take satisfaction from the sacrifices which everybody has endured in this time. I hope that my noble friend on the Front Bench will take back to my right honourable friend those words of comfort.
Listening to the noble Lord, Lord Carr, whom one respects and admires greatly, I felt that it was a great pity that the previous Administration dismantled the Prices and Incomes Board. Many of us have felt for a very long time that the only way of having full employment policies in a modern economy is to have a systematic public procedure for the regulation of prices and incomes. I feel that as soon as this can become a non-Party matter, and a body of agreed procedures can be established, which will build up from precedent to precedent in the traditional English way of doing things, the sooner we shall come to an end of this terrible dilemma of whether to seek full employment or whether to seek stable prices.
I rise in the debate for one very simple reason, and I hope tht my noble friend on the Front Bench will bear with me if I make this point. I make it because I am a member of sub-Committee C of the European Committee of the House, and because I am quite a leading light in the Child Poverty Action Group. I think it rather a pity that we are out of line with Europe in one major respect; namely, the
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payment of child allowances. Family allowances have never been a popular social service in this country. I think that they are the most unpopular social service. Judging from opinion polls family allowances are regarded as subsidising people with large families, and those who are responsible. Here we are very out of line with Continental Europe. Our family allowances are only about one-fifth of the level of family allowances paid in the countries of many of our major European allies.
If money is to be remitted in taxation, I should like to see it go to the children rather than to us, who pay taxes. I believe there are two reasons for saying that. This is the major way of getting rid of child poverty, which is still a terrible blemish on our society. Furthermore, it is a way of moderating wage demands of all kinds. In the firemen's strike we have seen examples of firemen, with three or four children, taking home more from supplementary benefit than they earn. That situation could not arise if we had proper family allowances. I know of the prejudice in the country at large against proper family allowances, but I know, too, that there are very prominent Members of the Government who are highly in favour of substantially increasing child allowances. I am aware that child allowances are not electorally favoured. Nevertheless, I am sure that in the long run that is the path we must follow in pursuit of our European allies. I am sorry that I intervened in the debate without giving notice, but I wanted to make that point on behalf of the Child Poverty Action Group and other groups to which I belong.
5.08 p.m.
Viscount AMORY: My Lords, the message that I passed to the noble Lord, Lord Vaizey, was related to my declining powers, because I am always interested in his speeches, and I hate missing a single word. So I readily assure the noble Lord that this afternoon I had the pleasure of hearing every single word he uttered.
This is not an occasion for broad economic debate, and there are only two points which my noble friend Lord Carr of Hadley mentioned, one at the beginning of his speech and the other at the end, which I want to say a few words about. He referred to the changes of view which

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the Chancellor of the Exchequer seems to have adopted during the years he has been at the Treasury. I should like to agree with my noble friend that the conversion of the Chancellor's attitude to direct taxation is among the most welcome of all his conversions. I hope—and I say this in no critical sense—that the day is approaching when all three political Parties will agree about the disadvantages of taxation of earnings as against taxation of expenditure. I hope, too, that we shall see a steady and accelerating movement against direct taxation, even if indirect taxation has to be increased at the same time; and, hopefully, that we shall reach a stage in the foreseeable future when the direct taxation of earnings will be regarded as a bizarre anachronism.
The other point which my noble friend mentioned at the end of his speech, was training. I do so agree with him, particularly in relation to the young unemployed. If they can be encouraged to take a training course it is a splendid thing, I think. They will sometimes be willing to take with enthusiasm a training course which is not necessarily related to their first choice of a career. At the same time, if they are enthusiastic—and in any well-run training course young people can become quite enthusiastic—they will never regret the skills that they have learned on that training course, even though the first job they take up after it may be something entirely different. That, my Lords, is all I wanted to say.
5.12 p.m.
Baroness BIRK: My Lords, the noble Lord, Lord Carr, raised a number of very important points, and I think that a great deal of what he was saying, and has said before, centred around the Government's pay policy. He raised the question of what is meant when we are talking about 10 per cent., and said that 10 per cent. had become the norm rather than a point to be achieved. It is perfectly true—and I am sure he must agree with me—that this is a human reaction in negotiations in a democracy. If he can think of a way—I cannot—in which one is able to alter this, then I am sure any constructive advice would be very welcome. But this is in fact what happens; and, as long as we can keep increases down to what has become the norm rather than let them rise above it, I think it is a very creditable achievement. The achievement
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includes, of course, the 12-month rule, which is absolutely essential; and I am sure that the noble Lord and other noble Lords were as pleased as I was to note today that the NUM executive have once again supported the 12-month rule in allowing local productivity arrangements.
It is extremely difficult to hold this position with a voluntary pay policy such as we have had in the last two years and which has been working remarkably successfully, and to stand firm, because, as the noble Lord quite rightly pointed out, any higher inflation would of course mean higher unemployment. The Government, I believe, are doing their part, although to many people (not, perhaps, in this House) they appear to be acting extremely harshly by having to stand firm and refusing to subsidise or in any way encourage inflationary pay settlements in either the public or the private sector. We have had to resist the claim of the firemen, for whom there is a great wave of emotion in the country: I do not think any Government like to feel they are having to turn down the claims of a group of people who may in their own way be special cases, and in whose case it is impossible to quantify productivity. Even last week, as noble Lords are aware the TUC felt they were unable to give the firemen the support for which they were asking; and this, of course, is because any breach of the Government's guideline would mean that the much larger public service unions would be likely to seek equal treatment.
I think the noble Lord was rather hard on the Government—of course, this is his job; it would be silly, answering for the Opposition, to be soft on the Government—when he said that we were not doing enough. I think that in these difficult circumstances the Government are holding the position extremely well. Numbers of negotiators are delaying their statements this pay round, and as a result under 5 per cent. have settled so far; but both the Department of Employment and the CBI calculate that 85 per cent. of those who have settled have done so within the guideline. We believe that this will continue. The immediate increases in take-home pay secured by this Bill are designed to strengthen the pay policy, and I am grateful to the noble Lord for appreciating that and being generous in his remarks about it. It is essential that

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this Bill's provisions are given full weight by pay negotiators on both sides of industry during the remainder of this pay round, so that they really are effective in trying to hold back any rush which will increase the inflationary situation. We are aware that the inflationary pay pressures will be a continuing problem.
The noble Lord referred to where we were going and to free collective bargaining. He also raised queries on Phase Four and Phase Five. I should like to feel that we had got through Phase Three before we discussed what we were going to do in Phase Four and then, perhaps, in Phase Five. I am very glad that he assumes, as I do—he seemed to take it for granted—that a Labour Government will be in office to carry these phases through. I think he is absolutely right, and I agree with him entirely. Free collective bargaining does not always necessarily lead to a socially equitable result, but, as the Prime Minister has said, at the moment we do not know of any alternative, and I do not think any has been put forward, which really would be as successful at this time or would manage to hold the line and get us through as this policy is doing.
The noble Lord also mentioned something which I thought was very important when he spoke on the question of incentives. Even apart from this Bill, the Chancellor recognised in the spring that the increase in the burden of direct tax over recent years had had undesirable results on incentives. Nevertheless, it would be impossible to make the concessions to which the noble Lord referred. We are up to about £3 billion now. To make it £4 billion, as it was in, I think, 1973, is quite impossible at the moment, and he is as aware as I am that there are a great many other factors involved. It is not quite the simple equation that he suggested but I am sure that, like me, he did not want to take the time of the House in launching into, as he said, quite rightly, a full-scale economic debate. The measures in the Budget—raising thresholds and increases in higher rate bands—will have helped to correct this. Both the lower paid, including those within the poverty trap, and the higher paid, particularly middle and senior management, have been given significant relief.
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Once we get this upturn and get greater production, then we shall get into a syndrome of higher production and greater productivity. Nevertheless, the Chancellor, as he has said, will clearly have the need for further improvements of incentives very much in mind in preparing for his Budget next year. As to the acceptance of the need for this, I do not think there is anything between us. Our differences are in the way it is done and the amount that can be given at any one time.
On the question of strikes, I am glad the noble Lord, Lord Carr, referred to what Jack Jones said in his Dimbleby Lecture. The noble Lord also referred to the number of days lost through strikes. The encouraging thing about the strike record—and I would not say that I view it with any complacency; nor, I think, does anybody, in the Government or outside—is how much it has in fact improved since the record level of days lost through strikes in 1972 and early 1974, which were times of the noble Lord's own Administration.
In fact, last year the days lost through strikes were a quarter of the 1974 level. Again, I say that this is not a matter for complacency. One of the things that the noble Lord omitted to mention when he was talking in the context of the importance of industrial relations was the catastrophic effect of the Industrial Relations Act that the last Administration brought in. I would be the first to agree that this does not mean that we do not appreciate that to find the right way through to a scheme of industrial relations which is based on negotiation and where strikes can be reduced and people can "talk-in", as Jack Jones has said, rather than "walk out", must be the objective of all of us. It is certainly the objective of this Government.
The noble Lord, and the noble Viscount, Lord Amory, also referred to the importance of training for skills, with which I agree. But the present constraints on production from the lack of skilled men are few and isolated. What we are concerned with—and this I imagine was what the noble Viscount and the noble Lord were referring to—is the increase in the number of skilled men and women available to meet what will now be, we hope, a rising level of demand as unemployment goes down. In the last

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two months there has been a decrease—and I know it is a small decrease. This emphasis on skilled training is something which has also been taken up and looked at from the educational side by my colleagues in education and not just from the question of employment, finance and the economy.
My noble friend Lord Vaizey raised the question of child allowances. It is true that our allowances for children are lower than those in many European countries. This has always caused a great deal of anxiety to many. Nevertheless, this Government have given a high priority to the introduction of child benefit, tax free cash benefits, to take the place of children's tax allowances. The child benefit brought in last April is due to be increased next April—and I know that there is a difference of opinion as to whether it is enough to make a substantial increase in the real value—in addition to the further transfer of the value of the tax allowances. I would add that this may be one of the areas where we will find that our inclusion, our partnership, in Europe, will be extremely helpful. I think there is very little more I can add to what has been said. I believe that we all want to achieve the same aims and that it is, perhaps, the means upon which we differ.
On Question, Bill read 2a; Committee negatived.

TOWN AND COUNTRY PLANNING GENERAL DEVELOPMENT (AMENDMENT) ORDER 1977
5.24 p.m.
Lord DUNCAN-SANDYS Lord DUNCAN-SANDYS rose to move, That this House calls upon Her Majesty's Government to withdraw the Town and Country Planning General Development (Amendment) Order 1977 (S.I. 1977 No. 1781) and to make another order in its place which would not have the effect of relaxing existing planning controls in respect of conservation areas, listed buildings, national parks and classified areas of outstanding natural beauty. The noble Lord said: My Lords, I beg to move the Motion standing in my name. In so doing, let me emphasise that this is, of course, an entirely non-Party issue.
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Concern for the protection of our architectural and natural heritage is shared in all parts of your Lordships' House. In this connection, I should like to express my warm appreciation of all the good work in this field which is being done by the Department of the Environment and, in particular, by the noble Baroness, Lady Birk.
There are two provisions in this new planning order to which I wish to draw special attention. First, it raises the basic level of permitted enlargement for all dwellinghouses from 10 per cent. to 15 per cent.; secondly, it almost completely removes planning control over the construction of free-standing garages. While alterations to listed buildings will still require what is called "listed building consent", the increase from 10 per cent. to 15 per cent. will mean that the compensation which the local authority might have to pay to the owner if it refused its consent would be correspondingly increased. This would inevitably tend to influence local authorities in the direction of permitting more extensive changes in the appearance of listed buildings than they might otherwise have been prepared to do.
But the consequences of this proposed change in the law would not, of course, be confined to listed buildings. The cumulative effect over the years of allowing a 50 per cent. increase in the volume of permitted alterations and extensions to buildings which, though not listed, harmonise well with their surroundings, coupled with the mushroom growth of little garages for which planning consent will no longer be required, must increasingly erode the distinctive and homogeneous character of conservation areas. The order will have the same damaging effect on the appearance of our national parks and upon what are called "areas of outstanding natural beauty".
Over the last quarter of a century, there has been growing interest in the quality of the environment in all its aspects. In 1967, the Civic Amenities Act, which I introduced as a Private Member's Bill, established the concept of a conservation area. Since then, some 4,500 of these areas have been designated in England and Wales. In 1974, the protection afforded to conservation areas was still further strengthened by the Town and Country

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Amenities Act and successive Governments of both Parties, as well as local authorities throughout the country, have by legislation and administrative action increasingly demonstrated their support for this policy.
The new order which we are now discussing runs counter to this whole trend. Apart from the direct consequences of its specific provisions, to which I have referred, it would inevitably have the indirect effect of giving planning authorities the feeling that there had been a change of emphasis in national policy and that less importance was now attached to the protection of the quality of the environment in town and country.
In the Press statement announcing the laying of this order, the Department of the Environment explained (and I quote) that:
"the main objective of this order is to ease the burden on local planning authorities".
In considering the question of the degree of planning control which it is desirable to exercise, I quite accept that one must take account of the administrative work involved. But, leaving aside the adverse consequences of this order to which I have referred, it is by no means certain that it will, in fact, have the result which it is designed to achieve.
It is, I think, significant—and I would emphasise this to the House—that the very people whose interests the order is intended to serve, namely the local planning authorities, are by no means happy about it. The Association of Metropolitan Authorities has stated that it is:
"concerned at the consequences likely to flow if this draft order is implemented in its present form".
Again, the Association of District Councils, in a circular to district councils, has likewise expressed its opposition to the order. It has expressed the view that, far from reducing the administrative burden on planning officers, the likely effect will be to increase it.
The Association of County Councils, having seen my Motion on the Order Paper, has written to me to say that it, too, considers that there should be special provision for high amenity areas—that is to say, conservation areas, national parks
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and areas of outstanding beauty—and in its letter it adds that this Motion consequently has the Association's full support. Finally, we have the expert advice of the Royal Town Planning Institute, which speaks on behalf of the whole planning profession. In a recent public statement, the Institute expressed the opinion,
"that the changes proposed are not regarded by the planners as changes for the better".
In the light of the considerations which I have presented, and of the overwhelming weight of adverse opinion among local authorities and planners, I most earnestly hope that the Government will consider withdrawing this order and reintroducing it in a form which would exclude from its operation conservation areas, national parks and classified areas of outstanding beauty. My Lords, I beg to move.
Moved, That this House calls upon Her Majesty's Government to withdraw the Town and Country Planning General Development (Amendment) Order 1977 (S.I. 1977 No. 1781) and to make another order in its place which would not have the effect of relaxing existing planning controls in respect of conservation areas, listed buildings, national parks and classified areas of outstanding natural beauty.— (Lord Duncan-Sandys.)
5.32 p.m.
Lord HENLEY: My Lords, I should like to support the noble Lord very strongly. The noble Lord who has moved this Motion has done so much in these matters. I am not sure whether we are talking about the first Motion, or should include in what we say, the second Motion that he may move. Perhaps the noble Lord could enlighten me.
Lord DUNCAN-SANDYS: My Lords, it is not the custom of the House to press Prayers for the annulment of orders of this kind: therefore the noble Lord may assume that I will not be pressing the Prayer.
Lord HENLEY: My Lords, I am most grateful. I did not want to speak exclusively to the first Motion without giving myself a chance to say something on the second. I agree entirely with the noble Lord. But I go further because I do not think the first Motion goes far enough. The exemptions that it

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allows to the general development order, which are made available to householders in particular, leave us open to great erosion of the whole idea of the general development order. Any diminution of bureaucracy is to be welcomed, and I know that my noble friends take that view. But there are very great dangers, as the noble Lord has explained. He has pointed to a couple of the most difficult problems in this order. There are many things in the order with which we would all agree. In particular, the fact that some of these matters have indefinitely to remain upon the books publicly is a good point. The fact that Grade II listed buildings no longer need be dealt with by the Minister but can be handled by the planning authorities is a good point, too. But there are too many erosions for this to be a safe policy. I know that we can all point to a number of very foolish decisions by bureaucratic councils, but I am inclined to think that those obvious errors in judgment—and sometimes taste—which have been most frustrating to a number of people, are outweighed by the advantages, that we have in our planning system which, despite many slownesses, is probably one of the best in the world. There cannot be planning—and, after all, planning is relatively new—without a degree of slowness because slowness is the very essence of the kinds of safeguards that we wish to promote.
Why I think that the noble Lord's first proposition does not go far enough is that it deals only with designated areas, areas of outstanding natural beauty, national parks, conservation areas, and so on. This order opens up not only designated areas but everything else as well. There are many areas which are not conservation areas; they are not areas of outstanding natural beauty, and they are never likely to be designated so anyway. These rely very often for their charm, for such beauty as they have, on the protection which the existing legislation allows. It would be a great pity to prevent changes being made only to the designated areas. That is why I want the annulment of this order because it will damage a great deal of what we already have.
It is unfortunate that these proposals contradict advice which has been given to the Government, and contradict statements that the Goverment have themselves made. Regarding undesignated land and
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the advice given by the Dobry Report, your Lordships will remember that that was the Review of the Development Control System. Dobry considered and rejected the possibility of precisely such an enlarged GDO exemption in undesignated areas as have now been brought forward. These are the words that he used:
"I feel able to recommend that the tolerance under the general development order should not be substantially altered".
That is what he said about undesignated land. Regarding the House of Commons Expenditure Committee, the possibility of relaxation of the GDO was raised on several occasions by developments in evidence to the recent inquiry of the Environment Sub-Committee of the House of Commons Expenditure Committee into planning procedures. It is significant that, despite those urgings, the committee made no recommendation on the issue. Implicitly therefore I think that we can say that they endorsed the status quo. That is as far as undesignated land is concerned.
The same thing has been said even more forcefully so far as designated land is concerned. Here I come back to Dobry. He said that the designated areas, such as national parks, conservation areas, area of outstanding natural beauty, and so on—and this was even before the amendment in the present order—provided for too lax a form of control. In regard to development control in such areas, he said:
"Evidence submitted indicated considerable dissatisfaction with the effect of GDO permissions and [with the] number of local authorities seeking Article 4 directions to restrict such permissions".
He went on:
"On the basis of this and of advice given to me by the planning boards of two national parks, I believe that the lack of control over development, arising from exemptions under the GDO, can cause harm to the landscape or to the character and appearance of these areas".
He said finally:
"I conclude that there is good reason to question the degree of protection which can be given to special environmental areas so long as there is no control over the permissions granted automatically for such developments under Schedule I of the GDO".
I want to stress that Dobry's categorical criticism of the GDO was made long before the present amendments were proposed. In the face of these categorical

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statements by Dobry, the line that has been taken by the House of Commons Expenditure Committee and the statements made by the Government over the Sand-ford Report on national parks, I am surprised to see what has happened. I should like to read a line of what the Government said, because I think it is apposite. They stated:
"The Secretaries of State endorse the Committee's view "—
that is the Sandford Committee—
"that in the face of growing pressures stricter development control policies need to be applied in national parks."
There we have very strong advice to the Government both as to designated areas and undesignated land, from Dobry, from the House of Commons Expenditure Committee and from Sandford, which the Government specifically endorsed. The noble Lord, Lord Duncan-Sandys, has already told your Lordships of the weight of opinion from local government authorities suggesting that this is a bad change. He has demonstrated conclusively that, whereas it is supposed to take the load off local planning authorities, in fact it does nothing of the kind. It seems to me that in the face of this sort of criticism the Government ought to think again about relaxing the general development order and about relaxing it as substantially as they propose. I hope very strongly that there will be sufficient support for the noble Lord when he moves his second Motion for this general development order to be annulled and for the Government to think again.
5.43 p.m.
Lord SANDYS: My Lords, in the Motion which is before us this afternoon, my noble kinsman Lord Duncan-Sandys has performed a very valuable public service in drawing attention to this draft order. It is quite clear that here is a case where the Department of the Environment has a different view in one half from the other half. It is quite clear that the policy of "loosening of nuts and bolts" was not intended at an earlier stage, and I was particularly glad when my noble kinsman, who was of course the founder of the Civic Trust 20 years ago, said he was broadly in support of certain
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of the Department's policies. I assume he meant that he was in favour of the speeding up of development control procedures so far as Mr. George Dobry's proposals were to this end.
However, I think we both entirely agree that what we have before us now is something of a quite different nature. The effect of the draft order on conservation areas—and, as they have been referred to, there are more than 4,500 of them in all—is going to be in precisely the opposite direction from that which the Government intended; yet another example of Ferrers' Law. I should like to refer to page 17 of a departmental circular which will be well known to the noble Baroness opposite; it is No. 113/75. If I may paraphrase it, Mr. George Dobry made it clear that he considered Article 4 directions to be the simplest and most effective way of having tighter control in areas of national importance, and particularly national parks. It is interesting to note that at page 17 of this particular circular, the Secretary of State agreed with Mr. George Dobry in that regard.
But, my Lords, we are looking at the draft order, and that completely ignores the recommendation which was acknowledged by the Secretary of State. It is rather interesting, because under the signature of the noble Baroness's right honourable friend on 1st April this year, an order was brought into effect: it was called The Town and Country Planning (Listed Buildings and Buildings in Conservation Areas) Order 1977, S.I. 228.
These regulations were supported at the same time by a most interesting circular—and from these Benches, I should like to say how valuable we have found it, because in this further circular, No. 23/77, the Department consolidated all the existing circulars on the subject. There is one small part I should like to quote to your Lordships, which refers to the setting of a listed building. I think it follows on what the noble Lord, Lord Henley, said. I quote from paragraph 25:
"The setting of a building of special architectural or historic interest is often a central feature of its character. It is important to consider the effect that proposed development may have on such buildings. In addition many attractive streets or villages owe their character not so much to buildings of great individual merit but to the harmony provided by a whole range of complex buildings."

1801
The noble Lord, Lord Henley, referred to undesignated land, and I assume by that he carried with it undesignated buildings, of which there are very many—not necessarily outstanding buildings, but buildings in which one can see a character, perhaps, of a village or part of a district or town. I think that anyone reading Circular No. 23/77 would agree that a vast amount of consolidation has been done by the Department, which forms a source of encouragement to all those who are particularly enthusiastic, as my noble friends are, to support the conservation concept. However, I am afraid that this circular from which I quoted cannot have been in the minds of those who produced the draft order. I think it is quite clear that this discernible change of policy, if indeed it be that, was noted by all those local authority associations—and the House has already heard how unanimous their view has been—and also that of the Royal Town Planning Institute.
Finally, I should like to broaden the scope of this matter a little by referring to a Green Paper on housing which your Lordships have not so far discussed; that is, Cmnd. 6851. Quite early in that Paper the Government refer to the supply of houses of the right type, and in paragraph 208 they stress the priority of rehabilitation and repair in the use of housing stock, as follows:
"… will often be as important as new house building in dealing with bad housing conditions and providing for new households."
It is a most welcome fact that the Green Paper on housing gives a rather higher degree of priority to rehabilitation than has been discernible both in the document concerning the policy for inner cities and other recent thinking, but I feel that what we have in the general development order, so far as the arrangements for certain listed buildings are concerned, will be an unhappy situation.
So far as the question of shared households is concerned, a note of warning should be struck. As chairman of a building preservation trust, I know of cases where a listed building has been internally divided to the great detriment of its decoration, fittings and structure. One can say exactly the opposite in certain notable and striking cases. I am thinking of one of the most pre-eminent, the Nash terraces in Regent's Park, where the whole
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of the internal structure was removed and a new building was constructed behind. Nevertheless, the listing of a building very often includes the listing of its interior, and if, under this general development order, it will be permitted to sub-divide a listed building, possibly into multiple occupation, without reference to the Secretary of State, we think that it is a matter of very serious concern.
5.51 p.m.
Baroness WHITE: My Lords, I feel that I should voice the sentiments of the Principality in this debate, as the order covers Wales as well as England. I wish my noble friend to know that I do so partly because, at the recent delegate conference, on Saturday last, of the Council for the Protection of Rural Wales, it was unanimously agreed that all possible representations should be made in the other place and in this House against this order in the form in which it is now before us.
I think my noble friend will be aware that, with the noble Lord, Lord Henley, as Chairman of the Council for the Protection of Rural England, and the noble Lord, Lord Duncan-Sandys, as the founder-President of the Civic Trust, we can fairly say that in England and Wales we represent the senior voluntary amenity bodies, all of which, I believe, are greatly disturbed at the possible consequences of this order as it is now before us. I am not saying that there are not one or two good points in it. For example, the fact that the conditions attached to planning consents are in future to be included in a public register and open for inspection is admirable. I dare say that certain people may take some satisfaction from one little item which provides that development within 800 metres of the Tower of London will in future involve the planning authority consulting the Secretary of State as if the Tower were a Royal Palace or Park. One speculates as to whether the fact that the current Secretary of State for the Environment represents Tower Hamlets inspired this addition to the order.
But, seriously, we should be sympathetic to what I assume is the reason behind the order, which is an effort to speed up planning procedures. One must take this seriously, because there is a most appalling delay. I find this in my work

1803
as Chairman of the Land Authority for Wales. We can work with a fair degree of speed, but we are hampered, as is everyone else, by the backlog of planning applications which have not been determined and which, very often, are not determined for months rather than weeks. So that I, personally, have a certain sympathy with the general aim of this order.
But it is also perfectly plain from what has already been said in this debate that what might be an overriding consideration in certain circumstances or in certain localities—perhaps in Willesden—is not applicable in many other parts of the country, where speed is not so much of the essence as what we are going to leave to posterity. One has different values in different circumstances, and no consideration whatever seems to have been given to this in the order which is before us. That is why, although I have a certain sympathy with the feelings of the noble Lord, Lord Henley, I am also most grateful to the noble Lord, Lord Duncan-Sandys, for suggesting that we could reach at any rate a reasonable compromise on the matter, and that we should take care of the sensitive areas.
After all, what is the point of designating a conservation area, a national park or an area of outstanding natural beauty and then allowing the kind of relaxation which is suggested in the order before us? This could do considerable damage, often unintentionally—but it is none the better for that. Therefore, I hope very much indeed that my noble friend will take extremely seriously the fact that both the local government associations and the voluntary bodies are united in their disapprobation of the order.
I made it clear to some of my colleagues, that, if it were necessary—I hope that it will not be—for the noble Lord, Lord Duncan-Sandys, to press his first Motion, I should feel constrained to vote with him against the Government. I could not in conscience do otherwise. It really seems wrong to those of us who, after all, spend a great deal of our time and effort in trying to preserve the very areas which the Government have designated as being specially worthy of preservation, that the Government should come along with an order which may look innocent enough,
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on the face of it but which one realises, when one begins to analyse it, could do damage.
I do not want to weary the House by going into some of the highly complicated details contained in the order, but the extensions really could be quite serious. For example, if you can build a freestanding garage up to 50 per cent. in area of the curtilage of a dwelling, that could be a building which might have a very deleterious effect upon an area which was otherwise harmonious, and the planning authority would be virtually helpless. Similarly, I am very much concerned as regards the national parks about the proposals for industrial buildings, because, while one is most anxious that there should be more suitable industry in the national park areas, the way in which it is provided, the appearance of the building, the proper siting and so on is extremely important. But, as noble Lords will be aware, where industrial buildings are concerned, it is not half as much again, but double the extension which will be allowed. One will now be allowed up to 20 per cent.—that is one-fifth—of the cubic content of the original building, and up to 750 square metres of floor area. That is a quite considerable area in a rural situation.
I find from studying the order that one can also aggregate two or more original buildings comprised in the same curtilage—I am speaking now of industrial buildings—if they are used as one unit for the purpose of the undertaking, and,
"… the reference in this permission to the cubic content shall be construed as a reference to the aggregate cubic content of those buildings"—
one or more—
"and the reference to the aggregate floor space as a reference to the total floor space of those buildings."
If I were determined to extend my factory, I should find a good way of showing that it was regarded as one unit and escape planning permission.
The planning officers, also, are very much concerned that it will not be within their authority to object if, for example, someone who wishes to escape having to apply for planning consent extends his premises over an existing car park, so that cars may then be parked in adjoining streets or roads. Or he may build

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over a landscaped area, which was possibly part of his original planning application, but, so far as we can understand it, if it is now built over as an extension within the permitted limits of the existing building it will be out with the planning procedure.
I do not wish to take up your Lordships' time by going into further details, some of which are fairly complex. But I hope that I have said enough to make it quite plain to my noble friend that those of us who spend a good deal of our leisure time, if I may call it that, in striving to preserve the amenities and the values of our countryside would be very unhappy indeed if the Government persisted in enacting this order without the reservations proposed in the first Motion of the noble Lord, Lord Duncan-Sandys.
6 p.m.
The DUKE of GRAFTON: My Lords, I venture to speak today in support of my noble friend Lord Duncan-Sandys who, as we all know, founded the whole concept of conservation, wearing two hats: first of all, as chairman of the Joint Committee of the National Amenity Societies and, secondly, as a member of the Historic Buildings Council for England which is now spending an increasing amount of time on advising the Secretary of State regarding the spending of nearly £2 million a year on:
"… any work which preserves or enhances the character and appearance of a conservation area."
In this role, I am very gravely disturbed that these proposals may harm, I venture to think, the very valuable work only now getting under way with the help of public money. After all, it is very worrying to think of the possible effect of the relaxation of the general development order on unlisted buildings in the conservation areas. Even what may be described as a small extension to a building in an historic town can have a totally disastrous effect.
May I say a word about the Joint Committee of the National Amenity Societies. We have received many representations about this order from local amenity societies, architects and private individuals. Perhaps not enough has been said about the rather delicate question of building up enthusiasm for
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conservation areas; the idea is comparatively new. My experience has been that enthusiasm has to be pushed along very gently. Therefore, the relaxation of this order might prove to be a very serious, retrograde step. Think, my Lords, of the feelings of a gentleman who owns a house in a conservation area and who then sees work being done which he must know will have a damaging effect on the street but which nobody can control. It might do untold damage. I do not intend to detain your Lordships further. However, I should like most warmly to support the Motion of my noble friend Lord Duncan-Sandys.
6.2. p.m.
Viscount AMORY: My Lords, may I begin by supporting most enthusiastically the tribute my noble friend the Duke of Grafton has just paid to my noble friend Lord Duncan-Sandys for his initiative and leadership in matters of conservation over the past 20 or 30 years. It has been tremendous. I remember reading about an Oriental potentate in the Middle Ages who was very keen on architecture. It was said of him that he used to drive around his country in a chariot and that whenever he came across development of which he did not approve he would lop off 20 or 30 heads and then pass on without further comment. I wish my noble friend Lord Duncan-Sandys could be endowed with those powers; I am sure that they would be well used.
Lord DUNCAN-SANDYS: My Lords, it is an interesting thought!
Viscount AMORY: My Lords, I should also like to pay a tribute to the services in the same field which have been rendered to the Council for the Preservation of Rural England by the noble Lord, Lord Henley. I know how enthusiastic he has been, too. I confess that normally I have a strong bias in favour of an order which, contrary to so many, relaxes controls or regulations which are held to be unnecessary. When, therefore, the Government bring forward an order with the aim of saving the time and trouble of individuals and officials, in order that then they will be able to concentrate on more important matters, normally I feel that one ought to give at least three cheers. It may be, indeed, that there are

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planning matters which are too small to justify the present amount of intervention. In fact, I believe noble Lords will agree that the principle of de minimis non carat lex is generally sounder. Whenever I quote Latin I look around, hoping that a noble and learned Lord is present. I cannot see one at the moment, although I am never quite sure who is a noble and learned Lord.
The areas about which in this case serious doubts arise are, as my noble friend Lord Duncan-Sandys has made clear, the extension of any development in conservation areas, national parks and areas of outstanding natural beauty. I do not quite agree here with the noble Lord, Lord Henley. In areas other than those which I have mentioned, I should have no general objections to the aims of this order. However, in those areas, as I am sure noble Lords will agree, quite small developments, if misjudged, can do damage to scenery and amenity which is out of all proportion to the size of the development. It is in these cases that serious worries arise.
Other kinds of problems arise from this order, to which. I shall not refer now. However, it has been mentioned to me that if an area currently used as a car park is proposed to be used for permitted development, it may throw traffic on to neighbouring roads, to the aggravation of traffic problems. As my noble friend Lord Duncan-Sandys has indicated, I believe that all three local government associations are against this order.
The Department have not failed to consult the associations. However, I do not believe that the representations made by the associations have had much effect on the Minister's views, judging by the order as it now appears. I can speak only for one of these associations—the Association of County Councils. So far as they are concerned, I can say that they would be immensely relieved if the Government were to accept the advice of my noble friend Lord Duncan-Sandys and take back this order for further consideration of its application within the special areas I have mentioned. Because I feel so strongly about this, I have no hesitation whatever in saying that I shall support my noble friend's Motion in any way that I can.
6.9 p.m.
Lord NORTHFIELD: My Lords, I apologise for not putting down my name on the list of speakers. I shall speak only very briefly. I intervene because I am the chairman of a new town corporation. A new town corporation has planning powers that parallel those of a local authority. I am chairman of a planning committee which every month has to judge the applications submitted for development in a conservation area, the Ironbridge Gorge, which is an area of great beauty and one which may well be damaged by the order which is before the House. I want very briefly to relate to my noble friend the experience I have had and the way in which my colleagues and I on the development corporation, have tried to use our powers.
We are in a double dilemma. I should say, first, that we are not happy that the target of our remarks this evening is my noble friend, whose passion for historic buildings and whose devotion to conservation areas is known and to whom we owe a great debt for her energy in this part of her duties within the Department of the Environment. It gives us no pleasure to be hurling these remarks at my noble friend who has so distinguished herself and who, quite properly, prides herself in this role.
Our second dilemma is the one posed by the noble Viscount, Lord Amory, when he said that of course we applaud the motives. We applaud the motives, which are less delay and less restriction, and our problem is at the borderline where, in the view of many of us, that is going to lead to dangers to districts, to the environment and indeed to our national heritage. We are faced with a difficult dilemma on that count, too, so I join with other noble Lords in restricting my remarks to the conservation areas.
In an area like mine—in the Ironbridge Gorge, which my noble friend knows very well because she has visited it and I know she takes pride in what we are doing—we are rescuing it as one of the most outstanding areas of industrial archaeology, and for the preservation of the buildings and the houses of that period, in this country—indeed, if not in the world. If in that area we had not had a very strict planning control, it is perfectly clear that by now that area would have

1809
been dilapidated and changed out of all recognition by additions and odd buildings, many of which we have cleared away in our work of conservation.
We went so far as to publish a booklet, like many which the noble Lord, Lord Duncan-Sandys, is familiar with and indeed is responsible for, showing photographs of the buildings in the Ironbridge Gorge, showing how hideous extensions had in fact been built and where they are particularly prominent because they are all on the side of a gorge. If you stand on the iron bridge in Telford today and look up, there are additions to almost every house you see, and if somebody takes undue advantage of this enormous relaxation of powers in regard to garages and extentions on that gorge side, a great deal of our conservation work will be ruined and will come to naught.
Moreover it is not the case that there is any need to fear delay or the restrictive use of powers in this matter. I spent part of last week visiting one factory in the Ironbridge Gorge where they wanted to build an extension which might well be covered by this order. I was there saying, "Well, we do not want to refuse you; we would like very much to talk with you about the best way of accomplishing your aim within the general limit of preserving the environment of the gorge". Because we had behind us the planning power we were able to reach a very happy agreement with the factory owner, and it was all done with the complete goodwill of everybody concerned.
So it is not the case that bodies like mine, or indeed local authorities, use their powers in a wholly restrictive and bureaucratic manner. We are sensitive to the needs of the area; we are sensitive to the freedom that local people want to extend their dwellings. We simply want to have that slight push behind us when we come to negotiate about the details which will make all the difference between real conservation and the dangers of ruining an area by something which sticks out like a sore thumb as totally inappropriate for the district.
Therefore, I say to my noble friend, with all the earnestness at my command, that if she cannot take away the whole order in the sense of totally redrafting it I hope she will agree to consult with her
1810
noble friend on the point that there must be some greater protection in the relaxation being proposed for the conservation areas. This is the real danger point where I would part company with my noble friend and, like my noble friend Lady White, I would feel it very hard to support the Government on this issue.
6.15 p.m.
Lord SANDFORD: My Lords, I rise to welcome once again an initiative by my noble friend Lord Duncan-Sandys in this field and to assure him that if he feels it necessary to press his first Motion I for one would want to support him. I owe the House an apology for speaking without having put down my name, but the fact is that I was not at all sure that I should be able to be present for this debate. I have a number of interests in this field, one of which is that I am a vice-president of the Association of District Councils which, like all the other associations, is united in opposing this order; but I have perhaps a more general interest in being the predecessor of the noble Baroness in her present office and in as good a position as anybody to admire the distinguished three years' service which she has given to that office. It is that fact which leaves me somewhat at a loss to understand what is going on in the Department. There are explanations in this order in the Explanatory Note—two pages of them—but they do not explain any of the matters which are of real moment and which we have to consider in this debate. It is those that I hope the noble Baroness will be able to explain to our satisfaction.
There are four points. The first is that having appointed Mr. Dobry specifically to look at the whole development control process with a view to speeding it up and simplifying it, how is it that he comes to the conclusion that he is not prepared to recommend any general extension of the exemption granted by the general development order, and the Department which appointed him then ignores that advice? That is the first thing we want to have explained. The second is how, when the committee which I had the honour to chair, represented to the Secretary of State that there should be stricter control in all the national parks, and the Department at that time agreed that the whole planning process had to be

1811
simplified and speeded up, they nevertheless agreed with us that in the national parks the planning procedures and the development control procedures needed to be tightened up, not to be relaxed with any of the others? That is the second explanation which is due to us, and it is an explanation which would not be necessary if my noble friend's recommendations were accepted.
The third point which requires explanation is this: the present Government agreed with the previous Government that there should be no relaxation in the requirement that planning permission to alter listed buildings should be referred to the Secretary of State. There should be no relaxation in that requirement unless and until the Secretary of State was satisfied that the local planning authorities concerned, either county councils or district councils, had between them staff of sufficient calibre and suitable qualifications to take those decisions for themselves. How is it the Department has come to the conclusion that that can all go to the wind and that any authority can have the right to give itself planning consent in respect of listed buildings, regardless of whether or not they have adequate staffs and advice available to them?
The fourth point which my noble friend touched on at the beginning is: how is it that an order can be introduced specifically to make life easier for the local authorities in the exercise of their functions under the planning Act and result in a united opposition and objection to all four of them, to say nothing of the objection of the joint committee of the four amenity societies, the CPRE and the CPRW? I have seldom known any Government introduce any order against such united advice and, in this case, it is from the very bodies that the order is designed to help.
6.19 p.m.
Baroness HYLTON-FOSTER: My Lords, I also apologise for not putting my name down but I rise to support the noble Lord, Lord Duncan-Sandys, and I have an interest to declare as I have the honour to be the president of the Dorking and Leith Hill Preservation Society which is supporting the Mole Valley District Council in their protest over this Order. The Mole Valley District
1812
is an area of special planning restraint because it is close to the London conurbation, and consequently the extension of existing properties in the neighbourhood is very lucrative.
Under the proposed regulations many small properties will, therefore, be enlarged, and this will probably put the cost of them right outside the means of the local people, for whom there is a very great housing shortage. This order will also have the effect of upsetting decisions on applications which have rightly been turned down in the past, probably because of overlooking or obstruction; it will now make them permissible, which will cause hardship and injustice to neighbours. Also there are many examples in this district of large buildings which have established office or industrial uses in the area; these would become capable of further uncontrolled expansion, causing serious problems of parking and access, and again would be detrimental to the character of their surroundings, as there would be no control at all over the style and materials used in the extensions. I understand that in certain cases this will also apply to Grade II listed buildings. Therefore, I hope the Government will give further thought to these problems.
6.21 p.m.
Baroness BIRK: My Lords, first of all, I find my task extremely difficult, because it is not really pleasant being at odds with people on all sides of the House who are not only friends but whose work is so well-known and distinguished in the various organisations they represent. My noble friend Lady White quite rightly pointed out that the heads of three of the important conservation societies and the noble Duke, the Duke of Grafton, from the Joint Amenity Societies, have all come down on the same side. At first glance it looks for me an extremely sticky wicket.
I should like to thank the noble Lord, Lord Duncan-Sandys, for his charming remarks when he introduced his very annoying Motion, also to thank my noble friend Lord Northfield for his kind remarks before he stuck his gentle and charming dagger in as well. Nevertheless, having listened very carefully to everyone who has spoken, and spoken very much to the point and briefly, I

1813
feel that there has been a considerable amount of misunderstanding about the effects of these amendments—a misunderstanding which has resulted in, I believe, quite unnecessary alarm. I want, first of all, to try and clear up these points.
First, permissions to extend buildings are of a once-and-for-all nature. Once the allowance has been used up then planning permission must be sought in the usual way. It is not allowed, for example, to make successive extensions to a dwelling-house each of 15 per cent. of its cubic volume. Similarly, the permission to use one house as two can only be used once; in other words, the amendment order does not give permission either for use as more than two dwellings or for each resulting dwelling itself to be divided again. I think I should point out here that the old order, the order to which this is an amendment, provided for extensions of 10 per cent., which lasted for 30 years, and this is just an increase of 5 per cent. on that. Put in the way that my noble friend Lady White did, it sounds enormous, but I think when it comes down to the percentage figure it is very much less frightening.
Secondly, the new relaxations do not give freedom to extend listed buildings; express grants of planning permission will not now be needed—it was just to resolve that anomaly—but these will still remain under the control of the local planning authority, because listed building consent must be obtained for any alterations that affect its character. This relaxation applies only to Grade II buildings; if it is Grade II or Grade I then it has to come to the Department for permission.
The application of the amendment order to national parks, conservation areas and areas of outstanding natural beauty is nothing new. This is entirely consistent with the present order, which applies nationwide throughout England and Wales The background against which these amendments to the general development order have been made is obviously familiar and has been touched on by most speakers. There has been a welter of complaints from all quarters about the slowness and inefficiency of the development control system. In 1973 Mr. George Dobry was asked to undertake a review of the development control system precisely
1814
to look into this problem. In the final report (paragraph 9.20) he says:
"Relaxation could only be accepted if we were to regard it as the price of freeing the planning control system from too much clogging detail".
Then he goes on to discuss less substantial changes.
The noble Lord, Lord Sandford, asked for reasons for rejecting of accepting the Dobry recommendations. These reasons were given at length in a Statement made by the Secretary of State two years ago. Each individual recommendation was commented on. I do not think this is the moment to spell all that out.
More recently, the House of Commons Expenditure Committee, during its investigation of planning procedures, recommended measures which might be taken to speed up the planning system and make it more efficient. At paragraph 89 it says:
"We consider that at present the planning system is obliged to deal with too many minor alterations and we broadly welcome the Government's proposals for widening the GDO."
This is very important because it stresses what the Committee considered was the matter of central importance and urgency. The planning machine had become bogged down. Dealing with a host of minor matters has meant delay and frustration; there is less time to look carefully at those development proposals likely to have a significant impact on the environment or to deal speedily with developments, large or small, where delay really means very serious cost penalties and real loss of economic growth or foreign investment producing additional jobs.
Incidentally, I would point out that in the conservation field, which is not only my work but also something very close to my heart, it is also true that all the delays that cover the rest of the field do spill over there, and do mean that where there are inquiries or appeals that delay is transmitted to these buildings to the detriment of buildings which are already sometimes in a fairly perilous state.
It was against this background that it was decided that amendments to the general development order were required. The package of amendments now before the House has not been arrived at frivolously, or in a philistine manner. We have had to balance the need to maintain control over development which will have

1815
a significant impact against the need to relieve the burden on the development control machine. There are those who would like to see even tighter controls, and there are those who would like further relaxation of control.
There has been very wide and lengthy consultation on these proposals, and although the noble Viscount, Lord Amory, pointed out that the representations of the local government associations were not completely accepted, I must point out that many amendments originally considered have been dropped and others have been modified as a result of these consultations. It is obviously clearly impossible to please everyone; there are so many varying interests involved. Noble Lords will I am sure, recognise that this is a basic dilemma of the planning system, a dilemma which was well summed up in evidence to the House of Commons Expenditure Committee. Here I quote Vol. II, page 558 of the report:
"A system that has to balance the rights and wishes of individuals with the public interest, preservation with change, and quality with economy, is not likely to be thought perfect by all who are affected by it. Sometimes it has to try and reconcile the irreconcilable. Sometimes its application has been inflexible or petty or inconsistent. Sometimes its processes have been unwarrantably slow with insufficient regard to the difficulties this can cause the applicant whether property company or householder".
I think that sums up the problem admirably and I daresay the noble Lord, Lord Duncan-Sandys, will not only agree but will recognise the quotation because it formed part of the Memorandum submitted by the Civic Trust. What the Government have tried to achieve is a well balanced compromise between these very difficult areas of polarisation.
Now, I turn to some of the benefits which should come about as a result of these changes. We have heard more about the other side of this. First, the planning machine will be troubled by fewer minor matters. This should leave more time for the careful and efficient control of those proposals which are of greater significance to the community; it should allow generally for speedier decisions and result in a saving of time and money for the general public, planning authorities (and their ratepayers), industrialists, architects, planners, house builders and surveyors. The fact that there are differences of
1816
opinion between the individuals in these categories does not, in my opinion, necessarily damn the whole scheme.
The relaxation of control over small-scale development will reduce the frustration felt by people wishing to extend their own homes who have previously found themselves caught up in the planning system. As I am sure noble Lords are aware, not only local authorities but my Department also are inundated by these people. It will also be of benefit to small firms proposing to extend their premises. To be able to turn a single dwelling house into two will make for better utilisation of the housing stock and I should think that this would be welcome in a situation where it is essential to increase our housing stock as rapidly and economically as we can. I envisage that this will be particularly useful where large older houses are under-occupied and it may even result in an improvement of environmental standards. The maintenance of a large house can be an intolerable burden for a single family whereas conversion into two makes for more manageable units and could result in a higher standard of repair and maintenance.
I hope that noble Lords will be convinced from what I have said that the amending order will not have a catastrophic effect on conservation areas. I have already explained that control over the alteration and extension of listed buildings will not be removed—listed building consent will still be required for these. In addition there are the various specially designated areas which the noble Lord wants to exclude from the order. What the Government say is this: we sympathise with this objective and there is no difference about that at all. This was one of the recommendations of the Expenditure Committee, since we do not want sensitive areas to suffer. Our view is that the right mechanism is for the local planning authority, where it sees trouble, to deal with it by an Article 4 direction. The circular to local authorities will make this plain and the Secretary of State will consider their applications sympathetically where his consent is required.
The effect of an Article 4 direction is to rescind the permission granted by the general development order. The great advantage over the way in which the noble Lord, Lord Duncan-Sandys, is

1817
trying to achieve this is that such a direction can be used to regain control over all permitted development. This gives far greater control than the noble Lord's proposal, because the control will be not only of the extra 5 per cent. but also of the present 10 per cent. I am sure that the use of this provision to retain control over minor development in selected areas is preferable to the very cumbersome proposal of a general withdrawal of permitted development over wide and disparate areas.
Lord MOLSON: My Lords, may I interrupt the noble Baroness? Would not the procedure she is mentioning add greatly to the amount of paper that would have to pass between the local planning authority and her Ministry?
Baroness BIRK: Not necessarily. So many other cases which were not in sensitive conservation or other designated areas would have been freed from the need to get planning permission that it would more than balance out. The greater speed would be important. No noble Lord who spoke on this order made reference to the other side of the picture, which is that there is a weapon at hand ready to use to deal with this in a very much more expeditious and discriminating manner than would be achieved by making a rescinding and general relaxation of the whole order.
If the Motion moved by the noble Lord, Lord Duncan-Sandys, were accepted, it would exclude about a quarter of England and Wales from the proposed relaxations. The planning system is complicated enough without introducing two systems: one where the current proposals operate and one where they do not. I do not think it would be defensible to suggest that all of those living in the special areas referred to by noble Lords should be denied rights available to other citizens.
Baroness WHITE: We already have two systems. We have particular conditions in national parks and conservation areas. There is nothing new in that.
Baroness BIRK: If this were rescinded we should be adding another layer to it. By this Amendment we are now adding 5 per cent. to the general area and if you then make a general relaxation you are
1818
breaking it up even more. If this is not clear I can write in detail to my noble friend. The designation or declaration of areas of this sort is not a sufficiently precise basis upon which to decide where control over minor development should be applied and where it should not. There may be particular areas or individuals building where more detailed control would be fully justified, and this can be effected by the use of Article 4. Automatic and wholesale discrimination against everyone who lives there cannot be fair. Incidentally, if it were done the other way, you would see the other side of the coin; where Article 4 directions under the system that the Government are proposing should operate—and speakers have made references to neighbourhoods and localities which may not be in conservation or specially designated areas or national parks—it would be important that they should be treated as sensitive cases. The Article 4 direction could do that. However, if it is not used but a general blunderbuss is wielded, that could produce the result which noble Lords are anxious to stop. People living in the areas referred to by noble Lords and which they want excluded from this order may already extend their houses and factories by 10 per cent. without specific planning permission. All we are discussing is a further and relatively small increase in this allowance. Dividing lines are almost always arbitrary but it is difficult to argue that 15 per cent. is intolerable whereas 10 per cent, is quite acceptable.
Baroness WHITE: It is 20 per cent. for industrial buildings.
Baroness BIRK: An ill-designed, badly executed development will be unsightly whatever its size; a well-designed extension can be an asset to a neighbourhood. One has to be fair and look at what can be positive improvements that may come about through this. The Amendments to the general development order will not alter this situation one way or another. What we must aim for—and I believe it is already happening—is that individuals should have greater awareness of their environment so that they will be interested in preserving and enhancing the character of the place where they live and will not propose building operations that will harm its appearance.

1819
I believe that bodies like the Civic Trust, the Council for the Protection of Rural England, the Council for the Protection of Rural Wales and all the amenity societies, have already achieved a great deal in this sphere. I am sure that their continuing role of education, propaganda and encouragement is likely to provide the best defence of those places which we especially value for their appearance and also to make sure that the Article 4 direction is used where necessary.
To sum up, the amendments to the general development order are not as far-reaching or sinister as some noble Lords may have feared. They have been made, after very careful consideration and an acknowledgment of all the various points that have been raised, in order to improve the operation of the planning system in the public interest. Where that interest requires the exercise by the local planning authority of detailed control over minor matters, then the Government's approach is that this should be put into effect by Article 4 direction. However, I am sure that for the general run of small-scale development it is right for individuals to have the freedom which is now proposed.
I acknowledge that it is difficult to find the best way of lightening the burden of the planning machine while at the same time safeguarding the public interest and giving freedom to the individual. The Government's method of reconciling these directives represents a fine balance between what is effective and what is environmentally acceptable. I hope that noble Lords will carefully consider what I have said and come to the conclusion that this really is a better way of obtaining the objective about which, there is no doubt, we are all agreed—I am not arguing about that—than supporting the Motion of the the noble Lord, Lord Duncan-Sandys. However, I should go further and ask the noble Lord whether, in view of what I have said—I know that he is a very reasonable man—he will not reconsider and decide to withdraw his Motion.
Lord SANDFORD: My Lords, before the noble Baroness, Lady Birk, sits down I should like to press my point about listed buildings. If I may say so, the noble Baroness has completely misunderstood
1820
our concern about those buildings. I do not think that any of the noble Lords who have spoken in the debate ever supposed that the need for development control over listed buildings would be withdrawn. That is not the point. The point is that the requirement on local planning authorities to seek the consent of the Secretary of State before approving a planning application has been withdrawn by the order. It seems to have been withdrawn without any assurance that the planning authorities in question have the necessary staffs to advise them. Will the noble Baroness please deal with that point?
Baroness BIRK: My Lords, the noble Lord, Lord Sandford, is as aware as I am that local authorities are able, apart from the order, to decide on alterations themselves as regards a grade 2 building. The noble Lord, Lord Sandford, asked a rather extended question. The letter giving the 1976 direction withdrew individual directions previously given to some authorities which, because they had suitable specialist staff, had been given authority themselves to decide applications for alterations and extensions. These directions sometimes included grade 1 and grade 2 buildings. Only the GLC has been given this authority. The Association of County Councils has been protesting ever since that some authorities are worse off as a result of the 1976 direction. This is really just a way of saying that we cannot please everybody. As regards the listed buildings, all that has happened is that the planning point—an anomaly in the Act—has been brought into line. There would still have to be listed buildings consent from the local authority for alterations to listed buildings, as it is now, and has been since last spring.
Lord DUNCAN-SANDYS: My Lords, the noble Baroness, Lady Birk, has said that she hopes that we shall give most careful consideration to the explanations which she has given. I hope, and I am confident, knowing the noble Baroness, that she will ask the Secretary of State to give most careful consideration to the unanimous views which have been expressed by all speakers in the debate. I believe that the best way in which we can strengthen the hand of the noble Baroness is to record our views in the Division Lobby.
Lord NORTHFIELD: My Lords, that is unreasonable.
6.46 p.m.
Resolved in the affirmative, and Motion agreed to accordingly.

TOWN AND COUNTRY PLANNING GENERAL DEVELOPMENT (AMENDMENT) ORDER 1977
Lord DUNCAN-SANDYS Lord DUNCAN-SANDYS had given Notice of his intention to move, That an Humble Address be presented to Her Majesty praying that the Town and Country Planning General Development (Amendment) Order 1977 (S.I. 1977 No. 1781) be annulled. The noble Lord said: My Lords, I do not propose to move this Motion.

HIGHLANDS AND ISLANDS AIRPORTS
6.54 p.m.
Lord BOYD-CARPENTER Lord BOYD-CARPENTER rose to ask Her Majesty's Government whether they will make a Statement on the future of the Highlands and Islands airports. The noble Lord said: My Lords, in asking the Question may I express my appreciation to the noble and learned Lord, Lord
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 21.

CONTENTS

Amory, V.

Halsbury, E.

Rankeillour, L.

Avon, E.

Henley, L. [Teller]

Rochdale, V.

Boyd-Carpenter, L.

Hives, L.

St. Aldwyn, E.

Broadbridge, L.

Hornsby-Smith, B.

St. Davids, V.

Cathcart, E.

Hylton-Foster, B.

Sandford, L. [Teller]

Colwyn, L.

Kilmarnock, L.

Sandys, L.

Croft, L.

Kinnoull, E.

Somers, L.

Cullen of Ashbourne, L.

Lloyd of Kilgerran, L.

Strathclyde, L.

de Clifford, L.

Lyell, L.

Strathcona and Mount Royal, L.

Denham, L.

Massereene and Ferrard, V.

Swinfen, L.

Drumalbyn, L.

Meston, L.

Trefgarne, L.

Duncan-Sandys, L.

Molson, L.

Vickers, B.

Elton, L.

Montgomery of Alamein, V.

Ward of North Tyneside, B.

Faithfull, B.

Mowbray and Stourton, L.

White, B.

Falkland, V.

Northchurch, B.

Wigoder, L.

Grafton, D.

Phillips, B.

Young, B.

NOT-CONTENTS

Ardwick, L.

Lovell-Davis, L.

Stewart of Alvechurch, B.

Birk, B.

McCluskey, L.

Stone, L.

Davies of Leek, L.

Melchett, L,

Strabolgi, L.

Houghton of Sowerby, L.

Murray of Gravesend, L.

Torphichen, L.

Kagan, L.

Northfield, L,

Wallace of Coslany, L, [Teller]

Kirkhill, L.

Peart, L. (L. Privy Seal.)

Winterbottom, L. [Teller]

Llewelyn-Davies of Hastoe, B.

Shepherd, L.

Wootton of Abinger, B.

McCluskey, who I am afraid has been somewhat inconvenienced by being here tonight but who, with his habitual courtesy, has arranged to be here to answer the Question.
The airports as to whose future I would invite the attention of the House are two on the mainland of the Scottish Highlands—namely, Inverness and Wick; Kirkwall and Sumburgh in the Orkneys and Shetlands respectively; and four in the Western Isles—Stornoway, Islay, Tiree and Benbecula. Within the compass of this Question I shall not raise the matter—as the title of my Question might suggest—of some of the even smaller airports which are operated by local authorities, such as that at Barra where, as some noble Lords may know, one has the exciting experience, subject to the tide, of landing on the beach.
Under the Civil Aviation Act 1971 those eight airports that I have just listed, plus the rather larger one at Aberdeen, were vested in the Civil Aviation Authority. The guidance given under that Act in February 1972—it is Cmnd. 4899, paragraph 21—directed that Authority to make recommendations to the Secretary

1823
of State as to their future and as to the arrangements to be made, if possible by 31st March 1974. In compliance with that direction, the Authority submitted such a recommendation in February 1974 during the last few days of office of Mr. Peter Walker and the Government of which he was a Member. But as Mr. Peter Walker demitted office within a few days of receiving this recommendation—though not, I hasten to say, as a result of receiving it—he can hardly be blamed for what followed.
What followed was, in fact, an indication of the usual dynamism of the Department of Trade in its civil aviation capacity. That is to say, nothing happened for three and a half years except that Aberdeen, having become a larger airport, on the direction of the Government was a couple of years ago handed over to the British Airports Authority. I now understand—and that is why I seek your Lordships' permission to raise this matter tonight—that the Government have in contemplation the possibility of transferring the remaining eight airports which I listed to the British Airports Authority. If that be so, I beg them to think again before committing themselves to such action.
In saying that, I have nothing but admiration for the British Airports Authority, with which I used to work in quite close collaboration when I was chairman of the Civil Aviation Authority, which I was for five years. The British Airports Authority is an admirable body; it is admirably skilled in the operation of large airports, and fortunate and skilful in its use of its powers to grant concessions for restaurants and duty-free shops which greatly help it to turn in the admirable financial results which it regularly produces.
However, the point I wish to put particularly to the noble and learned Lord who will reply, is that there is all the difference in the world between large airports and the techniques involved in operating them, and the small airports which are referred to in this Question. In an office in Whitehall—perhaps I should say Victoria Street—it is very easy to deal with a matter on paper, to reason that the British Airports Authority is a competent body in managing airports,
1824
that the Civil Aviation Authority is not primarily an airports authority at all and that, therefore, these small airports should be handed over to the British Airports Authority.
But the essence of the point I wish to put to the noble and learned Lord is the profound difference in the job of running airports of two different kinds. If one looks at these airports—not from an office in Victoria Street or on paper, but in person and on the ground—one sees that the difference is immediately, violently apparent. I shall take as an example some of the airports in the Western Isles, where apart from the fire services—which, I am glad to say, as I understand it, are still being most loyally operated—very often the handling of traffic is done by one man whose traditional form of duties takes the place, first, of chasing the sheep off the runway, then talking the aircraft down, and then carrying the baggage to the terminal. All that is done by one man. Almost always he is a local man, locally recruited, whose heart is in the job and who is proud of the fact that he is running the airport which, under modern conditions, is the hub and centre of these remote islands. The job structure is very different from that of a British Airports Authority airport, where the very nature of the organisation means that those jobs must be divided between several categories of workers. Their structure and their agreements with their trade unions make that quite inevitable.
Another reason why the operation of these airports by the Civil Aviation Authority has proved to be so economical is that it is done with the aid of the organisation which already exists, and must continue anyhow to exist, for the provision of air traffic control over the Highlands and Islands. The British Airports Authority is not qualified to provide that air traffic control, and indeed, as the noble Lord will recall, the Civil Aviation Act explicitly provides that the provision of air traffic control at British Airports Authority airports must be given by the Civil Aviation Authority,
So the consequence of transferring these tiny airports from one authority to the other would mean that two complete background organisations would be required to offer legistical support, technical

1825
advice, and the whole machinery of a central organisation. With the probable exception of Sumburgh, none of them will in the foreseeable future be economically viable propositions. They are there not for economic but for social purposes. Indeed they provide the only means of maintaining civilised standards of life for the people of these remote regions. They are a crucial part of the social infrastructure but, with the possible exception of Sumburgh with its association with the oil industry, they do not pay. I doubt whether they will pay in any time about which noble Lords need concern themselves.
Therefore, it seems the height of folly to alter what is plainly the most economical system, in order to substitute for it a system which, in the nature of things, must be more expensive and therefore must increase the bill which the taxpayer, in one way or another, will have to meet. In raising this matter, I do not wish to seem to be unconstructive. On the contrary, I would remind the noble Lord that when the Civil Aviation Authority, as I have said, carried out its duties under the guidance of making a recommendation to the Government, it recommended that these airports, together in fact with Aberdeen, which is no longer in issue, should be vested in a subsidiary company registered in Edinburgh, with a Scottish board, but receiving their service and their support from, and the use of the staffs of, the Civil Aviation Authority.
Although three and a half years have passed during which no answer one way or the other has been given on that recommendation—and that is a fact which I do not think is very creditable to the Government Departments concerned, but be that as it may—there is really no reason why that should not be done, because those who made that recommendation at the time deliberately conceived it on lines which would enable it to fit in with any major changes which took place in the government of Scotland, or indeed to fit a situation in which no such changes took place. It fits into any general picture which Parliament, in its wisdom, may draw.
However, if the Government are still not prepared to accept a recommendation which was made after a great deal of study by people directly concerned with
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the subject and knowledgeable about it, then I would really beg them not to take action at all at this moment, because to take any other sort of action at this particular moment seems odd in the extreme. The Scotland Bill, as we know, is proceeding in another place under the guillotine, with large areas of it undiscussed. I understand that the part of it which is relevant to the point I am raising tonight—that is, the proposed transfer of authority for aerodromes to the devolved Scottish Authority—is likely, as a result of the guillotine, not even to be discussed in the House of Commons. None of us in this House knows whether the Bill as a whole will pass, or whether that particularly silly proposal to which I have referred may be amended in this House.
Faced with that uncertainty, it seems odd to transfer these airports from one authority to another against the background that if the Bill goes through in anything like its present form they would inescapably have to suffer yet another transfer—perhaps in a matter of months. Therefore, my plea to the Government is not to go forward with their alleged intention of transferring these airports from the Civil Aviation Authority to the British Airports Authority. If they wish to make a change—and there is a case for action because three and a half years of uncertainty has not been wholly fair to the devoted staffs concerned—why not adopt the recommendation which has been on their desks for three and a half years and which, as I have suggested, is wholly consistent with whatever picture may eventually appear of the future government of Scotland? If they are not prepared to do that, I would say to them, in the words of Lord Melbourne, "Why not leave it alone?"
7.6 p.m.
Lord TREFGARNE: My Lords, I find myself in almost total agreement with the conclusions of my noble friend Lord Boyd-Carpenter. For that reason, if no other, I am especially grateful to him for bringing this matter before your Lordships tonight. It is very satisfactory that my noble friend was able to find an opportunity to bring this matter before the House before the Christmas Recess. Therefore, I join with him in expressing thanks to the noble and learned Lord, Lord McCluskey, who is to reply, and who

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we know had to alter his personal arrangements to be here to answer tonight.
Although I agree wholeheartedly with the conclusions which my noble friend has reached, and which he has described to us tonight, there are some additional reasons which occur to me which I would put to your Lordships and which will, I hope, add weight to what my noble friend has said, and what I understand my noble friend Lord Kinnoull is to say a little later. There is one point, however, where I venture to disagree with my noble friend; that is, upon the general performance of the British Airports Authority, particularly in recent years.
I would not dispute the fact that the British Airports Authority has produced consistently satisfactory financial results, and indeed in recent years has generated almost all of its capital requirements from internal sources. It has done this because it has access to what is, in effect, a monopoly market; namely, the major airports of the South-East of England; Heathrow, of course, first and foremost, Gatwick and, to a lesser extent, Stansted. As noble Lords will know, it also operates Prestwick, Aberdeen, as the noble Lord mentioned, Edinburgh and Glasgow.
Most of these—indeed I believe all the BAA airports except Stansted and Prestwick—at least break even. Of course, Heathrow and Gatwick make a substantial profit. Much of the profit is generated from concessions such as restaurants and duty free shops, and the like. But there are areas in the BAA's sphere of influence and its activities which give rise to some comment and some complaint. I am, for example, particularly concerned with the consistent difficulties which general aviation aircraft have experienced at BAA airports. I know that the BAA is alive to those criticisms, and recently it invited me and others to listen to its views, while it explained its problems and how it was going about them.
But talking is not enough, and the actions by which we must judge the Authority in these matters are less than satisfactory. Only now, in 1977, has the Authority got round to constructing a general aviation facility at Heathrow. From a photograph of it, it will be seen that it is a very modest facility. Believe it or not, this facility, essential for British
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aircraft operating between Europe and the United Kingdom and elsewhere, is not to be available to international flights, but only to domestic flights. Your Lordships may regard it as surprising that this much trumpeted facility having been produced at Heathrow, and having, I believe, been opened only recently, has no customs or immigration officials at all. That was an Answer which the noble Baroness, Lady Birk, gave me recently to a Question put down for Written Answer, and I must say—
Lord BOYD-CARPENTER: My Lords, if my noble friend will allow me to intervene, may I ask whether he is being just a little unfair in putting the blame for this situation on the British Airports Authority? Is it not his experience, as it was mine, that the difficulty in these situations is the somewhat mediaeval attitude adopted by the Board of Customs and Excise?
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, before the noble Lord replies, may I ask whether he is not being entirely unfair in speaking on this Question about the matters to which he is now addressing himself? The British Airports Authority is not impugned in some way before this House. The relevance of Heathrow, and the operation which the noble Lord is describing, seem to be a world away from the Question which is being discussed, and I hope that the noble Lord will consider that before he continues on this line.
Lord TREFGARNE: My Lords, I am sorry that the noble and learned Lord takes that view. I am afraid that I do not take that view. I am endeavouring to show what is my most sincere and considered opinion; namely, that the BAA is not the best body to operate the airports in Scotland, which is the matter under consideration, and the matter which is the subject of the Question tonight.
The noble Lord, Lord Boyd-Carpenter, asked me whether it was not the case that the difficulty at Heathrow for example, was the archaic attitude of the customs and immigration officials. That may be. But my information is that the British Airports Authority has not sought to have any customs or immigration officials available

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at the new terminal which it has recently constructed. I would contrast that with the terminal at Gatwick, which is indeed manned by customs officials. However, that was a facility which was arranged a long time ago, when Sir Peter Masefield was the chairman of the BAA.
Let me now come, if I may, to the question of the Highlands and Islands aerodromes themselves. I have explained—apparently to the dissatisfaction of the noble and learned Lord, Lord McCluskey—that I do not consider that the British Airports Authority is very good at providing facilities for general aviation aircraft; that is to say, for small aircraft. I admit at once, as the noble Lord, Lord Boyd-Carpenter, would know, that there are of course difficulties at Heathrow which makes the Authority's task there in that connection very difficult. None the less, the authority has not, in my view, set out to solve those problems.
I now turn to Scotland. The eight aerodromes which it is now suggested in some quarters may be transferred to the BAA are very much used by general aviation aircraft. Indeed, at Sumburgh (which my noble friend mentioned), I should imagine that the great majority of operations are from small aircraft operated by the oil companies. Of course, there are scheduled services operating there, but the great preponderance of operations is from general aviation. I believe that the British Airports Authority is not best equipped to provide the very necessary facilities for these operators.
The reasons for this are sometimes difficult to discover, but, for example, I am told that the manning levels which were applied by the BAA at Edinburgh (which it took over a couple of years ago) were greatly increased shortly after the authority took over. I do not deny that Edinburgh then, as now, is operated efficiently, and no doubt to the satisfaction of the operators. But I find it hard to believe that the substantial increase in staffing levels which took place in Edinburgh was altogether in the best interests of, in particular, the small operators.
I am persuaded that the transfer of these aerodromes to the BAA would not be in the best interests of the majority of the users of these airports in Scotland. Therefore, I hope that the noble and
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learned Lord will be able to say in reply that the Government do not have that in mind. Speaking personally, I should like to see consideration given, at any rate, to a merger of the CAA and the BAA, but that is hardly a matter for tonight's debate. Let me reiterate that I believe that the set-up which the BAA has organised for operating the major airports of this nation is in many respects satisfactory, and indeed the financial results must surely prove that. But I also believe that some of the smaller operators, the efficiency and wellbeing of whom is so essential to the Scottish economy, would not be best served by this transfer, and I hope that the noble and learned Lord will agree with me.
7.16 p.m.
The Earl of KINNOULL: My Lords, I believe that it is almost an unhappy habit of this noble House that those who have held high office outside the House in some specialised field seem often too rarely to give us the benefit of their experience. That is why it always gives me great pleasure to listen to my noble friend Lord Boyd-Carpenter speaking on the subject of aviation. I believe that he has unrivalled experience, both as a politician and as the former distinguished chairman of the Civil Aviation Authority.
I am tempted to support my noble friend in those brief words and then sit down, but I feel that his case has been so fairly and so well presented to the noble and learned Lord, Lord McCluskey, that it would be a little discourteous if I were to do so. I take part in the debate for two reasons. First, I have a small connection with the glorious island of Barra, and I was sad to learn this evening (which I had not realised previously) that the Civil Aviation Authority does not have the responsibility for that unique airport and unique runway, which disappears twice a day. There are 1,200 people on this island, which was made famous by the late Sir Compton Mackenzie, and I know how much they appreciate, as I am sure do all the Hebridean islanders, the air connection that they have.
The second reason I take part in the debate is that I have enormous respect, and indeed affection, for the Hebrides, and I believe that those who live in the remotest part of Great Britain deserve a

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good air connection such as has been given in the past. It is for that reason that I want to see it continued in the future.
The air services to the Outer Hebrides, or the Hebrides, or the Highlands and Islands, are, I believe, a symbol of connection for those who live in those isolated spots. The eight airports, or airfields, as my noble friend has explained, run on a shoestring—and a very successful shoestring, if I may say so. Here, I should like to pay tribute to the Civil Aviation Authority for the way it has run these airports in the past. I believe that these airports employ about 100 people, and both the air fares and the management of the airports are heavily subsidised. I believe that, in the case of the Civil Aviation Authority, it runs to about £1 million a year. I am not sure what the subsidy is to British Airways and Logan Airways, but perhaps the noble and learned Lord can tell us later what these subsidies are.
When one reads that the Minister is considering a change in the management, I think it is perhaps very natural, not only for my noble friend to query this but for those who live there to ask what good industrial logic there is in any change of management. For the present management has carried out its task splendidly, and, so far as I know, there have never been any local grumbles. One would indeed ask the noble and learned Lord, Lord McCluskey, this: Have the views of the local people, who benefit from and often depend upon these airfields, been sought? Has there been any indication of their views? Or, as I think my noble friend suggested in his speech, is the possibility of a change in the management a matter of administrative tidiness; a matter which, at least on paper, looks more tidy so far as London, Whitehall or Victoria Street is concerned?
If that is the reason, I believe that it is a bad ground for the change—and I do not say that because the British Airports Authority is incompetent, or does a bad job. It is the most respected of all the airports authorities in the world. I am not sure my noble friend agrees with that but the BAA carries out a magnificent job on the major airports of the country.
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The obvious reason is the connection between Heathrow and the fine airport at Tiree, and this has no connection at all with the expertise required.
The second reason why I believe it would be bad to transfer to the British Airports Authority is because it is bound to lead to a need for extra staff, extra manning. That is not to say that that is a bad thing in the Hebrides, but it is a bad thing when one looks at the services which are already subsidised. The reason why I say that extra staff will be required is because I am advised that the Civil Aviation Authority will still have to be involved in the air traffic services of the airfields and there would therefore be a possible duplication, particularly where one had the example which my noble friend was quoting in one case.
My noble friend raised the issue of devolution—and rightly so—and asked whether this decision, if it is to come, should not be delayed until the legislation, if it goes through, has been passed. I support that view and should like to ask the noble and learned Lord whether, if the devolution Bill goes through, there are any grounds to believe that all Scottish airports will become the responsibility of Scotland. This is perhaps one reason why the Minister is considering it now. I hope that, tonight, not only will the noble and learned Lord be able to say that, because of the persuasive arguments of my noble friend, the Government are not planning to transfer the management of these airports to the British Airports Authority, but also that he can give an assurance that the Government will continue to recognise that the air services to these outlying, remote islands are an essential feature—indeed, are socially essential—for those who live in these isolated but glorious islands.
7.23 p.m.
Lord DRUMALBYN: My Lords, I apologise to the House for intervening in this debate without having put my name down. I do so because I had some responsibility for taking the Civil Aviation Bill and the guidelines that followed it through this House, and I remember something of what was in our minds at the time in the Department of Trade and Industry. I was at that time in it rather than of it, in a sense, but, quite naturally,

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as a Scot, I took a particular interest in (to use the words of the Question which we are debating tonight)
"the future of the Highlands and Islands airports".
The problem was an obvious one. None of them was ever likely to pay. My noble friend, who presided with such distinction over the Civil Aviation Authority and who has asked this Question tonight, I think suggested that Sumburgh might pay its way—I do not know whether it does yet—but for the rest of them it is very unlikely that any of them will; and this was the basic problem. Which of the authorities wanted to have attached to them something which was bound to cause a loss to offset against the profits which were expected to be made at most, if not all, of the other airports? This was the problem.
I think there are really two main questions here, and they were the questions we had to face then. First, what is the best way to run them, and who should run them? Secondly, how can we be sure that they will continue to be run? I congratulate my noble friend Lord Boyd-Carpenter on the economy with which he has run these airports. What we were afraid of, among other things, was that there would be a degree of overmanning of these airports of such a character that the losses would cause the body running them to say, "Look, we cannot do this any longer; we must close the airport down" —not all of them; we wanted to maintain them all in existence. To my mind—and I understand my noble friend's point of view—I think the really essential thing (and he made this point very strongly) is that these airports are the focus of activity nowadays. They are places from which people who are sick go away to the hospitals. Both socially and commercially they are the focus of activity, and they are absolutely indispensable. Therefore, the first question we must ask the noble and learned Lord is: If they are to be handed over to a new authority, what guarantee will that new authority give that these airports will always be maintained?
The second question is: If my noble friend is right in thinking that the intention is to transfer them to the British Airports Authority, on what grounds is that transfer to be made and in what way will this be an improvement? I ask
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my noble friend, what happens now, so far as the British Airways Authority is concerned, in their control of Edinburgh, Glasgow, Prestwick and, presumably, Aberdeen? I understand there is some degree of decentralisation, although not decentralisation with financial control. I would regret it if the only reason for transfer was simply to get the whole thing under that devolved unit, so to speak, in Scotland. I think this would be an error, if that is the only reason. If there are other reasons justifying it—reasons of greater economy, of greater efficiency and of greater safety and overall control—then of course, let us hear them. This is what we want to know.
My Lords, I have intervened briefly to emphasise what I see as the two major points here. I have not got what I suppose is now the avuncular interest of my noble friend Lord Boyd-Carpenter in one of the authorities, but this is a matter on which, as the noble and learned Lord, Lord McCluskey, will know very well, feelings in Scotland are very strong indeed, and I am most grateful to my noble friend Lord Boyd-Carpenter for having asked his Question tonight.
7.29 p.m.
Lord McCLUSKEY: My Lords, may I, first of all, express my thanks to the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Trefgarne, for their special concern about the interference with my personal arrangements. I consider it such a privilege to speak from where I am now speaking that for that privilege I count one plane well lost.
Lord LYELL: The last plane.
Lord McCLUSKEY: Yes, my Lords. I am also indebted to the noble Lord, Lord Boyd-Carpenter, for the measured care with which he presented his arguments. Let me say this at the beginning, because all the speeches have been directed against a transfer to the BAA or some such transfer, and in replying to the points that have been made I do not want to appear to commit the Government to such a transfer. So that if I try to reply to the points, I hope that noble Lords will not consider that I am advancing a totally one-sided case. If it has that appearance, it is because of the situation in which I find myself.

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I would remind the House of the particular eight aerodromes with which we are concerned. As the noble Lord acknowledged, we are not tonight debating the future of Barra, an island made famous long before Compton Mackenzie made it notorious. The airports range from Tiree at one end, with some 3,000 passengers per year, to the largest, Sumburgh, in the Shetlands, with nearly a quarter of a million passengers a year. That is almost the same number of passengers as at Stansted Airport. I mention it because the noble Lord, Lord Boyd-Carpenter, spoke of the smallness of the airports in the eight; in fact, in terms of terminal passengers the numbers are comparable between Sum-burgh and Stansted.
Lord BOYD-CARPENTER: My Lords, I am sure that the noble and learned Lord does not want to mislead the House, but is he comparing apples and pears? Is he not aware that whereas most of the traffic from Standsted, which is rapidly rising, is long-haul, most of the movements into Sumburgh are helicopter movements to and from oil rigs and, therefore, are short-haul? They are not really the same thing.
Lord McCLUSKEY: My Lords, I accept that. I was making a limited reply that, so far as size is concerned, you find more aircraft movement at Sumburgh and it is roughly comparable in the number of passengers. I want to say specifically and clearly in the presence of the noble Lord, Lord Drumalbyn, that the future of these airports, their existence, is not in doubt. What is at issue at the present time, and has been for some time, is the balance of advantage in relation to the possible change of ownership.
I should like to say also, specifically, in relation to a point made, that until the call of the noble Lord, Lord Boyd-Carpenter, tonight no one has been suggesting that one should simply settle for the status quo. Indeed, the report which came from the CAA in 1974 made recommendations for a change. I need not detail those. Other recommendations, too, have been made and there has been a good deal of discussion; but no one is saying that the present position is ideal.
Lord TREFGARNE: My Lords, will the noble and learned Lord allow me to intervene? Can he say whether the CAA recommendations in 1974 have been published; and, if not, can they be published and can a copy be placed in the Library of the House?
Lord McCLUSKEY: Yes, my Lords, they have been published. The document is entitled Air Transport in the Scottish Highlands and Islands and was published promptly in accordance with the request of the Minister. It contains a great deal of well-expressed argument about the whole matter. I want to quote from one paragraph of this—in a sense against the noble Lord, Lord Boyd-Carpenter, who, I thought, quite unfairly suggested that the Department of Trade had dragged its feet and nothing had happened. To quote from the document which came from the Authority of which he was then the chairman, they said in the report:
"Any change can be disruptive. It might be sensible to await the outcome of the negotiations"—
about Aberdeen and Glasgow—
"over Glasgow and Aberdeen before considering the possible transfer of the Highlands and Islands aerodromes to the BAA".
The CAA themselves suggested, "Do not rush at it". That was sound advice.
Lord BOYD-CARPENTER: My Lords, if the noble and learned Lord relies on that, perhaps he will tell us how much time has elapsed since the situation in respect of both Aberdeen and Glasgow has been determined.
Lord McCLUSKEY: My Lords, I cannot give the precise dates, but the noble Lord will know that Glasgow was first—and that was certainly after this date—and Aberdeen was much later. The development of Aberdeen following on the take-over has been considerable and is now near completion. The report said:
"No significant economic advantage would result from their transfer "—
the transfer of these aerodromes—
"to a different owner or manager."
I am not an unduly cynical man, but I would point out that the CAA, having investigated their management of these airports, found it good. That is perhaps not a totally surprising conclusion and

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one is certainly entitled to have other views on whether they should retain control. The whole discussion of the matter is contained in chapter 15 of that document.
Since the publication of that report there have been, as the report foresaw, some significant developments. I mentioned Aberdeen and the development there; I mentioned Glasgow. There has also been the very successful redevelopment of Edinburgh Airport and the effect of that on the pattern of air travel in Scotland. There has also been developments within the BAA in the setting up of the division called Scottish Airports.
The report rightly foresaw that developments of this kind could have a bearing on this important matter; but another development of significance is the very considerable growth of Sumburgh's traffic, well beyond what the authors of that report foresaw at the time. The Government's consideration of this matter since that report has been influenced by a number of such considerations of which I should mention a further three; although the Government are considering many matters, including those raised in this debate. These matters can be found again discussed in the Board of Trade document which was to precede the White Paper. It is called Airport Strategy for Great Britain, published in June 1976.
The three factors I will mention are these. First, aerodrome management, as the noble Lord would acknowledge, is peripheral to the CAA's main role, which is to regulate civil aviation and to run the National Air Traffic Services; whereas the running of aerodromes is the sole function of the BAA. Secondly, the rapid expansion of Sumburgh, as with Aberdeen, involved issues including the control of investment, the development of new airport facilities and the exploitation of commercial opportunities where the BAA have particular expertise of a kind not available within the CAA.
Noble Lords have mentioned their concern about the losses that these airports necessarily suffer. One way, the present way, of making good those losses is by means of subsidy, whether it comes directly from the Government to the CAA or whether it comes perhaps from an air service operator like British Airways.
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Another way to reduce the losses is to exploit other means of income which airports have. There is very little of that done at Sumburgh at the present time. It is a matter in which, as Lord Trefgarne pointed out, the BAA are expert. They can bring their expertise to that airport, maybe the only one, but certainly to that one. Thirdly—and I mentioned the devolution proposals—unlike the CAA itself, which would not otherwise be affected by the devolution proposals, the aerodromes in Scotland are to be devolved if the Bill becomes law in its present form. I shall come back later to that. The transfer of the eight Highlands and Islands aerodromes to the BAA and their incorporation with the other Scottish airports in a single organisation with headquarters in Glasgow, perhaps or, possibly, Aberdeen, would therefore be wholly consistent with, and would facilitate, the Government's approach to devolution.
It was, for that reason among others, that the chairmen of the two Authorities, the CAA and the BAA, were invited by the Secretary of State for Trade, in 1976, to let the Government have their views on the future of the aerodromes. The chairman of the CAA was at that time the noble Lord, Lord Boyd-Carpenter, and the present chairman of the CAA was then the chairman of BAA. Earlier this year, the present chairman of the BAA, Mr. Norman Payne, advised the Secretary of State that his Authority was prepared to take over the aerodromes if the Government so wished on certain terms. I want to make clear that the British Airports Authority are not grasping at these airports. They are not seeking to take them into their maul, into their empire. That is not the approach at all. They are willing to take them over on certain terms. The present chairman of the CAA advised the Secretary of State that he saw no benefit to be gained by his Authority relinquishing the aerodromes and there, essentially, the matter rests as far as advice from these two bodies is concerned.
Lord TREFGARNE: My Lords, I am obliged to the noble and learned Lord. I wonder whether he is being entirely fair when he says that the BAA do not want to take these airports over.
Lord McCLUSKEY: My Lords, I did not say that. I did not want to give the

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impression that the BAA were grasping at the airports; that is all.
Lord TREFGARNE: My Lords, they have been at some pains—if I may use a pun—to explain the benefits of transfer to the BAA.
Lord McCLUSKEY: I think that is only right and proper. The Government are still considering whether the eight aerodromes would be run more effectively as part of the CAA, perhaps on the lines suggested in the 1974 report, or as part of the BAA. Let me deal with specific points. I hope I can do it shortly, although as I have no plane to catch I need not be too short. First of all, the noble Lord, Lord Boyd-Carpenter, donned the mantle of the late Dr. Schumacher to proclaim that "small is beautiful"—an odd posture, in a way, from an ex-chairman of the CAA.
Lord BOYD-CARPENTER: My Lords, I did not say "small is beautiful". I said that it was different from big.
Lord McCLUSKEY: My Lords, in that event, I shall say no more about sheep or other matters he raised. Of course the BAA is a large organisation, but it is certainly not as large as the CAA. One would think that it can appreciate the problems of small aerodromes, just as the CAA did when it was founded and took over these aerodromes in 1972. It has no experience of running small aerodromes of this kind, like Tiree. But it is a matter of judgment whether the BAA, nevertheless, has the capability effectively to adapt to and run small aerodromes. I emphasise the diversity between the smallest and the largest. It becomes a matter of judgment. A point has been raised, and I want to answer it particularly, about likely airport charges and costs and the effect upon the whole economy of these aerodromes. But first let me say this: the Government acknowledge as a central point that these airports will not pay their way, and that there will be a continuing responsibility in one way or another to ensure that the social need which these airports help to fulfil will be met.
In that context, there is no evidence to suggest that if the British Airports Authority were to take over the aerodromes
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and run them that would lead to any increase in costs which would reflect in the costs of air travel. There obviously might be some savings in relation to management costs. Concern has been expressed by the employees of the CAA at Space House in Edinburgh that their jobs might be lost. There might be extra jobs created. As the noble Earl acknowledged, from an economic point of view, in the Highlands and Islands it may be unfortunate to create extra jobs; but from the point of view of jobs in that part of the world that cannot be wholly bad.
Lord TREFGARNE: My Lords, would the noble and learned Lord give way? We are very much obliged to him. Is he not aware that the be-all and end-all of these airports is to promote the operation of air services to these airfields? If there are more staff and more employees, is it not the case that there will be fewer air services because the costs will inevitably rise?
Lord McCLUSKEY: My Lords, it would be a very foolish airport manager or management body which caused the costs so to rise as to diminish the services. That is a judgment which would simply not be made.
Lord BOYD-CARPENTER: My Lords, may I put this to the noble and learned Lord?—he is so patient. He has not dealt—and it is germane to the point I put—with the fact that there would have to be the CAA's air traffic control services in this area. If an organisation has to be built subordinate to the BAA as well in this area, as the air traffic control services must be kept anyhow, there will be duplication.
Lord McCLUSKEY: My Lords, I accept of course one has to separate the air traffic control function and the airport management function if there are two separate bodies; although one supposes that that may have been implicit in the suggestions made by the CAA in 1974. But when one considers the size of the airports and their likely growth—take Sumburgh, Inverness, and the airport at Orkney for example—it is not unlikely that one will have to divide up these functions anyway in some of these airports.

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The Government have not been shown convincing evidence that transferring aerodromes to the BAA would in itself result overall in increased costs. The Government's policy is that those who use the air services should in principle meet the cost of providing those services. That policy cannot be applied in its pure form, as indicated, to these airports and the Highlands and Islands generally. This is a region in which people who rely upon air transport as an essential social service cannot be expected to meet the full cost of the service which must therefore he subsidised. I do not therefore wholly agree with the way the matter was put by the noble Lord, Lord Trefgarne, when he talked about commercial air services.
There are airports—and Sumburgh is the striking example—where much of the use is the use by the oil industry. There is a certain amount of such use elsewhere, and surely it is right that the air services provided for these people should be, so far as may be and without detriment to the social needs of others, run as nearly as possible on commercial lines. There is no reason why the taxpayer should subsidise passengers engaged in the oil industry. So a balance has to be struck. I do not think that noble Lords would suggest—and certainly the noble Lord, Lord Boyd-Carpenter, would not—that that balance could not be properly struck by the body for which he has such a regard, the BAA.
I should like to repeat to the noble Lord, Lord Trefgarne, that I regret he chose to base the first part of his argument upon the alleged unfitness of the BAA. I repeat that I do not think that the examples he gave have any relevant bearing upon the issues raised by this Unstarred Question. I do not propose to follow him through those examples. I will simply say this: certainly in Scotland the BAA enjoy a well-deserved reputation for competence and concern in the running of the airports that they now run.
I have mentioned Barra. I was asked about the size of subsidies. It is difficult to give a picture to the House that does not possibly mislead. The subsidies have been very substantial; and to Sumburgh, for example, it was over £2 million in 1976, but that is because there are exceptional
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works going on. The subsidies overall have been of a very high order indeed. I was also asked about employment; but I have dealt with that and I need not detain the House further. The noble Earl, Lord Kinnoull, asked about consultation with local people. He will know the Highlanders and Islanders as well as I do—perhaps better. They have not been slow in coming forward to make their views known to the Government, and the Government have been well-informed of their views, particularly, of course, through Members of Parliament, and others.
I am not able tonight to announce the Government's conclusion on the future ownership of the Highlands and Islands aerodromes. The Government have not in fact reached a conclusion. The Government accept that a decision has been long delayed and that the matter should now, if possible, be settled—not least to remove the uncertainties affecting those who work at the aerodromes and, indeed, at Space House in Edinburgh This may seem to some a relatively minor matter, but not to the Government or to those who depend in one way or another on the aerodromes. The decision cannot be entirely divorced either from the debate on devolution, and I believe that a decision will be taken and will be announced within a matter of a few weeks. Around the end of the year, the Government plan to publish a White Paper—that was referred to earlier—on airports policy, and it is my expectation that a decision on the aerodromes will be reached by them and announced at that time. In reaching that conclusion, the Government will study the views expressed in this House today.
My Lords, finally let me commend the noble Lord, Lord Boyd-Carpenter, for bringing this matter to the attention of the House and for reminding the House that these aerodromes, small and remote though most of them are, are of vital importance to the communities which they serve. The noble Lord and the Government are agreed on at least one thing—indeed, I think we are all agreed on this—that a decision on the aerodromes must take account of that basic fact and of the need to ensure that the aerodromes are run as efficiently as possible and with the minimum cost consistent with safety and with the social need of which noble Lords have spoken.