Lords Sitting of 21 March 1977

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury.

TRIBUTES TO THE LATE VISCOUNT COBHAM
The LORD PRIVY SEAL (Lord Peart): My Lords, the sudden death of the noble Viscount, Lord Cobham, is a shock to his many friends in the House and I should like to take this opportunity of paying tribute to his memory. We have lost a most congenial friend, an entertaining speaker, and a notable sportsman. The people of New Zealand in particular have lost a devoted servant.
Charles Cobham was a man of widespread talents. He shone at cricket in which he maintained the family tradition by captaining Worcestershire in the 1930s, and he was vice-captain of the MCC touring team to New Zealand in 1935. After the war he became President of the MCC, and kept a watchful eye on the wellbeing of English cricket from his house in the shadow of Lords Cricket Ground. This, together with his interest in golf and the Outward Bound Movement, which I am glad to say was associated with my Cumbria, was one of the qualities which led to his being chosen as chairman of a major Select Committee of this House on the subject of Sport and Leisure in 1972.
He played a leading part in the affairs of his home county, Worcestershire, which he loved deeply, and before his father's death in 1949 he was for a short time Conservative candidate for Dudley and Stourbridge.
But his main achievement was as Governor-General of New Zealand from 1957–62. He was the first civilian to hold the post after a long line of Service officers and he fully justified his appointment by proving to be one of the most popular Governor-Generals the country has ever had. He took a keen personal
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interest in the country's affairs and enlivened all his actions with his sparkling wit and good humour.
After his return to this country he became a Knight of the Garter and from 1967–72 was Lord Steward of Her Majesty's Household. On retirement from this post, he was then able to take part in the work of this House and to cheer us with his great charm and elegant turn of phrase. His death is a cause for great sadness and I am sure that the whole House will want to join me in expressing our deepest sympathy with his widow and children.
Lord CARRINGTON: My Lords, I should like to associate those who sit on this side of the House with the most appropriate tribute paid by the Leader of the House to Lord Cobham, and I do so with particular sadness because he was a personal friend and colleague. As the Leader of the House has reminded your Lordships, he was a man of many parts: a sportsman—cricket, Worcestershire and Vice-Captain of England; a scholar—and he was a considerable scholar; a soldier; a businessman; a Parliamentarian—he was once a Parliamentary candidate; an administrator, Governor-General and courtier.
My Lords, those of us who knew him know that everything he did he did with vigour and gusto and enthusiasm, and whether it was cricket or an after dinner speech he took an infinity of trouble. Your Lordships will remember his chairmanship of the Select Committee on Sport and Leisure. My noble friend Lord Strathcona and Mount Royal was a member of that Committee and he has told me how good Lord Cobham was in that position.
I was fortunate enough to stay with him on two occasions when he was Governor-General of New Zealand. There may be some people who think it is easy to be a Governor-General; I do not think it is. He certainly was an outstanding Governor-General. Everywhere he went he made his mark. I think I am right in saying—I do not think it is apocryphal—that when the MCC visited New Zealand he arranged for the Governor-General's team to play them, and he offered a crate of champagne for the batsman who made the quickest 50. And he won the crate of

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champagne! That cannot have done him very much harm! I know at first hand that wherever he went in New Zealand he was admired and held in great affection. He certainly was one of the most public-spirited people I have ever met, but perhaps even more than that he was funny and fun to be with. He was greatly loved by all who knew him and we send our sympathy to Lady Cobham and his children.
Lord BYERS: My Lords, we on these Benches would certainly endorse everything that has been said by the two noble Lords who have just spoken. The House is deeply saddened at the sudden death of the noble Viscount, Lord Cobham, after a most distinguished life of public service. I got to know him fairly well when I served under his chairmanship on the Select Committee for Sport and Leisure and on occasions had to take his place as chairman when he suffered from continuing illness during that period. I can attest to the fact that he was a remarkably good chairman, with a deep knowledge of the subjects we found we had to examine. Added to that, his wit and humour and his courtesy with witnesses made him a perfect chairman. The House has lost a good friend and a very efficient colleague. We send our deepest sympathy to his widow and his children.

WATER CONSERVATION
2.43 p.m.
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government, in view of last year's drought, what steps have been taken to conserve the winter rainfall and what additional new reservoirs are planned.
Baroness STEDMAN: My Lords, compensation water release has been reduced under drought order powers in a few cases to help with reservoir filling; otherwise the steps taken have been those normally taken by water authorities in winter. Authorities are actively pursuing the establishment of reservoirs at Carsington, at Broad Oak, at Colliford and at
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Roadford. But grant of powers to construct these is subject to the outcome of normal statutory procedures.
The Earl of KINNOULL: My Lords, I thank the noble Baroness for that reply. Could she say whether at present the stocks in the reservoirs, and indeed the underground reserves, are fully recovered from last year's drought? Could she also say what is the increasing demand by industry, and indeed by the population, on water supply? Is there any evidence that our climate is changing?
Baroness STEDMAN: My Lords, taking the last point first, we have as yet no substantive evidence that our climate is changing. We believe that our underground water supplies are adequate, and that they have recovered. With regard to reservoirs, many of them are overflowing, many of them filled and many of them well on the way to being filled. Our position is considerably better than it was at this time last year.
Lord WAKEFIELD of KENDAL: My Lords, could the noble Baroness say what steps are being taken to increase the underground storage of water rather than storage of water on the surface?
Baroness STEDMAN: No, my Lords; not without notice of the question. I can tell the noble Lord that we have new reservoirs under construction, but that is not quite what he was asking. I will make inquiries and, if the noble Lord will allow me, I will write to him.
The Earl of KINNOULL: My Lords, in view of the reported comment by the National Water Authority that building a new reservoir takes 10 to 15 years, may I ask whether the Government are looking into the question of the planning facilities of the Water Council? Could she say also what capital expenditure has taken place over the last six months, or what has been planned over the last 12 months, by the authorities?
Baroness STEDMAN: My Lords, it takes several years to plan and construct a major new reservoir. Much of the rainwater has to flow to the sea in waste. Last year's conditions were quite exceptional, but we do not think that they were so exceptional as to justify a shift

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in our present policy on reservoirs. We have new reservoirs which are supplying water for the first time. We have other reservoirs under construction. I am not able to give the noble Earl the details of the capital costs. I can only tell him the additional expenditure that last year's drought cost the water authorities. I will look into it, and if we have the information readily available I will let the noble Earl have it.
Lord NUGENT of GUILDFORD: My Lords, I wonder whether the noble Baroness is aware that her well-balanced answers give a fair picture? But is she also aware that, in making its future plans, the water industry wishes to strike a fair balance between providing sufficient supplies of water and not drawing excessively on the capital resources of the nation? In the meantime, in the light of this winter's rainfall, the water industry is very conscious of its gratitude to the Almighty.
Baroness STEDMAN: My Lords, I am very grateful to the noble Lord, with his much deeper knowledge of the water industry, and of the Almighty presumably, as well. Obviously, we cannot plan, and it would be unwise to plan, for the maximum demand in the exceptional circumstances which arose last year. I am sure the water authorities are doing their best, and we are reasonably confident that we can meet any demand this summer.
Lord PAGET of NORTHAMPTON: My Lords, could not Mr. Howell, who was so successful in turning on the rain in the drought, be asked whether he could turn it off? We are flooded.
Lord STANLEY of ALDERLEY: My Lords, I wonder whether the noble Baroness could tell me whether the Government are still keen to encourage farmer-built reservoirs with the 40 per cent. grant they kindly brought in earlier this year. If that is still the Government's intention, I wonder whether the noble Baroness would, with her usual charm, be so kind as to write to the water authorities to ask them to take a more tolerant and helpful attitude in this matter, particularly over on-site reservoirs which are often very much cheaper than off-site? Would she ask them to bear in mind that, as the tax-payer is paying 40 per cent. Of
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the cost, it does matter, and they should give it considerable thought.
Baroness STEDMAN: My Lords, as I said earlier, I do not have the details of the capital costs and other grants we are making. I certainly hope that such steps as can be taken will be taken, and I will certainly bring the point raised by the noble Lord to the attention of my right honourable friend.

BIOLOGICAL MATERIAL: MRE SALES
2.48 p.m.
Lord HALE: 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 the advertisement in the magazine Nature by the Microbial Products Section, Microbiological Research Establishment, Porton, was fully authorised by the Government; and whether it is now Government policy to sell bacteria and toxic products on commercial terms.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, advertisements in Nature by the Microbiological Research Establishment, Porton, were fully authorised. It has been the policy of succeeding Governments over many years to sell, on commercial terms, and under arrangements which have proved perfectly safe, biological materials for use in civil scientific research.
Lord HALE: My Lords, is it not a fact that in the official statement it was conceded that the item staphylococcal entero toxins had definite toxic possibilities, and that reference was made to animal viruses without going on to say that one of the items was monkey cells prepared for viral DNA extraction—and those three letters are of some significance? In view of the unique potential of this gifted institution for protecting large areas from disease—Lassa disease, Marburg disease—is it not a little unfortunate that we are trying to get a few pence back

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by exporting monkey cells to, say, Uganda; or does the Foreign Office give advice on destinations?
Lord GORONWY-ROBERTS: My Lords, I think I can allay the noble Lord's apprehensions on this matter. For those few products which are not completely harmless, safety is fully ensured by a combination of three factors: knowing the customer, whether the customer is in this country or in another country, regulating the quantity supplied and ensuring safe transmission. Those three precautions are, of course, part of the very stringent international regulations which govern the transfer of such substances, to which this country adheres very carefully.
Lord PLATT: My Lords, will the Minister kindly explain some of the points that he has just made? If this is done only under the strictest of precautions, why are they necessary if the material is harmless? Under what rules or regulations do the Government control this?— because I understand from the first Answer that they do. Does not the mere fact of advertising suggest that these materials are available to anyone who cares to purchase them?
Lord GORONWY-ROBERTS: My Lords, no; I do not think so. The fact of advertising arises from a development and is consonant with the decision, of which noble Lords will be aware, to confine the MRE to civil research. The precautions that I have described of course apply across the board but, to quote myself, it is for those relatively few products, one or two of which my noble friend mentioned, which are not completely harmless that the precautions are particularly applied. It is right that we should apply them across the board in this kind of situation. They are necessary in regard to only some of these substances.
Lord HALE: My Lords, from his own experience is not the noble Lord personally aware of the special problems of microbiological investigation in the tropics? Has he not received reports from the Volta area of special problems? Is not this institution uniquely equipped—and I use the word "uniquely" precisely—to deal with Lassa fever and Marburg disease
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and other tropical diseases? Does it not also have potential power to provide a European Economic Community team for dealing with toxic disasters such as the one at Seveso? Is it not the fact that the institution is frightened of the Policy Distributions Council and of its future in view of the hiving off of the mass production of poisons—genocidal poisons —under the euphemistic description of "defence"? Could not the noble Lord ensure that this unique institution, with its immense potential, is put to the best possible use?
Lord GORONWY-ROBERTS: My Lords, yes of course it will be constantly and continually the intention and duty of Her Majesty's Government to ensure that the most complete control and safety precautions are taken over this class of research. I have sought to say with some precision to the House this afternoon that in relation to the matters raised in this Question there is no reasonable cause for apprehension. As to the remarks my noble friend made about the quality of the research conducted in the two institutions at Porton Down, I particularly agree with what he said about the immense possibilities for progressive and constructive uses of a great deal of the information which this excellent team acquires in the course of its researches.

CONSUMERS AND THE NATIONALISED INDUSTRIES
2.55 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is their intention to make a considered Statement on the recommendations contained in the report of the National Consumer Council entitled Consumers and the Nationalised Industries and, if so, when this is expected.
Lord GRAM: My Lords, the Government will make a full Statement when their consideration of the report, and of the related report of the National Economic Development Office on the nationalised

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industries and the study of industrial democracy in the nationalised industries, is complete.
Baroness BURTON of COVENTRY: My Lords, that does not get us any further, but I did not really expect it to. Bearing in mind the Minister's very real interest in this matter, will he try behind the scenes to push this matter forward? Is he aware that today there is considerable anxiety about the position of consumers in relation to the nationalised industries? Perhaps it might be possible to do something about that position without waiting for the Statement to which he refers.
Lord ORAM: My Lords, I certainly share my noble friend's interest in this matter of consumer protection generally, and I shall certainly do anything that I can to help consideration of this report and the related ones. In her opening sentence my noble friend indicated that she was a little pessimistic about progress. I urge her to consider that quite a number of organisations are currently commenting on the report. This is necessarily a process which takes time. As I emphasised in my Answer, this is a question of co-ordinating consideration of this particular report with the other related reports.

INFLATION ACCOUNTING
2.57 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are in favour of inflation accounting, and if so, whether they propose to adopt it in the nationalised industries.
Lord ORAM: My Lords, the Exposure Draft of a Current Cost Accounting standard produced by the Morpeth Committee was published on 30th November last year. On the same day the Government reaffirmed their support for the system of Current Cost Accounting and their desire that this should become the basis for the preparation of company accounts as soon as practicable. The Government also
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agreed that the system should apply to nationalised industries and public trading bodies, subject to any necessary adjustment to meet their special circumstances.
After the end of its consultative period on 31st May, the Morpeth Committee will consider, in the light of views expressed, whether changes will need to be made in the Draft Standard.
Lord CULLEN of ASHBOURNE: My Lords, I thank the noble Lord for that reply. Will he agree that an article in The Sunday Times on 13th March made it clear that nine of the largest firms of chartered accountants had very varying views about this matter and said that a great deal more study was needed? Secondly, will he agree that to adopt this system for nationalised industries, with the obvious result that higher prices would ensue, particularly in the case of electricity, would be unfortunate until we get the rate of inflation down to the single figure that we are all so eagerly awaiting?
Lord ORAM: My Lords, it is true that considerable interest is being shown in this proposal by the organisations to which the noble Lord referred and by many others. It is these expressions of opinion that the Morpeth Committee will be considering. On the question of the application of this system in the nationalised industries during a period of rising prices, subject to the advice that they will receive, the Government are of the view that this proposed system will give a more realistic financial picture and will help both the private sector and the nationalised sector to reach better commercial decisions. I ask the noble Lord to bear this side of the picture in mind as well as the aspects to which he drew attention.
Lord AVEBURY: My Lords, would not the alterations in the accounts of both the nationalised industries and private companies to take into account the effects of inflation, cause an increase in the amount of fees charged by auditors which would then have to be passed on to consumers? Would it not be better if we could eliminate inflation?
Lord ORAM: My Lords, I think that a number of bridges have to be crossed before the auditors raise their fees. I do

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not think that there would be any automatic raising of fees as a result of this. I agree that it is a point that needs looking at.
Lord ORR-EWING: My Lords, would the noble Lord agree that it is desirable to introduce some inflation accounting to take a more realistic view of profits? Is he aware that there is considerable controversy about Exposure Draft No. 18, and that if this was applied, particularly in the heavy capital goods industries, many firms making slender profits would be making substantial losses under the present scheme? Would it not be wise, therefore, to wait until there is more general agreement about a system and particularly, as said by previous noble Lords, until the inflation rate is reduced remarkably and markedly below the 16 per cent. now prevailing?
Lord ORAM: My Lords, I accept what the noble Lord said about the consideration of capital intensive industries, and that is something which we shall have to weigh up. Historic cost accounts, the existing system, have become dangerously misleading, and this problem has to be tackled, and the timing of it of course is one of the things that the Government will have to consider. We have made up our minds about the principle of it.
Lord HAWKE: My Lords, until a proper method of inflation accounting is agreed upon, would it not be best if firms were encouraged to put a note to their accounts stating the cost of replacing their assets? Would not that be a reasonable interim substitute for the real thing?
Lord ORAM: My Lords, I will take note of what the noble Lord said, and I am sure that that will be put before the Morpeth Committee.

REDUNDANT MINEWORKERS AND CONCESSIONARY COAL (PAYMENTS SCHEMES) (AMENDMENT) ORDER 1977
3.2 p.m.
Lord STRABOLGI Lord STRABOLGI rose to move, That the draft Redundant Mineworkers
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and Concessionary Coal (Payments Schemes) (Amendment) Order 1977, laid before the House on 2nd March, be approved. The noble Lord said: My Lords, the origins of the Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1977 lie in the Coal Industry Act 1967, where power to make redundancy payment schemes was first provided. Subsequently the power was extended by the Coal Industry Acts of 1971 and 1973 and by various orders, the latest of which the Coal Industry (Redundancy Payments Schemes) (Extension) Order 1976, takes the powers up to March 1978. The Coal Industry Bill 1977 at present before another place seeks to extend these powers further, but in considering this draft order we are concerned only, I suggest, with the existing scheme up to 26th March 1978.
The current Scheme is contained in the Redundant Mineworkers and Concessionary Coal (Payments Schemes) Order 1973 as amended by the 1975 and 1976 Amendment Orders. Under this, for the first three years of redundancy the man receives 95 per cent. of his previous take-home pay—that is after tax and other deductions. This payment is made up of two elements, "basic benefit" and unemployment benefit. During the first year of redundancy the man receives unemployment benefit in the normal way from the Department of Health and Social Security; for the next two years he gets the equivalent of unemployment benefit from the Scheme. It is obvious from this that whenever the level of unemployment benefit changes it is necessary to change the basic benefit accordingly so that in total the man continues to receive the same amount as before. So having regard to the increase in unemployment benefit which took place in November last year, it is necessary to change the basic benefit. The "basic benefit" to which men are entitled at each level of gross income is shown in the table of benefits at Appendix 4 of the Scheme Order.
The new table of benefit is annexed to the draft order now under consideration and this will apply from 6th April. Noble Lords will note that this follows the pattern of the 1975 and 1976 Amendment Orders where the table of benefit was amended for similar reasons. In addition

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to this necessary adjustment of basic benefit, the Government are proposing three improvements. The first is to increase the maximum amount of pre-redundancy earnings which can be taken into account in calculating the corresponding basic benefit. Since 1975 this has been £70 per week so that any redundant man who had been earning more than that received basic benefit as if he were earning only £70 per week. In order to take some account of the increase in the general level of earnings that has taken place, the maximum is being increased to £80 per week and noble Lords will find that the table in the Schedule to the draft order now goes up to that figure.
The second improvement is this. As I have said, for the first three years men receive basic benefit plus unemployment benefit or an equivalent sum. At the end of three years basic benefit ceases, but men continue to receive from the Scheme a sum equivalent to unemployment benefit until they reach the age of 65. In addition, they receive their mineworkers' pension paid prematurely. Article 6(1) of the Scheme allows certain State benefits to be deducted from the basic benefit which is payable subject to a minimum of £3. The draft order raises this minimum from £3 to £5·23 which is the present level of the mineworkers pension, so that a man's income will not be lower during the first three years of benefit than it will be subsequent to that period.
The third change is to Article 8(3) of the Scheme and concerns the level of pension which may be retained by members of the Staff Superannuation Scheme in the period after the first three years of benefit. Officials and weekly paid industrial staff are members of the Staff Superannuation Scheme and most of them would receive a pension which is higher than the mineworkers pension since it is earnings related, whereas it will be some years before the earnings-related element in the new Mineworkers Pension Scheme which was established in 1975 begins to work through. Under the present redundancy scheme the amount of any pension over £5 per week from the Staff Superannuation Scheme is offset against the redundancy payments. We are now proposing to raise this limit to £8 having regard to inflation and to the fact that the
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mineworkers pension, which is received without offset, is now £523. In addition to these three improvements there is an amendment contained in Article 3(b)(iii) of the order to update the method of calculating the benefit to he paid to a man who is re-employed in the industry, and is then made redundant a second time. All these changes will apply from 6th April.
While useful and, I understand, very acceptable to the unions and the men concerned, these are, I suggest, amendments of detail, and the draft order, I should like to stress, makes no fundamental changes in the arrangements which have operated smoothly and successfully for many years since their introduction through the Coal Industry Act 1967, which was extended and brought up to date by the Conservative Government in their 1973 Coal Industry Act to give assistance to miners who lose their jobs. I hope it will have your Lordships' approval, and I beg to move.
Moved, That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment) Order 1977, laid before the House on 2nd March, be approved.—(Lord Strabolgi.)
3.10 p.m.
Viscount LONG: My Lords, we on this side are grateful to the noble Lord, Lord Strabolgi, for the information he has given about the order. I am glad to note that this matter has again been reviewed and is continuing to be reviewed, because since 1967, when the then Labour Government introduced the scheme, we have welcomed it, and indeed when we were in power we reviewed it. It is of course a most horrible and difficult job in the coal mining industry, and all of us have always had the greatest sympathy for those who do this work. We can therefore understand the reason for these severe and strong pensions which, as I say, we reviewed, and which have been reviewed again this year.
I would not wish to criticise the scheme in any way. As one listened to the noble Lord one might think that the figures of wages were large, but in fact they are not. The miner today can be without a job because his mine has been closed down. He may find himself redundant and it is

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bound to take time before he can be rehoused or rehabilitated in another mine. Bearing this mind, I have four questions to put to Lord Strabolgi and I hope he will be able to give some information on them. First, how many in the coal mining industry today are unemployed? Secondly, from what fund does this money come? Knowing that the Government have to subscribe at times to the National Coal Board, I believe there is a separate fund to deal with this. Thirdly, what is the cost of this scheme to the NCB? The answer to that question might help us realise how difficult the NCB is finding it to obtain money to go ahead with new mines. Fourthly, can the noble Lord elaborate a little on what the total effect of early retirement is likely to be? We are glad to see that the pension has risen from £3 to £5 and that we in Parliament are continuing to look after the miner.
Lord STRABOLGI: My Lords, I am grateful to the noble Viscount, Lord Long, for the welcome he gave to the order, and wish to associate myself with what he said about the work done by miners, often in very difficult and exhausting conditions, and of their great importance to the economy. Lord Long asked a number of questions and I will do my best to answer them. He asked, first, how many men have been entering the scheme through redundancy. It might be best if I gave him the figures for the last four or five years. From 1972 to 1973 there were 6,300; from 1973 to 1974 the number went up to 16,000, chiefly through the closures of exhausted pits; in 1974–75 it went down to 4,000; and in 1975–76, the last period for which figures are available, it was 6,100.
The noble Lord then asked from what fund the amounts were paid. The costs of the scheme are met from the Consolidated Fund through the Department of Energy Vote; the cost does not fall on the National Coal Board. Each week the NCB informs the Department how much money is to be paid out, the Treasury deposits this amount in a special giro account and the NCB makes out cheques on that account which are sent to the individual beneficiaries who cash them at their local post offices. Thus, the money does not in any way go through the Board's accounts. The Government
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pay the Board an agency fee for managing the scheme. Lord Long then asked the costs of it. For the weekly benefit, in 1975–76 the cost was nearly £13 million and in 1976–77 it was nearly £15 million. For the early pensions, the figure was £3 million for 1975–76 and £3,300,000 for 1976–77.
The noble Viscount also asked about the effects of early retirement at 62. This of course will conic into effect on 1st August —this has been agreed—if allowed by the pay policy, but I should like to stress that early retirement will have no basic effect on the structure of the Redundancy Payments Scheme. The reason of course is that early retirement payments, although calculated on the same basis as redundancy payments, will be paid by the NCB and not by the Redundancy Scheme in the rather complicated way I have explained. Early retirement should also reduce the numbers who may be declared redundant. I hope that that answers the noble Viscount's questions, which he properly raised, and I am grateful to him for his remarks.
Lord DAVIES of LEEK: My Lords, I feel it right that somebody from this side should welcome my noble friend's announcement and the comments of the noble Viscount, Lord Long. Lord Long spoke of the 1973 Act which was introduced by the then Conservative Government. That made some quite important changes. In the few seconds I wish to take up of your Lordships' time to pay tribute to those who work in the coal mining industry, I want to point out the vital contribution to our energy requirements they make, and for this reason we need to recruit miners to the industry. There is no doubt that whatever progress we may make with other sources of energy, coal will be of paramount importance, so far as the scientists can see, for at least another century. If we do not give youth the opportunity of good conditions in mining—remembering that after pitting their strength against nature underground they face the possibility of pneumconiosis, emphyzema and other diseases—we will not get the recruitment we want. Nor must we forget that in Britain our miners work far longer underground than any others in Europe.
On Question, Motion agreed to.

TRANSPORT BOARDS (ADJUSTMENT OF PAYMENTS) ORDER 1977
3.19 p.m.
Baroness STEDMAN Baroness STEDMAN rose to move, That the draft Transport Boards (Adjustment of Payments) Order 1977, laid before the House on 3rd March, be approved. The noble Baroness said: My Lords, the draft order before your Lordships concerns payments in lieu of ratesmade by the three transport boards; namely, British Rail, London Transport and British Waterways. In common with most other public utilities, the operational property of these boards is not subject to rates in the normal way. It has proved more convenient to provide for the calculation and payment of rates by means of a formula.
Section 32 of and Schedule 5 to the General Rate Act 1967 provide for a contribution in lieu of rates to be paid by each transport board to the Secretary of State, who then distributes this money to rating authorities. The total amount that each board has to pay varies from year to year and is determined by three factors. The first is a prescribed figure called the "standard amount"; the second, the average rate poundage in England and Wales in the preceding year; and third, the activity or traffic of the board in each year. The standard amounts are roughly analagous to rateable values and it is these figures that the draft order before your Lordships seeks to increase. The figures were last changed at the time of the general revaluation in 1973 but this was solely to take account of the drop in rate poundages that follows such a revaluation. The present change does not follow from a revaluation but from a general review of the working of all these formulae. This review, largely completed by the end of 1975, covered the transport boards and a number of other public utilities. Several orders introducing changes as a result of this review came before your Lordships' House last year.
An order changing the formula for the transport industries was also to have been made last year; it would have introduced a system for these boards similar to those which apply to the gas and electricity industries. A national rateable value would have been calculated for each
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board and this would then have been apportioned to individual rating areas according to the activity of each board in each area. The rating authorities would then have charged rates in the normal way on these apportioned rateable values. The order was to have been made under Section 19 of the Local Government Act 1974, but we were advised that the powers in that section were not adequate to make the changes proposed.
We have, therefore, now made orders— the one before your Lordships only in draft at this stage—within the scope of present powers to produce a similar effect to the proposals made following the review. As a result of the review, rateable values for each of the three boards were decided upon in the light of material submitted by the boards, the local authority associations and advice from the valuation office of the Inland Revenue. The figures are £20 million for British Rail, £7½ million for London Transport, and £220,000 for the Waterways Board. There are no existing rateable values with which these figures can be directly compared, but the present standard amounts are roughly equivalent to rateable values of £9·4 million for British Rail, £3·3 million for London Transport, and £200,000 for British Waterways.
The original standard amounts were set at a time when industry as a whole enjoyed a 75 per cent. derating. It is anomalous that the railways alone should continue to receive that derating, and the figures I have quoted earlier do not provide for it. But, on the other hand, we considered that the track and associated structures should not be rated, and the figures reflect an allowance for the de-rating of the track, and take into account other changes in the boards' properties since the original standard amounts were set. The draft order before your Lordships raises the standard amounts to levels which are calculated to produce a total contribution from each board in 1977–1978 equal to the rates that would have been paid if the proposed rateable values had been created. The actual contribution may be subject to slight variation because of recent changes in the boards' traffic, but the amounts payable will be about £14·4 million for British Rail, £2·5 million for London Transport, and £160,000 for the British Waterways Board.
Noble Lords may have seen that another order has been laid giving effect to the proposed changes in distributing the contribution. Rating authorities will now receive amounts that are proportional to the activity of each board in their area. That order does not require an Affirmative Resolution and is therefore not before us today. But these two orders, taken together, reproduce very closely the effect of the changes which were proposed following the review. We regard them, however, as interim measures only until our powers are adequate to lay down a suitable formula for rateable values. My right honourable friend has consulted each of the Transport Boards and the associations of the local authorities concerned. I beg to move that the draft order be approved.
Moved, That the draft Transport Boards (Adjustment of Payments) Order 1977, laid before the House on 3rd March, be approved.—(Baroness Stedman.)
3.25 p.m.
Lord MOWBRAY and STOURTON: My Lords, I am very grateful to the noble Baroness for introducing this order. Having said that, I am slightly aghast at the way in which her Department has left her to announce a major change under the innocent mask of a simple order. She has today announced that, under this simple order, railway track is to be totally derated. I must protest. Under this rating and valuation order, as we have it, there is nothing at all about this change and I think that, even though the noble Baroness has announced in her very explanatory commentary on the order that this is so, it is wrong that we on these Benches, those in other Parties and other interested persons on her own Benches should learn of such a fact only from the noble Baroness's explanation. The last valuation was done in 1967 and, on the face of it, anyone looking at the order would believe that it was framed on the same basis. Yet we have all the mileage of track removed from the valuation order. I feel that it is fair to protest that there should have seen a little more explanation before this was done. Parliament is accustomed to being "bounced", but we do not like being "bounced" too much.
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Having said that, I thank the noble Baroness for explaining the factors involved. The basis of this is probably understandable. Roads are not valued for rates and the argument runs, Why should railways be? I am not arguing this point but merely that of more explanation—government by more honest means ahead of time. I had been going to ask this question because I thought that this change was coming up but, outside devious questioning, we should not have known this. I do not believe I can say very much more. This is a normal order. One is slightly appalled at the rateable values having to go up so much, but this is part of the price we all have to pay for inflation. Whether the Government of the noble Baroness is doing better than I should like to think my friends would be doing is, I suggest, highly problematical, but I nevertheless accept that, in the general context, the Government are doing what is necessary. Having made my protest about the secrecy of the order in covering the point to which I referred, we shall accept the order.
Baroness STEDMAN: My Lords, I am sorry that the noble Lord feels that we have been less than honest in the way in which we have presented the order. I thought I had explained that up to this point of time the railways were subject to 75 per cent, derating and he himself has offered the explanation for it, in that the railways are in competition with road haulage. Roads are not rated and it therefore seemed fair, in the light of the consultations that we had had, that railway track should also be derated. I hope the noble Lord will accept that this was done in all good faith. It has been done with the agreement of all those bodies we have consulted and I hope that, in spite of the noble Lord's minor protest, the House will accept the order.
On Question, Motion agreed to.

FAMILY INCOME SUPPLEMENTS (COMPUTATION) REGULATIONS 1977
3.29 p.m.
Lord WELLS-PESTELL: My Lords, I beg to move that the draft Family Income

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Supplements (Computation) Regulations 1977, a copy of which was laid before this House on 3rd March, be approved. As your Lordships will know, family income supplement is a benefit for working families bringing up children on low incomes. The benefit is payable if the family's total gross weekly income, which at present includes family allowances and child interim benefit, is less than an amount determined by Parliament and known as the "prescribed amount".
The prescribed amount comprises a basic amount for a family with one child —and the same basic amount whether there are one or two parents—and this basic amount increases in equal steps for each additional child in larger families. At present the basic prescribed amount is £39 per week and the step is £4·50 per week per child. This means that the prescribed amount for a family with two children is £43·50; that is £39 plus £4·50, and for three children £48; namely, £39, with the two amounts of £4·50, and so it goes on according to the number of children in the family. The amount of benefit payable is half the difference between the family's total income and the prescribed amount appropriate to the size of the family. When the calculation has been made, the amount is then rounded up to the next 10p. There is a maximum payment of £8·50 per week for a family with one child, and if there is more than one child, there is added to the £8·50 the sum of 50p per week per child.
My Lords, I have spent a little time explaining the arithmetic of this for two reasons. The first is that, although the principles have been the same since family income supplement was introduced by the Conservative Government in 1971, there still seems to be doubt about them in some quarters. At this stage it would be fair to say that there are a number of well-informed (in the ordinary way) people in this field who sometimes find it difficult to understand the working of the family income supplement; and I am not pretending that it is easy to understand. The second reason is that, as I shall explain to your Lordships, some of the details have had to be altered to take account of the introduction of child benefit in two weeks' time. For example, there will be the disregard of child benefit, and
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secondly, reducing the step in the prescribed amount from £4·50 to £3·50, which I shall touch on shortly.
One other preliminary point which I should mention is that families receiving family income supplement are automatically entitled to a range of other means-tested benefits on what we call a passport basis. These other means-tested benefits include free school meals and free milk and vitamins. So any family who are in receipt of family income supplement get a whole range of other benefits automatically. I mentioned free school meals, free milk and vitamins. There is also remission of prescription, dental and optical charges, refund of hospital fares, legal aid and advice, and receipt of family income supplement is also one of the conditions of eligibility for the electricity discount scheme. Therefore the family income supplement has to be seen against a fairly wide background of additional benefits.
At the beginning of April, child benefit begins to be paid at the rate of £1 for the first child and £1·50 for each other child. Child tax allowances will be reduced by 70p per week for the first child and 87½p per week for each other child. As you know, the new child benefit will replace family allowances. It will also replace the child interim benefit which has been paid over the past year for the first child in one-parent families; and so these one-parent families will get an extra 50p on top of their £l. It is also true that since the introduction of the child interim benefit for one-parent families, they have in fact been getting that extra 50p since April of last year. As the new terms come into force in April, so that they should not be at a disadvantage, they will get the £1·50 for the first child.
Ideally, families on means tested benefit should break even when child benefits are introduced, since we do not wish to reduce the overall level of support which these selective benefits give to the poorest families. But in reviewing family income supplement—and this applies throughout the whole complex of means tested benefits—our aim has been to ensure, so far as practicable, that the improvement in universal benefit, brought about by the introduction of child benefits, does not leave those already dependent on means-tested benefits worse off at the changeover point.

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We fully accept—and I should like to repeat this—the principle that improvements in universal benefits should reduce dependence on means testing. I feel sure that noble Lords will acknowledge that we on this side of the House are firmly and expressly committed to that principle. Indeed, we believe that it is embodied in the very concept of the child benefit scheme. But reconciling these two aims—that is, reducing reliance on means testing, and protecting poor families from losing out—can produce practical problems which vary with the way in which means tested benefits are assessed.
I should like to give your Lordships an illustration of that. It is true that the last Government, who introduced the family income supplement, wanted the supplement to be a simple scheme, easily administered. We believe that it is a simple scheme; it is easily administered; but as with so many other things there are a number of problems. When I said a moment or two ago that it varies in the way in which the means tested benefits are assessed I had in mind, for example, that rent and rate rebates are assessed on a gross income basis, whereas free milk and vitamins are assessed on a net income basis. So there are different kinds of assessment, which in a sense complicates the problem and perhaps leads sometimes to a little difficulty.
Family income supplement is at the heart of this complex because, as I said earlier, it is a passport to so many other benefits which I mentioned a few moments ago. The solution we have adopted is to disregard child benefits completely as income for the purpose of family income supplement. This is affected by Regulation 2(1) of the Family Income Supplements (General) Amendment Regulations 1977, which were made on 1st March and laid before your Lordships' House on the 7th of this month. In isolation the complete disregard of child benefits would significantly increase the amount of family income supplement payable. But to increase reliance on means testing to that extent would be contrary to the principle I have just described. In our view the answer lies in reducing the prescribed amounts.
Regulation 2 of the computation regulations, which are now before your Lordships, provides for a reduction in
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the step by £1, from £4·50 to £3·50. A good deal has been said, both in another place and outside both Houses of Parliament, as to the effect of some of these measures. This deals, I think, with the core of the problem. Taking the overall situation for families receiving family income supplement together with housing benefits, free school meals and free milk and vitamins, I believe we have got as near as it is possible to get to the break-even point. There are in fact only two groups who could lose, and then by only a few pence per week. I say, "only two groups". Even this is regrettable, but it is very difficult, as I say, to introduce a scheme that does not leave somebody out. There are, on the best estimate we can make, about 5,000 families receiving rent and rate rebates who could lose about 3p a week; that is all. The other group is so small that it is not possible to make a reliable estimate of their number; there are a few families receiving free school meals by direct claim. These families could lose up to 7p per week.
Your Lordships will have noticed that these regulations also provide for the basic prescribed amount to be uprated from the 19th July next. For the past three years family income supplement has been uprated in July, whereas the main social security uprating has always been in the November. It would be sensible to achieve a common uprating date for all benefits, and we propose to do just that by making the uprating for which these regulations provide an interim one, pending the main uprating in November. However, to protect families from losing family income supplement because they may have received a pay increase in line with the pay guidelines, it is necessary to increase the prescribed amount within a year of the last uprating. An essential feature of this year's proposals, therefore, is that the July uprating is designed to preserve the status quo for existing beneficiaries. The increase of £2·50 in the basic prescribed amount—that is, it will go up from £39 per week to £41·50—is therefore sufficient to protect any family from losing family income supplement if they have had a pay rise since last August. This is the effect of Regulation 4 of these computation regulations.
I think the only other point I need mention about these regulations is that,

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under Regulation 3, the maximum payments which will apply from the 5th April remain the same as they are at present; namely, £8·50 per week for a one-child family, plus an extra 50p per week for each other child in larger families. Perhaps I have spent a longer time than is necessary on these regulations, but in view of their complexity I felt it was necessary to include a certain amount of detailed information. With that, my Lords, I beg to move.
Moved, That the draft Family Income Supplements (Computation) Regulations 1977, laid before the House on 3rd March, be approved.—(Lord Wells-Pestell.)
3.45 p.m.
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Wells-Pestell, for explaining so carefully, and with a profusion of detail, the reasons for bringing forward this order. I was very glad that the noble Lord brought out snags of the scheme, and the way in which the present regulations are going to cover the eventualities as foreseen. There are three questions I should like to ask the noble Lord, of which I have given him notice. First, what is the threshold on entry into the scheme? Secondly, what is the likely cost of the order to the Exchequer? Thirdly, has the noble Lord any figures of take-up, and could he compare the take-up of this scheme with the present situation?
Lord BANKS: My Lords, I, too, should like to thank the noble Lord, Lord Wells-Pestell, for his very thorough explanation of this exceedingly complicated matter. We on these Benches have very considerable reservations about the family income supplement scheme. We all know the relationship of means-tested benefits to the poverty trap, and we know, too, that the take-up of the benefit, to which the noble Lord, Lord Sandys, has just referred, is not as good as we should like. I do not propose now, at this point, to attempt to cover the interesting details that were set out for us by the noble Lord, Lord Wells-Pestell, but I should like to welcome the principle that the means-testing should be gradually eliminated by the development of the child benefit scheme. In fact, it is through a development from that, which is the sort of embryo of a tax credit scheme, that
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one would hope to see means-testing over the whole field of social security ultimately very considerably reduced. I welcome the fact, as the noble Lord explained, that there is to be an uprating to cover, as he pointed out, any pay rise since August last. So, because we support that principle and welcome that increase, we support these complicated regulations.
3.48 p.m.
Lord WELLS-PESTELL: My Lords, I am grateful to both noble Lords for what they have said with regard to this matter. I know that both noble Lords recognise that this is a very complex and difficult matter in which to arrange a series of benefits which are always going to come out (shall I say?) on the positive side; but, as I tried to explain, those who are likely to suffer are infinitesimal in number, but if you happen to be one of them it is nevertheless an extra piece of suffering.
My Lords, the threshold of entry is about £22 per week. That is for a husband, wife and one child. I have not been able to ascertain, even roughly, what the cost will be when the new scheme is introduced in April; nor have I been able to ascertain as yet the cost of the scheme when it comes in on the 19th July. This has yet to be worked out, so I cannot promise to let the noble Lord know by tomorrow; but what I will do, when the figures are available, is to write to him accordingly, and he may well feel that it would be perfectly proper for me to send a copy to the noble Lord, Lord Banks. I cannot give the noble Lord the figure of the number of people who are entitled to claim FIS. I do not know the figure; but what I do know is that at the present moment there are about 80,000 persons in receipt of family income supplement. After April this year that figure, we anticipate, will go up to 82,000; and after 19th July we expect it to go up to 84,000. What percentage that is of the total number of people who will be entitled to claim, I cannot say. If that is a figure that I can obtain then I will let both noble Lords know.
Viscount HANWORTH: My Lords, bearing in mind the very bad take-up of some of the benefits, which has been estimated in some cases as being as low as

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30 per cent., does the noble Lord really feel that the complications of the new measures are justified, bearing in mind the number of civil servants required? Moreover, does he also agree that means testing is not a black-and-white affair; that our taxation, for example, is one form of means testing; that even the benefits made for married women or the provisions made for people who are married is, in another shape, a means testing? Is it wise to use this extremely emotive word? Is it wise to raise principles on a matter which is not black or white?
Lord WELLS-PESTELL: My Lords, there is a very simple answer to what the noble Lord has just said. In the absence of any other scheme that could be administered as simply as this, we have no alternative. I think that Members on both sides of the House would say without any qualification at all that society has a responsibility to do something for those who are less fortunately placed in the community. Very often, the difference between us is one of degree and emphasis. We see that there is a good deal of merit in the family incomes supplement. It can be done at present only by some form of means testing. We have made it clear that, on this side, we do not like means testing; there is a growing opinion against it. This is what we have to apply at the moment. In the absence of some other scheme that would be equally simple and easily administered, we shall have to carry on with the scheme until such time as we can devise a better one.
On Question, Motion agreed to.

WEIGHTS AND MEASURES ACT 1963 (HONEY) ORDER 1977
3.53 p.m.
Lord ORAM Lord ORAM rose to move, That the draft Weights and Measures Act 1963 (Honey) Order 1977, laid before the House on 24th February, be approved. The noble Lord said: My Lords, I beg to move that the Weights and Measures Act 1963 (Honey) Order 1977, be approved. The order arises from our obligations to implement the terms of the EEC Honey Directive adopted in July 1974 and made under Articles 43 and 100 of the Treaty
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of Rome. We are, accordingly, required to bring our law into line with the Directive. The main compositional and labelling provisions have already been implemented by the Ministry of Agriculture, Fisheries and Food in their 1976 Honey Regulations made in November 1976, which become fully effective on 1st May, 1977. The order now before the House dealing with subsidiary weights and measures provisions contained in the Directive is timed to coincide with this date. Regulations concerned with origin marking provisions also contained in the Directive are also under preparation in my Department.
The EEC Commission is being advised of the proposed order. Comprehensive weights and measures legislation concerning prepacked honey already exists in the 1963 Weights and Measures Act and the necessary powers are available to make the minor changes necessary to bring it into line with the Directive. It was not, therefore, necessary to invoke powers under the European Communities Act 1972. The provisions have been kept to the minimum which are needed to comply. They entail extending weight marking on containers to packs of comb and chunk honey not currently required, ending the unnecessary exemption from this requirement for very small packs and introducing provisions to allow weight marking for non-retail packs of 10 kg. or more to be given in an accompanying document if desired.
The requirement for weight marking to be in metric units, also included in the Directive, is covered by the terms of the dual marking provisions of the 1975 Weights and Measures (Marking of Goods and Abbreviations of Units) Regulations which state that quantities on prepacks should be in both metric and imperial units. The Directive does not cover loose sales of honey over the counter; but we have considered it necessary to preserve the current safeguard by continuing our requirement for honey likely to be sold in this way to be weighted out for the customer.
Noble Lords will, I am sure, agree that these measures are unexceptional and unlikely to have any tangible effect on retail prices. This view was shared by a wide spectrum of opinion among

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industry, consumers, enforcement authorities and the distributive trade which, as required, under the 1963 Act was sought before the order was laid.
Before commending the order for your Lordships' approval, I should touch on the subject of prescribed quantities. These are covered by the order only in the interests of perpetuating the present position as related to imperial sizes. The derogation written into the Directive makes allowance for this until the end of 1978 by which time it is required that a Community-wide solution for metric prescribed quantities should be adopted. This solution, which will be a general one embracing honey, jams, marmalade, syrup, treacle, et cetera, is now being actively considered among proposals for a Directive on Ranges of Nominal Quantities Permitted for Certain Pre-Packaged Products currently before the EEC Council. A further order will then be necessary to introduce them in this country. I beg to move.
Moved, That the draft Weights and Measures Act 1963 (Honey) Order 1977, laid before the House on 24th February, be approved.—(Lord Oram.)
Lord TREFGARNE: My Lords, the House will be grateful to the noble Lord, Lord Oram, for introducing his Motion this afternoon. I have no serious comment to make on the order before the House, but there are three small observations which I should like to make and I hope that the noble Lord will be able to clarify them. We have heard what he said about the future intentions, as we understand them, of the European Community with regard to the labelling of containers in metric and imperial quantities. He explained how the requirement to label in what is, primarily, at this stage imperial measure will be replaced in due course by the requirement to label primarily in metric measure when the Directive comes into force in 1978. I am therefore a little surprised that the Government have chosen at this stage to perpetuate the prime marking of these labels in imperial measures; because I should have thought that the intention of the Commission was now clear enough for us to be able to lay down the requirements for metric measure and avoid having to change in two years' time.
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However, the Government have chosen not to do that. So be it.
The second point relates to the marking of the larger, 10 kg., containers which are sold only for wholesale purposes. I wonder whether the Government appreciate that there is an increasing tendency for these large containers, by one means or another, to come on to the retail market. With inflation as it exists, people with large families or even small commercial undertakings, sometimes buy these larger packs from cash and carry establishments, and the like. I wonder whether those people are adequately protected by the requirement only to provide an invoice or something similar with the quantity on it, and not mark the large containers.
With orders such as this, which are increasingly coming before the consuming public, would it be possible or practical in the future to write them in rather more comprehensible language? I have to confess that I am not particularly used to studying these matters in detail, but this order gave me an unpleasant three-quarters of an hour while I waded through the language and tried to marry up the Explanatory Note which to me made it worse, not simpler. Could the noble Lord consider in future writing orders such as this in more understandable language which may help us in Parliament but which, above all, would help the consumers as increasingly they have to rely on these documents for their guidance? Having said that, my Lords, I think that we should approve the Motion and this order into law.
4.1 p.m.
Lord ORAM: My Lords, I will reply briefly to the three points made by the noble Lord, Lord Trefgarne. I think, if I may say so, his first point was a little wrong. Under this order, taken together with the 1975 Weights and Measures (Marking of Goods and Abbreviations of Units) Regulations, it will be necessary for packs of honey to be labelled both in metric and imperial units. The point the noble Lord was intending to make was regarding prescribed quantities expressed in metric terms. It is this that is now being settled within the EEC and upon which we cannot yet legislate until that decision is made. That decision

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covers not only honey but the list of commodities to which I have referred.
Lord TREFGARNE: My Lords, may I be allowed to clarify what I said? I was not clear and I apologise to the noble Lord for that. Under this order, honey must be packed in jars of I oz., 2 oz., 4 oz., 8 oz., 12 oz., 1lb., 1½lb. or a multiple of 1lb. I wonder whether it would have been wiser to provide for the jars to be principally in metric units, for example 250 grammes or 500 grammes, which is what will happen in due course anyway. I should have thought that the intention of the European Economic Community is clear enough now for us to have been able to take that step.
Lord ORAM: My Lords, as I understand it, the intention of the Community is not yet clear on precisely that point. Therefore it is not possible for us to do this. The only question is: should we have not waited until that decision had been reached and dealt with the two matters together? This order is already overdue and it was necessary to do as much as we could at this stage. There will be an additional order to take care of the noble Lord's point.
Regarding the reference to large packs becoming increasingly available through retail establishments, if they are sold by retailers they come under the requirements for marketing. The giving of the information in a separate document only applies—and the order makes this clear—to non-retail sales. The third point was a plea for simplicity which we are constantly hearing, echoing and about which we feel very sympathetic.
The noble Lord complained that he is new to these orders. I am comparatively new, and certainly a year ago when I was tackling this kind of order I felt exactly as he describes himself now. I can only assure the noble Lord that after a year's practice the orders begin to be a little more meaningful. I would not say they are absolutely clear, but I offer him some hope.
On Question, Motion agreed to.

EEC: 23rd REPORT ON FARM PRICES
4.6 p.m.
Lord RAGLAN Lord RAGLAN rose to move, That this House takes note of the Twenty-third Report from the European Communities Committee on the EEC Farm Prices Review. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I should like to say, first, how appreciative I am that my noble friend the Leader of the House has managed to attend this debate. I know that he has had to tear himself away from a busy Committee and has had to hurry in order to be here, and I appreciate it very much. I should like to thank those who have helped to produce this report with such speed. I hope that the way that we had to cope with the review this year will not recur. I would remind your Lordships that the way in which the prices review is undertaken in the EEC, unlike with the old British system, gives Parliament and the public the opportunity to comment on the proposed level of prices before they are agreed. This is a great advance. Since we are given this opportunity, it is essential that we should be given enough time for study and comment. This year, because Commissioner Gundelach took over from Commissioner Lardinois only recently, in December, and Mr. Gundelach had but a short time to put forward the type of package to which he felt able to put his name, it has all been done in too much of a hurry. There seems to me to be a case at another time for transferring responsibility from one Commissioner to another much sooner before the beginning of the agricultural year in order to give the new incumbent time to settle down and produce his proposals in good time.
As it was, your Sub-Committee obtained a copy of the proposals, had them translated from French, considered them, drafted the report, commented on the draft, redrafted it, edited it and had it printed all in the space of a month—which is short for these things—just in time to get it debated today before the Agricultural Ministers' meeting at the week-end. We regret that this hurry has prevented us from doing as good a job as we think we should have done. My thanks, as always, go to my kind, tolerant

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and companionable Sub-Committee, and to our two specialist advisers, Mr. Simon Harris and Professor Josling, the Sub-Committee Clerk and the Select Committee Clerk. They have all worked hard, sometimes at great inconvenience to themselves.
It will not have escaped your Lordships' attention that there is much anxiety being displayed about the present agricultural surpluses. Much of this anxiety is genuine; that is, it is not motivated purely by opposition to our membership of the EEC. The Sub-Committee share that anxiety. We are making more fuss in this country than they are on the Continent about the surpluses, and that is because we in this country are strangers to surpluses of food. After devising very elaborate protections for our farmers in order for them to produce as much as seems politically feasible at home, we have been used to picking and choosing from abroad to make up our deficiency.
However, on the Continent they are used to surpluses, and their ingenuity has long been directed to trying to control them. Far from their consumers being used to grumbling about too much food being produced, their Governments are used to being blamed by the farmers for not buying all the produce. I remember that once when General de Gaulle had his way blocked by a heap of artichokes, or something similar, he is said to have exclaimed:
"They blame me, but they should blame le bon Dleu, who has given them such abundance"
National Governments in the EEC, having gratefully ceded their responsibility for handling surpluses to the Commission, have now turned to playing the game of getting as much as they can out of the CAP cake; and the Commission, in endeavouring to get agreement among them, finds itself having to give away more than it should. It has been given the responsibility but not the necessary authority concomitant with it. In other words, it is not the fault of the Commission, as I see it, that there are surpluses which are becoming so embarrassing: it is the fault of a system which allows, if it does not encourage, national Governments to behave without a sense of overall responsibility. They can then use the Commission as a whipping boy at home, whereupon the Commission, goaded into
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trying extraordinary remedies to cure the surpluses, listens to extraordinary ideas from the various special interests concerned. Lately they have come up with the idea of a tax on margarine to encourage the eating of butter, a tax on isomerose to reduce its competitiveness with sugar and a tax on petro-chemical-derived alcohol to help drain the wine lake—although none of those measures would scarcely dent the existing surpluses.
All those surpluses are structural and, in my view, the Commission have to be encouraged and then allowed to set about reducing them, but naturally with as much humanity as possible. I say that because there is a very big social problem here, which has to be recognised and appreciated. I might say that my right honourable friend the Minister of Agriculture said as much when he referred to this matter in his speech in the other place last Wednesday. We do not have structural surpluses of food in this country but we have long had surpluses of industrial goods of one kind or another, and we have got nowhere near solving that one. Whether we are making too many telephone exchanges of the wrong sort, or steel that is too expensive to buy, or more people than necessary are engaged in making certain types of goods, we are familiar with that and we know only too well the traumas which are involved when people's jobs and ways of life are at stake.
In France, Italy and Germany there are just too many people on the land, producing just too much. Perhaps there are 25 million people in the EEC engaged in farm work. To resettle 10 per cent. of them means finding jobs for 2½ million people. It is a huge problem and it cannot be done quickly. We do not even know at the moment how to cope with our present unemployment. But the Commission have to start luring people from the land and, furthermore, they must be allowed to start doing that. The only way they can do it is by reducing the incentive to produce. To be fair to them, I think they are trying. In a period of high inflation—I do not know what the average is for the whole EEC—the overall 3 per cent. increase in price which is proposed is equivalent to a quite large reduction in real terms. The question is whether member countries, pleading their

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own special causes, will allow the Commission to hold this effective reduction in prices.
Where the Commission have not themselves been helpful to their own case—in fact they have done themselves a great disservice—is in publishing a list of what they call "world prices" on which they calculate their threshold prices. Their device is that in order to keep up the level of import levies they calculate them according to the price of whatever parcels of food may be on offer round the world at that moment. As those offers are usually for a relatively small amount of food which is having difficulty in finding a home, the price is frequently low. Some country just wants to get rid of a surplus, as the EEC wants to get rid of surplus butter, so it sells it at a cut rate, or tries to, to the Soviet Union—but nobody suggests that the rate at which butter has been sold to the Soviet Union is actually the world price of butter. What the Commission do not say, and what everybody who is familiar with the world market knows, is that should one go out to buy food on world markets in the quantities necessary to make up the deficiency in this country, that food would not be available at anything like the price at which it may be advertised at the moment. I will not now venture an opinion as to what basis the Commission should use to calculate threshold prices, but I would say that their present method is unrealistic and they know it; and if they go on with it they are deservedly going to invite very much more criticism from consumers than they have even at the moment.
Of all the surpluses, I suppose the most emotive is that of dairy products. I am greatly alarmed that, according to the latest news from Brussels, the Agricultural Ministers may be forced into relaxing the measures proposed by the Commission for reducing the dairy surplus which, in the view of your sub-committee, are in any event unlikely to be effective enough even if they are adopted as they are. Again, I hope that my right honourable friend the Minister will state in no uncertain way that the Commission must be encouraged, and then allowed, to do its job; otherwise the whole of the Common Agricultural Policy will be washed away in a sea of milk. The silliest thing to do,
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in view of all this surplus—a great deal of which, as our report suggests, is caused by inefficient marketing—would be to get us to abandon our Milk Marketing Boards. The combination of the boards, the Dairy Trade Federation and the Government has provided a stable foundation for an efficient and successful industry. The Commission should try to emulate what has been successful and not what has been shown to be unsuccessful.
The position with regard to cereals is not difficult, as it is with sugar and alcohol, and it is not prodigal, as it is with milk production. The Commission propose to abandon the intervention price for feed wheat. We are glad of that, but they are still insisting on introducing a reference price for wheat which is allegedly of bread-making quality—although nobody has yet discovered what that is, because it means different things in different areas and in any case there is no adequate test of quality except by baking it. We repeat our conclusions, to which we referred in a previous report, that by far the best way of dealing with the matter would be to let wheat which is judged to be of baking quality to command what premium it can in the market; otherwise we may have yet another surplus which nobody will quite know what to do with. Cereals have been discussed by the Ministers, but our sub-committee's intelligence service, on which we normally pride ourselves, has not yet told us what conclusions have been reached in the talks in Brussels so far. I wonder whether my noble friend, when he comes to reply, will be able to give us an indication of how things are going in the talks.
As for beef, we think it is essential that the slaughter premiums, which have for so long been such a tremendously successful feature of the United Kingdom Government's support, should continue and should be adopted by the Commission as a permanent part of the Common Agriculture Policy. I do not want to make much of the 37·8 million unit of account increase in FEOGA expenditure which, when one looks again, one finds is really 807 million units of account, because the 37·8 is really an increase over last year's forecast appropriation, and we already knew of that. But the Commission is naughty to present its figures in that way. It makes it look as if they have something to hide—which they have—

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and so we thought it well worth while drawing attention to what they wanted to hide.
Lastly, the implications for the United Kingdom of the package which is proposed are discussed in paragraph 28 onwards. The Ministry of Agriculture, Fisheries and Food estimate that the two transition steps, and the proposed adjustment in the rate for the Green Pound, would increase the gross receipts for agriculture by 9 per cent. and increase consumer prices by 4 per cent. Here, we left out an interesting figure for the good reason that we were not sure what it ought to be. The receipts for agriculture, 9 per cent., and the increases for consumers, 4 per cent., do not agree, because the food has to be transported, processed, packed and distributed, and the proportion of the cost of food which is taken by all these stages, which is known as the "food chain", is getting larger every year as people demand ever more sophisticated food products and better presentation of them. We think that the figure for the proportion taken by the food chain is between 35 per cent. and 50 per cent. overall, though it obviously varies, anyway, from product to product. But I hope that, if we have time, your subcommittee will be able to do some more investigation into this highly complicated subject, and that in due course we may be able to present a report on it.
Paragraph 31 warns that the effect of institutional price rises may be more real than apparent, and paragraph 33 states that these rises may take some time to work through. But, of course, nothing has such an effect on our food prices as the level of the Green Pound, without a discussion on which no discussion on EEC prices can possibly be complete, so intertwined are the Green Pound and prices. But my noble friend Lord Pritchard will have great pleasure in explaining to your Lordships in a moment all about the Green Pound, with his usual ease and lucidity. It must have been intuition which warned me off asking my sub-committee to deal with it. I made some excuse and later gave myself a hearty vote of congratulation for having done so, after I had attended one or two of my noble friend's committees.
I do not know whether it is quite proper for me to refer to a report to which your Lordships' attention has not been formally drawn, but I should like to make one point
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to finish up with. At the back of the Select Committee's Report on EEC Farm Prices and in its Green Money report are glossaries. There is necessarily some duplication between the two, but anyone, by just glancing at them, can see that the CAP is an amazingly involved and complicated creation, with a language of its own which has to be mastered before one can begin to understand it properly. Even after having been a member of the sub-committee for over two years, I still have not grasped it all and, indeed, our specialist advisers, who are steeped in it through day-to-day familiarity with it, sometimes disagree with each other over the meaning of something or other.
I only want to make the point that, just as I believe the noble Viscount, Lord Amory, will be able to tell us as a former Chancellor of the Exchequer, it is not possible to devise a taxation system which is at the same time both simple and fair, it may not by the same token be possible to devise a Common Agricultural Policy which is both simple and equitable to all Member States. But I suggest that it must be worth while, continually and consciously, trying to resist its increasing complication and, in fact, to make real efforts to simplify it. Otherwise, in a short while, nobody will be able to understand it at all. My Lords, I beg to move.
Moved, That this House takes note of the Twenty-third Report from the European Communities Committee on the EEC Farm Prices Review.—(Lord Raglan.)
4.24 p.m.
Lord PRITCHARD: My Lords, I beg to move that this House takes note of the Eighteenth Report of the Select Committee on the European Communities, which examined a number of EEC proposals relating to Green Money. The Committee recommended that the subject under scrutiny was of considerable importance and that it merited debate in your Lordships' House. However, they felt that, since the Green Money issue was inextricably bound up with the fixing of the level of EEC farm prices and since the farm price proposals for 1977/78 themselves contained proposals for Green Money changes, as my noble friend Lord Raglan has pointed out, which burden he has so generously laid upon my shoulders, then both reports should be

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debated together. That is not to say that noble Lords must address their minds to both, but merely that they may do so if they wish. At the end of the debate, I shall merely move my Motion formally, on the assumption that those wishing to speak to it will have already done so.
With the attendance of certain noble Lords and Sub-Committee D members, Sub-Committee A have held six meetings since December to consider and report on these proposals. We have had written and oral evidence from a number of sources—the Treasury, the Ministry of Agriculture, Fisheries and Food, the National Farmers' Union and the Consumers' Association. We had written evidence from the Dairy Trade Federation and, in addition, a number of other papers by the Federal Trust, the National Union of Agricultural and Allied Workers, the Labour Party and the Farmers Weekly were laid before the Committee. It was clear to us from the outset that this was a subject charged with political significance, on which it would be both undesirable as well as difficult for us to make any firm recommendations. Indeed, the attitude among those who gave evidence to us varied from strong support of the present Commission proposals to outright opposition. Your Committee therefore resolved to try to describe, in as dispassionate a way as possible, the Green Money system and the likely effects of the proposals under scrutiny. The result is the report which your Lordships now have before you.
Before I describe the Commission's proposals on Green Money and your Committee's reaction to them, perhaps it would be useful if I were to outline the Green Money system and what Green Money is. This is, of course, the nub of the remarks of my noble friend Lord Raglan, and the difficult part of what I have to say. I am deeply indebted to the noble Viscount, Lord Amory. At one of our Committee meetings, when I was battling with this problem as to how to express myself clearly, he suggested, "Well Chairman, if you really find it very difficult to explain something that you are not fully aware of, I suggest you begin with 'As every schoolboy knows'." I thought that that was a very good and helpful suggestion in that respect.
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In fact, I do not think it would be helpful to the House if I tried to go too deeply into the technical wording of the system which, in any event, is already set out in Section A of our report with far greater clarity than I could show, and certainly at very much greater length. Put very briefly, the Green Money system involves a set of exchange rates relating only to the food and agricultural sections of Member States. When market rates of exchange of Member States' currencies either appreciate or depreciate, the Green Money system cushions the effect which these movements would otherwise have on prices for both producers and consumers. Monetary compensation amounts, known as MCAs, are then applied with the object of offsetting the effect of divergence between the Green and the market exchange rates. Of course, the wider the divergence the greater is the volume of MCAs.
Among the several effects of this system on the United Kingdom, which we outlined in our report, I feel that I should draw your Lordships' attention to one in particular: the difficulties caused to Border trade between Ireland and the United Kingdom owing to Ireland having twice devalued their Irish Green Pound without any equivalent movement having taken place in the British Green Pound. This has opened up a significant differential between the sterling intervention prices in Ulster and in the Republic. It has created an incentive for smuggling livestock from Ulster into the Republic, resulting in the United Kingdom Government having to spend over £1 million a week through its Northern Ireland Meat Employment Subsidy Scheme in an effort to protect the Ulster meat processing industry from the effects of such smuggling.
Speaking generally, the EEC Commission find the present system unsatisfactory for a number of reasons, especially because the cost of this MCA system has become embarrassingly large and renders the size of the budget increasingly unpredictable. As noble Lords know, originally the system was intended to cushion minor fluctuations in the currencies of Member countries for short periods only, but in the case of Great Britain, for example, it has now risen to an indirect subsidy on our food prices of around £600 million per year. This

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is the effect of the MCAs paid on Continental exports of food to the United Kingdom in consequence of the near 40 per cent. disparity between the market rate of sterling—which, as your Lordships know, today is around 1·71 US dollars—and the Green rate, in which intra-Community payments are made, which was last fixed in October 1975 and has never been altered, when the pound was 2·37 US dollars, or 1·75 agricultural units of account.
The result is that the Commission have put forward the proposals which are the subject of our report. These proposals are described in detail in the report, so I shall not dwell on them, save to say to your Lordships that they fall into two main categories. One of them seeks to provide a long-term solution to the problem of the divergence between the market and the Green Pound rates by means of an automatic formula which would come into operation whenever the MCA percentage reached a certain level. This would, in effect, remove from the Council of Ministers, and hence from individual Member States, their discretion to accept or reject proposals for changes in Green rates.
The other proposal is for an immediate change in the value of the United Kingdom and Irish Green Pounds. Incidentally, I should like to draw the attention of noble Lords to the fact that the proposal for a 4·5 per cent. devaluation in the United Kingdom Green Pound has now been superseded by a proposal in the Farm Price Review that this devaluation whould now be 5·9 per cent.
What conclusion can we therefore reach? There is no easy solution to the Green Pound problem because of the seemingly intractable conflict between the principle of common agricultural prices on the one hand and the differing domestic policies of Member States on the other. Your Committee therefore finally felt that in the long term the present divergence between the Green rate and the market rate is untenable and runs counter to the whole concept of the Common Market, but that the speed, extent and timing of any adjustment must remain under the control of individual Member States through the Council of Ministers and should, if possible, be considered in the context of further
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reconsideration of the whole Common Agricultural Policy price levels generally.
4.35 p.m.
Lord SANDYS: My Lords, the House will indeed be grateful to both the noble Lord, Lord Raglan, and the noble Lord, Lord Pritchard, for drawing our attention to these important documents. I think it is true to say that the speed with which the Scrutiny Committee have been able to take the wrappers off these documents from Brussels and examine and publish them with their own comments, so that we can have a debate in your Lordships' House, is quite remarkable. It is almost entirely thanks to the very hard work of the Scrutiny Committee that these very difficult documents are in any way intelligible in their present form, because they are accompanied by a sheaf of Press releases which came out almost simultaneously.
I should like in particular to address my remarks to the EEC Farm Prices document. I should also like to comment briefly on the Green Money document, although my noble friend Lady Elles will comment in much greater depth upon it. There are days when I understand Green Money, but there are very many more when I do not. Today, I am about half way between the two, so I welcome the fact that my noble friend, who has such a close acquaintance with this commodity, will be giving our views with much greater clarity. I think that the document is of particular importance because it sets out the history and background of Green Money. Further, Appendix 2 furnishes us with a very important glossary of all the terms in use, a point to which the noble Lord, Lord Pritchard, referred.
These documents come as part of a string of documents from Brussels, and I regret to say that I must refer to one which was published last autumn. The dairy proposals were published as a scrutiny document on 30th September of last year. If I may weary your Lordships with its number, it is R/1734/76 and R/1742/76. The dairy proposals document lays special emphasis on the situation in Europe over milk. I must refer to page v where we read:
"It is the milk surplus which is the most expensive and the most intractable of the many problems faced by the CAP."

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Further, in the Green Money document we read on page 9:
"Much the largest single element in the agricultural part of the Community budget at the moment is the cost of financing the milk surplus."
It is quite evident that the milk situation, to which the noble Lord, Lord Raglan, referred in some detail, should come at the top of the list. Therefore I shall devote some of my remarks to this aspect of the price review.
In company with colleagues from another place, I felt that it was most timely to go to the headquarters of the Milk Marketing Board at Thames Ditton to find out precisely what that important body felt about the document to which I have just referred. It is quite evident from the background to the present proposals and, further, from the Press release from Brussels only last week when another place was debating these documents, that the Commission is very anxious to see the end of the Milk Marketing Board. If this occurred, nothing could be more unfortunate for this country in terms of food production and distribution. It is no small matter even to suggest that the board should be altered. We ought to remember very carefully the background to this, the oldest of the marketing boards, which was set up when I was quite a small boy, in 1933, when the dairy industry was on its last legs and the distribution system was in a similar situation.
The advent of the Milk Marketing Board, which has developed over the past 44 years, has been of the greatest significance for both the consumer and the producer. I do not think there is another country in the EEC, and as far as I know, certainly not in Western Europe, which has a daily doorstep delivery of milk. This is something which we should cherish in this country, not only for consumer reasons but also for social reasons. When I refer to the Milk Marketing Board I naturally include its counterparts in Scotland and those covering other parts of the United Kingdom. The Milk Marketing Boards fulfil a tremendously important role, and in the present circumstances we should do our utmost to support the Government's argument in regard to sustaining their continuance.
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I should like to refer to the innovations which are suggested in the document and I think it is important that we should be chary of accepting yet further innovations, bearing in mind that over the past years we have had to take on board the metric system of weights and measures, coupled with substantial innovations in the system of taxation. I come to the prices review document which was published on the 12th February, to which the noble Lord, Lord Raglan, referred. Here the Commission has proposed that the EEC farm prices should rise by approximately 3 per cent. When one couples this with the revaluation of Green Money, it adds up in sum approximately to a 15 per cent. increase over commodities, which is at least 5 per cent. below the 20 per cent. costs increase in the last 12 months. So the British farmer will by no means recover his costs if the views of the Commission are accepted. I think it should be commented upon at this stage that COPA calculated that an average increase of at least 7.4 per cent. is needed on prices if income is to keep pace. But they are referring to Europe as a whole and the British farmer has been rather unfortunately placed.
I return to the question of the small dairy farmer, both in this country and in Europe, because I believe he deserves an important place in our thoughts this afternoon. An excellent product is economically produced in this country and one must remember that the number of dairy farmers in 1960 was 123,000, and that over the last 17 years the number has been reduced to 56,000. It is a great tribute to the dairy industry that over the 17 years the production of milk has not only been sustained but has risen, and it is remarkable that the efficiency has risen with the herd size.
It is interesting to look across the Channel and see what the herd sizes are there. I think it is worth pausing a moment to consider this, because in this country we have an average herd size of 41 cows. Of course there is a large number of herds which are substantially more than 41 and a large number which are below that figure. But in Holland the figure is about 16, in Germany it is eight and in Italy, five. If one takes the average as being five in Italy it means that there are some cow herd sizes of three and even I two. So one must remember that one is

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dealing with a substantial number of very small dairy farmers. On this side of the House, as indeed on the other side of the House to a greater or lesser extent, noble Lords will appreciate the woes of the small family farm, but I think noble Lords opposite are less seized of the problems.
Lord PEART: Oh!
Lord SANDYS: My Lords, if the noble Lord the Leader of the House takes exception to that, I am delighted to hear that the noble Lord is willing to accept the situation. But it is true that while the British dairy industry has passed through a considerable structural alteration in 17 years, a reduction to half its numbers, its European counterpart has by no means reduced in numbers in proportion.
What is going to happen, my Lords? One certainly wishes that the small farmer, and particularly the family farm, shall continue as an entity throughout the EEC, but what one wishes to see, coupled with its continuance, is an increase in efficiency, the amalgamation of holdings and the alteration of levels of regional support. If the aims of the Commission are carried out, then looking at the present proposals I do not think very much will be achieved in this particular field. One must at the same time remember the needs of those who at present live in cities such as Naples who do not demand a daily doorstep delivery of milk. Perhaps in coming years we may be able to persuade them that this admirable product should have wider application.
Referring to the butter mountain, which was also referred to by the noble Lord, Lord Raglan, standing as it does at 260,000 tons (and the skimmed milk powder mountain stands at over 1·1 million tons), it gives enormous offence to everyone that the sale of this butter mountain at a rate of 17p per lb. should take place in the circumstances at present arranged. It is a serious criticism of the Common Agricultural Policy that it should do so, but as the noble Lord, Lord Raglan, rightly pointed out, we are strangers to surpluses of food. We have recently joined in the Common Market and perhaps we may he able to suggest remedies whereby these enormous and
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totally unnecessary surpluses may be put to better use.
The noble Lord referred to the ingenuity which is brought to bear by the Commission. In my view, that is a scarce commodity in present circumstances. Nevertheless, the Commission must also be aware that, should a surplus of this magnitude arise again, there will be a total revulsion against a second sale of this nature to a third country. A sale to a country outside the EEC in the Third World is a different matter altogether, but the sale to Soviet Russia on such particularly favourable terms has given great offence.
I should like to refer to what my right honourable friend the Leader of the Opposition said on the subject in a speech in Zurich on 14th March. She said this:
"It is the West, not the East, which sells off surpluses of grain and other foodstuffs to the planned economies and also gives them to countries of the Third World."
This is a highly political matter and one which we should bear in mind because the philosophy of surplus food has taxed the minds of the most skilful of your Lordships. I should refer to the work of the late Lord Boyd-Orr in this particular field, who spent many years examining the subject but reached no firm conclusion about a particular problem as intractable as this one.
I end with the matter of skimmed milk and this particular surplus. It is a matter which is a source of some pleasure that at least a positive suggestion has been made by the Commission for using this in a school milk programme; here at least is something which may be built upon. Nevertheless, I believe that 1·1 million tons of surplus milk is a matter of the greatest concern within the Community, and it must never be allowed to build up. The notion of using and recycling this milk for animal feeds appears to be one of the most uneconomical methods of using this important commodity. I had intended to quote the wise words of Lord Birkett, when he said he had never known a speech that was too short, but as I have been speaking for 16 minutes I feel this might be inappropriate.
4.52 p.m.
Lord MACKIE of BENSHIE: My Lords, I speak today as a member of Sub-Committee D, and I should like to start by saying that I have enjoyed greatly working under Lord Raglan's chairmanship, and greatly enjoyed working with the experts of the money committee, sub-Committee A on the occasions I was able to attend. I would say how very right it is that these two reports should be debated together, and how very right it was to split them; I think that Sub-Committee A did get a great deal of information about agriculture, and we certainly received a great deal of information about money and its workings with which we were not too familiar before. The two are wholly bound up together. There is no shadow of doubt that we are talking today about matters which affect the consumers in this country and the farmers and the producers of food, and the two are bound together, of course, by the prices received and paid by the two groups.
What I dislike about the present situation is that a great many people are getting mixed up. They are questioning the whole of the CAP; they are questioning its value. They are producing figures such as £600 million to £800 million which could be saved by buying our food in the free world market. I think this is a very unsophisticated and very dangerous approach in the present situation. We are also pointing out in this country the great advantages of deficiency payments as against intervention buying, but I wonder if we should do this entirely. We ourselves in the past have used both systems.
With potatoes, for example, we had a fall-back price which worked very well. Deficiency payments can lead to surpluses in exactly the same way, but when you get surpluses with deficiency payments you have a far greater problem, because you depress the price still further getting rid of them. I think it is very important, when we consider this, to look at intervention buying not as it is working now but as it should work, and consider where the real problem is. I will come to that at a later point, but I will say now that the real problem is that we are paying far too high prices to the farmers on the Continent. It sounds a selfish sort of thing to say, but I will explain it later.
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Before going on to that I would remind the House of some figures of world production of food. In a debate in another place Mr. Jay, that well-known anti-Marketeer joke, said that world food production was rising at a faster rate than the population. This was true in the period of the decade from 1960 to 1970. It is not true in this decade. World food production is falling behind the increase in population, particularly in the developing countries, and the FAO are extremely worried about it. It is also true to say that, as was said in the debate in the House of Commons, there have been improved harvests in Russia, India and other places this last year. But in 1973 the world reserves of grain were in the region of 140 million tons, mostly held in the United States. In 1975, the last true figure I have, there were only 40 million tons. This is not a situation we can look upon as being a 19th century situation where we were mining the fertility of the prairies all over the world in order to feed Great Britain.
If I can weary the House a little with figures from the Annual Review of Agriculture, the contribution to the gross domestic product in this country is £2,760 million from our own production. We import food, feed, and I am happy to say alcoholic beverages to the tune of £500 million and set against that we have exports of about £1,500 million. But it still means that the vast amount of our food and drink is imported, and both are equally important. It is a situation that we in this country should never forget. If I may bore your Lordships with some more figures—I must produce them since I looked them up—in milk products there is an interesting situation. The total production of butter and cheese in the EEC—I should like the noble Lord, Lord Sainsbury, to listen to this with particular care—is 4,700,000 tons. These are the main products sold across the trade frontiers. The whole production of Australasia—Australia and New Zealand —is 614,000 tons. The total exports of butter and cheese from both Australia and New Zealand are 278,000 tons. It is a lot of butter and cheese, but it is only 6 per cent. of our production in the EEC. So let the people who say that we can buy cheaply in world markets drop the production in the EEC by 6 per cent. and then see how cheaply these products can be bought.

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I make no apology for bringing out these figures because I think they are very important to our thinking in this country. With regard to cereals the position is even more serious. World production is 1,000 million tons. The United States produces a quarter of this amount, West Europe produces 122 million tons. The total world trade in cereals is 140 million tons, of which Western Europe takes 43 million tons, and Great Britain takes 10 million tons. Our own production is 13½ million tons. These are figures which cannot give rise to any form of complacency. The world production of grain needs to rise, to maintain the per capita production at its present level, by something in the region of 30 million tons a year, and that is the produce of a country twice the size of Scotland, all arable.
I think I must by now have made the case for the production of food by some efficient system in this country and in Europe. A number of people are at the present moment producing these figures of great savings by buying in world markets, but I do not think there is any doubt at all that if we were to put up by 10 per cent. our buying in the world market —not our whole production—we would put the prices up by very large amounts indeed, probably to just about, or even over, the EEC current prices. In this country we have a lot of experience in managing a controlled market in agriculture.
We have done it since the war, starting with Tom Williams, whose name has always blessed the Labour Party when it speaks to farmers. He began by keeping down the prices to farmers in return for giving them a guarantee. In order to produce farmers require a guaranteed market. They do not require high prices; they require stable prices. Over the past few years, if we had had stable milk prices in Europe and if that commodity had been properly promoted, we could certainly have sold a great deal more to the benefit of the public instead of selling so much sugar, as we do at present.
It is difficult to sell a great surplus of food by lowering the price. People can take only so much. It is silly to reduce the price of butter so that housewives buy it up and put it in their deep freezers. Long-term stability is of more value in the marketing of food than trying to
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dispose of surpluses and thus upsetting the whole market by dumping the particular commodity at a lower price. It is valuable to provide milk for schoolchildren and to allow the poorer sections of the community, for example, old-age pensioners, to buy it through a system of vouchers. In the main, a good deal is to be said for intervention buying. If we were selling just 1,000 tons of cheap butter to Russia in order to rid ourselves of an embarrassment no one would be crabbing quite so loudly as the noble Lord, Lord Sandys, says they are.
It is the size of the surplus that is wrong. We must tackle the reasons for that large surplus. We have heard a great deal about the small farmers in Europe. We have crofters in Scotland and small farmers in Wales. Many are very good farmers and are doing very well. There is no such thing as a small farmer. Many a small farmer can adapt his farming methods to the size of his farm and make a good job of it. This is mainly a social problem. In the debate in the House of Commons the Minister of Agriculture said that it should be regarded as a social problem by separate countries. That is right. It would be very much better if these matters were dealt with by the Governments concerned. If Brussels is to deal with the problems of the crofters in the Highlands, the small farmers in Wales and everything else, we shall receive even more paper than we are receiving at present. We must pitch prices at such a level as will control the surpluses. At the same time the prices must always follow the market—at the end of the day we cannot get past the market. In the long run we can only reduce the price if people produce too much. We in this country found that when the price was coming down and milk was not so profitable farmers kept an extra cow or two and production rose when the price fell.
The most important commodity in the price package is milk, and it is in that area that the Commission has some good and sensible ideas. I have no time for the co-responsibility levy. It is a method of reducing the price. If it is increased by 3 per cent. and decreased by 2·5 per cent., it is a piece of nonsense and a way to get round political opposition. I suppose that if it does that, there is a place for it, but it is not very sensible. It would not be

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fair to the farmers in this country, who are already paying for a great deal of promotion through the excellent efforts of the Milk Marketing Board.
The tax on vegetable oils is absolute nonsense and one that we should oppose by every means in our power. We should also look very carefully at the detail of banning investment aids. Anything that will make milk production more efficient in a number of countries should be examined closely and there should not be a total ban. The provision of school milk is good. I turn to the restriction on dairy names. I have long felt that there is a certain justice in not allowing anything made out of vegetable oils to be called ice-cream. I have no doubt that there will be much trouble over it. In fairness, this could well be examined. The non-delivery premia, and the proposal for limiting the support for skim milk are sensible.
All this boils down to giving farmers on the Continent some inducement to leave the production of milk as well as making it rather less profitable. In evidence Sir Henry Plumb agreed that the price of milk on the Continent was too high. The difference between the real value of the Green Pound and what the farmer is paid here is, in the case of Germany over 40 per cent., and in the EEC as a whole 35 per cent. It may be a curious thing for a farmer to say, but farmers in this country deserve more money and the farmers on the Continent deserve less. There is a certain logic in that when one takes into account the difference in the valuation. At present milk production is increasing in this country and at a lower price. The ultimate objective of the EEC is to have the goods produced wherever they can best be produced. There is little doubt therefore that milk should be produced in Denmark, Holland and Great Britain, and that our case for producing it is far stronger than those of the very inefficient producers in large parts of the Continent.
I make a plea as regards Green Money. I appreciate that it is a difficult problem and that any Government have to take into account the rate of inflation and the rise in the cost of living. However, we really cannot go on like this. As the Minister well knows, the situation in the
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pig market is ridiculous. We are paying our producers about £3·50 a pig to make up for a ridiculous calculation which allows the Danes, who pay more for their grain to feed their pigs, to sell to this country at a price which makes it impossible for our farmers to make a profit out of pig farming. We are just as good as the Danes; in many cases we are better. Our technology has improved. Yet it is impossible for a competent pig farmer in this country to make a profit without a subsidy because of the system of subsidising the Danes through MCAs. It may be ACAs, but no doubt noble Lords can refer to the glossary.
If we do not harmonise the Green Money, the values and prices over the whole of the EEC within a certain period, we would be better out of the EEC. If we do not take advantage of the system, it is no good having this enormously complicated paperwork which goes on all over the place and which takes up the time of a large number of civil servants. There must be harmony in prices, and eventually we must go for the original objectives of the EEC. I have spoken for seventeen minutes. I commend the report to the House.
5.10 p.m.
Lord COLLISON: My Lords, I too should like to thank the noble Lords, Lord Raglan and Lord Pritchard, for introducing their respective reports, and say once more that it is a delight to work under the noble Lord, Lord Raglan. It is a very enjoyable job to do and one that I greatly appreciate. I should also like to endorse what has been said about the work done by the people on the staff who produce these reports in difficult circumstances. I am sure your Lordships would agree that the reports, as they stand, are extremely well done, well written, and entirely comprehensible. That goes too for the specialists who advised us, again in a difficult and in a short-term situation.
Before I say what I want to say about the report—and I am going to concentrate on Committee D Report, the Twenty-third Report—I want to indicate that I thoroughly agree with the noble Lord, Lord Sandys, in his remarks about the Milk Marketing Board, and indeed about the other boards. It is frightening

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to learn that doubts are being cast upon the legality of the Milk Marketing Board. I do not know how far this has gone or how deeply one should be concerned, but certainly it is true that the Milk Marketing Board, and our other marketing boards, provide for both the producer and the consumer in this country a very efficient system indeed which leads to the stable prices which have just been referred to by the noble Lord, Lord Mackie. Here again I agree with him, and I agreed with much else that he said but not quite all.
As I say, I am going to concentrate on the Twenty-third Report and going to confess at the outset that I feel some unease about the situation as it has developed and is developing. I hate reading speeches, but I thought on this occasion that I ought to put some words down on paper. Having read what I put down I rather shocked myself in the sense that it appeared to me that I was being unduly critical. I do not intend that, and what I say is meant to be entirely constructive and not destructive. There are one or two suggestions that have been made of which I can heartily approve. For example, the school milk programme. This is a means whereby we could reduce the surplus. I have felt all along that when it comes to skimmed milk it would be a good and useful thing, and a humane thing, to supply this commodity where it is needed, particularly in times of famine and maybe as part of our aid to developing countries programme. On the other issues that have been proposed, I agreed with and welcomed the continuation of the brucellosis eradication proposal. On the others I have certain reservations which I shall mention as I go along.
It is important that one should realise what the overall packet means in terms of increased prices to the consumer. The Ministry of Agriculture and Food estimate that the effect of the Commission's package, including the two remaining additional steps which will have to be taken, will be to raise retail food prices by about 4 per cent. which is equivalent to about 1 per cent. on RPI or something less than 1 per cent. Here I agree with the noble Lord, Lord Raglan, that there are other considerations which have to be taken into account. There is the cost of packaging, transport and retailing. Therefore, we really do not
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know what the exact figure is. Here again I agree that it would be useful for an exercise to be done to indicate the degree of these additional costs.
That 4 per cent. increase relates to a 23 per cent. rise in food prices in the United Kingdom between 1976 and 1977. Seen in that light the results of the overall package on the consumer are not perhaps so terribly frightening. I emphasise this at the outset because I have a considerable concern about the growing public attitude which is being shown. We are hearing severe criticism, for instance, about the sale of surplus butter to Russia. Some people may base their reaction to this on the fact that it is Russia, and there is a political bias there. But I believe that if surplus butter, the butter mountain, is sought to be reduced by selling at reduced prices to any developed country you will get the same reaction.
It is a reaction which can be well understood. Here we have the butter mountain, we have the wine lake, we have the beef mountain, and people believe that all these commodities are there and should be issued to the consumer, maybe ignoring the effect that this would have on prices and the farmers' income. But there it is; these commodities are there and people feel that they should be made available to them. I do not believe that they would be so very much concerned about the price issue. It is the fact that they see this commodity, this butter, being sold abroad, and immediately there is this enormous emotive reaction, which can he easily understood. I understand it, and in a sense I do not blame them.
One also has to remember that inflation is still running at about 15 per cent., and it is doing this at a time when the situation of the lower paid people in this country and those on small fixed incomes when they retire, income-wise, is extremely strained. Again, it is important that the misunderstanding—and there have been misunderstandings; some of them unfortunately perpetrated by the Press, maybe out of a not complete understanding or knowledge of what the Common Market is all about or its procedures—be cleared up. We should try to give a very careful explanation but, more important than that, people have to see that the Government do not supinely accept the

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decisions or proposals which are put out, which emanate from Brussels, and the people must see that the Government consider these and are prepared to debate them, and maybe to fight them if necessary.
It is in this light that I should like to comment upon the proposals outlined in the Twenty-third Report. Because I have said what I have said, it means that I am looking at this in terms of policy issues. The proposals are a continuation of the overall CAP objectives; that is, to protect and encourage the producers, although one does see, and I think approves of the fact that this year more regard has been given to the need to contain inflationary pressures.
As an erstwhile representative of farm workers, who of course depend upon the success of agriculture in this country for their conditions, I obviously must approve of measures to see that the industry, and those in it, get a proper return for their contribution to the economy at large. I also recognise that we are now members of a wider Community, comprising nations which have different agricultural situations, and therefore different agricultural problems from our own. We have to recognise this and go along with some of the proposals which are made by the Commission, by the Common Market countries, which are sought to be resolved not only in the light of what we need but in the light of what these other countries need, too.
Here I am going to disagree with the noble Lord, Lord Mackie. For myself—and this is a sort of pipe-dream now, I suppose—I must say that it appears that the old support system, which we developed emanating from the Tom Williams proposals—and I do not say that because I sit on this side of the House—supporting agriculture in this country via the Annual Price Review and all the considerations that went into it, was a better method for us than the method of intervention used by the Common Market.
Possibly CAP is in danger of breaking down; for example, in paragraph 36 of our report we say:
"Measures to make processing, marketing and farm structure more efficient occupy far less attention than that given to the support of farm price levels. This shows up in the budgetary imbalance, where expenditure on guaranteeing
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institutional prices, particularly in the dairy sector, is already too high and is increasing further. In the view of the Committee, the renewed growth of the guarantee section of FEOGA threatens to swamp the whole EEC budget and to retard the development of other policies such as the social policy, the regional fund and joint expenditure on research."
That means that if CAP is in danger of collapsing, that endangers Common Market policy overall. One understands what the intervention policy is aimed to achieve—to take produce off the market to maintain prices—but it has resulted in mountains of beef, butter and wine and methods are being sought to deal with and reduce those surpluses.
The dilemma becomes very apparent. It became clear to us in Committee through the evidence we took: on the one hand the consumers' representatives took the view that the increased prices resulting from the two remaining transitional steps were too much to bear anyway, notwithstanding what would happen if the Green Pound were revalued, and, on the other, we had evidence from the NFU who complained that the 5·9 per cent. to 6 per cent. increase in the Green Pound revaulation was not enough. This kind of dilemma arises because of the intervention policy, simply because we have these surpluses; in my view we must take very seriously the consequences of not modifying the policy in a way which will resolve the dilemmas in which we and everybody else find ourselves.
For example, there are those who take opposing views on the proposal to tax the production of isoglucose; the NFU welcomes it as a protection for the sugar producers while others feel that such a proposal is wrong. The final paragraph of the report on this subject indicates that while we understood the objective, there was something rather unhappy about a situation in which a tax is put on—as it is proposed in respect of vegetable oils and ethylalcohol made from other than natural oil products—and one must say to the public, "Here is a development which could produce a cheaper commodity either for direct or indirect use, but you cannot have it because we want to protect the industry concerned".
I am not making any comment about this, but I think it proper that there should be a reasonable balance between, as it were, isoglucose, on one hand, and sugar, on

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the other, so that if there is to be competition they should be able to compete on an equal basis, without simply just ruling one out altogether as apparently might happen as a result of this new proposal. We are therefore faced time and again with unfortunate dilemmas arising from these policies.
Lord DAVIES of LEEK: My Lords, may I ask my noble friend whether he has any figures on this subject? He will be aware that there is a £48 million investment in these subsidies, but I do not think there has been any discussion about the effect of all this on jobs. For example, what will be the result of dropping the pig subsidy? I believe there has been no discussion of that, although it will cost us £50 million a year and 3,000 jobs.
Lord COLLISON: My Lords, the only figure I can give my noble friend—this is in terms of isoglucose—is the estimate I have seen of it possibly amounting to between 4 per cent. and 8 per cent. of the total sugar requirement. I read in The Times last week—I think this is what my noble friend is referring to—of a proposition to create a new factory (indeed, a new industry) and while I have forgotten the name of the proprietor, I believe he said that if this latest proposal went through he would make a loss from the start.
I conclude as I began. I do not want to give the impression that I am being nothing but destructive. Noble Lords know me to be a keen supporter of the Common Market over the widest front. Some of the opponents of the Common Market—those who did not want us to go in, who have never accepted that we are in and who do not appreciate that, now that we are in, we must play ball—observe with glee the reaction of the housewife. Not only in England but on the Continent the Commissioners met representatives of housewives who complained about high prices. Opponents of the Common Market hail this with glee and I dislike that; it is a matter of sadness to me that the opportunity could exist for the Common Market to be criticised.
My remarks tonight have been made with the intention of being helpful, constructive and certainly not destructive, supporting, as I do, the Common Market and wishing it and the future of the CAP well. Nevertheless, I agree with the noble Lord,
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Lord Sandys, that we, with our experience and sophistication, have something to give and perhaps something to give towards the realignment of CAP policy. I appreciate that a return to the old Toni Williams system is a pipe-dream. We are in the Common Market and obviously we must have a different policy, a policy to suit not only us but the people on the Continent. However, let us, through our Government, use our influence there to streamline, improve and help to get away from the constant dilemmas with which we are being faced.
5.28 p.m.
Lord TRANMIRE: My Lords, I found myself in considerable sympathy with the noble Lord, Lord Collison, in expressing his unease at certain aspects of the present situation, but first I wish to congratulate my noble friend Lord Pritchard on not only his very able chairmanship of Sub-Committee A but also on his very clear explanation of the Green Money situation. With a Green Money system operating between such wide limits as at present, I feel that it is illusory to talk of a Common Agricultural Policy. When a German farmer is receiving for his product 49 per cent. more than his British counterpart is receiving for the same product, quite clearly the Common Market becomes a nonsense, and an unjust nonsense, in that the British farmer is paying for his taxed inputs just as much as the German farmer.
That leads me to look at the whole situation, where it is quite remarkable that in all the White Papers published by successive Governments on the Common Market, there was no mention of the Green Money problem, nor indeed was there any in the numerous documents brought out by the National Farmers' Union. Their policy can best be epitomised in paragraph 13 of British Agriculture and the Common Market, which the National Farmers' Union brought out in 1971. They said:
"Through the adoption of the common agricultural policy and in particular the application of community preference, imports from the Commonwealth and other non-member countries will tend to be reduced in favour of greater supplies from United Kingdom farmers and from other farmers inside the Ten."
That was before the Ten became the Nine. Certainly, Commonwealth imports have

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declined very considerably within the period in question but, to compare the position in 1969 with that this year and taking cereals in general, cereals from the Commonwealth declined by 450,000 tonnes, from the United Kingdom by 200,000 tonnes and from the Common Market we brought in 2,500,000 tonnes more. Therefore, the British farmer has not been the gainer.
Taking the position in sugar, imports from the Commonwealth—the Caribbean and Mauritius—have declined by 800,000 tonnes. In Britain, sugar production went down in the period 1969–1976 by 160,000 tonnes; in the Common Market, it went up by some 322,000 tonnes. We have heard a lot of talk about the butter mountain and the wine lake, but something much bigger is coming up the great EEC alps; that is, the sugar mountain, which looks like being up to a surplus of 3 million tonnes in a very short time.
This makes one wonder what will be the effect on our policy—which I think we all agree—of getting greater agricultural expansion. This was embodied in the White Paper which the Government, to general acclaim, brought out last year, Food from our own Resources. That envisaged a 2½ per cent. increase in production per year in these years. This was slightly more than the average increase in production in the previous decade.
What has happened? The latest anunal review White Paper, published very recently, shows that there has been a decline in nearly all our crops and livestock products since the White Paper was published. Why has that happened? What has happened is that the Green Money system has prevented that expansion coming about in British agriculture. The object of that expansion was to improve our balance of payments. I read at the week end that Mr. Wynne Godley had worked out that the common agriculture policy and the green money system were costing this country £600 million a year in balance of payments. Whether or not that is right, I do not know but, after all, Mr. Wynne Godley is a fairly reputable economist who is not given to extravagant statements. All I know is that, if one looks at the visible trade balance of the country, one sees that, whereas in 1969 we had a £72 million deficit with the Common
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Market countries, in 1971 we had a £183 million deficit and in 1975 that deficit had grown to £2,352 million. In the last year which we have just completed, it was a deficit of £2,222 million.
I believe that a great part of our troubles comes from this very large deficit, bearing in mind that our food and drink bill from the Common Market in the year 1976 is just about £2,200 million—very nearly identical with the whole of the deficit.
Of course, this has in effect on the whole of our cost of living. One of the reasons for this large increase of 69½ per cent. in the cost of living in the past three years, has been the weakness of sterling. I am very glad that the noble Lord the Leader of the House is to reply to this debate and I ask him in that reply to try to give us a breakdown of that increase of 69½ per cent. in the cost of living. In the White Paper on entry to the Common Market we were told that the cost of living would increase as a result of the Common Agricultural Policy by a half penny in the pound each year. It does not seem quite to account for the 69½ per cent. increase over three years and I should therefore like a breakdown showing how much of the increase in the cost of living is due to the weakness of sterling which is caused by the adverse balance of payments and the public sector borrowing requirement and how much to the Common Agricultural Policy with the levies on imports for nonmember countries and the high level of the common agricultural policy prices.
I believe that these two reports lead us to a rethink on the whole of the Green Money situation and of the demand for a revision of the Common Agricultural Policy. In paragraph 30 of our report, we make a suggestion that the Government should look at a change in the agricultural unit of account and should base it instead on a basket of currencies, as the Select Committee previously recommended and just as it is with the European unit of account.
As I understand it—and I hope that the noble Lord the Leader of the House will correct me if I am wrong—the agricultural system is based on the system that is linked with the deutschemark and the "snake", so it does benefit West

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Germany, the Low Countries and Luxembourg and puts Britain, France, Italy and Ireland at a disadvantage. Denmark, of course, benefits with the "snake" countries. If this were changed to a basket of currencies as we suggest, one would find that there would be an advantage to Britain and to the British farmer and a disadvantage to the German farmer and that the level of prices throughout the community would be lower. This is a suggestion that comes from the Select Committee and I believe that it requires a considered reply from the Government.
When we come to the Common Agricultural Policy, I must say that I have great sympathy with the noble Lord, Lord Collison, and that I am in disagreement with the noble Lord, Lord Mackie. The noble Lord, Lord Mackie, did not appear to distinguish between a surplus that comes from over-production and one that comes from the fact that prices become so high that the consumer is not able to buy. I am quite ready to work a guarantee and efficiency system and occasionally run into surplus if I have too much enthusiasm in agricultural production, but what worries me under the Common Agricultural Policy is that the price level has been fixed so high that the low income groups cannot get the food they require at reasonable prices. In the dim past, when I was working in the agricultural field in the other place, I worked out the system of guaranteed prices and deficiency payments that was eventually adopted and successfully put into operation by Mr. Tom Williams (as he then was), and so I have the greatest sympathy for a system of guaranteed prices and deficiency payments—
Lord MACKIE of BENSHIE: My Lords, if I may intervene for a moment I should like to put my point of view. What I said was that if there was over-production the price paid to farmers was too high and that guaranteed prices, or intervention prices, must in some degree follow the market.
Lord TRANMIRE: My Lords, I took down what the noble Lord, Lord Mackie of Benshie, said, but I do not know whether the revised version was very much different from the authorised version. He said that he thought that one got a surplus in both
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cases and that it did not matter which way one had it. That is what I understood him to say, but I am perfectly happy if he wishes to retract that; and if I find that he is in agreement with me that the old guaranteed payment system is better, I hope that he will convert our partners in the EEC to that view.
It always seems to me that to prevent the consumer from being able to take the advantage of lower world prices is a very cruel policy for the lower income groups, and I would hope that at this stage Britain could strike a bargain with our partners in the EEC. After all, we could say that we would agree to the proposals they have made on Green Money provided that they would allow us to import, without the high levy, a sufficient quantity of food from non-Member countries at prices which would be low for the lower income groups. I cannot think that the system in the Common Market of building up huge surpluses because prices are too high, then trading them away to the Yugoslavs, the Russians and the Bulgars at cheap bargain prices is fair to people of this country. I believe that we must have a new policy on this matter.
If we were to have the policy that I am suggesting, of getting food cheaper for certain lower income groups on the world market, it would not alter world prices because there would not be a sufficient demand for it. But it would mean that the farmers would get an extra £300 million a year, and there could then be achieved the expansion under the agricultural expansion programme that all sides of this House desire. That programme could then become a meaningful possibility. But so long as there is a system of Green Money which is weighted against the British farmer, and so long as there is a system of making prices so high that the consumer cannot afford to buy the food, I am afraid that expansion of British agriculture becomes a very dim possibility.
5.44 p.m.
Lord GORDON-WALKER: My Lords, like the noble Lord, Lord Tranmire, I will also talk about the Green Pound. I will cover some of the ground that he has covered and then come to sonic of his points as we go along. The British consumers have certainly benefited from

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the Green Pound, though not, as the noble Lord, Lord Tranmire, pointed out, the British farmers; this is one of our problems. But be that as it may, we had nothing whatever to do with the setting up of the system of Green Money. It is not sufficiently recognised, as we talk so much about the Green Pound and so on, that the Green Money was introduced before we became a member of the Common Market, and it was due to the devaluation of the French franc and the up-valuation of the deutschemark. Its aim was exactly the same as it has always remained, though in this case to prevent the flow of agricultural production from France into Germany. It was a method of protecting the German farmer at that time. The purpose of the introduction of Green Money by the Commission was to save the Common Agricultural Policy, but I agree with the noble Lord, Lord Tranmire, that it undermined the Common Agricultural Policy or, perhaps, the whole Common Market. It is in grave danger of doing that.
The real purpose of the Economic Community is to provide for the free flow of goods of all kinds—agricultural, industrial—through the whole realm of the Community. But in fact the outcome of Green Money has been the creation of an elaborate structure of what are, in effect, frontier tariffs, and in some ways the new system is worse than it was before the Community was created, because at least in those days the customs officials worked normally with known tariffs that would be long-lasting. Nowadays, however, the poor customs officials may have been told every week that there has been some shift in the relative value of currencies and therefore a shift in the export levies and export subsidies. They have to cope, as they did not in the past, with an absolute mass of paper that is circulated from the Community. If people here and in the Community realised more fully how far Green Money has restored tariff barriers in the Community, after they were abolished, we should have a rather better understanding of all these related problems.
The Commission is very angry with us about the Green Pound. But one must remember that the Commission was wholly, solely responsible for the invention
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of Green Money. We were not responsible; it was the Commission that invented it. The Commission has now repented of its ways and has put forward proposals, which the noble Lord, Lord Pritchard, has told us about, to phase out Green Money. It seems to me very doubtful whether that can in fact be brought off whatever the Commission wants. Perhaps as part of a much bigger package it could be brought off, but as an isolated act I cannot see that the phasing out of Green Money will work. Too many vested interests have grown around it.
It is not only countries like Britain that have gained; a country such as Germany, for example, has gained a great deal from its point of view. Its politically very important farmers have got higher prices than they would otherwise have got, and these very same farmers get subsidies for exporting their food to us and other people. Germany does not want to get rid of the Green Pound; at least, Germany's farmers do not. Its farmers are politically very important and in the long run what the farmers in Germany feel very strongly about Governments, and indeed Oppositions, are very apt to agree with.
Most other countries in the Common Market benefit one way or another, although there is one (I have forgotten which) which is in the neutral position. As the noble Lord, Lord Pritchard, pointed out, the Commission has also proposed, in effect, that the Council of Ministers should be set aside in this field and that there should be automatic consequences from reports by the Commissioners. Here again I think it is extremely doubtful whether they can bring this off. It would take from Member Governments the final control of shifting the rates of Green Money one way or the other. Not only is it unlikely to happen, because Governments will not let it happen, but I think that Governments should not let it happen. It is not for people like the Commission to settle great political matters of this kind; it is for representatives of elected Governments to do so.
In any case, I think it would be an error, a mistake, to make a sharp reduction and abatement of Green Money as an isolated act, as the Commission proposes. I think there are two main reasons for this.

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The first is that, as my noble friend Lord Raglan and the noble Lord, Lord Pritchard, said, Green Money is inseparable from the CAP, and you therefore cannot deal with it in isolation from the CAP; it would upset the whole apple-cart. It was only because common agricultural prices were so high and consequent over-production so heavy that Green Money was in fact invented in the first place and has been sustained since. The second reason is a very different one, but I think it is the more important. It is that the maintenance of Green Money gives us the only effective lever to get a more sensible Common Agricultural Policy. Already because of the high cost of the Green Pound and other Green Money, there are some signs that a more favourable attitude is arising in the Commission towards lowering Common Agricultural Policy prices. Indeed, it has begun a bit, although it has a long way to go.
I agree with those who have said that what the European Community needs is a move towards our system of deficiency payments, which, as my noble friend Lord Collison said, had very great advantages, the chief of which was that it avoided the creation of great mountains, surpluses, lakes and so on—and that is, after all, the greatest need facing Europe. But I think that those who, like Lord Tranmire, advocate this system for Europe must recognise that it is much easier to work such a system if, like us, you import half your food than if, like other Common Market countries, you produce nearly all your own food. It is very much easier if you have a large import element, whether it is coming from the Community now or whether it is coming from overseas as before. Nevertheless, it seems to me that there is an obligation on people like the Commission, who want to get rid of Green Money, to work out some compromise plan for lowering agricultural prices by some form of subsidy or supplementary subsidy to producers —perhaps not to adopt our whole system of the past but to supplement their system by such a system as that.
I think, therefore, the best and the only tolerable way of getting rid of Green Money is as a part of the reform of the Common Agricultural Policy, not as an act by itself, in isolation. In the meanwhile, grave as are the effects of Green Money—there is no doubt about it—
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it still remains as the only effective lever to secure reform of the Common Agricultural Policy, and we should not let go of that lever until we have a real momentum, at any rate, towards reform of the Common Agricultural Policy. It is the only means to bring the Commission to propose ways of eliminating Green Money as part of a plan to eliminate some of the major dilemmas, as my noble friend called them—and some of them are major absurdities—of the Common Agricultural Policy,
5.54 p.m.
Lord COBBOLD: My Lords, a considerable number of member of the Committee have already spoken, and therefore I am afraid I am bound to be somewhat repetitive, but I shall try to concentrate a little on some of the rather longer-term issues which are mentioned in the report. If I may say so, I entirely agree with the noble Lord, Lord Mackie, who I think has now gone, that it was extremely useful having the members of Sub-Committee D sitting together with the members of Sub-Committee A.
So far as short-term decisions are concerned, the Committee felt that they could do little more than set out the very complicated problem as clearly as they could. Attention has already been drawn to the implications for agricultural producers and consumers, and also for the general pricing policies, both of the United Kingdom and of other Member States. Both the arguments put forward by agricultural interests and those put forward by consumer interests obviously have great weight, and there is the overriding importance of not adding to inflationary pressures at this moment. The noble Lord, Lord Tranmire, referred to the possible use of the "basket" in place of the joint float currencies as the basis for the unit of account. This is a highly technical matter which I shall not try to explain to the House at this moment, but we did try to explain it in some detail in paragraph 30 of the report, and it is a suggestion which seemed to us to deserve very serious consideration.
In forthcoming negotiations Her Majesty's Government have the choice between acceptance, in whole or in part, of the Commission's proposals or of striving to maintain, again in whole or in part, the flexibility given by the Green

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Money system and, more particularly, by the present level of the green pound. It became increasingly evident to the Committee, as has been said many times today, that to deal with the green money proposals in isolation from general discussions about CAP prices and domestic price policies would make no sense, so that beyond expressing a general feeling that some compromise should emerge on the Green Money proposals in the context of further discussions on CAP price levels generally our Committee did not feel able to suggest that the balance of advantage in these negotiations lay in one direction or another.
Turning, my Lords, to the longer term, the Committee felt it right to call attention to some broader implications. As the noble Lord, Lord Pritchard, said, the present system of green money and monetary compensation amounts was intended to deal with minor exchange fluctuations (as the noble Lord who preceded me said, it was invented before we came in, so it is a mistake to talk of the invention of the green pound; it is the invention of the green money) and to help to prevent such minor fluctuations over short periods from interfering with common price policies. In the event, the system has been overtaken by much wider exchange movements over much longer periods than was anticipated. It is obvious that, as things have developed, there is in fact no common price policy. One is bound to ask oneself whether, in these circumstances, the whole Common Agricultural Policy, together with the green money system, does not need a basic review.
My Lords, if continued indefinitely on anything like its present scale the divergence between green rates and market exchange rates could create quite unpredictable complications. In its present form, the Green Money system is inconsistent with the concept of the Common Market and also with the long-term aims of economic and monetary union; and it must be questionable whether the Community budget could for long bear the heavy burden of these MCA payments without curtailing Community expenditure in other areas. Again, the system highlights the problem of balancing national interests with those of the Community as a whole; there is a
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clear conflict between the principle of a common European price level for the major agricultural products and the different interests of Member States in their domestic policies. The Committee emphasise the importance of viewing the Green Money question in the light of these broader and longer-term issues.
The committee recognise, I repeat, that the Green Money question is inextricably tied up with CAP policy and general price policy in Member States. It therefore has political implications for each national Government. As your Lordships will have noted from the report, the Committee conclude that, while some formula of adjustment needs to be worked out in due course, the speed and extent of adjustment must be subject to the final control of Member States through the Council of Ministers. I am sure, my Lords, that the noble Lord, Lord Pritchard, will join with me in expressing the gratitude of Sub-Committee A to our special adviser, to the clerk and to his staff. This has been a rather complicated exercise which has involved a great deal of research and a great deal of checking and rechecking.
6 p.m.
Lord MOTTISTONE: My Lords, I must start by declaring an interest as the Director of the Cake and Biscuit Alliance, a trade association which deals with the manufacture of cake and biscuits. I know that my noble friends on Sub-Committee D will be getting bored with my constant repetition of this. I must also say how grateful I have been to the noble Lord, Lord Raglan, our chairman, and to other members of the Sub-Committee for being such good colleagues to work with and for helping me to learn a great deal about this somewhat complex subject. I should also like to say what a pleasure it was to attend one or two meetings of Sub-Committee A with their great wisdom on these more detailed financial matters.
It seems to me that there is little that one can say additionally to what has already been said about the question of Green Money. I felt, if anything, that my sympathies lay more closely on this subject with the noble Lord, Lord Gordon-Walker; and I would endorse practically all that he said. An example

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of how the Green Money imbalance, whatever the reasons for it, can be troublesome to us, is that we have rumours at the moment which endorse the sort of things that the noble Lord, Lord Pritchard, was saying about the outcome of the present difference between our Green Pound value and that of Ireland. We hear from across the water that there is a threat for MCAs to be applied to biscuits and associated products. Whether it comes about or not, this has been suggested; and one hopes that the Government in their negotiations might be able to ward off its worst effects. The fact is that MCAs have not previously been applied to finished products. It is normally the raw materials to which they apply. The suggestion has been brought about by what seems to be the desperation of the Irish at finding out that they are worse off because their Green Pound has been devalued and ours has not. Presumably, one would say the answer to this problem is for us to follow the Irish; but I do not think that that is entirely fair or right, for our problems are different from theirs.
It seems to me that all the remarks made earlier about the need to make the system simpler so as to avoid these sort of situations arising are reinforced by this particular threat which seems to be hanging over us at the moment. I took the precaution of telling the office of the noble Lord the Leader of the House that I was going to talk about this, and it would be helpful if we could be given some reassurance on this particular issue when the noble Lord comes to reply.
The other outcome—and I am confining myself to the small matters which the more learned Members of these two Committees are not covering—is the result of a new draft regulation which was issued at the end of February this year (and would otherwise, I think, have been the subject of paragraph 14 of the report of Sub-Committee D) to the effect that the marketing of milk products, if the regulation comes in force, will not be able to be carried out for those products which use the title "cream" or "milk" or "butter" or anything similar which do not have this commodity within the product. Some noble Lords may have seen an article in The Times a couple of days ago called "Exit the cream cracker"—the cream cracker being a biscuit which
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has not got cream in it and which, in some respects, is not even a cracker. This sort of title may appear frivolous to noble Lords. I noted that the noble Lord, Lord Mackie of Benshie, with many of whose remarks I agreed, took a side swipe at ice-cream. I am sorry to hear that; but the number of people who take a side swipe at ice-cream is intriguing, although they are prepared to go along with the argument which I shall shortly develop for other products. This is something that I have heard outside the House as well as inside it; and perhaps it is rather like the disappointment of discovering that Father Christmas is not real. Some of us when small discovered that ice-cream was not really cream. This was a terrible disappointment from which many people never recovered.
The fact is that there are many products which use the word "cream" which are not made of cream. A linguistic expert who got in touch with me was able to give me examples of the 15th and 16th century use of the word "cream" when it was not meaning the product of a cow. He also quoted the word "mincemeat", which was referred to in the Middle Ages but which does not have meat in it. There are many other products where we use our language flexibly to convey some impression without either wishing to deceive or actually doing so; because people get to know that a creamy surface means what we understand it to mean, but when translated into French or German these more rigorous languages cannot accept the variation of the use of the word. It is therefore, in part, a linguistic problem. I was sorry to see that the writer of the third leader in The Times, whom one would have thought was fond of words, was not prepared to take that, and thought that it might he a good solution to the problem.
It so happens that this subject came up some 18 months ago, as many of my colleagues in Sub-Committee D pointed out to me. The 8th Report of the Select Committee, which was printed on 10th December 1975, at paragraph 13 says:
"The alleged purpose of the Commission's proposal is to reduce the skimmed milk powder mountain and to prevent its arising again. The Committee have heard no evidence to suggest that this proposal, of itself, would encourage the use of any skimmed milk powder already accumulated; nor do they believe it proven that the

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adoption of the proposal would achieve any significant gain in the consumption of milk products over their competitors."
I suggest that this very sound opinion, reached some 18 months ago, sums up the whole matter and puts it in its right perspective. This particular effort on the part of what almost seems a rather desperate Commission to try to get out from under their enormous pile of skimmed milk seems to be quite unreasonable and something which should be resisted. It is the more frightening because it is a regulation. As your Lordships know, a regulation is not one that has to be reproduced at our own discretion in our own legislation, but one which must be enforced. Rumour has it that it is to come into force in September, which does not give much time for any changes. There are other factors such as cost; but I will not bore your Lordships more on the subject.
It seems to me that there are two points which perhaps might come out of this debate. One is the very (I thought) wise remark by the Minister in another place during the course of a debate the other day which was mentioned, I think by the noble Lord, Lord Mackie of Benshie—although it may have been raised by another noble Lord; and, if so, I hope he will forgive me —that the CAP is not suitable for dealing with the national problems of small farmers; that it should be dealt with under a national social policy. It seems to me that is a very wise statement and a very wise way in which the Common Agricultural Policy could direct itself. It is, I think, reflected in the concluding remarks of paragraph 36 of the 23rd Report of Sub-Committee D. I will not repeat the whole of it, but the middle paragraph says:
"Measures to make processing, marketing and farm structure more efficient occupy far less attention than that given to the support of farm price levels."
That whole thought, it seems to me, is the one which needs to be encouraged; and the Commission themselves perhaps could be encouraged to be a little less rigid in their approach to problems and undertake to modify their views rather more strongly than at present appears to be the case. I commend the 23rd Report to your Lordships.
6.10 p.m.
Lord VERNON: My Lords, I speak in this debate as a farmer, as a member of
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Sub-Committee D, and as a member of Lord Pritchard's Committee, which he kindly invited me to join. When I say "as a farmer", it would be more accurate to say that I am a recent farmer. One of the reasons I decided to start a farm of my own was that I read the Government's White Paper Food From Our Own Resources, I agreed with the policy enunciated that we should as a nation tend to become more self-sufficient in foodstuffs, and I wanted to play some small part in putting that policy into effect. Of course, like all farmers I am also a consumer, and it is obvious to me that, in considering the question of Green Money and farm prices, a proper balance has to be struck between different interests.
It is very hard for the British consumer to accept conditions in the EEC. Unlike his European counterpart, he is not accustomed to spending such a high proportion of his income on the needs of his stomach and the adjustment for him is very painful. But anyone who thinks that the halcyon days of cheap food are going to return is living in Cloud-Cuckoo Land. World prices fluctuate notoriously, and although at the present time the advertised world prices for many foodstuffs are cheaper than the prices in the Common Market, they have not always been so, (as we know in the case of sugar) and they will not necessarily be so in the future. Moreover, it has been made clear to our Committee, as the noble Lord, Lord Raglan, pointed out, that if the United Kingdom was in the market as a buyer on a substantial scale, the prices at which we could obtain these foods on the world market would be very much higher than the so-called world prices advertised. I think that is a trap into which the Cambridge economists and others—and I think I must include my noble friend Lord Tranmire here—sometimes tend to fall.
I turn now to the specific proposals of the Commission regarding the Green Pound and farm prices for the present year. The Commission may have made mistakes in the past and they may still be making mistakes; I believe they are making a mistake as regards the butter sales which have been referred to in the debate. But, generally speaking, I welcome both these proposals as being realistic attempts to solve two intractable problems. One has to remember that the Commission has the daunting and well-nigh impossible task of

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satisfying not only the British farmer and the British consumer, but the farmers and consumers in eight other European countries with differing economies and differing standards of living. We may regard a 3 per cent. rise in institutional prices as too high in view of the need to reduce the surpluses, but that is certainly not what the Germans or the Benelux farmers think of it, since with the revaluation of their Green currencies they will be getting no price increase at all in real terms at a time of rapidly rising costs.
In considering the Green Money proposal, there is a tendency to emphasise the immediate effects of any devaluation on the consumer rather than the longer-term advantages of reducing the growing disparity between the Green and the market exchange rates, and the need to improve agricultural output in the United Kingdom on the lines proposed in the White Paper. The immediate effect of devaluation will, as we know, be to put up the price to the British farmer and to make the cost of food in the shops more expensive. But when we signed the Treaty we knew that the cost of food was going to rise, and that was one of the main points which was made so powerfully by the opponents of our being members of the Community.
We also knew that the Common Agricultural Policy was founded on the principle of fair competition between the farmers in the different countries. That is something which is totally lacking at the present time. The Green currencies were envisaged by the Commission before we actually joined, as a temporary expedient to even out distortions in the CAP at a time of rapid national currency fluctuations. It was never intended that they should become a permanent feature, and were they to become a permanent feature, certainly on the present scale, it would undoubtedly wreck the CAP. It would wreck it because there is no fair competition when a German farmer gets 45 per cent.—or whatever the percentage is—more for his produce than the British farmer, and also because the other EEC countries will not be prepared indefinitely to subsidise British food to the tune of some £500 million a year.
The demise of the CAP is what its opponents want and have always wanted. But it is not what I want. It is not what those who envisage a closer economic
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monetary and ultimate political union between the Nine want; nor, I venture to say, is it what the British people voted for in the referendum. No one is suggesting that the Green Pound should be devalued by the full 36 per cent. That would clearly not be practical. What is proposed is that the existing powers of national Governments to control the level of their Green rates should be surrendered to the Commission who would gradually reduce the disparity between the Green and the market rates by means of a semiautomatic formula which is set out in the report. The monetary compensation amounts will not be abolished, but they will be reduced to manageable proportions. Opinion in our committee was divided on the merits of this proposal.
There is of course a natural reluctance on the part of national Governments to surrender any powers, especially when such powers can act as a bargaining point in negotiations. But I am clear in my own mind that something on the lines proposed by the Commission is highly desirable if the CAP is to survive. So long as the Council of Ministers retains the power of veto on the level of Green rates, decisions will inevitably be taken on the grounds of short-term national and political expediency. That, in my view, is bad for the Community as a whole, and bad also in the long run for the individual country concerned. So I hope that the Government will give perhaps a little more sympathetic consideration to this proposal than they have done hitherto.
Where I think the Commission should do some fairly drastic fresh thinking—and here I agree with my noble friend Lord Tranmire—is not on the principle of automatic adjustment, because I think they are right about that, but on their apparent intention to continue the existing system under which the level of MCAs is determined in relation to the disparity of national currencies from those of the joint float or "snake" countries—that is, the wealthier countries. That matter is referred to in paragraph 30 of the report, and it would appear to me to be much fairer to those countries who are not in the "snake" if the agricultural unit of account could be devalued to a level based on a more representative basket of all the Community currencies, as with the European unit of account employed

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in the European Coal and Steel Community. That would no doubt create difficulties for the "snake" countries and would probably lead to counter demands; but it would make it easier for us and for some of the other less well-off countries to accept the principle of automatic adjustment, because the basket itself would float and the degree of adjustment would be correspondingly less.
I propose now to extricate myself from the thorny thicket of Green Money before I am tripped up by some noble Lord. That would not be a difficult thing to do, because I am not an economist and I find the whole subject incredibly complex.
A noble Lord: Hear, hear!
Lord VERNON: I will turn very briefly, my Lords, to the farm prices proposals, and especially the dairy package, which is really the crux of the surplus problem. I personally have doubts about various aspects of the package. I have doubts about the co-responsibility levy because, as the noble Lord, Lord Mackie, has said, we are already paying such a levy towards the cost of the Milk Marketing Board and under the proposal we should then have to pay twice. I have doubts about the ban on investment aids in the dairy sector, because I do not see how that is going to reduce the amount of milk which is produced. I have doubts about the non-delivery premia because of the social and economic consequences of pushing out of business the small farmer with 20 or 30 cows, who makes such a valuable contribution to rural life at the present time. Also, I am very doubtful about the Community's intention to abolish the Milk Marketing Board, although I realise that is not included in the package at present.
Nevertheless, when all is said and done, I think we should refrain from being too critical of the Commission. We spend our time castigating them for creating these huge surpluses, but here at last they have made what I believe to be a genuine attempt to reduce surpluses, and especially the milk surplus—an effort which, in the opinion of our expert advisers (and I would differ on this from the noble Lord, Lord Raglan), would have a considerable
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effect. I think they are right and that we shall see a fairly dramatic reduction. If we do not, then of course stronger measures will have to be taken and the larger milk farmer will have to be hit, not just the smaller one.
In this country the effect of the package is difficult to estimate. It depends so much on the Government's attitude towards Green Pound devaluation. Through the Commission's overall proposals, which the Minister regards as over generous, the British farmer is to receive a 15 per cent. increase in price, when it is admitted that his costs have gone up by 20 per cent. That, of course, includes the 6 per cent. Green Pound devaluation. In these circumstances, it is very difficult to see how the expansion envisaged in the White Paper can take place. Indeed, production may fall. Without expansion we shall continue to import huge quantities of food which could otherwise be grown at home. That will adversely affect the balance-of-payments, which in turn will hit the market value of the pound, which in turn will hit the British consumer; so I sometimes wonder whether those who so ardently oppose an increase in farm prices are not cutting off their noses to spite their faces. The Ministry evidence on that point was quite clear: all the experience to date has shown that only if the price was right would the farmer be prepared to take the risks involved in expanding production.
The British consumer has taken a frightful hammering in the past year and he is likely to suffer further blows in the coming year, not only because of Common Market prices but because of world prices. We have before us at this moment the examples of coffee and tea. One of the things that tends to be forgotten in the farm price tug-of-war is that the population of the world in the year 2000 will be not 3,700 million, as it is today, but 7,000 million. I am not talking of wild guesses made by demographers, who sometimes make mistakes; I am talking about facts, because the mothers who are going to give birth to those children have already been born. My Lords, when I reflect on the effect those 3,500 million additional mouths will have on world food prices, I never cease to think what a wise decision was taken by the British people when they endorsed so unequivocally the Government's signature of the Treaty of Rome.

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The EEC countries are largely self-sufficient in temperate foodstuffs. We may have to pay more in the short term but we are at least ensured of security of supply. To a major importing country such as ours, the value of that security is incalculable.
6.30 p.m.
Lord BRIMELOW: My Lords, the noble Lord, Lord Vernon, has spoken most persuasively and I am in agreement with most of what he said. If I do not follow him in detail, it is in part because I wish to avoid repetition, but also because I should like to follow up one remark made by the noble Lord, Lord Cobbold. He asked if these monetary compensation payments, made in the execution of the Green Money policy, are to continue to increase, will that not entail a reduction in expenditure from the Community budget for other purposes? We are on notice from the President of the Commission, Mr. Jenkins, that far from increasing the monetary compensation payments, he wishes to reduce them and to increase payments from the budget of the Community for other purposes, notably with a view to increasing the degree of economic union in the Community. I doubt, speaking purely personally, whether he will succeed in that, but he has given us, in his speech of 8th February in the European Parliament, formal notice of his intention.
The noble Lord, Lord Vernon, spoke of the thicket of Green Money. There was a time when people thought that the Community was set on a smooth and broad highway leading to economic union, and when, in 1969, the system of Green Money was invented it was regarded as an alleviation for a small, insignificant stumble which had occurred on that broad highway. But the highway has petered out, and we are indeed in a thicket and each individual government is trying to pick its way through that thicket in its own way. The paths which we are following are now divergent, and it is that divergence which is already threatening the unity of the Community, and the threat may be increased if the Community is enlarged.
It is perhaps worth recalling what Mr. Jenkins had to say on that subject on 8th February. He said that failure to
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make progress towards economic integration and the risk of slipping back were, in his opinion,
"… by far the gravest danger facing the Community at the present time."
Making no mention whatsoever of monetary union, he asserted that to abandon the goal of economic union merely because the road towards it was difficult would be an abdication of responsibility. He warned that if we failed to move towards greater economic integration, we should sooner or later move back; and that if we moved back it would not be in the economic sphere alone.
Subsequently, on 17th March, Mr. Jenkins spoke to the Political Committee of the European Parliament and was questioned about the attitude of the Commission to the enlargement of the Community. The gist of his reply was that the Commission accepted the enlargement now being considered as a political imperative; but that it was essential to be clear about the consequences. He did not go into further detail on that subject, and the whole subject, being delicate, is handled with a certain reticence in all the Member countries of the Community. I will, none the less, venture to make a few personal comments, because I think that this question of divergence is of fundamental importance.
In any economy, the rate of growth depends upon the scale and efficiency of investment. The wealthier a country is, the greater the amount of resources available for investment for each percentage point of the national income allocated to growth. This means that if all the Member States of the EEC were to devote the same percentage of their national income to investment, and to do so with equal efficiency, the gap between the richer and the poorer members in absolute terms though not of course proportionately, would tend to widen. For the gap to be narrowed, the poorer Member States would have to pursue consistent long-term policies of investing a higher percentage of their national income than the richer States, and to do so with at least comparable efficiency. Yet it is in the poorer countries that the pressure to increase consumption tends to be strongest, and where the factors that bear adversely on the efficiency of investment tend to be the most numerous.

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If these difficulties cannot be overcome, convergence within the EEC would presuppose a transfer of investment resources from the richer members to the poorer. But is it likely that such transfers of resources will be on the scale necessary to make convergence possible? And even if they were to be made, would they be used, and used efficiently, to that end? Hitherto, loans within the Community have chiefly been used to cope with balance of payments problems, rather than to bring about convergence. In his address of 8th February, Mr. Jenkins said that the Commission would devise a general policy to concentrate its present and future financial resources on the central problem of economic divergence, but he added that the funds currently available for this were "extremely small".
The conclusion I draw from this is that the difficulties which at present impede progress towards convergence will not be easily or quickly overcome; that they will be increased in the event of enlargement, and that for some time to come the prospect is one of increasing divergence. It is divergence, my Lords, which has led to the growth of the sums paid in monetary compensation under the system of Green currencies. The more these sums have grown, the greater the distortions which have been introduced into the pattern of agriculture within the Community, and the greater the departures from the concept of a common market in farm produce. These points have been well illustrated by previous speakers in this debate.
If economic divergence within the Community continues to increase, if it were to be still further increased by the enlargement of the Community, if the present rules governing the management of the Green currencies and the payment of monetary compensation amounts remain unchanged, then the distortions in the pattern of agriculture within the Community will grow and be consolidated, and the burden on the Community's budget will increase until at some point it becomes intolerable. The more determined the Commission is to switch funds to deal with the problem of divergence the sooner that point will be reached. From the point of view of the Community, the Commission has acted sensibly, and by no means prematurely, in proposing change.
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From the point of view of this country, however, the Commission's proposals regarding the future management of the Green currencies are a mixed bag. As regards our balance of payments and the relief of inflationary pressures, this country is the principal beneficiary of the present state of affairs. Our farmers, on the other hand, as noble Lords have pointed out, have several legitimate causes of complaint. In these circumstances, I fully agree with the statement in paragraph 25 of the Select Committee's report that:
"… the striking of a national balance of advantage will be a fundamentally political decision for each member government".
I hope that nothing said in this debate will make more difficult for Her Majesty's Government the playing of their hand in the negotiations which they now face.
It is against this background that one has to assess the specific arguments so far advanced in this debate in favour of higher incomes for United Kingdom farmers, or for protection against highly subsidised imports of Danish pigmeat, or in favour of keeping down the prices paid by consumers, or in favour of retaining the benefit to our balance of payments which we derive from the present rules. These and all the other aspects of the problem are matters on which balances have to be struck, first in this country by the Government and secondly in the Community by the process of negotiation. It is legitimate, of course, for the spokesmen of every interest to state their respective cases, but the final decision on the proposals for change now put forward by the Commission will be a bargain struck in inter-governmental negotiation. For better or for worse, the Community as we know it has been shaped by negotiation and the striking of bargains, and I have no wish to make any difficulties for Her Majesty's Government by anything I may say in this debate.
To those who have always had doubts about the concept of progress towards full economic and monetary union, the present trend towards divergence, and the prospect of still further divergence if the Community is enlarged, may be a source of satisfaction. To those who have subscribed to the concepts and aspirations which found expression in the Treaty of Rome, the anxiety expressed by Mr. Jenkins on 8th February may seem well

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founded. If it is accepted as a political imperative that the doors of the Community should be open to all democratic European States which may apply, the loosening of the economic structure of the Community which has already occurred as a result of economic divergence is likely to have far-reaching consequences. It may be that this loosening is already facilitating the expansion of the Community at the cost of a creeping and still unacknowledged change in its nature.
If this evolution in the nature of the Community which is, in fact, already taking place, although so little is said about it, has eventually to be publicly and officially acknowledged, we may find that the institutions of the Community have to modify some of the assumptions, aims and principles on which their activity has hitherto been based. It would certainly be no light task to amend the relevant provisions of the Treaty of Rome. It might be easier to reach a consensus on the modification of the aims and modes of operation of the institutions, including even the Common Agricultural Policy and the Green currencies which have been subject to much criticism but which have also received some defence in the debate today.
Palliatives in themselves are unlikely to prove satisfactory. The history of the Green currencies and of the monetary compensation amounts to which they have given rise shows how easily palliatives of this kind can create forces tending to deepen and perpetuate the divergencies which they were intended to alleviate and to undermine the principles which they were devised to sustain. These are, in my opinion, bigger issues than the outcome of the forthcoming negotiations on farm prices and the management of Green currencies and monetary compensation amounts. But the very size of the sums now being paid by way of compensation under the system of Green currencies points to the magnitude which the underlying problems of divergence have already acquired.
A debate on Green money is not the place to go into these problems, but I thought it only right that some mention should be made in this debate of their existence and of their importance for the future development of the Community, particularly if, as seems probable, its proposed enlargement comes about.
Lord O'HAGAN: My Lords, before the noble Lord sits down may I ask him a question. I respect enormously the noble Lord's expertise and I am not trying to play games with him. I do not wish to detain your Lordships for more than a second, but would not the noble Lord recognise that his speech could be easily described as "Powellite"—full of logic, gloom and despair?
Several noble Lords: No!
Lord O'HAGAN: My Lords, does not the noble Lord feel that as well as giving us an extended analysis of all the difficulties incumbent upon it, he should add a constructive suggestion about the way out of the thicket of Green money—not perhaps now but at some other time? Is it not a little negative merely to look at what is wrong?
Lord BRIMELOW: My Lords, I thank the noble Lord for his question. I think that the problems inherent in the enlargement of the Community are so complex that they will be clearly stated only in the process of negotiation. It is largely because of uncertainty as to the way these problems will emerge that nobody yet feels able to discuss them in detail. It is, however, clear that the problems as we know them today will be complex and numerous and that they will be hard to reconcile with the Common Agricultural Policy or with the Green currencies. I said at the end of my speech that I did not think that this was the occasion to go deeply into them, but that I did think it would be wrong to let this debate go by without pointing to the existence of these underlying and very deep and difficult problems. I was, in effect, following up a remark of the noble Lord, Lord Cobbold, who said that he wished to draw attention to the larger issues. I was not intendng in any way to prejudice the handling of those larger issues by Her Majesty's Government either in the immediate negotiations on farm prices and the Green currencies or in the longer-term negotiations on those subjects, or the handling of the issues which are bound to arise in connection with the enlargement of the Community. As for the suggestion that my speech was Powellite, may I just say that I am not a partisan of Mr. Enoch Powell.
6.50 p.m.
Viscount AMORY: My Lords, I hope the noble Lord, Lord Brimelow, will forgive me if I do not venture to follow him directly in the most interesting and thoughtful reflections he has given us. I will simply say that at the moment I cannot recall any similarity between his speech and those that I seem to remember having heard in past years from the right honourable gentleman, Mr. Enoch Powell.
I am sure your Lordships will agree that Green Money is a horribly complicated subject. The noble Lord, Lord Gordon-Walker, and I were recalling at lunch, today an observation made by Dr. Johnson when, unusually for him, he went to a concert. He hated music and at the end of an orchestral piece somebody turned to him and said, "A very difficult piece, Dr. Johnson, is it not?" He received the answer, "Very difficult indeed, sir; would God it had been impossible". Some of your Lordships may feel that is not irrelevant to what we are discussing.
The noble Lord, Lord Pritchard, and the noble Lord, Lord Cobbold, have given such able expositions that I should feel an imposter if I tried to persuade your Lordships that I could speak with anything approaching their knowledge and authority on this matter. My noble friend Lord Sandys spoke about milk, and I entirely agree with him that the record of improved productivity on the part of our milk producers over the past 17 years is enormously to be commended. I am sorry that he started with that particular year, because I think that that year when I gave up being Minister of Agriculture was the year when apparently this dramatic improvement appears to have started.
I entirely agree with him, too, in what he said about the Milk Marketing Board; it was one of the greatest triumphs of the agricultural instruments that were devised and it would be an absolute tragedy if anything were to happen there. Milk is a very difficult product. When I was at the Ministry of Agriculture I recall attending a farmers' meeting. I daresay the noble Lord the Leader of the House may recall something similar. At that time we had reduced the price of milk by a penny and a farmer most indignantly said to me, "Minister, you don't seem to realise what will happen now that you have reduced the price by a penny. I shall go out and
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buy more cows to keep up my turnover and I shall produce even more milk." I said, "I do realise how difficult these things are and that indeed might be the result. What would you have done if I had increased the milk by twopence a gallon?" "Oh, Minister, then by God, I should have gone out and shown you what I could produce." You get it either way!
In recapitulation I shall do no more than pose five simple questions and suggest answers to them with telegraphic brevity. I hope your Lordships will not feel that this approach savours too much of a simple guide to the Green Money for the common man or first year O-level students. The first question I should like to pose is: what is Green Money? I suggest the answer, as the noble Lord, Lord Pritchard, has mentioned, is in paragraph 2 of the Committee's report:
"… a set of exchange rates which relate only to the food and agriculture sectors… which is used for converting all community institutional prices… set in units of account into the national currency."
That sums up that point.
The second question might be: why is a system such as Green Money required? I suggest that the answer to that is to be found in paragraph 3 of the Committee's report. It is to the effect that if there were no Green Money rates, since prices are fixed Community-wide, some nations' farmers would get more and some less, dependent upon whether their particular national currency had depreciated or appreciated. That would conflict with the Community's aim that trade should be conducted on an equal basis throughout the Community, as the noble Lord, Lord Cobbold, has said. When it was started—and here again this point was made by the noble Lord, Lord Pritchard—it was hoped that a special exchange rate might be a temporary necessity. Unfortunately, the differences between the Green Money rates have greatly increased and now in some cases are embarrassingly great.
I think the third question may be: what are monetary compensatory amounts? Here again the answer is in paragraph 2 of the report which says that MCAs are applied at national frontiers to offset the differences between market exchange rates and agricultural

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exchange rates; that is, Green Money rates. They may take the form of a subsidy on imports and a tax on exports, or vice versa, according to whether the Member State in question has a currency which has depreciated or appreciated, and the value of individual MCAs are revised frequently in the light of changes in market exchange rates. It is admittedly a very complicated system.
The fourth question might be: what, in a nutshell, are the current EEC proposals? I mentioned just now that the present differentials had become embarrassingly large in some cases, and because of that the total bill for MCAs in the EEC budget has become a heavy one, and its size for budgetary purposes unpredictable. The Commission is therefore anxious to see the scale of current arrangements come down so that Green Money rates are nearer to the market exchange rates.
It is an undoubted political embarrassment that, if the differences were extinguished, some nations' farmers would get large increases and others would get substantial decreases. So long as market exchange rates fluctuate violently, it is very difficult for the Community to realise its aims of common agricultural prices. The current Community proposals envisage formulae for adjustments which appear to be due, which could be applied automatically at an administrative level. The noble Lords, Lord Pritchard and Lord Cobbold, and my noble friend Lord Vernon referred to that. It seems to me that the attractions of automatic adjustments according to agreed formulae are obvious from the administrative point of view. As, however, adjustments are seldom likely to be free from political difficulties in Member States, it is difficult to believe that Finance Ministers will not insist on such decisions being subject to the positive agreement of the Council of Ministers. At the same time, one feels that the more adjustments that can be carried out by the Green formulae, the better for the system. I thought my noble friend Lord Vernon put that difficulty very clearly.
The last question might be: why are Green Money value adjustments apt to be embarrassing for individual national governments? I suggest two or three
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answers: first, because changes may increase the price of food and perhaps in some cases raise domestic farmers' prices excessively, thereby adding to EEC surpluses, or alternatively reduce farmers' returns, damaging them. Secondly, either way, changes may interfere with an individual nation's discretion to pursue domestic anti-inflation policies. In the case of the United Kingdom, any downward revision of the Green Pound will put up the price of food and increase the return to producers. While higher returns across the board will improve our balance of payments, it may of course add to the European surplus. Having admitted so much, I must declare my own view that a carefully worked out system of encouraging a higher aggregate of home food production would be very much to the benefit of our national economy.
I entirely understand Her Majesty's Government's reluctance to see food prices rise; they are in any case likely to rise because of the tapering off of the abatement concession given to us when we joined the Market, and the rise in CAP prices to cover inflation in the Annual Price Review. It is an embarrassing moment to be asked to accept a third rise. On the other hand, I cannot think that the maintenance of the present situation which is relatively very beneficial to the United Kingdom, can reasonably be sustained for ever. I believe that the direction in which we ought to be using our strongest endeavours with our European partners is in persuading them that some of the CAP prices are unreasonably high, leading to ridiculous surpluses, notably in butter and sugar. The current CAP system calls for a revision.
I agree with the noble Lord, Lord Collison, my noble friend Lord Tranmire, and the noble Lord, Lord Gordon-Walker, in saying that our own system of deficiency payments and other price supports is really sounder than the CAP method, though I equally agree that it would be a very difficult method for the Community to apply in their circumstances. Meanwhile, it looks as if we must learn to live with some kind of Green Money until something simpler and more efficient has been worked out. The Green Money system is running into trouble because of the wide differences which have been referred to; but I agree with those noble Lords who have asserted

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that the CAP is really getting into a mess in one or two cases and must be revised to eliminate some of the surpluses which have developed and which are earning it a poor reputation.
7.2 p.m.
Baroness ELLES: My Lords, we have been debating this evening a matter which is of immediate and practical concern to everybody in the country, but primarily the consumer: proposals which relate to the prices of food and methods of regulating these prices within the CAP. I very much share the concern of the noble Lord, Lord Collison, who I thought very movingly put the problem. He realises there is a problem, as we all do, and it is one which is undoubtedly being misunderstood by the consumer in this country. The problem, as we have heard today, is an extremely complex and difficult one. In fact every noble Lord who has spoken has contributed in some measure to advancing the debate a step further in trying to clarify an almost impossible position.
To begin with, I should certainly like to add my expression of gratitude to the noble Lord, Lord Raglan, and the noble Lord, Lord Pritchard, for having so clearly introduced this intricate subject, and would also add my gratitude to those who produced the report. The evidence contained in it, I thought, was of extreme value. Those civil servants who answered the questions at the Sub-Committees did so, I thought, with great skill and honesty, and clarity. Undoubtedly, in their expositions they helped us to understand some of the complexities, not only of the problems themselves but of the decisions which the Government have to take. I thought they took a very fair position and stated the case extremely fairly. May I also say how glad I am that so many members of the Sub-Committee have taken the trouble to be here in your Lordships' House today and to take part in this debate. It has undoubtedly, as I have said, helped us to understand the very many difficult questions which arise on the question of Green Money and the Farm Price Review.
My Lords, my noble friend Lord Sandys covered the question of farm prices with his usual clarity, knowledge
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and experience. I will try to stick to the problem of Green Money, though, of course, it cannot be taken entirely in isolation. I would at this stage declare an interest, as I have done before, in that I have a small farm, not in this country but in another Community country. When I hear of the small farm being attacked, I feel very strongly about the plight of my neighbours who might have to lose their two or three cows, on which, of course, they rely for a good many of the products and assets of their not just small farms but very small farms, of something like six hectares or 15 acres.
It is not just a question of cutting down milk production by eliminating cows, because, of course, the small farmers themselves benefit from the sale of veal; they benefit from organic fertiliser, which is now practically impossible to buy. They would not know what to do with their hay when they have cut it in their vineyards; they would have to burn it. They would have a very deep feeling of having to throw away something they have always found valuable. These sound very feeble reasons in your Lordships' House, and particularly in this country where we have very large farms; but you will understand the concern of the small farmer who has lived in this way for perhaps hundreds of years in these districts, for instance, in the hills where I happen to be, in Tuscany. They have a way of life and a psychology and a social structure which would be radically changed by the elimination of some part of their existing system. So, while seeing that it is perfectly logical and reasonable that milk production should be cut down, it is not something that can be done automatically and immediately, but something which must be faded out over at least a decade so that future generations will deal with the problem in a new way. I particularly make this plea to your Lordships because these are questions which we discuss daily on our farms, and they are of great worry and concern to the people involved.
With regard to the Green Money, the Community is having to manipulate a mechanism which was introduced in very different conditions—this point has been made by several noble Lords—and to deal with specific circumstances. The truth of the matter is that no one envisaged

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in 1973, when we joined the European Community, that three years later the United Kingdom would be in the position of having a failing economy, with a pound which has fallen by 30 per cent. over the last year, and inflation running at something like 21 per cent. as was said in another place the other day, food prices have increased by 81½ per cent. from 1974.
So, although I do not wish to make any political points, I wish to point out that we are considering the problem of Green Money in relation to what has happened in our own country, and this is one of the major difficulties that has arisen. Not only does the adjustment of the mechanism of Green Money and MCAs affect every Member State and take into account the conflict—which I do not think is irreconcilable—between the interests of the farmer and the consumer, but also it influences the special position of the United Kingdom, affecting as it does a sizeable percentage of the agricultural budget of the European Economic Community.
Whatever can be said against the CAP—and I think all Members of your Lordships' House will agree that there are very many things wrong with it and that it needs looking at very closely—to date the Green Pound has served as a shield to the consumer in this country, and particularly in certain products imported from other Member States. The Secretary of State for Prices and Consumer Affairs admitted on 14th March that food prices are determined by the value of the pound sterling, not the Green Pound. I think this is a point that perhaps has not been made enough of during this evening's debate. I know that one noble Lord pointed out the difference in price of some other commodities which are not covered by the CAP, such as coffee. While these have been affected by world shortages, the decline in the value of the pound has also been a major factor and one of our difficulties. To my mind, not only has the CAP provided a shield for certain food products; it has also provided security and stability of supply.
My noble friend Lord Tranmire is an expert in the agricultural field and I should hate to take issue with him when he said that Green Money was not mentioned as a problem when we joined the Community. He was of course quite
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right because it became a problem only because of the enormous differential in the market rate of the currency and the consequent divergence between the real value of the pound sterling and Green Money. If it had not been for Green Money we should be paying at least 30 per cent. more for our food imports from the European Community. Even if we did go to outside markets, we should have to contend with the results of the increasing rate of inflation.
I would add one question to those which my noble friend Lord Tranmire put to the noble Lord, Lord Peart. If there had not been Green Money over the past 18 months, could the noble Lord tell us what the increase in the price of food would have been from 1974 to date? Would it still have been only 81·5 per cent. or would it have been higher? I do not expect an immediate answer, but perhaps the noble Lord could send a written answer at some stage.
The other question which has been raised by many noble Lords is that of surpluses. I was particularly grateful to the noble Lord, Lord Mackie of Benshie, for the figures that he produced on production outside the EEC, and the effect there would be on world prices if suddenly the United Kingdom became a purchaser of certain commodities outside the European Community. It should be said that most people would prefer to live in an area where there is plenty rather than in an area of shortage. The figures show that there is a very narrow margin between a deficiency and a surplus. When we calculate a surplus spread over a quarter of a billion people, which is what the Community is doing, the butter surplus adds up to about 2 lb. to 3 lb. of butter per head. It can be called a mountain; it can be called anything. But the fact is that spread over 250 million people the butter surplus amounts to an absolutely derisory amount.
Perhaps we should also remember that of the 200,000 tons which are in store, 120,000 tons are imported from New Zealand. It is right that we should have done so; it was agreed on our accession to the Community. Like any other institution the Community has its faults, but rather than attack it the whole time we should recognise that no country in the Community has objected to our continuing

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to import butter from New Zealand and to our fulfilling obligations to our Commonwealth friends. That point should be emphasised rather more when we are discussing questions of surplus.
Apart from the fact that it is an advantage to live in an area of surplus rather than one of deficiency, let us remember what happens when there is a shortage. I do not know whether noble Lords will remember, but I certainly remember when I had to do my shopping during a sugar shortage—a shortage that was not due to imports or exports but to industrial difficulties in a particular firm. There was absolute panic throughout the supermarkets, which was no doubt unnecessary. However, the popular effect was one of drama and great worry; people rushing from store to store trying to accumulate as much sugar as they could for fear of not getting any more. One has only to draw attention to that kind of shortage to realise the benefits of living within a surplus area.
Frequently the same members of our country who attack the CAP and the European Community also say that we must do more for the Third World. No one in your Lordships' House would disagree that every possible assistance must be given in particular to developing countries and even more so to those developing countries where there is a shortage of food. If there were no food surplus in the Community, we should not be able to give those countries the enormous amount of food aid that we do. One has only to look at the figures in the report produced by the Commission to appreciate that over 450,000 tons of skimmed milk powder and over 200,000 tons of butter oil can be sent to developing countries which otherwise would be very undernourished. These quantities may not sound very important in the context of the overall problem of the CAP, but they are immensely important to those who receive them and they contribute to alleviating hardship and suffering. Therefore, when we consider surpluses we must consider them in these particular contexts.
Even if the Green Pound was devalued at the proposed rate, which I think is now 5·9 per cent., the increase in food prices would certainly be marginal in relation to price rises in other industries.
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We have only to think of the increase of 10 per cent. in the price of gas to realise that everything is increasing in price. If the Green Pound was devalued, there might be the compensating factor that agricultural funds could be diverted from MCAs to assist in restructuring farms and other much-needed expenditure. The noble Lord, Lord Brimelow, even widened this particular argument—very wisely, if I may say so—when he referred to the determined hope of Mr. Jenkins that the Community's budget should be used for matters other than MCAs and that the amount spent on MCAs should be reduced.
What of the farmers who are producing? They certainly did not envisage a pegging of the Green Pound, thus affecting the return on production, while having to pay increasing costs for feeding stuffs, transport, insurance and so on, amounting to about a 20 per cent. increase in costs over the past year. If farmers do not receive a fair reward for their labours, production will not increase but will decline. Coupled with that decline one cannot but envisage a further increase in unemployment, this time affecting agricultural workers who, as we all know, are among the lowest paid workers of the working community in this country. They would certainly not benefit if farmers were not compensated for the increase in costs and were not encouraged to produce more.
Under the transitional arrangements it had been estimated that the price levels for agricultural products would reach parity by 1977, but the maintenance of an unrealistic Green Pound imposes restraints on farm prices which may well have the effect of depressing United Kingdom food production and so, in effect, worsen the balance-of-payments position of this country. In their White Paper, Food from our own Resources the Government had projected increased production but if there is no investment, incentive or, indeed, guarantee that what is produced will be bought, there will be no increase. As I understand the figures, the projection which was contemplated is about 30 per cent. down so far. As in any other major industry, productivity cannot be increased immediatily—it certainly takes time—and even in the agricultural community it would be about

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two or three years before this productivity could be increased. The Government must be prepared to take a more realistic view of their position and accept some measure of devaluation for the Green Pound, otherwise the food industry will be put in danger. Encouragement for the farmers would in the long run mean less dependence on imports, either from European community countries or from outside.
This evening we are also having to consider the position of Ireland, which cannot be overlooked as the Irish Government are about to devalue their Green Pound by about 8 per cent. The existing divergence between the currencies of the Irish Republic and the United Kingdom will be greater than ever if we do not follow suit at least to the amount that has been proposed by the Commission. All the dangers of across-the-Border activities between the Irish Republic and Northern Ireland will be enhanced rather than diminished. This, I am sure all not he Lords would agree, is very undesirable in the circumstances.
We also have to take into account that the Government are already providing something like £1 million per week to sustain the meat industry in Northern Ireland, and presumably if there was devaluation of the Green Pound this amount of assistance could be reduced, as well as the hope that the cross-Border activities would also decline. I wonder whether the noble Lord the Leader of the House could give some indication of what would have to be paid to Northern Ireland meat producers if devaluation of the Green Pound was implemented, and whether we would be able then to reduce this £1 million weekly payment.
However, the Commission's proposals of a devaluation by 5·9 per cent. would still leave a gap of about 26 per cent. between the Green Pound and the market rate. But it should be made quite clear that for countries where currencies have appreciated and reflect a strong economy, the effect of the proposed change would mean a reduction in price levels. So the basic concern of the Commission must be to balance the fair reward for farmers, as well as encouraging them to continue production, in the hope, expectation, and guarantee of a fair reward, and on the other hand to ensure that food prices
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remain as stable as possible for the consumer. We quite see that these two positions are extremely difficult to reconcile, taking into account the very wide divergencies of currencies that exist in the Community.
In fact, it would be true to say that the CAP would not be in such a mess if all our currencies were not in such a mess, but since they are it would be very much more realistic if we tried now to adapt CAP to the new circumstances rather than try to adapt our own circumstances to the CAP. In fact, this is no longer possible in the light of present events. The noble Lord, Lord Brimelow, touched on the very real problem of entry of third countries into the Community, when this problem will be even further increased. Without going into detail, it is certainly clear that countries with perhaps weaker economies than even our own will create even more problems in this regard.
The contemplation that the Green Pound rate should be left to the Commission is certainly, in our opinion, untenable at this stage of the development of the Community. This is something that could possibly be attained when we have economic and monetary union, when it is no longer a political decision that is needed but merely some regulatory adjustment. Certainly during the transition period and during the periods to come when we have not reached economic and monetary union, or at any rate a closer balance between the economies of the Community, we believe that this decision must be left to the Council of Ministers rather than to the Commission. I should like to thank all those on my side of the House who took part in this debate, and all those who have at least tried to help me understand the Green Pound slightly better. However, I know that when we go and do our shopping tomorrow the prices will not have been affected all that much.
7.23 p.m.
Lord PEART: My Lords, may I say, first, to the noble Baroness, Lady Elles, that I agree so much with what she said about the people who initiated this debate. I want to pay tribute to my noble friend Lord Raglan, and to the noble Lord, Lord Pritchard, for the work they have done on this Committee. The

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two documents constitute an excellent report. Anyone who does not know the complications of the Green Pound should take it home and read those documents. Even then, they may not get the answers. I agree with another former Minister who spoke, the noble Viscount, Lord Amory, that it is not an easy subject; it is very bewildering and difficult. The system existed before we joined the Community. It is not of our creation, and some day it will have to be modified. Many noble Lords who have spoken so well on this matter, including the noble Lord, Lord Gordon-Walker, support that line. Therefore, we are grateful to the two noble Lords for creating this debate and taking the initiative in it.
I must reply to a number of points, and for many of them I will not have time this evening, or I should be here for another hour. However, I shall write to all noble Lords on matters that have been raised if I have not answered their particular points. It is not a question of dodging; it is purely a question of time. This has been an extremely interesting debate. I always feel a little nostalgic when joining in in a debate of this kind. It is an important debate because major decisions have to be taken in Europe, and inevitably there are going to be changes. Mention was made of the new Commissioner Gundelach. I have once referred to him previously in this Chamber. I believe that he is a very competent commissioner, an honourable man, and I have every confidence in him. He succeeded Pierre Lardinois, who I respected, and who I think is to attend a luncheon tomorrow in this city. However, there are problems. I have listened very carefully, and I think I must deal with some of the major aspects of the Commission's price proposals. I thank everyone for what they have said, and for the tributes they have paid to our noble friends.
The Commission's package is inevitably a complex and detailed one. It always is, as anyone who has been involved in negotiations on price reviews in Europe will know. The Commission's package covers both prices and related measures. Noble Lords have commented on a large number of points in the proposals. We have also discussed the agri-monetary measures, and I shall do my best to
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answer some of these points quickly. Before I do so, however, I should like to make some general remarks about the timetable for negotiations, the proposals, and the Government's attitude towards them.
The CAP price proposals have already been discussed in the Council, briefly on the 14th and 15th February, and more fully on the 14th and 15th March. A further Council has been arranged for the 25th to 27th March, and there will be a good deal to be discussed at that Council. My noble friend Lord Raglan asked me about progress in the negotiations. He was especially concerned about feed wheat, and matters affected by it. May I say to my noble friend that predictably there has been a divergence of views and there has been pressure from some Member States for increases higher than the 3·1 per cent, average proposed by the Commission.
Opinions also differ on the proposal to stand by last year's decision to give the main support for wheat at the level of other feed grains. My right honourable friend the Minister has made clear the Government's views on these issues. It is too soon to predict the outcome of the discussions, but I shall keep in touch with my noble friend. The Council will not be looking at the proposed changes in the monetary arrangements until after the price package is settled. It is convenient, however, for the House to consider these at the same time, since many of the principles which apply are also relevant to the changes in Green currencies which have been proposed by the Commission as part of the price package. The Commission's proposals are based on the combination of an overall common price increase of about 3 per cent. on average, plus Green currency changes for all countries except Denmark. The Commission estimate that for the Community the cumulative effect of the common price increases, Green rate changes and the remaining transitional steps would amount to a weighted average increase of roughly 5 per cent.
For the United Kingdom the proposed devaluation of the Green Pound is of the order of 5·9 per cent. The Government estimate that the effect of the package as it stands would be about 4 per cent. on retail food prices—or rather less than

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1 per cent. on retail prices generally. As for the effect on producers, noble Lords will be aware that some market prices are already higher than institutional prices, and some products are scarcely affected by the package. The Government estimate that the effect of the proposals, plus the transitional steps on producers' gross receipts, would be to raise them by about 9 per cent.
I will now deal with the United Kingdom objectives towards the Common Agricultural Policy. The Government's approach to this year's price negotiations is consistent with our long-term objectives under the CAP. We want to make the CAP more responsive to the needs of the consumer. I agree here with those who have said that one should not go too far. After all, there is a producer interest. There must be a right balance and I am sure that the noble Viscount, Lord Amory, when he was Minister, argued that, as I did. In my view, that is the right approach. On the other hand, it is essential that we do not price commodities out of the market so that they are not consumed. That has happened on many occasions over many years; for example, when beef prices were too high the consumer resisted the price increase which occurred and there was a drop in consumption.
We must, therefore, strike a right balance. Therefore, as I have said, we want the CAP to be more responsive to the needs of the consumer. Naturally, at the same time we are dealing with the producers of food and they are an essential element in any package. We want to ensure a more efficient use of resources. At present, as the result of unduly high prices in some sectors, the EEC is diverting excesive resources into agriculture. This involves undue cost for the Community budget, particularly where there are surpluses. I agree with the noble Baroness, Lady Elles, in what she said about surpluses. I would be more worried if there were shortages. Lady Elles spoke about shortages of sugar. That happened when I had a responsibility. It occurred because of panic buying and it could have created problems.
However, I am thinking more of those parts of the world where people are affected by storms or catastrophes—Bangladesh is an example; parts of the world which are affected by war and
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other catastrophes. We must always recognise that we may have to help these people, as of course we have. I was glad that Lady Elles mentioned the considerable amount of aid that the Community has given to the developing world, because in this respect the Community has been very progressive. I was once a critic of the Community, but then I saw the reality of the situation and what was being done. For example, I think of the Lomé Convention, which helped the developing world in another way; I think of the access of the old Commonwealth countries into our own market—sugar and all the negotiations we had about that. Except in terms of sugar of course, which is produced for export, here is a Community, and a section of it, which has worked positively to help parts of the world which have suffered serious shortages of food and famine conditions. Let us not forget that.
A great problem will be how to use the surpluses sensibly. After all, America produces surpluses and sells them to the Soviet Union and other countries. Indeed, I cannot understand some of the squeals over certain countries in Europe buying food perfectly legitimately. It may be that the recent case of the disposal of butter at subsidised prices will have to be looked at. I find it somewhat ironical that we should be subsidising Soviet communism—that seems rather odd to me —but there may be good commercial reasons why we should sell to parts of Europe and other parts of the world. Why not? If Europe and the Common Market can be efficient and develop agriculture efficiently, why not do these things?
There is another problem here and the noble Lord, Lord Vernon, answered it clearly and sharply: we cannot go back to the halcyon days of cheap food. That is a fact and there is no question about it. We cannot go back and, in any event, why should we? Why should we exploit people in other parts of the world in various countries by paying low wages? Why should we exploit farmers and farm workers in this country? My noble friend Lord Collison would agree that we should not do that. They deserve proper remuneration, and that is what I say to those who talk so glibly about obtaining cheap food supplies from outside.

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In this connection, I had to negotiate prices with New Zealand. They were quite realistic and when I was negotiating the question of New Zealand dairy products in Europe I wanted them to export their dairy products to this country. We got a good deal for them, which was praised by the New Zealand Government. Again, we must give the New Zealand farmer a fair and reasonable price. So all the talk about cheap food must go. The sooner many people in this country realise that the better. We tend to be rather too sensitive about food. We are sensitive of course because it is essential, but consider the other commodities; look at the price increases in other fields. Food compares very favourably in many ways. I admit it is a sensitive matter—it always will be in all our societies—and often it will inspire political crises, as it has done, in many parts of the world, but we cannot go back to the days of cheap food and the sooner we realise that the better.
Of course we want to ensure that surpluses do not put a heavy burden on both the consumer and the Community budget. Therefore, in my view, milk must be a priority target. The Commission has recognised the need for decisions on support prices to contribute to the fight against inflation and the Government agree with the thinking which has led the Commission to propose a low general increase in common prices. They also sympathise with the intention of taking firm action on milk, especially through the price mechanism.
The Government also support the proposals for a reduction of the B quota on sugar, which will help to discourage overproduction, as well as the implementation of the changed cereals intervention arrangements. However, the Government would have liked to see a generally tougher approach to the prices package in the interest of price restraint and to make progress in dealing with the problem of surplus production. My right honourable friend has insisted that the proposed increases are too great, and as noble Lords know, he was not prepared to move from that position in the recent Council meeting.
However, noble Lords must recognise that we are alone in this view; no country other than the United Kingdom is seeking
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smaller price increases than the Commission propose. The House will be aware that COPA, the EEC producer organisation, wants an average increase of 7·4 per cent. and some Governments think that even that is not enough. The Commission's proposals for revaluation of Green currencies also caused some problems to other Member States. We must therefore expect a difficult negotiation on the package as a whole.
Many noble Lords have mentioned the milk proposals. The Government have consistently argued that if surplus milk production is to be overcome, there is no substitute for action to contain producer prices. The Government have therefore argued for a real reduction in the Community's intervention prices. We are prepared in this context to consider the co-responsibility levy, but there would be no point in that if it were simply offset by a price increase. My right honourable friend has made clear that he is prepared to judge the Commission's milk action programme on its merits and he accepts the need for some specific action to help dispose of existing surpluses, but this must be cost effective and, wherever possible, give priority to Community consumers. It must not be achieved by arbitrary interference in trade, whether by prohibitions on competing products, by levies on those products or by compelling traders to use dairy products.
My right honourable friend has made quite clear that he regards the proposed tax on oils and fats as completely unacceptable. I did so when they were proposed last year. On this there was general agreement between Government and Opposition. The Government are also unwilling to accept the proposal on the exclusive use of milk fats and proteins, even though this has now been presented by the Commission in a different form. The proposed ban on investment aids has now been eased. This was mentioned by one noble Lord who, I hope, will forgive me if I do not refer to him specifically. However, there are still some points of difficulty. As for the proposal for non-marketing premiums, the upper limit is still too high and the Government hope that there can be modifications in this. I should also mention two proposals in. the milk action programme which are welcome to us. They have been mentioned by noble Lords and are, I believe,

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accepted. These are the suggestions for aid for quicker eradication of brucellosis and tuberculosis and for subsidisation of school milk programmes.
I should like to turn briefly to some commodities. As regards beef, the noble Lord, Lord Mackie, mentioned this and tempted me to come into the field of arguing about deficiency payments and intervention as a method of support. As the noble Lord knows, we negotiated —and I did this first—a system of fixed premia, later altered to a variable system, which, in many ways, is like the old deficiency payments system. At the same time, I agreed to a limited amount of intervention. I believe that intervention by itself was not a good method of support, although, for certain commodities, we have intervention. Potatoes are one example. Potatoes are taken off the market and dumped or put into clamps, as the noble Lord knows, but I believe that even the deficiency payments system had defects sometimes. I can remember a Minister of Agriculture, Sir Christoper Soames, who had great difficulties because of surpluses created from our own grasslands. The Treasury had a formidable bill to face and there was a great outcry in the country. In the end, this led to a major inquiry into the meat industry, as noble Lords know.
So it has not always worked well. However, I still think that it would be better for the Community if it adopts our premium system with limited intervention. I believe that, one day, we shall win. I had thought that we might do so in this price review, but perhaps at the next price review they will come to face the reality and accept what I was suggesting.
Lord MACKIE of BENSHIE: My Lords, I wonder whether I may try again to explain what I said. It was that we should not condemn intervention altogether for the many faults and surpluses that arise. What was wrong was the high prices paid in intervention for certain of our products.
Lord PEART: I accept that, my Lords, but the noble Lord mentioned deficiency payments in glowing terms. All I am trying to make clear to the Liberal Party spokesman is that there must be a little realism and a sense of pragmatism about
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this. We cannot be doctrinal about agricultural policy. If we are, we are fools.
The Commission's proposal for beef is for a 3 per cent. increase in the guide price. The Government are pressing for maximum restraint on the common price because the present market situation in the Community does not justify any significant increase. I gather that the date which the Commission have proposed for the extension of the premium scheme is 31st July, following which I assume that it will be examined and a report on the EEC's internal beef support mechanisms, including premiums, produced. So I welcome the review and am confident that it will focus attention on the advantages of the premium system.
I was asked about pigmeat. In the pigmeat sector, the proposal is for an increase of 4 per cent. in the common basic price. Noble Lords will be aware of the acute difficulties which pigmeat producers in this country face at the present time and also of the steps that the Government have taken in order to alleviate them. It is essential that we should find a permanent Community solution to the problem of the calculation of monetary compensatory amounts in this field. This has always been a difficult sector. I can remember the difficulties which we had at home even with our normal Price Review negotiations. It is not easy, but the pig is an animal which produces so much good food that it is important that we should get our sums right.
I do not want to go into too much detail. I have spoken for just over 20 minutes and I should like to finish by dealing with agri-monetary questions. To comment on the points made in that sector, the question of Green currencies arises in today's debate in two separate ways. First, the Commission's proposals for changes in all Green currencies except for Denmark are a central part of the current price proposals. It is, after all, the Green currencies which, as noble Lords know and have said, determine what the common prices really mean when they are applied to each individual country.
The Commission's proposal for a devaluation of the Green Pound by 5·94 per

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cent. would raise agricultural support prices here by 6·32 per cent. The Government do not take a doctrinaire attitude to the Green Pound changes. They cannot. I changed the Green Pound four times when I was Minister of Agriculture and there will inevitably have to be some changes. I do not think that it can stand still, whatever the arguments about long-term review or the whole system. However, the Government's view is that the need for a Green Pound change has to be judged on its merits in terms of the overall national interest. On this occasion, we must judge the proposal in the contest of the Commission's package as a whole, and it is too early to give a precise view as to what may emerge.
Lord MACKIE of BENSHIE: My Lords, I am sorry to interrupt the noble Lord again, but a very important statement was made by his right honourable friend the Minister when he said, in column 418 of Hansard:
"These two transitional steps would, in my view, give a reasonable return to producers in our own country."
Lord PEART: My Lords, I was saying that this is something which has as yet to be finalised. I have given an example an I do not think that we can be doctrinal about this. We have to decide the overall balance. The noble Lord quite rightly quoted that passage, and there is a reference in the documents before us to the sort of balance we must think of and what is in our national interest. All I am saying is that we cannot be too doctrinal and I gave an example where, in the short period during which I was responsible, I changed four times.
The question of Green currencies also arises in our debate today because of the thorough nature of the report prepared by the Select Committee. I shall not go into that, however, because I feel that I must now close. I have not answered every question but I shall reply to all noble Lords. I have gone beyond my time, but I would only say this to the noble Lord, Lord Vernon, who, quite rightly, talked about Food from our own Resources. I still believe that this represents a good strategy for our country in the field of agriculture. If we achieve what is set out
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in the broad conclusions in the summary, where it says that,
"the net product of the agricultural industry should be capable of a continuing expansion of about 2½ per cent. a year on average",
I believe that this is the objective at which the Government and industry should aim, and that is why the industry must never be neglected. It is one of our most efficient industries, one of our greatest industries. It provides a great market for a great agricultural machinery industry and a great fertiliser industry. People must never forget that. This is not something which is peculiar to the farming community; it is a great interest and a national industry, and I believe that every noble Lord should support it. We must see that, out of whatever emerges, we enable our farmers and our farmworkers to produce food at reasonable prices for our consumers.
7.49 p.m.
Lord RAGLAN: My Lords, we have been here quite a long time and I should like just to make three broad points in summing-up. I thought I knew all about Green Money, having read our report, until my noble friend Lord Brimelow threw us with this matter of divergence of the economies. He posed a conundrum, because he pointed out the institutionalisation of divergences by the use of what are intended to be temporary palliatives which recognise the divergence and there fore make it easier to allow that divergence which otherwise might have been resisted. I think that is what he conveyed to me—that Green Money was a device which was invented to pretend that there had not been economic divergence. Now I cannot make up my mind whether it is a good or a bad thing. It seems to me that it is the exchange rates that have gone out of line. At least the Green Money is common to the Common Agricultural Policy; so I am back at square one.
The noble Lord, Lord Vernon, and the noble Baroness, Lady Elles, quite rightly spoke about shortages which I did not deal with in my speech. I thought of the Potato Marketing Board, which was created to prevent surpluses, and there has been a tremendous fuss almost every year about potatoes which have been dyed purple, and about how they are wasted and thrown away and so forth. Then whoever it is—perhaps the clerk of the

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weather—turns off the tap and there is a shortage of potatoes; and of course people criticise a shortage of potatoes much more than they criticise a surplus of potatoes. They say what a bad, mad thing the Potato Marketing Board is for allowing a shortage of such a simple thing as the common spud. So you cannot win. But I take the point of the noble Lord, Lord Vernon, that it is much safer to have a surplus than to risk a shortage.
I am sure that these reports are useful to your Lordships. I feel that one of the best things your Lordships' House does is to have these Scrutiny Committees. That point is reinforced by the fact that of the 14 speakers today, 10 have been members of the Select Committee or of the Sub-Committees, and but for their membership of these committees there is absolutely no doubt that noble Lords would not have been so well informed as they are. Furthermore, they are thoroughly well informed, and that must be good for everybody. It must be useful to the Government, it must be useful to Members of the European Parliament, and it must contribute to a better understanding of the Common Agricultural Policy. I thank my noble friend the Leader of the House for his comprehensive summing-up.
On Question, Motion agreed to.

EEC: 18th REPORT ON GREEN MONEY
Lord PRITCHARD Lord PRITCHARD rose to move, That this House takes note of the Eighteenth Report from the European Communities Committee on Green Money. The noble Lord said: My Lords, just before I move this Motion, may I follow my noble friend Lord Raglan in thanking very much those Members of the committee who have spoken today in such a constructive way. So far as the Green Pound Committee is concerned, I should like to thank my noble friend Lord Cobbold who has been of enormous help; he has put in a great deal of time. All that is good in the financial part of this report has sprung from his eminent brain, and all that is moderate has come from mine. My Lords, I beg to move.
Moved, That this House takes note of the Eighteenth Report from the European
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Communities Committee on Green Money. —(Lord Pritchard.)
On Question, Motion agreed to.

RHODESIA
7.53 p.m.
Lord ALPORT Lord ALPORT rose to ask Her Majesty's Government what progress has been made since the breakdown of the Geneva Conference in achieving a negotiated solution to the threat to the whole of Southern Africa posed by the present situation in Rhodesia. The noble Lord said: My Lords, this gives me an opportunity of reporting to your Lordships such conclusions as I have reached during a five weeks' tour of Southern and Eastern Africa, during which I had, as a private individual representing no one but myself, a particularly favourable opportunity of assessing, in the light of such previous experience as I have had, the trends and possibilities which exist there. I acknowledge with gratitude the help that I received from the Foreign and Commonwealth Office and from its extremely able representatives in five of the six countries I visited, many of whom were old colleagues of mine.
In this post-imperial era, so far, not in time, but in distance from the days when British influence was paramount in Africa, I felt a sense of pride at the manner in which Her Britannic Majesty's Ambassadors and High Commissioners are continuing to exercise an influence in the countries to which they are accredited, which so closely corresponds to the welfare of those countries concerned and to the interests of Great Britain itself. I was able to meet all whom I wished to meet. If I do not catalogue them, your Lordships will, I am sure, accept that they represented the Governments and the political Parties in most of the countries concerned; and in Rhodesia itself Government Ministers, the representatives of the European Opposition Parties, the executive committees of the Patriotic Front, the ANC and ZUPO, and many individuals of long experience of the politics and problems of that part of the world.
I set out to discover the answer to two questions: first, so far as Rhodesia is concerned, what is the time-scale for a

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peaceful settlement of the situation there? I started by thinking in terms of a year or more. As a result of my talks with a great many individuals, both black and white, it came down from three months to "less than a minute". What they were trying to say is that a new initiative is of paramount urgency if the poison which is spreading over the whole of the Southern part of Africa from the present situation in Rhodesia is not to corrode the hopes for stability and progress for black and white alike.
My second question was: if a new initiative is to be taken by the British Government, what form should it take? Let me, in this context, make two remarks. Mr. Young was quite right in saying that none of the Heads of State or political leaders he met believes that he can trust Britain—not in the moral sense, but simply in the sense that Britain would not conform to the particular policies and ideologies he represents. This goes for President Nyerere, Mr. Nkomo and Mr. Ian Smith. But the fact of the matter is that there is in Africa an almost desperate hope that a British initiative, an acceptance by this country of the responsibilities of statesmanship which history has bequeathed to us, will rescue them from the same disaster in Rhodesia which has accompanied the transfer of power by the Portugese in Angola and Mozambique. Secondly, they understand that if Britain is to take the lead, it must have the support of the super-Power of the West and from Africa itself.
Let me therefore, before I attempt to give my personal assessment of the form which any British initiative should take, give to your Lordships what are known as the relevant considerations to anyone who has even a wartime training in military logic. First, the guerrilla warfare, despite the loss of European lives, is unlikely to produce the unconditional surrender for which some—but not all—the front line Presidents hope. Its main impact on the present régime is the fact that the withdrawal of white manpower from the farming and business communities, in conjunction with sanctions, provides a very serious drain on the resources of the Rhodesian economy.
Although human life in Africa has supposedly a lower value than in Europe
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or America, the killings of Africans by the Rhodesian forces on the Mozambique or on the Botswana borders has involved the death of many innocent Africans whose only aim was to follow the paths across frontiers which from time immemorial had been open to them, or who have strayed out in curfew time to gather food from the fields. As your Lordships know, it has led to the death of missionaries who have devoted their lives to the welfare of their African congregations; of the wives and children of white families on the farms, which they have in many cases cut out of the bush; and of many young men—both black and white—who seek from different standpoints to serve causes in the rightness of which they profoundly believe.
The loss of life, my Lords, is tragic, but with every casualty—and this, to me, is more important—the bitterness is increased. The poison it produces spreads further into the body of Rhodesia itself, and seeps out over the borders into the neighbouring States, of which the most recent is Botswana. But let me emphasise this. There is still sufficient good will in Rhodesia today for the wounds of the present conflict to be healed if a political settlement can be reached this year. Those who believe that it can come only "at the muzzle of a gun" are the enemies of black and white alike, and are recognised as such.
The second relative consideration is this. While I do not believe that it is realistic to suppose that an internal settlement negotiated by Mr. Smith with any significant Africa Nationalist Party is possible, there is a strong and justifiable demand among the Africans that any régime which comes into being when a settlement is reached should be one of their own choice, and not imposed from without. Majority rule is now accepted. "Right", they say, "let the majority decide, and let them decide by a vote based on a referendum". And if there is to be a referendum, let it be internationally supervised by Britain and America, and possibly by representatives of the OAU. It is of course true, my Lords, that there is a tribal factor in the Rhodesian situation. The Mashona represent perhaps 80 per cent. of the African population, the Matabele less than 20 per cent. The ANC is primarily a Mashona Party with Matabele attachments; the Patriotic Front

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is a Matabele Party with Shono attachments. The front line Presidents, by throwing their influence behind the Patriotic Front, are seen in Rhodesia as trying to impose minority, not majority, rule on the Zimbabwe of the future. Why, so the argument goes, should they, however eminent they may be, seek to treat the Rhodesian Africans differently from the way in which they were treated at Independence by Britain or would allow their own people to be treated in any foreseeable future? That argument, my Lords, is in my view conclusive.
Thirdly, I was assured by a senior Minister in the Rhodesian Front Government that it would be possible to organise a referendum in a matter of days, or weeks at the most, using the Kenya system of identification by dye, which we have seen most recently was used in the Indian election, or by using the identification card. I understand that registration on a local basis already exists. Of course the campaign which preceded the referendum would involve security problems. There would be intimidation; there would be intervention by various guerrilla factions. There might be some abuses of the electoral procedures—which, after all, my Lords, is not unknown elsewhere. But the process of a referendum would enable the settlement of the Rhodesian problem to be achieved by the vote and not by "the muzzle of a gun".
Fourthly, my Lords, whatever may be thought by history of the rights or wrongs of the proposed Kissinger settlement and the subsequent Geneva Conference, it produced the acceptance by the Rhodesian Front Government of the reality of majority rule, not in a thousand years but in two. It does not matter now, my Lords, that the interpretation of majority rule was quite different in the minds of Mr. Smith and his advisers from what it was in those of the leaders of the Nationalist Parties or, indeed, from that of someone like myself. Nor is the situation changed by the new policy to eliminate some racial discrimination, which has caused a split in Mr. Smith's Party. His proposals are almost identical with those on which the late Sir Edgar Whitehead fought the 1962 election, when he was defeated by the defection of Mr. Smith under the leadership of the late Winston Field, with all the tragic consequences which have followed during
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the last 15 years. The fact is that what seemed a lot then—too much for many white Rhodesians to swallow—is too little now. The issues are not the relaxing of racial discrimination or the introduction of majority rule, but how soon and in what manner both are to be achieved with the minimum loss of life and damage to the whole structure of the Rhodesian economy.
I must emphasise to your Lordships three things. The front line Presidents, by throwing their influence behind a single Party, which from a tribal point of view in Rhodesia is a relatively small minority, have forfeited the confidence of the majority of Africans there. I know that there are many experienced observers who believe that if the outcome of a referendum were to place power in the hands of the Shona-based Party, the ANC, there would be a new and an even more destructive civil war. My Lords, I do not believe this. I think that the chances of trouble would be far greater if, as a result of external pressure, power was given to a tribal minority. But, my Lords, that is not the point. If those who believe that the ANC represents the vast majority of Africans in Rhodesia—and the Observer recently estimated them at 80 to 90 per cent.—are wrong, let the issue be decided by the people of Rhodesia themselves; not by the intervention of the front line Presidents or the guns of the guerrilla forces, but peacefully on the basis of one man, one vote.
Let me say here that in my talk with the representatives of the Patriotic Front there was evidence of the essential reasonableness of many of their views. Indeed, the proposals which Mr. Nkomo made to Mr. Smith some months ago for a qualitative franchise were such that it is difficult to understand why they were so abrasively rejected. All one can say is that so many opportunities of reaching a reasonable and realistic settlement of the Rhodesian problem have been lost that history must simply add one more to the debit side of Mr. Smith's political balance sheet.
Secondly, my Lords, despite the flow of Soviet and Chinese arms, of President Podgorny's present tour, of the Cuban mercenaries and of the flirtation of African leaders of various sorts with Marxist imperialism, Africa and Africans are not

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a fertile ground for Communism. Tanzania, as the prototype of what is called African Socialism, is widely regarded as a failure. The only significant export of Russian Communism to Africa are the guns with which one faction in Africa is enabled to kill other Africans. I exclude, I must confess, the Chinese, whose Tan-Zam railway was intended to be a direct contribution to African development but which, alas!, owing to the inadequacy of the Dar-es-Salaam port and the high cost of freight, has made little contribution to the bankrupt economy of Zambia. My Lords, the point I am making is this. In African eyes—and this goes for most Europeans and for most Africans—the future of Africa lies with traditional Africa and not with the Communist East. It would in my view be a great mistake to allow our distaste and fear of Communism to distort our policies or influence our actions in that part of the world.
Thirdly, in a country of present-day Africa, where the numerical strength of the whites is less than one-to-twenty of the blacks, there is no future for political power for that tiny minority, however strongly they may be entrenched in the economic life of the country or however great may be the contribution they have made to its development. A delegation of Rhodesian farmers has recently visited Kenya. I was told that they were greatly impressed by the way in which the Europeans in Kenya had been integrated into the Kenyan economy. Many, of course, have been bought out; but those who are prepared to identify themselves with the interests and progress of an African State can still play a recognised role and live a tolerable life in a community in which they may no longer dominate politically, but to the development of which their past efforts and their future energies make a wholly acceptable contribution.
Lastly, the establishment of a majority African Government would destroy the reason d'être of the guerrillas. It is perfectly true that some Africans in Rhodesia suspect that the recruitment of guerrillas from Matabeleland over the Botswana border—as, for example, the recent incident of the so-called "schoolchildren"—is an attempt to strengthen the military hand of one element in the
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Patriotic Front with the aim of preempting any other settlement. This is certainly possible. But a majority Government would have at its disposal the disciplined police and army forces in Rhodesia in which the Africans are in a majority, and would certainly have the support of a substantial element among the guerrillas. I do not think that we should overestimate the problem which the ending of guerrilla warfare might pose.
My Lords, in the light of these considerations, I offer the following proposals which I hope may be considered by those who, here and in Africa, have the power to dispose and to act in the context of the present time. I suggest that Her Majesty's Government should propose the appointment of an electoral commission to supervise the holding of a referendum. This commission should consist of a British representative to act as chairman; a United States representative and a representative appointed by the OAU. This referendum must, in my view, take place before the end of September and must be on the basis of one man, one vote. The guerrillas in Mozambique and Zambia should have the right to vote under appropriate arrangements. As a result of the referendum, an interim Government should be formed with a representation proportionate to the voting strengths of the various Parties.
Following the referendum, the electoral commission would become a high commission with the responsibilities that I outlined in my previous speech in your Lordships' House—to act as Head of State, to frame a Constitution with safeguards for minorities, to be responsible for law and order with the support of an "internal security" mission representing, in addition to the present security forces, expert advice from outside, but working through a Minister in the interim Government who would belong to the majority Party; and, lastly, to make arrangements for the election of a Head of State of independent Zimbabwe and for its first Parliament.
My Lords, I suggest that when the interim Government is formed sanctions should be lifted and the British and United States Governments should proceed to activate the 2,000 million dollar fund, which should be used not only in

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Rhodesia but also to compensate the peripheral States such as Botswana, which have suffered severely from the present troubles. I think that Africans in exile, along with the detainees, should be given an opportunity in Rhodesia, on return or release, of taking part in the referendum —provided that they give an undertaking to abide by the settlement which this process will produce. If some still wish to conquer at the muzzle of a gun, it will then be easy to assess their real value to the peaceful evolution of the Zimbabwe of the future.
When Mr. Richard did his second tour of Africa he tried to hammer home—so I was told on the very good authority of the South African Foreign Minister—three principles. They were: one, that there must be majority rule; two, that there must be a tolerable and secure future for the Rhodesian Europeans in Zimbabwe; and, three, that there must be an end to guerrilla warfare. In all the countries I visited I had reason to suppose—from South Africa Northwards—that those principles were accepted.
I have outlined a method by which these principles could be put into effect. I do not underestimate the difficulties or the power of the malign forces which would seek to prevent a peaceful and orderly solution of the Rhodesian problem. I have tried to think that problem through. Of course I have not thought of all the combinations and permutations which others may consider appropriate; but of the practicality and desirability of the general design, I have no doubt.
It will require the willingness of Her Majesty's Government to accept the responsibility which is historically ours; it will require the United States Administration to act up to the principles to which President Carter dedicated his country in his speech last week at the United Nations; it will require the Republic of South Africa to implement the policies to which Mr. Botha has recently referred in New York; it will require the realism to which Mr. Smith has, at last, apparently, been converted; and it will require the co-operation and moderation of African national Leaders —and I believe that that will be forthcoming, at any rate from some of them.
I can only say, my Lords, that having lived with the problems of this part of the
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world for most of my political lifetime, I still believe that there is a chance of a solution to the Rhodesian problem which could prevent the untold damage to a fine country and the suffering to its people of all races which today seem inevitable; and perhaps it might achieve something beyond that. Perhaps it might avoid, for the whole of Southern Africa, a fate which in the words of Mr. Vorster is "too awful for any of us to contemplate".
8.16 p.m.
Lord ELTON: My Lords, I should like to start by thanking my noble friend for raising this matter upon which he has a depth of experience greatly in excess of my own. It would be difficult to exaggerate the importance of the matter which he has raised or of the conversations that are, I hope, continuing covertly on the future of Rhodesia. As he has indicated, their outcome will be crucial to the future of the whole of South Africa. The example of Rhodesia cannot fail to exert an influence on the future of Namibia. The future of Namibia is intimately bound up with the future of South Africa. We have to face the sad and urgent fact that stagnation is no longer an alternative to progress. In the past, the status quo could perhaps have been preserved by inaction. Today, up and down that end of the continent it can only be preserved by riot police, by emergency regulations, by guns and, as my noble friend has pointed out, by casualties and a heavy drain on the economy of the countries concerned.
It must be our concern as a nation to make possible a just solution and to see, in so far as it is possible for us so to do, that it is arrived at with the minimum of violence, suffering and loss by the people to whom it applies. The longer a solution escapes us—and not merely us, my Lords, for we are by no means in sole control or in any shadow of control at all of this difficult situation—the longer it is delayed, the greater, I believe, will be the cost of attaining it. The pressures that are accumulating—not just in Rhodesia but in the boiler of Southern Africa as a whole—portend a terrible and costly explosion unless, somehow, the fires are drawn.
My Lords, if it is not easy to exaggerate the importance of the Rhodesian problem in its proper context, it is no easier to

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exaggerate its complexity. It is both concentric and tortuous—indeed, if Mr. Richard went out to Geneva and the African capitals like Mercury, as depicted by the statue in Piccadilly Circus, his struggle with the circumstances that he met there soon reminded us more of Laocöon, as depicted in the group at the Vatican. Within Rhodesia, to reduce it to its simplest terms, we have a confrontation between Smith and Muzorewa, with Sithole—with Muzorewa perhaps disposing of 70 per cent. of the support of black Rhodesians, and more, probably so, if he is joined by Sithole. Over the border, Mugabe and Nkomo mount a continuing assault of young expatriates bent on the violent overthrow of the Smith regime. Behind them, stand the five front line Presidents upon whose good will this assault in different degrees depends. Behind Smith stands Vorster upon whom he, likewise, depends to repel it. Beyond this tableau of confrontation and dependence loom, on the one hand, the Russians, anxious to build a Marxist bridge across the continent, and, on the other, the Americans, anxious alike for their own interests and, more unmistakably now under the new Administration, for a solution that is fair in terms of what we now call human rights and used to call common justice. The figures in this moving tableau stand upon a ground in some areas of which lie undisturbed mineral resources of very considerable interest to all the participating States and to some who are not even engaged.
Her Majesty's Government cannot divest themselves of the responsibility given to them by history, and in no way lessened by their abortive efforts at Geneva and their fruitless journeys thereafter, of moving about among those figures, of trying so to adjust the balance of interest and advantage that a settlement can he reached that is at least acceptable to enough of those concerned to make sure that it sticks, that can be seen to be just as well as viable, and which does not betray the interests of this country.
The task is not an easy one, and it occurs to me that, like any other difficult task, it is rendered a thousand times more difficult by being carried out in the dark, as my noble friend has already indicated. We are in the dark, my Lords, on one
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very fundamental matter: the opinion of the actual inhabitants of Rhodesia—the future Zimbabweans, if you care to call them such—as to what they want. And that, for the principal protagonists of democracy in the Western world since the 13th century, is a pretty extraordinary position for us to be in!
I know that I said earlier that Bishop Muzorewa and Mr. Sithole between them could probably count on 70 per cent. of the support of their compatriots. Certainly I believe this. I believe it because it has been stated to me forcefully by quite a large number of people who have been there, or who live there and who ought to know. But it has been stated as an opinion held on purely subjective evidence. Thus, I may believe it, but I do not know it and I may be wrong. Certainly Mr. Nkomo would challenge it, and he would challenge the opinion at least as forcefully as it has been advanced to me. But he cannot know either what the Zimbabweans think, and nobody can know because nobody has asked them. Some of us know what we think they want, and most of us know what we think they ought to want, but that is not good enough.
Nor do I think it will be good enough if we finish up by collaborating in a solution to which we have acceded simply as a reaction to diplomatic pressure or in the more or less intelligent pursuit of what we regard as our own self-interest. It happens here, as so often, that our self-interest and our moral obligation coincide. Our moral obligation is to help the Rhodesian people, both black and white, in whose history we cannot deny that we have played a major part, to arrive at a Constitution under which, if they are wise —and nobody can guarantee that—they can live in peace and freedom, both as a nation and as individuals. That will not be achieved by imposing on them a Constitution designed to satisfy either our own preconceptions or those of the Marxists. Nor, my Lords, will we do any service to justice or to ourselves if we adopt a solution simply because those who favour it have guns, and those who oppose it do not. It is the function of diplomacy to achieve justice without resort to war, or whatever Klausewitz may have said, and in this case justice must not be blind.

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Surely, the time has now come for the Government of this country, seeking what support they may need from others, to turn their mind to ascertaining who in reality the Zimbabweans want to decide their future for them? And ought they not, whatever the answer to that question is, to ensure that it is accepted and seen to be freely given, and to turn their minds also to having it validated by some external and independent observer? The noble Lord knows that I could well be more specific (my noble friend has indeed been so), but this is no time, and I speak from no place, to tie anybody's hands with detail.
I recognise the very great delicacy of the task that now confronts the Foreign Secretary. I wish him luck in it and I wish to remind him of the magnificent carving that adorns the ruins of ancient Zimbabwe. I have not been there but I have been in Rhodes House, for my father was for many years International Secretary of the Trust, and there I have seen it carved on every conceivable angle and cornice. It is a bird of an austere and almost entirely mysterious majesty. But if little is known of it, it is clearly not a bird of the night, and I want to put into the noble Lord's head the thought that if he wants to know what or who the inhabitants of that troubled country actually want, he will have to ask them and bring the broad light of day. Conversations with pressure groups, with opinion-formers, with vested interests, with Governments, with Heads of State and with interested parties are not enough.
Nor is it enough simply to take the path of least diplomatic resistance or of most diplomatic advantage. Still less, if we are to avert a disaster which will spread eventually down to the Cape, can we afford to do nothing. Let him then find a means of asking all the people what—or better, perhaps, who—they want, and let him see that the question is asked and the answer given in circumstances under which no one can afterwards doubt that it is given freely and that it is true. It may be a tall order, but it is something he cannot lightly dismiss.
I will not follow my noble friend into the complexities of the arrangements. That is not something, perhaps, which the Secretary of State should himself have in mind at the outset of his journey; but let
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him recall that any settlement that is imposed upon an unwilling people, regardless of the good will which it will get for this country from the incoming Government, will not get permanent good will. It is in our interest to have friendly States throughout Southern Africa, and it is in their interest to have our friendship and support. If we go merely for the easy option—even though we are weak at the moment in terms of military and economic force—we betray not only ourselves but the Zimbabweans of the future.
8.26 p.m.
Baroness GAITSKELL: My Lords, we are indeed fortunate in that the noble Lord, Lord Alport, has put this Question to the Government, for there can be few men as distinguished and with as much experience of African and Rhodesian politics. I will not only read his speech again, but I will keep it for reference. The noble Lord's Question is right on target. So long as no negotiated solution is achieved in Rhodesia, there is a constant threat to the whole of Southern Africa, and with every delay the situation can only get worse. So I hope that the Government will examine the noble Lord's speech and see what can be done in order to implement his suggestions.
Since in the United Nations every resolution starts with a condemnation of apartheid and includes armed struggle as a legitimate means to achieve human rights, this ties in with the Soviet practice of giving aid to African countries in the form of armaments. When it comes to making friends, decolonisation cannot compete with Soviet guns. Over a span of about 12 years I have noted the growing influence of the Russians on Third World countries. I have sometimes thought: How can we speed the decolonisation when we lose friends by doing so? In last Sunday's Observer newspaper, Colin Legum, in an outstanding article, traced the course of Soviet ambitions and Soviet strategy over land and sea round South Africa. He concluded—and I agree with him—that if the Western nations, especially Britain and the United States, fail to solve the problems of Rhodesia and Namibia quickly, the Russians will continue to be invited to play a large role in Southern Africa. Of course the South African Republic and the Rhodesians are only too well aware of this.

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But their obsession with the Communist menace does not in their minds have much to do with majority rule, and I think that the noble Lord, Lord Alport, gave a hint of this. It just hardens their attitude towards apartheid.
The attitude of Mr. Ian Smith, despite his twisting and turning, is somehow a little different. He has, after all, accepted majority rule in two years and he has won his Bill over land for blacks which drastically cuts the exclusively white areas of the country and opens white farming areas to all races. He did that without solid support from his black Members of Parliament, and so a major breakthrough towards removing racial discrimination has come about. Mr. Ian Smith still seems to me to be the man—and here I am not sure that the noble Lord, Lord Alport, would agree with me—to continue to negotiate with.
On the other hand, Mr. Vorster fills me with gloom. The idea of majority rule paralyses him and he seems to recoil from any idea of dismantling apartheid. Mr. Vorster's attitude, to me, spells armed conflict, and few journalists or observers speak of the outcome of armed conflict between blacks and whites as a victory for the whites—because the black people are fighting for their human rights and they outnumber the Europeans by five to one. I suppose that I am naive, but I find it very difficult to understand apartheid and those who believe in it. It seems to me that those who maintain it are bartering the lives of their children and their grandchildren for a mess of privilege. Mr. Vorster appears to me as an unrepentant prisoner of privilege; he seems to me to be a man without a vision of the future, an eyeless man who is blind to the moral issue of apartheid.
As for our own Government and the possibility of influencing events in Southern Africa, they cannot come up with any instant solutions, but the fact that Dr. Owen, the Foreign Secretary, is himself going to Africa is a measure of the importance and urgency he attaches to the problems involved. Anyone who acquires a knowledge of apartheid and racial discrimination quickly comes to the realisation that human rights are indivisible. Finally, my Lords, may I say
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that I hope, again, that the Government will take to heart the speech of the noble Lord, Lord Alport, and will act upon it.
8.33 p.m.
Lord PAGET of NORTHAMPTON: My Lords, I should like to seek to put the record straight a little. Firstly, as to the personalities, Mr. Nkomo represents the Matabele. His patron is President Kaunda. The Bishop and the parson represent the Mashona. Their patron is President Nyrere. The Mashona are a mixture of tribes shattered by the Zulu and pinned against the Zambezi and the Barotse. For generations, they were treated by the Matabele as game. They were the people upon whom the Matabele warrior blooded his spears. For two generations before the white man came, they could not sleep in their huts because the huts were fired that they might be speared when they came out; and so they went and slept in the bush. Robert Mugabe represents nobody in Rhodesia; he is said to speak for the guerrillas. The guerrillas are not Rhodesian; they are Makonde from Mozambique in the great majority and are recruited, armed and trained by Russia. Robert Mugabe is not a Makonde; he is not a guerrilla: he is a lawyer. He is in fact Russia's man, put forward to speak for the Russian interest in this battle.
Now let us look at the front line Presidents. President Kaunda is dictator of Zambia; his patron is America. Both his economy and law and order are at a very low ebb. Nyerere dictates Tanzania. The country is bankrupt and central Government has largely broken down. It is what in colonial days we used to describe as "less and less administered". His patron is China. Machel of Mozambique—well, there, semi-official assassinations are probably as numerous but less publicised than in Amin's domain. The state of the nation is chaos and the patron is Russia. Neto in Angola is not in a very different position. Seretse Khama in Botswana is an extremely decent man, trying to administer a small backward district. Those are the front line Presidents to whom we have handed over.
Now let us see what is the state of the play. In September we had the Kissinger terms. They provided for a mixed

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interim Government, for that Government to be replaced by a majority Government to be drawn from Rhodesians, and for a compensation fund to be provided to assure the Europeans if their positions were made untenable. On the 22nd September, Kissinger confirmed that Presidents Kaunda and Nyerere had consented and agreed the terms. Our own Statement on the subject, issued a day or two later said this:
"They"—
that is, the terms presented by Mr. Kissinger to Mr. Smith and accepted by Mr. Smith without detraction:
"reflected the thoughts of the Presidents of the African nations most directly concerned, who were consulted throughout by Dr. Kissinger and in the course of five special US/UK missions to Africa in recent months."
That is the Kissinger terms approved by us, consented to by the Presidents, cheered by all except Russia.
Then came the Patriotic Front. Mr. Nkomo, knowing that he was in a minority in Rhodesia, made a deal with the guerrillas—that is the Makonde. This was a Russian plan to "dish" the Mashona, because the Mashona looked to Nyerere and, indirectly, to China. That is what the Patriotic Front really is. It is certainly based on no trust at all. Nkomo, with the assistance of his patron, Kaunda, has been arming busily, recruiting the Matabele, kidnapping the Matabele and transporting them North to Zambia to be trained, in order to fight Mugabe and the Northerners when the time comes. That is the build-up there.
Then came the Geneva Conference; and let us say that was to implement the Kissinger plan. It was upon that basis that Mr. Smith was advised. At the time, I said to the Government and to your Lordships: "This is a hopeless and mischievous proposal. It is a hopeless and mischievous proposal because the Russians have decreed that it shall not work". As usual, I received a rebuke from the Government for my warning. I have been used to that over the last 11 years. For 11 years I have warned the Government, step by step, of the disasters which would happen, and on each occasion I have been rebuked. The conference did fail, and it made things a lot worse. Geneva made things
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a lot worse, because it degraded our position. We "ratted" on the Kissinger agreement and our "ratting" failed, because it brought no agreement, because Mugabe was briefed by the Russians not to agree. I told the Government that before it happened. At that meeting, we abandoned our case for majority rule in Rhodesia. We changed that to rule by the appointees of the five Presidents—in fact, the Russian guerrilla front. Mugabe had his instructions, and even our humiliation did not buy any kind of agreement.
Then came the Salisbury proposals. Even if they had not been a recipe for the suicide of Rhodesia, they must have been unacceptable, in view of the extent of discredit, as to balance and equanimity, which Mr. Richard had earned for himself. The whole thing was the disaster that I told the Government it would be. This is the background which we are up against. Against this, the noble Lord, Lord Alport, has proposals. His proposals are that we should now hand over to the Shona majority. That is what his election, whatever one calls it, comes to. It comes to handing over to the Shona majority. Is he still naïve enough to think that that is acceptable to the Russians? Does he still think that that would stop the guerrilla war? Does that make him think that the Makonde are not going to break in? Does he think that that is acceptable to the Matabele? It is really very great nonsense and, with very great respect, I must say this to the noble Lord: No man has been more disastrously wrong in Africa than he has been throughout his contact, and I do not think that any man has earned the same degree of mistrust as he has earned among those Africans who have the current misfortune of sharing his colour.
Several noble Lords: Shame!
Lord PAGET of NORTHAMPTON: My Lords, I now turn to the future. There is going to be a war. I can tell the Government as I have told unhappy truths about Rhodesia and Africa for many years. Peace is not an option. Peace as an option is long, long past. The question is: who will that war be between? On the present Russian plan, it will be between the Matabele and the Makonde. They will set upon the Shona and the Europeans. When they have been destroyed, the

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Makonde will fight the Matabele and the object will be that Rhodesia joins Mozamibque as part of the Communist area in Africa. That is the African plan, worked out quite ruthlessly and fearlessly.
The alternative is a deal within Rhodesia, under which Bishop Muzorewa would probably become Prime Minister and the Rhodesian Army—mostly black, but for the time being certainly white-led—would have a reasonable chance of defeating the Makonde invaders. That is the alternative. But it is an alternative that must be fought for by arms. There is no peaceful alternative here. We totally "kid" ourselves. We "kid" ourselves as much as many people "kidded" themselves in 1939 in imagining that there was a peaceful solution when none existed. Appeasement here will not work any more than it worked then.
Here is a position where a little toughness is required and I hope that, at very long last, Her Majesty's Government will think for a little where the interests not only of ourselves but of Africa really lie. They lie in an internal settlement in Rhodesia, and armed military support to that new Rhodesian Government, probably led by Bishop Muzorewa, to enable them to defend themselves from the Makonde/Frelimo forces, which are at present the best armed and the most able, and which are organised by Russia on their borders.
8.46 p.m.
Lord COLERAINE: My Lords, the noble Lord, Lord Paget of Northampton, is always a difficult man to follow, especially on this subject, about which his knowledge is so extensive and on which his sincerity is so self-evident. There was a great deal in what he said with which I agreed, and I have no doubt that the noble Lord, Lord Goronwy-Roberts, will deal faithfully with him on those points of agreement. But I must say that I strongly dissociate myself from his, as I thought, unwarranted attack upon my noble friend Lord Alport.
Several noble Lords: Hear, hear!
Lord COLERAINE: My Lords, over many years now my noble friend Lord
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Alport and I have spoken in these debates on Rhodesia. We have always disagreed, but gradually, I think, the gulf between us has narrowed, until today it is very nearly, though not quite, non-existent. I think that where I differed from my noble friend, and where I agreed particularly with the noble Lord, Lord Paget, was in his assessment of the Russian threat. I cannot quote my noble friend's exact words, but he said something to the effect that the Africans do not like the Russians, and we will find that they will throw off Russian Communism quite easily. There are quite a number of people in the world who do not like the Russians. I do not think the people of Poland like them particularly. I do not think the people of Czechoslovakia like them particularly. But they have not been able to throw them off, and I think we "kid" ourselves if we believe that by getting a settlement we have removed the Russian threat.
The Russians do not think in terms of quick returns. They do not want results as we always want them, by Tuesday fortnight at the outside. They have long-term objectives and they stick to them, and if for a moment they seem to recoil it is only in order to jump further in the future. My noble friend insists that a solution is urgent. As he said, the time scale has dropped from years to months, even to minutes, and I agree with him that a solution is urgent. However, the main point which sticks in my mind from his speech is his insistence that there must be a settlement in Rhodesia—in Zimbabwe, if we prefer the word—for the benefit of the people of Zimbabwe, of whatever tribe or colour, and for the benefit of nobody else.
Earlier this afternoon I had the opportunity of a word with my noble friend Lord Home of the Hirsel, and I asked whether I could quote him in support of the general argument that I am trying to put forward. My noble friend was perfectly agreeable that I should do so, but he asked me to make an apology to my noble friend in particular and to the House in general for his not being here this evening. Only an hour or two earlier he had arrived from California and I think that it would have been unreasonable to expect my noble friend to wait for this debate.

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I want to draw the attention of the House, for noble Lords may or may not have seen it, to an article by my noble friend Lord Home of the Hirsel in the Spectator of 26th February, 1977. The theme of the article is the one which has been stressed by nearly every speaker today: that this is a matter for the people of Zimbabwe, not for the front line Presidents. The particular passage that I should like to quote is as follows:
"The probability of a negotiated arrangement has been compromised by the collapse of the Kissinger enterprise, but there are two factors in the present Rhodesian scenario from which agreement could derive.
"The first is that Mr. Smith has not repudiated his statement that he would agree to majority rule in two years provided that the transition was orderly. He has in fact lately repeated the pledge. The second is that Bishop Muzorewa is a Rhodesian, is in Rhodesia,"—
although he is not now, I believe—
"and wishes to reach a settlement without the use of force. The lesson of the recent months would seem to be that outsiders should lay off and allow the different groups inside Rhodesia to work out a reconciliation".
For my own part, I believe that if it is to have any chance of lasting, any settlement we come to must be on the basis that outsiders should lay off. I do not think that I can recall any debate on Rhodesia—and Heaven knows! I have spoken in enough of them and listened to enough of them—in which there was in general such a measure of agreement between both sides of the House. I was particularly impressed by the speech of the noble Baroness, Lady Gaitskell. I do not hold any brief for Mr. Ian Smith and it is not my place to defend him, but I was very much heartened by the openness of mind which the noble Baroness showed in her references to him. I believe that the noble Baroness reflected an openness of mind on all sides of the House.
There is just one question—I have given him notice of it and I hope that he received it—which I should like to put to the noble Lord, Lord Goronwy-Roberts. Just what is the interest of the front line Presidents in Rhodesia? Is it that they want to establish Parliamentary government in Rhodesia? It can hardly be so, or they would have established it in their own countries. Is it that they are so concerned with individual freedom and the rights of man? It can hardly be that, or they would have paid more attention to
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individual freedom and the rights of man in their own countries. Is there any basis for the attitude of the front line Presidents except the basis of race? And why is it that racism, which is illegal in this country, should seem to be mandatory in Africa? I should like the noble Lord to turn his mind to that question and to give us an answer that makes sense. However, I think it is clear from every speech that has been made that, whatever the solution is, it must be for the benefit not of the front line Presidents or their territories; it must be a solution for the benefit of the people of Zimbabwe, irrespective, as I say, of tribe, race or colour. I hope that the Government, however long they last, will bear that point in mind.
8.57 p.m.
Lord BROCKWAY: My Lords, I want to do much more than thank the noble Lord, Lord Alport, for initiating our debate tonight. I want to thank him for his speech. I have been a little disappointed that in the debate which followed we have not recognised the importance of his speech. It was delivered after the noble Lord had seen representatives of the different nations in Southern Africa, the leaders of the African peoples and the leaders of the whites in Zimbabwe. I thought that he gave us a most objective and impartial picture of the results of that investigation.
The noble Lord concluded his speech by making proposals, the significance of which we have not yet realised. He will forgive me for saying that one will have to consider his proposals very carefully after we have read them in detail. However, the noble Lord's speech contained proposals for the settlement of the situation in Rhodesia which were more constructive and hopeful than any I have heard in previous debates in this House. Therefore, I want to pay my tribute to the noble Lord and to say how ridiculous were the attacks upon him which have been made by one speaker in the debate.
We are now in a very critical situation. I think that the noble Lord, Lord Alport, was correct when he said that it is a matter of months, not years, whether this dispute in Zimbabwe is to be solved by discussion and negotiated settlement or whether we are to be faced with a racial war in Southern Africa the consequences

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of which we can hardly begin to contemplate. That settlement is as important for the whites in Zimbabwe as it is for the blacks. If they have a fear of majority rule in Zimbabwe let them look to Zambia, where the white residents who have remained are happy and recognise the justice of the African Government which has followed.
Lord COLERAINE: My Lords, may I interrupt the noble Lord, who is always so very courteous? When he thinks of Zambia and the position of the white man there, has he considered the economic dislocation and the poverty which has descended upon the people of Zambia as a whole since independence?
Lord BROCKWAY: Yes, my Lords, I certainly have and that economic depression which is in Zambia today is largely the result of the heroic attitude of the Zambian Government in its opposition to minority rule in Zimbabwe, in carrying out the sanctions for which we have asked; and we all ought to pay tribute to the Zambian Government for having done that. But I am thinking not only of Zambia; I am thinking of Kenya, where the quite remarkable conciliation under African rule of the Europeans who were there, particularly in the White Highlands, ought to make the whites in Zimbabwe feel that if a settlement is reached by discussion and negotiation, they may have a future in Zimbabwe as there now is in Zambia and in Kenya.
I have a terrible feeling tonight that history will not forgive us, will not forgive the whites in Zimbabwe, will not forgive the blacks, if the present opportunity for a settlement is not grasped. I should have liked—but I refrain from doing so in detail—to reply to what the noble Lord, Lord Paget of Northampton, said about the Kissinger negotiations. I shall only refer him to the letter which appeared in The Times last Friday from Colin Legum, who probably knows as much about this subject as anyone in this country, which completely denied the suggestion that when the proposals were made by Mr. Kissinger to Mr. Ian Smith, those proposals involved an absolute agreement in which the United States of America and this country were involved.
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I am not surprised that that agreement was rejected by the African people of Zimbabwe. It would have left the armed forces, and responsibility for law and order, in white hands. We now have a situation in which our Foreign Secretary, Dr. Owen, is making an examination of the whole situation in Southern Africa. I wish him every fortune that he can have in that effort. I will only say this to him. I very much hope that in his discussions with Mr. Vorster in South Africa he will not sacrifice Namibia in the interests of a settlement in Zimbabwe. We are forgetting the issue there, and justice in Southern Africa is as important as the issue in Zimbabwe itself.
I want to recognise that if a settlement is to be reached it will mean adjustments on both sides, by the whites and by the blacks. If there is to be an interim Government before majority rule is realised, that interim Government must be recognised as representing a transition to majority rule. It would have to involve very much more than Mr. Ian Smith has now proposed to end discrimination in Zimbabwe and it would have to secure that the control of the armed forces and law and order were in hands that were acceptable to the majority in Rhodesia.
On the other side, there must be adjustments by the African leaders. They must in this situation find a basis of unity. If they are to influence the future of Zimbabwe the conflict between three African leaders, all claiming to speak for the Africans in Zimbabwe, must be ended; and, if we are to succeed in moving towards majority rule, a supreme effort must be made by that conciliation between African leaders. I say this, further, that if a settlement is to be reached by reason and negotiation which makes majority rule in Zimbabwe possible within the period of two years which has been laid down, then the whole influence of African leadership must be exerted against the continuation of guerrilla warfare in that territory.
Finally, my Lords, I want to make an appeal to our own Government. I want it to be much more decisive and challenging in its assertion of the right of the majority in Zimbabwe to control their nation. I should like to see them much more challenging on the issue of sanctions. They are sometimes being betrayed by interests in our own country; they are

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being betrayed in many countries of the world. I should like to see our Government taking a much more challenging attitude in the Sanctions Committee of the United Nations, denouncing those who are repudiating this international obligation.
There is one further point that I want to make. British subjects of Asian descent and non-white descent are now asked in Zimbabwe to join the military forces against the African guerrillas. A number of them are refusing to do so. A number of them are now seeking to come to this country. There are three cases now which are before the Home Office, and at Heathrow they are being refused admission to this country, though they desire to come here because they are refusing to become the conscripts of a Government which we regard as illegal. When this matter was raised by my noble friend Lord Avebury—and I pay tribute to his initiative—I proposed in this House that all individuals of this character should, at Heathrow, before they are sent back, he allowed to make an appeal to the Home Office. I regret to say that that suggestion was declined.
What I want to say to Her Majesty's Government is this: if they are really sincere in their desire to secure majority rule in Zimbabwe, then they have to show a challenge and a decision to a Government which is illegal, which is in defiance of our own Government, and they have to show sympathy and support to those in Zimbabwe itself who are declining to become the instruments of that illegality. I hope the Government will listen to that plea.
9.12 p.m.
Lord BARNBY: My Lords, in following the noble Lord, Lord Brockway, who takes such an interest in Africa and whose sincerity I always admire, he will not expect me to agree with not a little of what he has said, although he has, as usual, made interesting suggestions. I have just returned from seven weeks in Southern Africa where I spoke with not a few responsible individuals, both black and white, and so carried back an impression. For that reason tonight I could not forego the inclination to advance some reflections. I was looking forward to the Question and how it was going to be put by my
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noble friend Lord Alport, and I am not disappointed in his address, so thoughtfully presented. He has put forward some massive suggestions and has made what is without question a contribution of great value to all our thinking. But to anybody with logical reasoning and some knowledge of Africa we should ask the question, what does the Free World really want to see—Rhodesia succumbing to the influence of Marxist principles, as pressed all over Southern Africa, doubtless with the intention of dominating the whole of Southern Africa?
There can be no doubt that in Rhodesia there was grave resentment against the attempt of the British Government to impose an external solution, as doubtless there would have been in many other countries under similar circumstances. Many find it puzzling that the British Government attach such importance to the so-called five front line Presidents and accept their advice. As those Presidents are all subjected to Russian influence, that advice must be suspect.
An internal settlement would be much more acceptable to all Parties and peoples in Rhodesia. The Western Free World must have grounds for the widest possible opposition to the dangers of Communism and it should pursue all possible means to oppose Communism, regardless of emotional or ideological feelings. High on the list of priorities should be the removal of sanctions. Such an action would prove to be a great discouragement to the terrorists and would contribute to a reduction in the loss of life. Surely sincerity and humanity should press for such a step being taken. That should also be acceptable to the emergent States which have received hundreds of millions of pounds of taxpayers' money, none of which has gone to Rhodesia.
Let there be no misunderstanding. The present conflict in Africa is not black against white: it is Communism against non-Communism; it is constitutionalism and private enterprise against Communism. Tan Smith has accepted the removal of racial discrimination, the abolition of the Land Tenure Act and the accompanying revision of the Tribal Trust Land areas. This practically satisfies the demands of both the previous Conservative Government and this Government. I believe that those steps will be taken by

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the Rhodesian Government. I should like the Government to display more guts in mobilising world opinion to save Rhodesia from the dangers of Communism.
Let us make no mistake. Terrorism is paid for by Russia, by money or weaponry. This is a contribution which receives assistance from other sources, such as the Swedish Government, who have recently voted 800,000 dollars to the terrorist movement, and assisted by others, even British private as well as official sources. The House was told recently, by the noble Lord, Lord Home, with much wisdom, that while we could call off sanctions we could not stop terrorism. Be sure that Russia, in contributing support to terrorism, will not relax.
I hope that we shall hear from the noble Lord, Lord Goronwy-Roberts, tonight some drift of the Government policy towards logic and sanity, and also policy in getting assistance from the United States and other Free World sources to bring about this possible saving of Rhodesia from Communism and to bring about a peaceful settlement in that splendid country, the responsibility for which this Government continue to admit.
9.23 p.m.
The Lord Bishop of SALISBURY: My Lords, I venture to intervene for a brief moment because my knowledge of Southern Africa is only infinitesimal after 30 years. It is in fact 32 years since a South African proposed marriage to me and I accepted her, and ever since I have been visiting the country and also been in touch with my friends in Rhodesia. But on behalf of these Benches I want first to pay tribute to the noble Lord, Lord Alport. I believe it was a promising politician elsewhere who said that, "Jaw, jaw, was better than war, war". I should have thought that negotiation is absolutely essential, but, as the noble Lord pointed out, time is getting short.
Secondly, I believe that your Lordships will agree that there is a breakdown of trust. That is what has to be re-established between black and white. From my knowledge of those in education and my brother priests out there, all the advice I
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get is that this is what they are looking for; the re-establishment of trust by negotiation. I do not believe that it can be done by force of arms for reasons that the noble Lord, Lord Alport, told us. In the areas of defence, internal security and law and order, trust needs to be re-established.
How can it be done? At this late hour it is perhaps not pertinent for me to go into any suggestion of detail, but I wonder whether it could be done by a Commonwealth presence at the invitation of the Geneva delegation to the Secretary-General of the Commonwealth. It could be drawn from various countries, which I shall not enumerate now. It would be a Commonwealth presence but not a Commonwealth force. It would be on a small scale for training purposes—training in defence; training missions to retrain those at present in nationalist movements under arms to serve a new national army; field officers to monitor the deployment and role of forces in the field, police officers to supervise police forces responsible to the Crown and so on; a great programme of retraining.
I wonder whether a referendum could be monitored by such a Commonwealth force? I should have thought that Bishop Muzorewa's concept of a poll to ascertain the degree of support would only result in saying, "We would support different people", and, as Lord Alport said, there are bound to be irregularities; there are in countries in the West, as he reminded us. But I think that such an outside presence, monitoring and supervising a referendum, would be more likely to meet with universal approval.
There are people who have already committed themselves in one way or another away from their civilian lives—some of them are friends of mine—some of them are in exile and others are under arms. There will, I suggest, need to be a massive and prompt retraining programme for those people if they are to contribute constructively, as I believe many of them want to do, to the economic and social strength of the new nation. Many of the personnel needed for this retraining programme could, I suggest, be found from Commonwealth sources.
I would follow the noble Lord, Lord Brockway, by saying that we shall be able to digest all that Lord Alport has given us. With enormous restraint, I

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hold back from explaining to the noble Baroness, Lady Gaitskell, the warped theology of Mr. Vorster, on which I could give her three or four hours' instruction at any time she wishes. I restrain myself at this late hour merely to wondering whether, in his answer, the Minister would convey whether some such thoughts as these may be in his mind, though of course not in any way presuming to suggest the details; a Commonwealth presence to achieve negotiation and, with God's will, peace.
9.28 p.m.
Lord GORONWY-ROBERTS: My Lords, we are all extremely grateful to the noble Lord, Lord Alport, for the tone as well as the content of his wholly admirable speech tonight. It follows a similar speech in quality and message that he made some weeks ago when we last discussed this important matter. I was personally delighted to hear the tributes paid to him from all parts of the House, not only for his speech, which was constructive and high-minded, but also for his immense services to Africa and to the Commonwealth over a long and distinguished career.
I agree with the noble Lord, Lord Coleraine, that there is indeed a good deal of consensus in the House tonight as to what needs to be done or attempted to be done to secure a fair and durable solution of the Rhodesian and, therefore, of the Southern African problem. Her Majesty's Government, like their predecessors, are motivated by the belief that there must be a credible alternative to armed strength. As Lord Alport put it, the solution does not come from the mouth of a gun. If it does, it will not be a solution; it will be a recipe for continuing chaos and bloodshed in the future. If we fail to find it, as I have said before at this Box, not only Rhodesia but the whole of Southern Africa may be consigned to a racial and ideological conflagration, the outcome of which none of us could predict and one which might involve not only Rhodesia and Southern Africa but the whole of mankind, for we are dealing here with issues that are African in context but humane in their implication for good or ill.
That is why, despite repeated setbacks and disappointments, we are determined
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to pursue the quest for a peaceful settlement based on genuine majority rule; and that is why—and here I give one point of assurance to a number of speakers in this debate—we shall continue to work closely with the United States Administration as with other parties involved. That is also why my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs has decided to make Southern Africa the object of one of his very first trips abroad since assuming office.
There are some who have said from time to time, and especially since Mr. Ian Smith on 24th January rejected our proposals as a basis for future negotiation, that we should wash our hands of the whole affair. I was very glad that the noble Lord, Lord Elton, invited me to join him in reasserting a firm determination of this Government and, I believe, this country, whatever the Government in power, never to abandon our responsibility for Rhodesia—a responsibility for all its people. We would indeed refuse to be party to any bogus solution that might be patched together internally in Rhodesia and which went only part of the way to render justice to a section of the people concerned. We are not interested in a so-called solution that would merely serve to perpetuate an existing repression; nor, indeed—and here once more I agree with the noble Lord. Lord Coleraine—are we interested in a solution that might hand over Rhodesia and its peoples to a Marxist repression.
Our objective is genuine non-racial democracy, and it is not an ideal which is impossible of attainment. We have heard tonight, and some of us know personally, that in many parts of black Africa they are well on the way to achieving this ideal. We have heard references to multi-facial communities in Zambia, in Kenya and, one might add, in Botswana, and what can happen in those three countries—and there are others—can, I suggest, happen in Africa, as in other parts of the world, where that ideal has not yet been attained.
My noble friend Lord Brockway called for a positive, striking initiative by the United Kingdom. I wish to say to my noble friend that if it were left to the United Kingdom alone there would be a settlement today, but, as he said, we are not alone in this. This is the post-colonial situation—not a colonial situation,

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still less a pre-colonial one. We are in this with others. We accept responsibility, but we have to share it; and when my noble friend says that we should be more definite about sanctions I should like to know more about this. If every country in Eastern or Western Europe had been as assiduous and as honourable in the discharge of its obligations to the United Nations in the matter of sanctions, it is possible that the illegal régime would already have been brought down. It really is not enough constantly to accuse the United Kingdom—Britain—of shortcomings, deficiencies in this and in so many other matters, as if it all depended on us. This country has, as a colonial Power, as well as a post-colonial Power, much to be proud of, and I should like to see a little more appreciation of the role and mission of this country today, as in the past, in Africa, as in other parts of the world.
My noble friend Lady Gaitskell, in an excellent speech, quite rightly examined the possibility of whether the later initiatives of Mr. Ian Smith—what I described the other day as the latter day sainthood, for which we have been waiting for 11 years, and which, in a rather patchy way, is coming forward—might not be the basis for a solution. I would only say: by all means, if the intention genuinely is to move ahead expeditiously to majority rule. Like her, I should very much like to be able to welcome such a policy emanating even from the illegal régime, but, quite frankly, I do not think that we can be too hopeful of this at the moment.
In common with the United States and all our major allies, we believe that if a durable agreement is to be reached in Rhodesia it must be subscribed to by all the parties. It is not for Mr. Smith and his cronies to pick and choose with whom among the black Africans they are going to come to an agreement. Justice is indivisible in Rhodesia, as elsewhere. We are told that Mr. Smith is willing for anyone to put to the test their claims to represent the majority. I wish that that gentleman had been here to listen to the section of the speech of the noble Lord, Lord Alport, in which he described—I do not necessarily accept the proposal at this Box—a possible electoral method of doing this. This is the kind of thing
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that we should like to hear the illegal régime declare for, the kind of proposal that the noble Lord, Lord Alport, put before us. May I say, both as to what he had to say about the organisation of the interim Government via the High Commission, and the other three points he made on that score, and, indeed, on the electoral process so vital to assuring everybody that the real views of the Rhodesian peoples have been ascertained, I can assure him that Her Majesty's Government will examine very carefully indeed what he has proposed, and, indeed, his entire speech.
The right reverend Prelate the Bishop of Salisbury made a number of excellent suggestions. I must be very careful not to express too swiftly agreement with what he said, so he will not take me as stating Government policy just yet. There is a certain comparison between what I am about to do and what I am told St. Augustine proposed at one period in his career—"Not quite yet". But the proposals he has made have more than the germ of common sense and practical sense. I personally very much like the idea of a Commonwealth presence. We said on 24th January to Mr. Smith in the paper we put to him, as we did to the other protagonists in this argument, that we were ready to provide a British presence. Let us not be too rigid about what precise presence there should be. It could be a Commonwealth presence. By all means let us look at this. I am speaking merely for myself at the moment, but I very much like this idea. After all, the Commonwealth is an association of 36 countries of all colours, creeds and backgrounds—and of systems, too. Not all of them are Parliamentary democracies, as the noble Lord, Lord Coleraine, almost accused them of being—not all of them, not yet—but they are a microcosm of the world, a fund of suggestion and, so often, of co-operative action. The suggestions of the right reverend Prelate, as well as those of the noble Lord, Lord Alport, certainly merit very close consideration indeed.
My Lords, I am bound to say that I find myself more in agreement with the two noble Lords I have mentioned than with the noble Lord, Lord Barnby, very much though I always want to agree with him because he has a way of making it almost impossible for me not to agree

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with him. When he talks about Communism, I do not see it this way. I do not think you are going to prevent Communism in Africa by backing what I see to be the prime inducer of Communism into the Continent over the past 11 years. This is not one of my wild far Left ideas. No less an authority than the noble Lord, Lord Alport, in a speech last November, trenchantly and I thought conclusively showed this on a basis of fact and history. I could only say that, so far as I can see, if you want to prevent Africa going "Red" you need to remember that it is black. The antidote to Communism, to totalitarianism, is of course the prideful, constructive nationalism that so often animates the self-governing States of the British Commonwealth.
I hope that the noble Lord, Lord Barnby, will look at this again, for he knows Africa so well. Is this the right way to prevent external totalitarianism from getting a grip on Africa; indeed, to have a kind of totalitarianism tighten its grip on the vast majority of Africans? I am afraid that the attractions of Communism, or, as I call it, of external totalitarianism, are going to prove increasingly strong to Africans as their experience of homegrown Rhodesian totalitarianism, as far as they are concerned, proceeds. If we stand idly by and make no effort to induce a sense of realism among the members of the Rhodesian Front and their friends in this country, then they will proceed, blinkered, to the inevitable possibility of extended bloodshed and, possibly, to the last thing that they want to see happen in Rhodesia, the great black majority of 7 million driven to the point where they welcome the introduction of external totalitarian Communism.
The noble Lord, Lord Coleraine, put a question to me; and he put it with what I can only call House of Commons incisiveness. He had, in fact, anticipated it with what I can only call House of Lords courtesy, by letting me know beforehand that he was going to ask the question. He asked me what interests, other than that of race, had the front line Presidents in Zimbabwe. I would say that they had at least three. First, they are interested in an early solution of the economic uncertainty and loss which the present situation imposes upon them as much as upon Rhodesia. We had the example of
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Zambia from my noble friend Lord Brockway—and so true it is. That is one interest they have in an early solution in Rhodesia; the interest of economic progress. Secondly, they have an interest in political stability. Indeed, before we upbraid certain African States with not having achieved full British-type Parliamentary democracy, let us pay a little attention to that second need: that is, a firm basis of political stability, without which they cannot start to think of systems, still less of democratic stability. They wish to see an early solution so that they can count on political stability. Thirdly, they have an interest in Rhodesia —of course they have—in their fellow-feeling for them. It is not a racist feeling; it is a natural feeling. If you like, it is an anti-colonial feeling; a feeling that it is time that this type of system ceased on their borders as it has ceased within their borders, whatever the deficiencies of the latter.
Having said that, I agree that some African States, not all, have not yet attained British-type political democracy. Would my noble friend—as I like to call him—say that the South African Republic has attained a British type of political democracy? It would not be enough to say that they had done it for 4 million white people. That is not an answer. Have they done it for 14 million coloured and black people in the Republic? What is the interest of the South African Republic in Rhodesia? Is it to introduce political democracy? If so—and I echo the noble Lord in his second question—why have they not done it in the Republic?—because they have not. My Lords, we could go on arguing and debating in this way and perhaps losing the precious boon of constructive consensus which I entirely agree has been discernible and audible in this debate.
Lord COLERAINE: My Lords, the noble Lord is always so courteous that I feel some extra sense of diffidence in pressing him a little further. He tells us that the front line Presidents foment guerrilla warfare in Rhodesia because they want an early settlement. That is the one way to ensure that there is not an early settlement. They foment guerrilla warfare in Rhodesia, as the noble Lord says, to achieve stability. But surely that is not the way to achieve political stability. If we want a political settlement which is

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fair to everybody in Rhodesia, Her Majesty's Government must do what they can to call off the front line Presidents from baying at the heels of Rhodesians, both black and white.
Lord GORONWY-ROBERTS: My Lords, I think that the noble Lord has somewhat rephrased the question which I, in my inexpert way, thought that I had attempted to answer. Nevertheless, he now asks me about the front line Presidents and their relation to the guerrilla fighters. But I do not think that one can insist on anything in South Africa. There was no need to insist on front line Presidents or anybody else not supporting guerrilla fighters for a long time because there were no guerrilla fighters. They came about because in the course of the 11 years they found that otherwise there was absolutely no hope of budging the illegal régime. I have said from this Box that Her Majesty's Government do not in any way condone or support, materially or morally, guerrilla fighters or fighting. But we have to understand that after years of trying it the other way, at last the inevitable has happened: men have taken up arms and some African Presidents have supported them. My Lords, how do we get out of this?
The Marquess of SALISBURY: My Lords, did I understand the noble Lord correctly in saying that because the guerrillas and their supporters were unable to achieve what they wanted by peaceful means, they were entitled to resort to arms, and it was perfectly proper for the neighbouring States to support them?
Lord GORONWY-ROBERTS: My Lords, the noble Marquess has not quite paid his usual attention to what I was saying. I thought I was most explicit, once more. Her Majesty's Government neither condone nor support, morally or materially, guerrilla fighters or fighting. But we are bound to understand why, after vainly attempting for many years by peaceful means to extort from the illegal régime some measure of movement towards what I have heard called "democracy", men's patience snapped and they took up arms; and some African Presidents have blessed and supported guerrilla fighting. That is what I said. Those are the facts of
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life, and I was addressing myself to the question: what do we do now? How do we stop guerrilla fighting? The only way to stop guerrilla fighting is to remove the cause of it and to attain as quickly as possible—and here I join those who have stressed the urgency of the situation—an arrangement in Rhodesia which is seen to be fair to all sections and to be durable. When that is attained, what was the state of affairs in Rhodesia only a few years ago, before 1972—namely, an absence of guerrilla fighting—can then be logically re-attained. There has not always been guerrilla fighting in Rhodesia. For a long period there was nothing of the sort.
By addressing ourselves to the task in which my right honourable friend the Secretary of State will very shortly be engaged we shall create those conditions. It is indeed to the end of achieving a peaceful solution of the Rhodesian and South African problem, based on general majority rule, that he will be visiting Southern Africa during the Easter Recess. I repeat, the fact that he is finding time, at this early stage in his tenure of office, to make such a visit in order to acquaint himself at first hand with the problems and with some of the key figures concerned, is a measure of the importance that he, together with Her Majesty's Government, attaches to finding a solution. I am confident that we can make progress, given good will and trust on both sides; but without it even the most perfect schemes for transitional Government or an independent Government will come to naught. My Lords, I believe that this evening's debate has yielded two things: a fundamental consensus and a number of extremely useful and constructive ideas. It will be my duty to convey personally to the Secretary of State the spirit and content of the debate.