Lords Sitting of 31 March 1977

Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Birmingham.):
The LORD CHANCELLOR on the Woolsack.

SMOKING IN PUBLIC PLACES
2.30 p.m.
Lord SHINWELL: 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 announcement by the Secretary of State for Social Services to prevent smoking in public places is intended to apply to pipe smokers.
Lord WELLS-PESTELL: My Lords, the purpose of my right honourable friend's initiative is to create a climate of opinion which regards non-smoking in enclosed public places as the norm and to reduce the nuisance of polluted atmosphere for those who do not smoke. For both reasons the restriction should apply to all forms of smoking.
Lord SHINWELL: My Lords, does my noble friend not agree that it is presumptuous on the part of Ministers to make pronouncements of this character which they themselves know have not the force of law? Can my noble friend say whether a pronouncement, such as that which the Minister concerned made, was considered by the Cabinet, and the Cabinet arrived at a decision? Finally, does he not agree that our liberties nowadays are so few that we object to them being further restricted? Would he take it from me personally—and I can speak for many other Members of your Lordships' House—that any interference with pipe smokers, even among the pigeons in a public place like Trafalgar Square, will be strongly resisted, even to the extent of interfering with the ambitions of Mr. Callaghan and his friends when it comes to the next General Election?
Lord WELLS-PESTELL: I do not quite know where to begin, my Lords. With the greatest respect to my noble friend, I should point out that it is the responsibility of my Department to concern itself with the health of the people. I think, too, that we must bear in mind that more than half the adults in this country are now non-smokers, and, that being the case, it seems to be reasonable that adequate provision should be made for non-smokers. I should also point out that market research shows that most smokers themselves feel that there should be further restriction on smoking in public places. This is not a question of legislation. My right honourable friend has made it perfectly clear that he proposes to do this, we hope, by persuasion and education.
Lord MACKIE of BENSHIE: My Lords, is the Minister aware that the noble Lord who asked the Question is the greatest example which the Minister could have of the benefits of pipe smoking to the health of the nation?
Lord WELLS-PESTELL: My Lords, there are peculiarities in every sphere.
Lord BLYTON: My Lords, is the Minister aware that I agree with my noble friend—
Several noble Lords: Order, order!
Lord PLATT: My Lords, although I recognise and respect the views of the noble Lord, Lord Shinwell, when somebody in the next place lights a pipe just as I am about to have lunch, I feel that it is my liberty that is being interfered with and not his. I am sorry, my Lords, that should have been a question. I beg your pardon.
Lord BLYTON: My Lords, with regard to the discrimination between nonsmokers and smokers, is the Minister aware that there is now being developed a policy of apartheid in which the cigarette smoker is penalised and the tobacco smoker is left alone?
Lord WELLS-PESTELL: My Lords, although pipe smoking is less dangerous than cigarette smoking to the health of the smoker, one must bear in mind that it causes equal discomfort and distress to the non-smoker.
Lord CAMPBELL of CROY: My Lords, in order to set an example, will members of the Government refrain from smoking pipes when they appear on television?
Lord SEGAL: My Lords, since pipe tobacco has been granted a reprieve in Tuesday's Budget, should not pipe smokers be content for the moment with small mercies?
Lord WELLS-PESTELL: My Lords, I think that I would subscribe to the view of my noble friend.
Lord SHINWELL: My Lords, will my noble friend be kind enough to reply to my original supplementary question? It was this: has this pronouncement the force of law? That is the first point. Secondly, was it considered by the Cabinet, and did the Cabinet arrive at a decision which entitled the Minister to make such a pronouncement?
Lord WELLS-PESTELL: My Lords, I pointed out that this pronouncement has not the force of law. There is no intention, certainly not at this stage, to introduce legislation. I said that my right honourable friend wants to deal with this matter by way of persuasion and education. This is not, I believe, a decision of the Cabinet. It is a matter arising from the view of, and the Statement made quite recently by, my right honourable friend the Secretary of State in charge of the Social Services, whose responsibility it is to concern himself with the health of the nation.
Lord SLATER: My Lords, is my noble friend aware that on one occasion a previous Chancellor of the Exchequer made a Statement in the other place that the taxation that was imposed upon people who smoked cigarettes helped to pay for the State educational system in our country and assisted towards meeting the expenses incurred in the National Health Service.
Lord WELLS-PESTELL: My Lords, I think it would be regrettable for any Government to raise money irrespective of the rights and wrongs of the situation or the particular sphere from which the money is to be obtained. If it is felt that a certain course should be taken in the
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best interests of the nation, then I think that money must be found from other sources.
Lord HAILSHAM of SAINT MARYLEBONE: In any case, my Lords, if we stopped smoking would not the taxable capacity of the nation he vastly increased?

POST OFFICE: SUNDAY COLLECTIONS
2.38 p.m.
Baroness YOUNG: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what advice they are receiving from the Carter Committee as a result of its scrutiny of the suspension of the Sunday postal service; and when they expect the Post Office to be in a position to announce the results of the trial period.
Lord WINTERBOTTOM: My Lords, the Government have not yet received any advice from the Carter Committee as its report and recommendations have not yet been submitted. As the noble Baroness is doubtless aware, the Post Office announced on 11th March that with postal finances so finely balanced it did not propose to reintroduce Sunday and late restricted postal collections at the present time. This conclusion was reached in the light of its own review, which it promised when the decision to suspend Sunday collections was taken last year.
Baroness YOUNG: My Lords, I can only regard that as a somewhat unsatisfactory reply to the Question. Does the noble Lord not consider that it is in the public interest for the Post Office, as a public monopoly which we are all obliged to use, to take the advice of the Committee under Mr. Carter (which is considering the postal services) before deciding to suspend the Sunday collections permanently?
Lord WINTERBOTTOM: My Lords, committees do not present their reports so quickly that nationalised industries of a major size can wait upon their decisions. But I understand that Sir

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William Ryland has said that he is not closing the door for all time on the subject of Sunday collections and the Post Office constantly reviews its service in the light of changing circumstances. The Carter report may be one of these changing circumstances.
Lord PAGET of NORTHAMPTON: My Lords, is the noble Lord aware that most users of the Post Office would be quite happy to do without Sunday collections and second deliveries if only they could have their postage a little cheaper?
Lord WADE: My Lords, pending the report from the Carter Committee, could the noble Lord enlighten the House on a point which concerns a number of people in areas where the Saturday collection is comparatively early in the day? Is there any advantage in posting by first-class post if the letter is posted after the time of collection on Saturday? Presumably it could not reach its destination until Tuesday. Does it follow that, if the second-class post is used, it will not reach its destination before Wednesday; or does it make no difference what stamp is put on the letter?
Lord WINTERBOTTOM: My Lords, that is a highly technical question, the answer to which, I would say, varies from place to place within the United Kingdom. But if there is a specific answer, I will write to the noble Lord.
Lord BYERS: My Lords, is there any point in the noble Lord writing to my noble friend?
Lord WINTERBOTTOM: My Lords, I am rather good at answering letters.
The Earl of KIMBERLEY: My Lords, is there any possible chance of the noble Lord being able to say whether the report of the Carter Committee will come out before the debate on the postal and telecommunications services in your Lordships' Chamber on the 20th April?
Lord WINTERBOTTOM: My Lords, I am informed that in fact the two could almost coincide. I will make an attempt to persuade my right honourable friend to see that the report is out before the debate.
Lord ORR-EWING: My Lords, could the noble Lord insist that no permanent judgment should be made by the Post Office? An independent committee has been set up. In these circumstances, surely it would be wrong for the Post Office internal committee to come to conclusions, and for action to be taken on those conclusions, until this matter has been thoroughly discussed in Parliament. It has a considerable impact on the business efficiency of our country, as well as on the private community, and this should not be a decision which is taken without mature and very careful consideration.
Lord WINTERBOTTOM: My Lords, I have crossed swords with many noble Lords before on this subject. I think noble Lords must make up their minds whether they regard the Post Office as a commercial undertaking, as I believe it is, or a social service. It is the firm view of Her Majesty's Government that the Post Office should not be required, contrary to its commercial judgment, to offer a service the cost of which is disproportionately high to the public benefit. This was agreed when Sunday collections were provisionally suspended last year. Quite frankly, that is the sort of question we ought to discuss. What is this very large industry? Is it a commercial undertaking or is it a social service? In the view of Her Majesty's Government, it is a commercial undertaking and the judgment of its management must be paramount.
Lord BOSTON of FAVERSHAM: My Lords, apart from the Post Office argument about costs, which was well known before the review was instituted last year, can my noble friend say, first, what evidence the Post Office has adduced justifying its decision not to reintroduce Sunday collections; and, secondly, and in particular, what evidence it has adduced which justifies its announcement two months before the review was due to end? There is great public feeling about Sunday collections, and indeed the Union of Post Office Workers itself wants them to be reintroduced. If the Post Office will not face up to its obligations, does my noble friend not feel that perhaps the answer might in the end be a simple one-clause Bill imposing this obligation upon the Post Office?
Lord WINTERBOTTOM: My Lords, as stated in the announcement on the 11th March, postal finances were so finely balanced that the Post Office did not propose to reintroduce Sunday and late restricted postal collections at the present time. I repeat, "postal finances". It really is a question of commercial judgment, and we had better leave it at that.
Lord ROBBINS: My Lords, may I ask the Minister whether he intends us to infer from his answer to the penultimate supplementary question that commercial undertakings which are monopolies are not the subject of public debate?
Lord WINTERBOTTOM: My Lords, I never said that; but the day-to-day operation of a nationalised industry is not the subject of questioning in Parliament. We have adequate opportunities every year to debate the performance of nationalised industries.
Lord HARMAR-NICHOLLS: My Lords, does the noble Lord recognise—
The LORD PRIVY SEAL (Lord Peart): My Lords, I have the feeling that it is the wish of the House to pass on to the next Question.

MEDICINAL PRODUCTS: SALE AND SUPPLY
2.45 p.m.
Lord JACQUES: 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 when they intend to implement Part III of the Medicines Act 1968.
Lord WELLS-PESTELL: My Lords, a series of interrelated statutory orders and regulations is needed to implement Part III of this Act, and last March the Government opened consultations on the drafts of the main orders. Consultations have started on draft Medicines (Sale or Supply) (Miscellaneous Provisions) Regulations, and further Instruments are being prepared. Her Majesty's Government intend to lay the whole series of Instru
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ments before Parliament during the course of the summer.
Lord JACQUES: My Lords, may I thank my noble friend for that reply? Is he aware that it is necessary that the uncertainty caused by the long delay in implementing this Part of this Act should be brought to an end as soon as possible? Secondly, could he give the House an assurance that, in making the regulations paramount concern will be given to the convenience as well as the safety of consumers?
Lord WELLS-PESTELL: My Lords, in reply to the first part of my noble friend's supplementary question, this has been going on a long time and the Government are fully aware of it, but the Medicines Commission set up two sub-committees and we are (shall I say?) in some difficulty in the sense that their members can give only a certain amount of time; they are people drawn from those professions which are competent in this field and who, therefore, can sit only at certain intervals. There are thousands of medicines which have to be examined by them in order to make sure which, in their view, must be sold by a pharmacist and which may be sold in other ways. This is part of the very real problem. It necessitates a good deal of consultation and discussion. With regard to the second part of my noble friend's supplementary question, we are aware that one must take into account the needs of the consumer, and this is certainly being borne in mind.
Lord DAVIES of LEEK: My Lords, anent the Answer given by my noble friend, would I be right in assuming that if Part III of this Act is implemented it would thereby enable certain drugs and medicines to be sold over the counter and to be advertised on television? And who vets the advertising of wonder drugs and the use of hyperbolic language in describing cheap drugs on television?
Lord WELLS-PESTELL: My Lords, there is a body known as, I think, the Advertising Standards Board. I do not know whether in fact they have any responsibility for this, but I will certainly make inquiries.
Lord DAVIES of LEEK: I thank my noble friend.
Lord WELLS-PESTELL: There is one proposal in particular which has given rise to controversy; namely, that there should be a ban on the self-service sale of analgesics such as aspirin and paracetamol. Noble Lords will know that some arrangement was entered into whereby they could be sold in drug stores provided, first, that the strength was not above a certain limit; secondly, that the containers in which they were sold were child-proof; and, thirdly, that they were not in containers containing more than 25 at a time. Following, the revised advice from the Commission, my right honourable friends the Health Ministers announced on the 24th February that they had decided that a ban on self-service sales was not necessary. That has given rise to all sorts of difficulties, because at the present moment medicines that can be lawfully sold in ordinary shops but which would be restricted to pharmacy sale or restricted if and when Part III is implemented, would comprise such things as eye drops or eye ointments, sedatives containing bromides and certain vitamin preparations. It really is a very difficult matter, my Lords.
Lord DRUMALBYN: My Lords, is the noble Lord aware that, so far as television advertising is concerned, to which I think the noble Lord referred, that is entirely the responsibility of the Independent Broadcasting Authority, subject to the control of the Minister?
Lord WELLS-PESTELL: My Lords, I am grateful. When I replied, I looked at the noble Lord in the hope that he would rise.

FISHERIES: 50 MILE LIMIT
2.50 p.m.
The Marquess of SLIGO: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in the view of their declaration that nothing less than a 50 mile exclusive fishing limit for this country is acceptable to most of the fishermen, it would not be good policy to support the Republic of Ireland at Brussels in a similar demand.
Lord STRABOLGI: My Lords, the broad objectives of Her Majesty's Government on the reappraisal of the Common Fisheries Policy remain those stated by the Minister of State for Foreign and Commonwealth Affairs at the Council of Foreign Ministers at Luxembourg on 4th May 1976. The Government will bear in mind at all stages of the discussions within the Community that their concern over some aspects of the present policy is shared by the Government of the Republic of Ireland.
The Marquess of SLIGO: My Lords, I thank the noble Lord for his reply. Will he not agree that, in the interests of conservation and of British fishermen, Her Majesty's Government should now claim an exclusive 50 mile fishing limit? Does he not think that this should be a precondition for licensing foreign trawlers, most of which have scant regard for the preservation of stocks and wish only to make a quick profit?
Lord STRABOLGI: My Lords, I fully accept that urgent action is necessary and the Government have emphasised this to the rest of the Community. However, the interests of conservation would be best served by a Community solution and, in present circumstances, this is what the Government are seeking. However, it remains open to the Government to take non-discriminatory measures where no Community rule exists.
Lord BOOTHBY: My Lords, in order to avoid yet another long and perhaps damaging wrangle in Brussels, does not the noble lord think that, on this issue, on which there is practically unanimity of opinion, it would be better for the Government to say now that the 50 mile limit is our minimum demand and to make it clear to the EEC that this is not negotiable?
Lord STRABOLGI: My Lords, the United Kingdom's aims, of which the 50 mile limit is one, are, first, this exclusive zone of up to 50 miles and then improved conservation measures, an adequate quota system within the 200 mile Community limit, effective enforcement measures and a substantial reduction in fishing by Third Countries within the Community zone.
Lord CAMPBELL OF CROY:My Lords, will the noble Lord make it clear

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that it is still the aim of the Government to negotiate within the EEC an exclusive United Kingdom zone extending up to 50 miles in the important areas in order to conserve fishing grounds which could still be productive for centuries to come? While this subject matter must be abstruse to many not connected with the fishing industry, is the noble Lord aware that any Government which appeared to acquiesce in the demise of our fishing ports and communities or which caused the cod or herring to become expensive rareties would never be forgiven by the country as a whole?
Lord STRABOLGI: Yes, my Lords. I agree absolutely with the noble Lord, Lord Campbell of Croy. I am glad to confirm that the exclusive zone of up to 50 miles remains one of our aims. It is part of the other measures that I have just given to the House. I should also like to say that the United Kingdom is able to take appropriate non-discriminatory action to protect fish stocks within the United Kingdom fishery limits wherever no Community measures are in operation.
Lord PEDDIE: My Lords, will my noble friend indicate to the House the precise machinery that exists for continuing consultation with fishing interests in this country on the subject of limits and quotas?
Lord STRABOLGI: My Lords, we are expecting a new initiative from the Commission for a definitive fisheries régime shortly after Easter with a view to reaching a settlement by June. Events since the beginning of the year only add greater urgency to what was already a major and pressing issue.
Lord MACKIE of BENSHIE: My Lords, do the Government agree with the report of the Expenditure Committee on the fishing industry in which it says that the preservation of irreplaceable fish stocks is more important than a semblance of short-term agreement, and that it welcomes:
"the Government's readiness to take unilateral action to protect fish stocks within British limits"?
Again, do the Government agree with the Committee which, in paragraph 9, says:
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"In our view, catch quotas have been completely discredited as the sole means of husbanding fishery resources, a view which is backed up by all members of the fishing industry …"?
Lord STRABOLGI: My Lords, the Government are fully aware that further conservation measures are needed to supplement those already adopted by the Community. In particular, there is a very urgent need to consider further action on herring stocks.

AIRBORNE EARLY WARNING
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m., my noble friend Lord Winter-bottom will repeat a Statement on Airborne Early Warning.
BRITISH TRANSPORT DOCKS BILL
Read 3ª, with the Amendments, and passed, and returned to the Commons.
CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
Read 3ª, and passed, and sent to the Commons.

EXAMINERS OF PETITIONS FOR PRIVATE BILLS
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That so much of the Order of the House of 9th December last as relates to the appointment of Mr. T. G. Talbot, C.B., Q.C. and Sir Robert Speed, C.B., Q.C. as Examiners of Petitions for Private Bills be discharged.—(Lord Aberdare.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, before agreeing to this Motion, may I say that we very much appreciate what these two gentlemen have done. The subject matter of their work was contentious but no one has criticised the impartiality with which

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they discharged their duties and, if I may be allowed a personal view, I was enormously impressed with the reasoning of the report. Some of us in the profession remember Mr. Talbot's father, a much loved Judge of the King's Bench Division, and we are glad to see that his son is carrying on the splendid family tradition.
The CHAIRMAN of COMMITTEES: My Lords, I am grateful to the noble and learned Lord. Certainly, they had a difficult task and, together with the other Examiners, they discharged it with great skill. I will, if I may, pass on the remarks of the noble and learned Lord to both the gentlemen concerned.
On Question, Motion agreed to.

MERCHANT SHIPPING (SAFETY CONVENTION) BILL [H.L.]
2.58 p.m.
Lord ORAM: My Lords, I beg to move that the Bill be now read a second time. The object of the Bill is to enable the United Kingdom to ratify the 1974 International Convention for the Safety of Life at Sea. I should like, first, to set out the background to the Convention, which is the fifth of its kind. In 1974, at the initiative of the United Kingdom, a conference of the members of the Inter-Governmental Maritime Consultative Organisation, which is the United Nations agency concerned with maritime affairs, was held in London. This conference led to the 1974 Convention being signed by 67 States, including all the world's leading maritime nations.
As this country played a leading rôle in events leading up to the Convention, we should do all in our power to bring the Convention into force as soon as possible by ratifying it through the passage of this Bill. The United Kingdom as one of the world's leading shipping nations—currently ranked third by the tonnage of its fleet—is very influential within IMCO, and it is important that we continue this rôle by being among the first to ratify the Convention. To date, four countries have ratified, and we must not delay much longer.
The sense of urgency I believe is strengthened if one considers the factors which led to the Convention being signed
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in 1974, and which contributed to the United Kingdom calling for the Conference that produced the Convention. First, there was the wish to implement by incorporation into a new Convention all the amendments which had been made to the 1960 Convention that had not yet been brought into force. Some of these amendments date from 1966. Yet, in spite of the fact that these amendments had been drafted for so long, and, indeed, in spite of all the work they entailed on the part of IMCO staff and member Governments, they were still not in force on account of the number of positive acceptances needed by countries before they could be incorporated in the Convention. In consequence, improvements in safety were being allowed to lag behind the recognised need for them. Secondly, apart from the implementation of past amendments, it was clearly necessary to quicken the speed at which amendments in the future come into force. This led to the agreement at the 1974 SOLAS Conference of an accelerated amendment procedure to prevent delays in future.
Safety of life at sea is in its very nature an international problem. We therefore attach great importance to the work of IMCO, which is the only United Nations specialist agency in this country. A substandard ship is a hazard both to itself and to others wherever it is sailing. It is therefore imperative that steps to improve shipping safety should so far as possible be taken internationally through the co-operation of the world's shipping nations. The United Kingdom is committed to this course of action, and ratifying the SOLAS Convention represents a vital contribution on our part to strengthening the international regulation of shipping safety.
The coming into force of the Convention, and the prospect of its continuing evolution through its built-in amendment procedures, will strengthen the credibility of international regulation-making in maritime matters. Recent events, such as the spate of tanker incidents off the coast of the United States of America, have contributed to a trend towards the unilateral regulation of shipping in the United States, and a number of Bills are now before the United States Congress which might well lead to the United States adopting safety standards at variance with international regulations.

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There is no doubt that one of the main factors making for unilateralism is the alleged slowness of international regulation, and its failure to keep pace with new situations. SOLAS 1974 is designed to meet this, and its coming into force as soon as possible is therefore vital. For make no doubt about it, my Lords, if Conventions of this sort are not brought into force, the trend towards unilateralism in these matters will grow. This would greatly complicate the problems of the shipping industry of a major maritime country like ours, which sets great store by international agreements. We should be much handicapped by having to comply with a variety of national rules.
Having described the background to the Convention, I should like to turn briefly to the Bill, which seeks to implement the provisions of the Convention so far as this country is concerned. The IMCO text of the Convention was laid before Parliament last April. The Convention will come into force 12 months from the date on which at least 25 States, whose combined merchant fleets amount to at least 50 per cent. of the world's gross tonnage, have become parties to it. To date, as I have said, four countries have ratified. Ratification by the United Kingdom will not in itself bring the Convention into force, but it will undoubtedly help and permit us to take the initiative with other countries regarding this.
As I have already said, the 1974 Convention will replace the 1960 Convention, which in turn replaced the 1948 Convention. This latter Convention was put into effect in this country by the Merchant Shipping (Safety Convention) Act 1949. The 1960 Convention in its turn was put into effect by the Merchant Shipping Act 1964, which, among other things, changed the references in the 1949 Act to the 1948 Convention into references to the 1960 Convention. This Bill does the same thing in terms of the 1974 Convention in that it translates the references to the 1960 Convention which appear in the 1949 and 1964 Acts into references to the 1974 Convention.
Provision for making these existing Statutes apply to the 1974 Convention is contained in Clause 1 of the Bill. This simple legislative change will go a long way towards allowing us to implement the requirements of the Convention. This is
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because the powers derived from the 1949 and 1964 Acts are sufficiently wide to make rules on most matters covered by the 1974 Convention, including many of the new measures introduced by it.
However, there are a number of new items introduced by the Convention where existing powers are inadequate, and I should like to mention these areas briefly. First, the Convention in the part dealing with fire safety establishes new requirements affecting the oil fuel used in machinery. Among other things, it provides for the prohibition of the use of oil fuel below specified flash-point levels. Powers to make regulations on these matters are at present inadequate to meet the requirements of the Convention. Accordingly, subsection (4) of Clause 1 makes minor amendments to the 1949 and 1964 Acts to enable the appropriate rules to be made.
Secondly, the Convention, in the part dealing with the carriage of grain, which has been substantially revised, extends the type of grain, subject to regulation, to include processed as well as natural forms. As your Lordships may be aware, grain is considered a dangerous cargo; movements at sea cause it to shift easily, jeopardising the vessel's stability. Processed grain, which can differ greatly in composition and appearance from natural grain, may in some circumstances be equally hazardous. With the extension of coverage to include processed grain brought about by the Convention, it is desirable to clarify the scope of our powers to include natural and processed grain, and this is done by subsection (5)(a) of Clause 1.
Thirdly, and also in relation to the carriage of grain, the Convention calls for the issuing of documents of authorisation to ships carrying grain which are loaded in accordance with the new regulations. Our existing powers under the 1949 Act to issue such documents are confined to ships where the cargo of grain exceeds one-third of the ship's registered tonnage. It is now desired to extend the power to issue certificates to all ships carrying grain, regardless of the volume of the cargo in relation to the size of ship. This is provided for by the amendment in subsection (5)(b) of Clause 1 of the existing definition of a "ship carrying a cargo of grain".

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The fourth area where new additional powers are needed to implement the requirements of the Convention concerns nuclear ships. Nuclear ships were covered for the first time in the 1960 SOLAS Convention. However, we ratified that Convention at a time when the building of nuclear ships was still under debate. We therefore reserved our position on nuclear ships. We made clear that while we fully accepted the requirements relating to nuclear ships, we would implement them only as soon as it became necessary to do so. More recently, one or two ships have been built which meet the Convention's definition of a ship provided with a nuclear power plant and, though they are still very few in number, it is desirable that we take powers to regulate them. Clause 2 provides for these powers. The regulations required by the Convention will be exacting. For instance, nuclear ships are to be surveyed at least annually; special regard is to be paid to the safety of the reactor installation and to radiation hazards, and special control is to be exercised on nuclear ships before entering and while in port. New nuclear passenger and cargo ship safety certificates are to be created and issued to nuclear ships complying with Convention requirements.
I should like next to turn to Clause 3 which deals with future amendments to the Convention. I mentioned at the outset the background to the Conference which drew up the Convention and its desire to make the amendment of SOLAS Conventions more rapid. Provision for this is contained in Article VIII of the 1976 Convention. The details are fairly complex, and they vary according to what part of the Convention is being amended. I will not go into all the complexities but they are designed to make the amendment procedure much quicker than hitherto, consistent with the fullest possible consultation between contracting Governments. Under the amendment provisions, a Government would not be bound to accept or bring into force any amendment to which it objected; so there is no question of a loss of national sovereignty. Furthermore, under Clause 3 implementation by the United Kingdom of amendments would be made by means of Orders in Council subject to Affirmative Resolution of both Houses of Parliament. There is, therefore, provision for the fullest
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Parliamentary scrutiny of future amendments.
In conclusion, I should like to stress the urgency with which the Government view this measure. To encourage other countries to ratify in sufficient numbers to bring the Convention into force and thereby maintain the prestige and effectiveness of international co-operation in safety at sea is, as I am sure your Lordships will agree, reason enough for welcoming this Bill. But beyond that, I believe that we have an obligation to all those who go to sea—whether they serve in the Merchant Navy or are passengers—to ensure that safety standards of the highest order are promoted and enforced. I know that both sides of the shipping industry in this country—both the shipowners and the seafarers—support this measure and are anxious to see the Bill become law. We have a duty not to let them down in this matter and, for this reason, I believe that the Bill will be welcomed both here and in another place. I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Oram.)
3.16 p.m.
Lord LYELL: My Lords, all of us on these Benches are most grateful for the very full explanation of this Bill given by the noble Lord, Lord Oram. Your Lordships will note that it is not a very large Bill, compared with the size of Bills with which the noble Lord, Lord Oram, and others of us have had to deal recently. Nevertheless, the noble Lord gave a very detailed explanation and, I think, a very reasonable one—because behind this fairly small Bill lie many important points, and almost all of them were brought out by the noble Lord.
We welcome the main purpose behind this Bill which, as the noble Lord said, is to ratify the 1974 Safety Convention. Its other purpose is to modify and update the Merchant Shipping Acts. It is to be hoped that ratification by the United Kingdom will encourage other maritime nations of the world to do likewise. For our part, we find it most interesting that a special Working Group from the Intergovernmental Maritime Consultative Organisation is continuing to seek a code for nuclear-powered ships and also—which is a point which has not yet arisen, I believe—nuclear-waste carrying ships. Clearly, nuclear power has a future both

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on land and at sea, but there are major problems and tiny, we hope, risks of radiation and pollution. It is most encouraging that the Working Group expects to complete the code by the end of 1979. I hope that the noble Lord, Lord Oram, may be able to confirm that point, either now or at a later stage today.
I understand that the Working Group which is looking at this problem is making considerable progress. Certainly we are very pleased that it is taking such an interest in this important aspect of safety. So far as we can gather, there are about half a dozen nuclear-powered vessels operating in the world at present and, of course, that number is bound to rise.
Another point which was made clear in the Bill is that provisions are laid down concerning processed grain and bulk grain, when carried on board ship. The noble Lord, Lord Oram, mentioned problems of shifting grain. I understand there are also problems concerning fumes being given off by processed grain. Those fumes, of course, involve problems of safety, together with the low flashpoint of fuels and also of hydrocarbon cargoes, which the noble Lord mentioned. We believe that such cargoes require very clear and specific safety rules. It is encouraging that the United Kingdom, as a leading member of the IMCO, is showing the way to implementing the provisions of the 1974 SOLAS Conference. We have made various inquiries in connection with this Bill from organisations representing those who work in the Merchant Navy, among them the National Union of Seamen and organisations covering Merchant Navy and airline officers. These are just some of the organisations which represent seafarers and all those who work in the Merchant Navy, both afloat and on shore. Every organisation that has taken part in the talks, and is currently taking part in the Working Party, is of the opinion that the Conventions, and indeed the Bill before us this afternoon, are a team effort and, we hope, are uncontroversial.
My noble friend Lord Inchcape, who is to follow in the debate this afternoon, is, of course, President of the General Council of British Shipping and we look forward to hearing what he has to say to the House. For my part, I think that it is invidious to go on at length on a subject of which I have but cursory knowledge at
1050
the moment. Nevertheless, I hope that my noble friend Lord Inchcape and the House will permit me to encourage the passage of this Bill through your Lordships' House for two reasons.
First, in 1975 the United Kingdom had under its flag 3,700 ships, and it seems that their gross registered tonnage was of the order of 33.2 million tons. This indicates our position in the forefront of maritime trading nations. My second reason for welcoming this Bill is that as leaders of the world merchant fleet we should do everything possible to strengthen the IMCO, and to discourage the unilateral action by other members of the organisation, to which the noble Lord, Lord Oram, referred. We believe that this Bill goes a considerable way to tighten up various safety codes and codes of practice. We also believe that the United Kingdom wishes to fulfil its part in ratifying the 1974 SOLAS Convention, and to that extent all of us here welcome and support the Bill which is before us today.
3.22 p.m.
The Earl of INCHCAPE: My Lords, I am most grateful to the noble Lord, Lord Oram, for moving the Second Reading of this Bill. As chairman of a major shipping company, I must declare both an obvious interest and, indeed, a keen responsibility for the safety of ships. But it is in my capacity as President of the General Council of British Shipping that I should like to give your Lordships the views of British shipowners on this Bill.
I can confirm that British shipowners welcome this Bill, which will enable the United Kingdom to ratify the International Convention for the Safety of Life at Sea, 1974. Our shipping industry fully supported the concept promoted by Her Majesty's Government, through the Intergovernmental Maritime Consultative Organisation—IMCO—in 1974, known as the "Simple SOLAS" Conference, as has already been said. The Convention that was concluded by that conference consolidated all the previous amendments to the 1960 Safety Convention which had been adopted by IMCO, but which had not taken effect owing to the recognised deficiencies in the procedure for amending technical regulations in IMCO Conventions. As the noble Lord, Lord Oram, pointed out, a particularly important and

1051
welcome feature of the 1974 Safety Convention is that it embodies an accelerated amendment procedure, which should help to ensure that the 1974 Convention can be kept up to date.
The noble Lord referred to the current trend towards the introduction of unilateral regulations which are at variance with internationally agreed standards. This is a matter of extreme concern to the shipping industry, which, by virtue of its international nature, requires the widest possible international agreement on matters affecting the construction, design and equipment of ships. I would confirm that the spread of unilateral legislation, such as that to which the noble Lord referred, would be highly disruptive to the efficiency of the industry. It is to be hoped therefore that, as envisaged by the noble Lord, the early entry into force of the 1974 Convention will contain the spread of unilateralism.
As the noble Lord, Lord Oram, said, this Bill also includes the means whereby enabling effect can be given to the provisions of the regulations for nuclear ships in the 1974 Convention. Again, this is most welcome to the shipping industry. Prospects for the economic viability of nuclear propulsion have clearly increased in recent years. However, it is also clear that shipowners will not be able to introduce nuclear propulsion until and unless the international political climate permits. For this purpose, further provisions dealing with the safety and environmental aspects of this problem need to be developed, and to receive wide international acceptance. It is therefore satisfactory that these questions are under active consideration at IMCO, and this Bill will facilitate the implementation by Her Majesty's Government of such provisions as may be agreed internationally.
I would re-emphasise that the British shipping industry would welcome the earliest possible ratification of this Convention by our Government. As the noble Lord, Lord Oram, stated, to date only four States have so ratified this Convention, and experience suggests that, for a variety of reasons, ratification as required by 25 States, the combined merchant fleets of which constitute not less than 50 per cent. of the world gross tonnage, is unlikely to be achieved rapidly. I would therefore most strongly urge that
1052
Her Majesty's Government take every measure at their disposal—and these are still quite considerable—to try to persuade other Governments to ratify this Convention as soon as possible. In the field of maritime safety, the United Kingdom Government and our shipping industry, who collaborate most closely and effectively in this matter, are still in the vanguard. I am sure that your Lordships will agree with me that Her Majesty's Government should continue to give the world a lead in this very important field.
3.27 p.m.
Lord ORAM: My Lords, I should like to thank warmly the noble Lord, Lord Lyell, and the noble Earl, Lord Inchcape, for the welcome which they have given to this Bill and for the informed comments which they have made upon it. The noble Lord, Lord Lyell, congratulated the two of us on the shortness of the Bill, and I think he was comparing it with the Patents Bill. Lying behind the Bill there is a document which is almost as formidable as the Patents Bill. But, fortunately, in terms of legislation, that need not worry us unduly in that, as I explained, this Bill is quite short and is comparatively simple.
The noble Lord, Lord Lyell, referred to dangerous cargoes which are dealt with in Chapter 7 of this document. Of course, powers already exist in legislation to deal with these dangerous cargoes and those powers are continued by the Bill which we are now considering. But I would confirm one point that he asked me about, that there is a Working Group of IMCO dealing with nuclear ships and I understand that it should complete its work quite shortly.
The noble Earl, Lord Inchcape, speaking, as he did, with his authority as President of the General Council of British Shipping, underlined the urgency which I attempted to outline to your Lordships, not least because we need ratification by 25 countries and, if we do our job as soon as we can, that will enable us to urge the others to go and do likewise. I think there is no need for me to add further to the debate, except once again to express my appreciation of the comments of those who have spoken.
Lord HAWKE: My Lords, before the noble Lord sits down, can he give us some examples of what is processed grain?
Lord ORAM: My Lords, I asked this question myself when I was inquiring into these matters, and was told that it is like little marbles. What the process is, I do not know. But it transforms the grain into tiny balls, which are equally capable of shifting as the seas become rough. But that kind of cargo is not covered by existing legislation. Just what the process is I would not know, but it transforms the grain into small balls.
Baroness WARD of NORTH TYNESIDE: My Lords, arising out of this very important question, could the noble Lord say whether the Government themselves are making any representations to the other countries which ought to support the Convention, or whether that is left to general organisations? Are the Government themselves taking any action to help on what is contained in the Bill?
Lord ORAM: My Lords, as I explained, the organisation that is responsible for this is IMCO. We are a leading and active member of that organisation, and it would be through that organisation that we should bring our influence to bear on other member countries.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

EEC: 13th REPORT ON REGIONAL DEVELOPMENT FUND
3.31 p.m.
Lord COBBOLD Lord COBBOLD rose to move, That this House takes note of the Thirteenth Report of this session of the European Communities Committee (H.L. 75) on the European Regional Development Fund. The noble Lord said: My Lords, I beg leave to introduce the Motion standing in my name on the Order Paper. The Commission published on 23rd June, 1976, a first annual report on the European Regional Development Fund, No. 724/75. It contains a factual account of the way that the Fund was administered in its first year of operation. The report also discusses policy issues which are of great interest to the United Kingdom. A new Commissioner, Signor Giolitti, has, since 6th January, 1977, been in charge of European regional policy. He will be primarily responsible for the preparation of the new proposals about the future of
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the Fund, which are expected to be considered by the Commission and within the Council of Ministers later this year.
Your Committee considers that this is an opportune moment to review the working of the Regional Fund to date and also to discuss questions about the future of EEC regional policy, in good time before decisions fall to be taken in the Commission and the Council.
Sitting concurrently, Sub-Committee II of the House of Commons Select Committee on European Secondary Legislation, et cetera, and Sub-Committee A of the House of Lords Select Committee on the European Communities received oral evidence from the Departments of Industry and the Environment, Scotland, Wales and Northern Ireland; the European Investment Bank; the Highlands and Islands Development Board; and Mr. Evans, Chairman of the European Parliament Committee on Regional Policy. They also received written evidence from a number of sources, including the CBI and the TUC, and other interested bodies and individuals. Dr. Helen Wallace's intended oral evidence had to be submitted in writing, owing to a train accident and train delays. The evidence, both written and oral, is printed with the report. In addition, the sub-committees have been greatly assisted in their deliberations by Lord Thomson, until recently the EEC Commissioner responsible for regional policy, and by Dr. Rugiero, the then Director-General concerned. I am very sorry that in the end Lord Thomson was unable to speak today. He had hoped to do so but he had other urgent public duties.
This has been the third occasion upon which the sub-committees of the two Houses have met concurrently to consider matters relating to scrutiny of Commission proposals. If I may express a personal view, though I believe that it is generally shared by my colleagues, the experiment of the two sub-committees sitting concurrently has been very rewarding. It saves the time of witnesses and Parliamentary staff; it avoids a great deal of duplication; and we have found the somewhat different approach very helpful. The terms of reference and the practice of the two sub-committees differ and the reports made by the two Select Committees need not be identical, the practice of this

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House being to go in more depth into detail and recommendations. The fact that the two reports are, on this occasion, not identical, though they are in no way contradictory, does not, in my view, invalidate the usefulness of the "concurrent" exercise.
As chairman of the concurrent sessions, I should like to say how much I and other Members of Sub-Committee A of this House appreciated the contributions made by Members of another place, particularly by the chairmen of their Select Committee and Sub-Committee, Sir John Eden and Mr. John Roper. Without that contribution, the report which we are considering today would have been much less thorough than I hope your Lordships will find it. I should also like to express warm thanks to all who helped in the preparation of the report: members of Sub-Committee A, witnesses, our very well informed specialist adviser, Mr. Rhodes, and the Parliamentary staff of both Houses.
Before turning to the main conclusions of the report, I should like to add that Sir John Eden and I had the pleasure a few weeks ago of an informal meeting with Signor Giolitti, the new Commissioner concerned, and explaining to him the nature of the Scrutiny Committees and also some of our general conclusions. The House will be aware that in the allocation of duties in the new Commission, Signor Giolitti was, unlike his predecessor, entrusted with rather wider responsibilities as regards other related matters, including the Social Fund.
The Regional Development Fund aims to contribute, along with other Community funds and national policies, to a reduction in regional imbalances and disparities. This means promoting a more rapid rate of economic growth in the economically backward regions of the Community and, in so doing, removing regional disparities in unemployment, investment, incomes and migration. With wide economic and social disparities in the regions of the Community, average incomes per capita are five times higher in the richest region than they are in the poorest.
It is laid down that Fund assistance must be co-ordinated with national regional aid programmes. As explained in paragraphs 14 and 15 of the report, assistance can be given, under slightly
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different arrangements, to both industrial projects and infrastructure projects; that is to say, to such things as road construction, drainage, water supply, et cetera. To be eligible for Fund assistance, projects must fall within the framework of regional development programmes prepared by Member States, and industrial projects must also be in receipt of national regional financial aid. Total assistance to such projects must not exceed the aid limits set by the Commission. Applications for grant may be submitted only by Member States. The Community then makes its choice from a selection of the projects already in receipt of public money.
In 1975, the net benefit to the United Kingdom, after taking account of United Kingdom contributions to the Community budget, could be valued at about 13·5 per cent. of the Fund. This proportion is declining as the United Kingdom contributions to the budget increase through the transitional entry period. By 1978, the net benefit to the United Kingdom is expected to be near 9 per cent. of the value of the Fund if the present quota continues. Detailed figures for the regional distribution of the United Kingdom allocation from the Fund are shown in Table 1 of the Department of Industry's written evidence. The net benefit of the Regional Fund to the United Kingdom could disappear altogether if further enlargement of the Community brought in mainly poorer States with large regional problems and this were to lead to substantial changes in the quotas which would be only partially matched by changes in budget contributions. However, the net benefit received by individual Member States should not necessarily be the overriding consideration.
The Fund is not permitted to lead Member States to reduce their own regional programmes. On the contrary, the resources of the Fund must complement these efforts. This is the so-called "additionality" principle—an instance of Community jargon to which I shall return later. All Member States, including the United Kingdom, accept this principle but, for the reasons given in paragraphs 14 and 15 of the report, they are not in a position to show that it is, in practice, being completely observed.
The Regional Fund's contribution for both infrastructure and industrial projects in the United Kingdom amounts to only

1057
about 10 per cent. of domestic expenditure on regional aid to industrial projects alone. This proportion reduces to between 4 and 5 per cent. if net receipts from the Fund are considered rather than gross receipts.
I can briefly summarise as follows the main findings and conclusions set out in the report before your Lordships. In the light of the evidence which the Committee received, we felt that the Regional Fund had made a good start considering its very limited resources. The technical arrangements in Brussels are efficient and speedy. Largely because of limited resources, the Fund has not yet fulfilled the high hopes with which it was launched. The obvious problems include, first, a need for more co-ordination in Community policy in all its aspects on the subject of regional development. The new Commissioner's more general oversight over other funds, to which I have already referred, should be helpful from this point of view. The second point is the desirability of closer contact between the Commission and local authorities in the Member countries, though we felt that the Fund must continue to deal through national Governments and within national programmes.
Thirdly, there is the need to simplify the complicated problem of additionality, which would take too long to describe in this debate but which is discussed in some detail in paragraphs 14 to 17 of the Report. I shall just quote paragraph 17 and a little from paragraph 18. This is in somewhat lighter vein but I found it a convincing explanation of the problem.
"The problem of additionality was well illustrated by a member of one of the Sub-Committees. His birthday fell on Boxing Day and he often received one present at Christmas time from friends rather than two. He might speculate that had his birthday fallen in June he would have received two presents rather than one. But the value of the two hypothetical presents was not known in relation to the value of the one present actually received, not even by his friends, since the two presents were never actually purchased. The loss, if any, of having a birthday at Christmas could never be known.
"The situation is exactly the same with the Regional Fund. National governments cannot prove, and may not even know, what they would have spent in the regions had the Regional Fund not existed."
With your Lordships' knowledge of his facility for making extremely shrewd remarks in lighter vein you may be able to
1058
identify the noble Viscount who has passed quite a number of unhappy Christmases!
My Lords, we felt that, to do any real good and to remove the unreal element in existing arrangements, the Fund should he considerably larger. We saw advantage in a review of the Fund on a one-year basis in 1977 and thereafter at three-yearly intervals. We commended extension of the already close co-operation with the European Investment Bank. Among other ideas mentioned was the possibility, admittedly not without its difficulties, of the European Investment Bank helping to cover exchange risks. We saw an important public relations question: it needs to be better known in the areas concerned that the Regional Development Fund is actually helping to complete a project. We were told of some cases in which a notice was put up saying, "This project is assisted by the Regional Development Fund". It is these problems to which the Committee felt that special attention should be given in the immediate future. The Committee concluded that regional policy was a valuable part of Community activities and that while one could not expect everything to be solved in the early years the Fund had great potential for encouraging Community cohesion.
The future development of the Regional Fund obviously depends to a large extent on the amount of Community budget funds available for the purpose and the proportion of such funds which the various Community bodies apply to the purpose. In this connection the recent debate in this House about the Common Agricultural Policy and green money, showing the heavy and increasing burden of monetary compensation amounts on the budget, is obviously relevant. Relevant, too, is the possibility of further accessions to the Community in the future, and the apparent probability that new Members might be countries with difficult regional problems. We considered any detailed discussion of these matters to be outside the scope of the present report.
If I may close with a personal view, it is this: as a strong supporter of the European Community, I always expected difficulties in the early years, particularly in economic matters. As a one-time practitioner in the monetary field I have never believed in

1059
monetary union, as opposed to close co-operation between monetary authorities, until a considerable degree of political and economic union has been achieved. To speak of a common currency or even of a common monetary policy without a large degree of fiscal and general economic harmonisation is a nonsense. But the aim of integration has always been, and remains, a long-term aim and, although some things have gone wrong, nobody should underrate the progress made. In my view, regional development is a concrete instance of where progress can and should be made towards the long-term aims. If a definite regional policy can become a more general part of Community thinking it is one way—and, in my judgment, an effective way—of moving in the direction of economic integration. I very much agree with recent comments by Mr. Jenkins that if the Community does not move steadily forward in that direction it will move backwards. It is with these general long-term and overall aims in mind that I commend this Report to the House. I beg to move.
Moved, That this House takes note of the Thirteenth Report of this session of the European Communities Committee (H.L. 75) on the European Regional Development Fund.—(Lord Cobbold.)
3.48 p.m.
Lord ELTON: My Lords, I must apologise at the outset to your Lordships for not being in the Chamber for the very first moments of this debate. This was due to the fact that my personal early warning system was not airborne as soon as might have been expected. In that perhaps I have something in common with the House.
My Lords, we must look at this in the context of the whole history of Europe and recall that the original motive for the foundation of the Communities was to bind the nations of Europe so closely together that never again could they drag themselves and each other, and with them the rest of mankind, into a world war. A regional policy is a corollary of that. The binding together of the nations makes nationalism impotent. The regional policy in fact dissolves it and makes it benign, and nationalism has fuelled so many wars and wrecked so many lives
1060
that if Europe succeeds in nothing else than in taming that, Europe will have been a success.
We should thank the noble Lord, Lord Cobbold, for the opportunity of this debate, and indeed his Committee for the considerable amount of very thorough and lucid work which they have done in making this report. It is in effect a report on a report, since it reviews a report upon which the European Parliaments Committee on regional policy, regional planning and transport in the person of M. Delmotte had already advanced its own report, which was in turn debated in the European Parliament on the 16th December. Therefore this ground has been examined in considerable detail over a fairly long period by a large number of experts.
It has the incidental peculiarity that although it is a review of the first three years of the operation of the Fund, in fact of course the Fund had been operative for only some five months when the report which this report looks at was written. It is a complex operation, if not a big one. The European Regional Development Fund disposes, as the noble Lord, Lord Cobbold, has said, of some 500 million units of account in a full year, which is only about £200 million for the whole region—a modest sum. In fact, Mr.—now, happily, the noble Lord, Lord Thomson—actually referred to it as a fig leaf, and one cannot get much more modest than that!
My Lords, if the subject is complex, I must apologise for my apparent and evident lack of expertise, but I think there are a number of practical considerations about which even a person with my naivety in these matters can make some useful comment. The aim of the Fund is to reduce the wide discrepancies between the wealth of the different regions. The United Kingdom will be, and is, a net beneficiary to the tune of 13.5 per cent. of the whole Fund, though this is not a very large proportion of our own regional policy allocation of funds. The intention of the Fund was that it should be a magnifier. This, I take it, was the intention behind the principle of additionality. Additionality meant, first, that the policy of the European Fund should follow and reinforce the policy of the national Government; secondly, that it should act as a means of increasing it,

1061
not only by the amount of the aid from the European Fund itself but also by the attraction of external investment funds in response to it.
The noble Lord, Lord Cobbold, quoted a splendid example of the difficulty of measuring its effect. I can only say that the House is fortunate that the noble Viscount, Lord Amory, did not have his birthday on leap year's day, when the difficulty would have been even more acute. But if the intention is to encourage investment, and hence employment in less developed areas, by adding to investment programmes already undertaken in the knowledge that such additional aid may become available, this does not happen in practice, because, first, Her Majesty's Government can make application only in respect of investment programmes that already exist; secondly, there is then no certainty that such application will be granted and aid given. The investor, therefore, whether in the public or private sector, must make his decision on the assumption that such additional aid may not be forthcoming. All these disincentives are common to all the countries in the Community to one degree or another. But especially in the United Kingdom it is apparent that, despite the really remarkably rapid response in cash to applications—and I think one must congratulate the noble Lord, Lord Thomson, as he now is, and those who helped him in Europe, on the bureaucratic efficiency with which this was done—it appears not to be possible for Her Majesty's Government to do other than make a full grant of the whole of the aid available on any project before recommending it for support from the European Fund. There may be specifically European administrative reasons for this, and I hope the noble Lord opposite will make these clear when he comes to reply.
Under the circumstances two factors then operate. First, the Community's own rules against topping up aid to any particular region above a prescribed limit that may already have been reached inhibit the addition of European aid to the aid programme which has been advanced for consideration for grant from the Fund. Secondly, there is an existing sharp restraint, and a very proper one, on Government expenditure. So the
1062
result is that Her Majesty's Government do not pass on specifically the subventions from the Fund to the projects which are to be aided, but merely take them, as a reimbursement of their own original grant, directly back into the Government pocket.
This process then does little to stimulate outside investment; since it cannot be counted on when the investment decision is being taken, it does nothing to make the intended beneficiaries aware of the effects of the Community's regional policy, and I use that phrase ill-advisedly, because, of course, as we shall see, there is no specific regional policy in the Community as yet, but there is an expression of it, among other functions, by the ERDF. This effect is hidden since the cheques never actually reach them in a recognisable European form. And it does very little indeed to stimulate our own Government to a more active stimulation of investment in the development areas, since the relationship between their own aid and European aid is tied to any particular project only by a simple book transaction carried out ex post facto. It does, it is true, result in a small net inflow of cash to our own development budgets, and in the form in which it is used for infrastructure programmes it results in a modest alleviation of the burden of rates borne by local and other authorities. But this is not additionality, and I believe additionality to be important, because it should result in more investment positively directed to where it is most needed.
I believe that two obstructions to this effect can be removed. The first is in the power of the European Commission and Parliament, and that is a change of the topping up regulation. There is to be a review of the ERDF regulation at the end of 1977, and I believe that this should be a first consideration when that is undertaken. Secondly, I think it is fair to note that, whereas there is a necessary very harsh constraint on the Government on expenditure of their funds, which are in fact our own taxes, where the money is available from other sources that constraint can be relaxed.
I believe that the process should be, first an application by an investor to Her Majesty's Government, and I am thinking principally, of course, of the private

1063
sector, but not only; secondly, a decision by Her Majesty's Government on their own grant aid; thirdly, an application by Her Majesty's Government to the ERD Committee for aid; fourthly, a decision by the ERD Committee on whether or not to grant aid from the Fund. Then that decision should be passed by Her Majesty's Government to the investor who should then be able to make his decision on whether or not to go ahead, knowing two things; first whether aid of both kinds is available, and, secondly, if European aid is available, then that should be paid to him or made available to him in addition to Her Majesty's Government's aid. This might marginally increase expenditure by Her Majesty's Government, but not from taxation, and it will help to reverse the present damaging trend of investors to keep away deliberately from depressed areas, as they will find better infrastructure elsewhere and cannot count on extra aid if they come to the depressed areas. The effects of this trend were very ably and sharply pointed out by the noble Lord, Lord Cobbold.
I should like, if I may, to direct your Lordships' attention also to the EEC Consultative Document associated with this Report, (the reference is R1611/76) where in Annexe III the first graph is an illustration of the relative changes in GDP per head expressed in units of account. I note only that in 1960, if the average throughout Europe is taken as 100, the United Kingdom index stood at 117 and that of Denmark at about 112. Today the Danish index has risen to 145, and ours has sunk to almost exactly half of that, to 72. In other words, only Italy and Ireland are below us in what you might call the wealth table, and expressed as a graph it is only too clear, if you extrapolate the current figures, we shall be below them before very long.
My Lords, the Fund is small. The policy in consequence must be weak, but its aims are absolutely vital. The report points out that the expansion of the Community now by the inclusion of other countries, other less developed countries, will dilute it even further, and I think that this should be very much in the minds of your Lordships and their representatives when it comes to considering current applications to expand the European Community. Both economically
1064
and, if I may so put it, in the realm of ideology we are not in a strong position to add to the size of the Community, since this will, I believe, dilute not merely the economic effects of the regional policy, from which we should be net beneficiaries, but also blow a very cold wind on the little plant which is beginning to grow up of a common and self-conscious European identity.
In paragraph 36 of the report the Committee sum up the choices open to Europe in the region of this policy. The first is to abandon it. The second is to extend it only by a year and keep it on probation. The third is to increase it substantially and to develop new aspects. I think that we must endorse that view, which is the Committee's view, which says that the third is the proper course. I think it is important that this should be done in the light of our own regional policy, which has to be notified to the Community under Article 6 by the end of this year.
I think it is important that when the Articles of Regulation of the Fund are reviewed after the end of this year we should consider two points. The first, as I have already said, is the removal of the limit on topping up at least to allow an increase above existing ceilings equivalent to the amount of the Fund's own subvention in any one region. The other, and more important, is that we should now consider setting up a structure of institutions for making and carrying out a policy which is truly regional throughout Europe. At present we have the ERDF, the European Development Bank, FEOGA and the Social Fund—a large number of not altogether integrated or co-operating funds, which have effects which are not entirely at random. I accept that there is a frequent exchange of information within the structure of Europe, but there must be a formal structure with formal aims carried out flexibly under the direction of Europe.
It would not be generous to conclude without repeating that I believe that the noble Lord, Lord Thomson, has had a significant period of office in the Community, to the extent that M. Delmotte suggested that the Fund should be called the Thomson Fund. I only hope that his successor, Signor Giolitti is equally forthright, active and successful.

AIRBORNE EARLY WARNING
4.2 p.m.
Lord WINTERBOTTOM: My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Defence. The Statement is as follows:
"Following the NATO Ministerial meeting on 25th March, the Government have given further consideration to their position on the provision of these aircraft to meet the requirements of the Alliance. As I made clear at the meeting, we have already agreed to two postponements of the NATO decision which is urgently required if timely provision of airborne early warning cover for the NATO area is to be achieved.
"As the House knows, we have maintained an alternative national development based on the Nimrod aircraft as a fall-back option in case of failure by NATO to agree on a system for the whole Alliance. This development has so far been funded at a low level, but if it is not to be delayed further a substantial increase in the rate of expenditure on it is now necessary. In the light of the continued uncertainty about the procurement of the AWACS system by NATO, we have decided that we must now go ahead with the Nimrod system, which, subject to the successful conclusion of the necessary contract negotiations, will now proceed to full development.
"In taking this decision the Government have taken full account of the arguments put forward in NATO for further delay to enable outstanding questions on the procurement of the Boeing E3A AWACS aircraft to be further studied. Our decision to go ahead with Nimrod, however, will give the Alliance an urgently needed and modern airborne early warning capability to replace the Shackletons now operating in the United Kingdom Air Defence Region and in the Eastern Atlantic and Channel areas. Our decision does not exclude the possibility of a collective NATO solution to the requirement. In developing the Nimrod system we shall aim to secure the maximum inter-operability and compatibility
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between Nimrod and whatever additional airborne early warning aircraft the Alliance may eventually decide to procure. I suggested to my NATO colleagues that a single NATO airborne early warning force, though it would be an ideal solution, is not the only way in which the airborne early warning requirement could be met. We shall continue to work for arrangements which will secure maximum military effectiveness from the resources which the Alliance eventually decides to devote to the airborne early warning task".
My Lords, that concludes the Statement.
4.5 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, the House is grateful to the noble Lord for repeating that Statement. First, I should like to express regret that NATO has again demonstrated its inability to agree on a common policy. I believe that all sides of this House remain dedicated to the notion of standardisation of equipment. Is it true that it is principally the Germans who have reservations about committing themselves to the AWACS system, and, if so, can the noble Lord tell us what their reservations are?
We can express considerable satisfaction about the employment implications in this decision. I believe that it gives employment to about 1,500 people for a matter of five years. Can the noble Lord tell us how this would compare with the part of the AWACS contract that this country would receive, because I do not think it is inconsiderable? We must accept that in pursuing the course that is suggested here we are laying ourselves open to being accused of parochialism and jingoism, whereas I would hope that we could demonstrate our readiness to submerge our national interests in the wider interests of the Alliance as a whole. Therefore, is there any chance of Britain persuading her allies to join her in the course that she will pursue? Also, can the noble Lord expand a little on what is meant by the sentence in the Statement:
"Our decision does not exclude the possibility of a collective NATO solution to the requirement"?

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Can the noble Lord tell us the relative technical merits of the two systems? For example, does the Nimrod system operate overland and does the Boeing system operate over water, or is it the specialised nature of the two systems which is referred to in the Statement where it says:
"… that a single NATO airborne early warning force … is not the only way in which the airborne early warning requirement could be met"?
Can the noble Lord tell us how the timings of these two developments compare? For example, when will the Nimrod system be ready? I believe that so far it has only been tested on the ground.
Clearly, we are glad to hear that there is to be inter-operability and compatibility, however much we may dislike those rather ponderous words. However, does that mean that we could envisage the possibility of Nimrod and AWACS aircraft operating side by side in a complementary role? Can the noble Lord tell us what compromises are envisaged in the development when the Statement says:
"In developing the Nimrod system we shall aim to secure the maximum inter-operability and compatibility between Nimrod and whatever additional airborne early warning aircraft the Alliance may eventually decide to procure"?
I apologise for firing so many questions at the noble Lord but they are relevant to the Statement. Finally, can he tell us to what rate of expenditure we are committing ourselves by taking this decision? I am certain that we have to take this step, but we should like to know how deeply committed we are and what, for example, would happen if, in a few months' time, it was decided, after all, to reach agreement on ordering the AWACS system. When is the next decision point and when will the next discussion of this matter take place?
The Earl of KIMBERLEY: My Lords, we on these Benches should also like to thank the noble Lord for repeating the Statement, and congratulate his right honourable friend the Secretary of State on making this decision. It may well turn out to be a very good decision. We should congratulate British Aerospace on concluding their first contract since they have been nationalised—it may be a good omen.
I should like to ask the noble Lord one or two questions. The present system
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is installed only in a Comet airframe. When it is due to fly? Secondly, when will the system be installed in the first Nimrod airframe and when will that fly? In view of what the noble Lord, Lord Strathcona and Mount Royal, said, as we have now made a stand on using our own aircraft, will the Government be able to bring even stronger pressure to bear on the remaining NATO countries to purchase Nimrod themselves? Also is there any chance of exporting it to other countries not in NATO, such as France and Australia? I should also like to repeat something that the noble Lord, Lord Strathcona, mentioned. Can the noble Lord, Lord Winterbottom, enlarge on what he meant by "the possibility of a collective NATO solution"? Lastly, can the noble Lord tell us, now that the decision has been taken to go ahead, how long it will take to equip the United Kingdom defence system?
Lord WINTERBOTTOM: My Lords, I hope that both noble Lords who have questioned me on my Statement will accept that fact that I should very much like to answer them in detail if I could, but the timing of the Statement has been such that I could grasp only the main outlines of the decisions. I should be grateful if perhaps another opportunity might be taken, by way of an Unstarred Question, to enable me to answer in detail the points made to me be the two noble Lords who have questioned me.
However, may I say that we have made it clear all along that a single NATO force would, if it could be established, be the best solution. We believe that. Unfortunately exercises have shown that the Shackleton force, which is now the only element we have for policing the United Kingdom air defence region, is inadequate. A recent exercise has shown that 70 per cent. of aircraft got through undetected. It was because our national need was so great that my right honourable friend insisted on his colleagues in NATO reaching a decision by, originally, I think it was the 25th of March; now it could not be reached until 1st July. That is why I am making the Statement today: because we believe that this particular decision cannot be allowed to drag on.
The noble Lord, Lord Strathcona, mentioned German reservations. Of course I cannot speak for the German

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Government, but the point is that, whereas on this matter I think in many ways they share our view, the actual reapportionment of resources that would have been demanded of them made it necessary for them to think a little further. For this reason we have decided to go ahead and buy the Nimrod variant. There is one point I can perhaps make. The two aircraft, the Boeing and the Nimrod, were designed for rather differing roles. The Boeing was designed mainly for over land operation, and the Nimrod for over sea operation. Their radars, as a result, have different capabilities which could be harmonised but which at the moment are not totally in harmony. The Nimrod is the better aircraft for sea work, and AWACS is the better for over land work. That is what I think my right honourable friend meant when he said a combined Nimrod/AWACS solution might possibly he the best that the Alliance could get.
Lord CARRINGTON: My Lords, would not the noble Lord agree that, regardless of whether or not the Government were right about this decision, it is yet another indication of the lack of political will on the part of NATO to come to a decision themselves and to equip and standardise their equipment? When the Statement says that the Government intend to secure the maximum inter-operability and compatibility between any two systems which develop as a result of this, does it mean that there is a possibility that they will not be inter-operable?
Lord WINTERBOTTOM: My Lords, I am speaking without exact knowledge in this highly technical field. I presume it means that what we have to achieve is the maximum degree possible of overlap between the two systems. If the noble Lord wants a more detailed answer, perhaps he could use a different situation. I am perfectly willing to give it, but these are highly technical matters on which I am not at this moment properly briefed.
Lord BEAUMONT of WHITLEY: My Lords, the noble Lord said that maybe we could put down an Unstarred Question, or that another opportunity might be found. In a situation like this, where a tremendous number of highly pertinent questions have had to be asked on a very
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skimpy Statement, is it not the Government's duty to expand in some kind of a much more detailed statement exactly what they are going to do, and exactly what are the implications of this decision? Will the noble Lord please say what the Government's intentions are about producing a detailed statement about this matter in some way?
Lord WINTERBOTTOM: My Lords, I would welcome the opportunity to inform the House in greater detail about the exact technical implications of this decision. I am certain that the usual channels will note what your Lordships have said and will make the necessary arrangements. But it is not simple. I am afraid that these things are not simple, and for this reason I think we should hope that the usual channels will arrange for perhaps a deeper discussion than I can answer today.
Lord ORR-EWING: My Lords, would the noble Lord bear in mind that the vulnerability of this country and Western Europe to low level attack is considerable? The figure he gave us of 70 per cent. getting through was truly alarming. Therefore, any delays are not welcome. Moreover, delays inevitably add to the cost of anything, and therefore it is important that we should get on with the job, and the provision. I understand that it is envisaged that this Nimrod force should eventually be built up to II aircraft. May we be assured that these Nimrods will not be taken from the anti-submarine maritime Nimrod force but will be additional to that? The cuts which the Labour Government have already made are desperately dangerous at a time when the USSR is launching a new nuclear submarine every four weeks, and we should not weaken our maritime surveillance capability by one single aircraft. Can we be assured that that will not suffer as a result of this decision?
Lord WINTERBOTTOM: My Lords, I am grateful to the noble Lord, Lord Orr-Ewing, for supporting in the first part of his question the point of view that I took in my statement in answer to questioning. Without a brief in front of me, but from knowledge, I am reasonably certain that I can assure the noble Lord that the maritime Nimrods will not be affected. We have some airframes

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available for immediate conversion. I imagine for that we have to thank the noble Lord, Lord Carrington, for a decision he reached while he was Secretary of State for Defence. If I am wrong, I will inform the noble Lord and the House.
Lord GLADWYN: My Lords, I would not want to turn this in any way into a debate. However, may I ask one question? As I understand it, the Government still think that a collective early warning system in NATO would be the best. As I also understand, they still wish to tend in that direction: they want to achieve that if they can. If it is achievable, is it compatible with the maintenance of the Nimrod system or would it inevitably imply the suppression of Nimrod and the substitution of AWACS? Is it hence to be concluded that when they talk of a collective early warning defence that can only mean AWACS?
Lord WINTERBOTTOM: My Lords, obviously what is meant is that the two radars are compatible. The airframes are really secondary to the transport of radar.
Lord WIGG: My Lords, would the Minister not agree that there can be no question of transferring the maritime Nimrods to the role of early warning because, although they have the same name, they are really different kinds of animal?
Lord WINTERBOTTOM: My Lords, the noble Lord is quite correct, except that they would have a common airframe.
Lord SEGAL: My Lords, while fully endorsing the action of Her Majesty's Government in this matter, may I ask whether my noble friend can say if any others of our NATO allies have supported us over the Nimrod issue, or whether this is a totally unilateral action on our part?
Lord WINTERBOTTOM: My Lords, I cannot give that answer because I do not know the whole course of the discussion.
Lord STRABOLGI: My Lords, we have now spent 17 minutes on this Statement. May I remind the House
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that ministerial Statements are made for information, and brief comments and questions are of course allowed but Statements should not be made an occasion for debate. I suggest that we move on with the original Motion.

EEC: 13th REPORT ON REGIONAL DEVELOPMENT FUND
Debate resumed.
4.20 p.m.
Lord BANKS: My Lords, as we return to the subject of the Regional Development Fund, I wish at the outset to express appreciation of the Select Committee Report, which I found to be a thorough, comprehensive and valuable document. It sets out very clearly the problems surrounding the Fund and its future, and the whole report was presented to us this afternoon most concisely by the noble Lord, Lord Cobbold.
We are coming to the end of the first three years of the Fund and it has now to be reviewed, so this is an appropriate time for us to make our views known and, on looking back, I think we can say that the introduction of the Fund was a significant step in principle. But, as has been pointed out this afternoon, it was a very small step in extent. To realise this we have only to compare the operation of the green pound and the compensatory amounts paid in connection with it with the size of the Development Fund.
We are told that the operation of the green pound system is now causing our food to be subsidised to the extent of about £500 million a year, yet the amount derived by this country per annum from the Development Fund is just about one-tenth of that. The first amount has grown up almost by accident, yet this other planned development is a mere one-tenth of it. And when we bear in mind, too, the effect of inflation on the value of the previously agreed figures, we can understand why the impact of the Fund has been fairly small.
Nevertheless, as has been pointed out, the United Kingdom has been a net gainer. With the enlargement of the Community by the likely introduction of three new

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members—Greece, Spain and Portugal—this advantage will no doubt disappear and the United Kingdom will cease to be a net gainer. However, I agree with the authors of the report that we should not seek to judge the value of the Fund by whether or not we are net gainers; the gross amount which we receive is a mitigation of what we should otherwise have to pay into the Community budget and it is a mitigation for a specific and useful purpose.
I must say that the position in regard to additionality as described in the report and as expounded by the noble Lord, Lord Elton, is to my mind, very unsatisfactory. I quite understand all the difficulties which are explained in the report, but we must emphasise that the Fund was never intended to be a means of first-aid for the budgets of national Governments. I see, in the course of the evidence which it gave to the Select Committee, that the North of England Development Council said:
"Unfortunately, the Fund does not appear to us to guarantee that the money so transferred will necessarily result in increased expenditure in the poorer regions of those Member States."
If the money does not reach the poorer regions, then the whole object of the exercise will have been frustrated. I read somewhere in the report a phrase about the Community having a Regional Fund "but no coherent, comprehensive regional policy", and I am wondering in this connection exactly what the function of the Regional Policy Committee is, and whether at this time it has an overall responsibility for all aspects of regional policy which may be carried out by the Community, and what is the potential of that Committee.
I welcome the fact that the new Commission has decided, as Lord Cobbold reminded us, that one Commissioner should have overall responsibility in this sphere of regional policy and that Signor Giolitti is to be responsible for both the regional and social funds and, as I understand it, for all the impact on regional policy of the various policies pursued in different fields by the Community; in, for example, the five different funds which there are and which can have a bearing on this matter. I am encouraged by the speech which the Commissioner made to the Committee of the European Parlia
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ment on Regional Policy, Regional Planning and Transport on 25th January in which he made it clear that he took this overall responsibility very seriously.
Lord Cobbold referred to the possibility at some future date of economic and monetary union. I agree with him that a great deal has to be done before we can hope to see that, but I believe it is a proper objective to have and that we must seek to arrive eventually, however long it may take, at that position. If we do, there will be a greatly expanded role, I have no doubt, for the Regional Development Fund. Once Governments are no longer able to attempt to correct imbalances within the Community by adjusting the parities of currencies, some other means of doing that will have to be found, and the Regional Fund will clearly have to play a very big part in that. When we reach that point I am sure it will mean that much which is now done in the way of regional policy at national level will have to be transferred to the Community.
With a Fund of the size I am contemplating it would be a question of substitution—the central expenditure would be largely a substitution for national expenditure; but at the present time, with a very small Fund, the principle of additionality is extremely important. Thinking for a moment about this future situation when we have economic and monetary union, I wonder whether then a redistribution of resources by means of capital investment would be sufficient to counter imbalances. I wonder whether perhaps we may have to think at that time of some means of redistribution of income—some means of providing a supplement to income for certain industries in certain regions—in other words, establishing within the Community a kind of Stabex arrangement similar to that already set up under the Lomé Agreement.
But all that is for the long-term future and, coming back to the more immediate future, I would agree with what has been said about the need for a larger Fund. Among other things, in addition to the reasons advanced for that, it would help to balance the very large amount of expenditure on agriculture within the present budget; agriculture takes about 70 per cent. of the present budget of the Community. Secondly, ideally, I should like to see the national quota system ended,

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as indeed the chairman of the Committee of the Parliament on Regional Planning and Transport suggested in his evidence to the Committee. If that is not possible entirely, it may be possible partly, as was foreshadowed in the evidence submitted by Lord Thomson; at least some money could be directly available from the Community and not have to go through the national Government sieve.
I should like to see direct contracts with the regions very much developed, though of course they exist now. Again, I am glad to see that Signor Giolitti lays great stress on the importance of these contracts. But what I am really suggesting is that regional authorities should be able to deal direct. I note that the Highlands Development Board said in the evidence which it submitted:
"While the Board wholeheartedly accepts the principle that Regional Development Fund assistance should be closely related to national and regional plans, it does not digest uncritically the principle that all regional development funds should be channelled through the central ministries of national government. If the Regional Development Fund is to establish itself as an effective instrument for equalising variations in regional prosperity within the EEC, it will have to assert itself as an independent force, working in close co-operation with national regional policies, but in a distinct and supplementary manner."
I would agree with that. It would seem to me that if the regional development plans which are required by the end of this year are submitted to national Governments, with their approval it would be possible for the Community, at any rate in a limited sphere, to deal directly with regional bodies as the Highland Development Board suggests, within the terms of the nationally agreed development plans. The national Government would have some influence and say in order to do that, but would not be the direct channel. To the extent to which we could establish this we would be safeguarding the principle of additionality which we have already mentioned as being vitally important.
The last point I would stress, and I have mentioned it before, is the need for co-ordination and the development of a coherent regional policy. I am suggesting a larger fund and an end, or at least a modification, of the national quota system, some money being directly available from the Community, direct contact with the regions, the regions dealing
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directly with the Community and greater co-ordination than there is at the present time. If we can achieve these things then, from the small beginnings of the first three years' operation, I think we can develop the Regional Development Fund into a powerful economic instrument in the hands of the Community.
4.32 p.m.
Lord SHERFIELD: My Lords, Members of your Lordships' House and of its Sub-Committee as well as Members of the Committee in another place are very much indebted to the noble Lord, Lord Cobbold, for his genial but firm chairmanship of the concurrent meetings which produced this report. The report itself is full and thorough and the noble Lord, Lord Cobbold, and other speakers have covered the ground comprehensively and have left little room for original or novel comment. The point which emerged most clearly from our discussions—and the noble Lord, Lord Banks, has touched on this question—was that the Regional Fund has been operating without the benefit of a regional policy. The Fund came into operation quickly, it has been well administered and the money has gone out notwithstanding the fact that the eligibility for assistance has been rigidly defined. All this is creditable: it has been a good start. But, to ensure the success of a second fund—and those who maintain that a Regional Fund is unnecessary must surely be in a large minority—it is certainly necessary to work out some guidelines.
As the noble Lord, Lord Cobbold, said, there are other activities in the Commission which have an impact on regions and regional policy of which the administration of other Community funds—the Coal and Steel Community Fund, the Social Fund and the Agricultural Assistance Fund—provides examples. There is also the European Investment Bank which has funds and stands ready to help, though there are some rather large obstacles in the way of its doing so. Clearly, the first step in formulating a regional policy is to consider the total effect of all these sources of funds together, and as a result of the reorganisation in Brussels which gives one Commissioner the general oversight of these activities, this step can now be taken. There is no proposal to amalgamate these sources of funds but rather to evaluate their

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combined impact and as far as possible to co-ordinate their application. The receipt of the National Regional Development programmes during this year will offer some concrete foundations on which a policy can be constructed in the Commission.
I refer here to some remarks made by the new Commissioner, Signor Giolitti, to Members of the European Assembly Committee on Regional Policy and Transport. This speech was made on 25th January. It was printed on 24th February, and was received by me this morning, which I think is an example of what might be described as "information drag". This speech by the Commissioner was an encouraging and positive performance. He declared his determination to carry out what he called "the testament of Lord Thomson". He stressed that the Regional Fund was only a tool of policy; he stressed the need for co-ordination of regional policy, avoiding the fragmentation of the past and taking all the sources of help to the regions into account. He laid emphasis on the need for flexibility in both the make-up and the administration of the Fund and he floated the rather interesting idea of a Community reserve in addition to the quotas given to individual Governments which could be used directly to top up various schemes. He also put in a plea for less rigid criteria in applying the Fund, and finally, emphasised the need for closer links with regional authorities. All this seems to me a positive and laudable preliminary approach to the problem and an encouraging one for the future formulation of policy later this year.
It was interesting to hear the suggestions from our witnesses on the form which a Community regional policy might take. The official evidence tended to suggest a step by step approach, but other witnesses, notably Mr. Evans, Chairman of the Regional Policy and Transport Committee of the European Assembly, offered a much more far-reaching scheme. I must say that the gradualist approach seems to me to be the only practicable one. It is clear that the Community will advance towards integrated policies only by building brick by brick, not by trying to make great leaps forward, and the move to the second stage of the Regional Fund cannot be an exception to this.
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Incidentally, just as there is a need, which is now accepted, for the co-ordination of regional policy in the Commission, so there seems to he a need for some change in the committee structure of the European Parliament. Mr. Evans told us that his Committee spent half its time discussing transport questions. There is, no doubt, some historical reason why regional policy and transport were brought together under one committee of the Assembly, but it would now surely be more appropriate that at least the operations of the Regional and Social Funds should be brought under the scrutiny of one committee and that transport should move elsewhere.
My Lords, I wish to make one other general point. It is evident that the move towards the enlargement of the Community is gaining momentum, though no doubt it will proceed by deliberate steps, but enlargement will come about in due course. One of its effects will be to accentuate the need and complicate the formulation of regional policy, since the gap between the prosperous and the penurious regions of the Community will widen. I have heard it said that this will reduce the attractions of a Regional Fund because the United Kingdom will stand to get less out of it. This seems extremely short-sighted. I sometimes fear that we in the United Kingdom are falling into the habit of looking at the development and measuring the success of the European Economic Community purely in terms of the short-term pecuniary benefit to ourselves. Perhaps we are not the only ones.
No doubt there are situations in which we are justified in digging our toes in. But to be in an obdurate minority of one in one field is not the best method of getting our way in other important matters where we have a good case, as some events of the last 48 hours have demonstrated. In any case the regional policy and the Regional Fund do not seem to be matters which justify a policy of maximum selfishness. As I have said, the enlargement of the Community will bring many problems of extreme difficulty, including regional policy, but this is not a good reason for blowing cold on a Regional Fund; on the contrary, it makes such a fund, and a well thought-out policy to guide its use, all the more essential.
4.42 p.m.
Lord TRANMIRE: My Lords, I am very happy to follow a colleague on the Sub-Committee, the noble Lord, Lord Sherfield, in paying tribute to the very able way in which the noble Lord, Lord Cobbold, chaired this committee. It was not a very easy one because it was a novel one, being a Joint Committee of the two Houses. I intervene chiefly because, although I am in complete agreement with my other colleagues on the importance of a regional policy, I have certain reservations on the actual tool of regional policy, as Mr. Giolitti says, the European Regional Fund. I should like to voice that in context, because directly there is a Common Market there is a certain centrifugal effect that tends to draw prosperity to the centre of the Market. In this case the prosperity of the golden triangle in the European Common Market has moved in the following way, as the noble Lord, Lord Thomson of Monifieth, said in his report. In 1970 the gross domestic product per head in Hamburg was live times greater than that in the West of Ireland and Italy. By 1975, presumably at the time when the Regional policy was just beginning to operate, that disparity had grown greater and had become six times greater in Hamburg than in the West of Ireland. Therefore we must look with a rather more critical eye on exactly what has been happening on the development of this regional policy.
My doubt lies in whether the European Regional Development Fund, with its present financial limits and the present principles that guide it, is really the adequate tool for running a European Regional Policy. It is quite true—I realise this and we must all take account of it—that this first report is dealing with the initial period when the Regional Commissioner was finding his feet, and in fact the money was rather slow in coming out of the Commission at the start. But as we say in paragraph 19 of our report, the impact has been very small. The noble Lord, Lord Thomson of Monifieth, with that Scottish restraint, put it I thought even better when he said:
"The resources allocated to the European Regional Development Fund are more modest than would have been ideal."
What has been the impact on the United
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Kingdom Regional policy? We received a memorandum from the Department of Industry and it said that the receipts had been 3 per cent. of our expenditure in the case of industry. When that was put to the noble Lord, Lord Thomson of Monifieth, he was shocked. He said that it was quite wrong. Such are the persuasive powers of the noble Lord—and I wish that he had been here today to have tried those powers on your Lordships—that he said, "No, no, that is quite wrong. It was 10 per cent. If you compare the commitments during this period with the expenditure, it was 10 per cent.".
The Committee then referred this difference of judgment to the Department of Industry. The Department looked at this matter and, as reported on page 26 of the report, stated:
"Commitments by the ERDF, like offers of financial assistance under section 7 of the Industry Act, cover expenditures which may be incurred during more than one year. The relationship between commitments and Government expenditure is therefore not a satisfactory measure of the 'significance' of the Fund."
Notwithstanding that, despite certain objections by one member of the Sub-Committee, paragraph 19 of the report assesses the impact as 10 per cent. of the Fund. If one looks at the Department of Industry's own figures it worked out. It said that in the case of 1975, the period with which we are dealing, if actual receipts from the Regional Fund are compared with expenditure it comes to 1·1 per cent., not 10 per cent. In 1976 the estimate is that it will come to 4·7 per cent., not 10 per cent., and in 1977 the estimate is 7·3 per cent. I must say that I find that a very disappointing result for— as Mr. Giolitti says—this tool of regional policy. Why is it so disappointing?
The three guidelines, as I understand it, for the European Regional Development Fund are, first, that one must work on the basis of a quota. The noble Lord, Lord Banks, talked about some of the drawbacks of the quota. I was very sympathetic to what he said. I find it very difficult to understand why, under the quota system, Ireland and the poorest countries in Europe, with tremendous regional problems, have a percentage share of the cake of less than that of Western Germany, a country, I should have thought, that had no need to go on any form of international assistance.

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It is quite true that under a provision this quota system was altered in favour of Ireland, so that the richer countries had to disgorge, and as I worked it out in the three year period Ireland would be getting 85 million units of account as opposed to Germany's 83 million units. Still, I think that is unfair. I do not believe that this quota system is the right way to deal with a regional fund. Nor do I think that Mr. Giolitti has it right when he says, "We will keep the quota, but then we will have a reserve fund that we may be able to distribute more fairly". That is a point of view I should like your Lordships to consider.
The second principle and guideline which is determining the whole of this is that it must be a Government-to-Government payment. We had evidence from many of the regions in Britain saying that they were not really conscious of the fact that the European Regional Fund was helping because the money went into the Government's hands and they did not see anything of it. If it was infrastructure, is is quite true that it did make a difference to them because it reduced the cost of their borrowing, but not if it was industrial. I think we are landing in a difficulty here—and, again, I was very interested in what the noble Lord, Land Banks, had to say on this point. He said that you must break this down and you must do it so that there is contact between the Regional Commission and the public authorities. There, of course, you come up against the difficulty that you have two judgments of a project: the judgment of the national Government and the judgment of the Regional Commission; and, in order to monitor that, to evaluate a particular project, I think it would require rather more staff than is justified for the European Regional Commission with the present amount of money available. That seems to me to be the dilemma into which you get by changing it from Commission to State and from Commission to authority.
Leaving that, we come now to the great joke of the Regional Fund—additionality. What does "additionality" mean? It means that but for the money received from the Commission this project would not go forward. If your Lordships want light reading, I would recommend that you read the written evidence of the
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North of England Development Council, which appears on page 95 of the report, in which it observes that in the other place the Minister responsible told the House of Commons:
"The projects so far approved are all Government advance factories. Those to be sited … in the Northern Region are …",
and then he gave a list. The evidence goes on to point out that the first one mentioned was
"a land purchase made in Hartlepool in November 1974".
We are talking about money given in November 1975, so I do not know how much additionality you can find in that. The second was,
"a factory announced in January 1973 at Skelton and completed in July 1974",
so there was not very much additionality on that. The third was
"a factory at Stanley … completed in 1973".
The next was
"a factory at Workington … finished in October 1973";
and then there were three other factories, all announced in 1970, on which there was a little work done in 1975. This seems to me to be a completely unjustified way of dealing with it. It may be inescapable—I am not saying that—but do not have a guideline or principle that cannot possibly work.
I would merely say that I think this means that we really must reconsider this. Mr. Hobbs, of the North of England Development Council, makes a judgment on this, and I think I ought to finish on the subject of additonality by quoting it—it is on page 90 of the report—so that it is on record. This is why I say that I find the Select Committee's Report is rather hiding some of the criticism, is a little too complacent and is a little too kind to the working of the Regional Development Fund. One wants to be polite, and I know from what used to happen in the other place that noble Lords are always, if anything, excessively polite, but I think that probably we are being a little too polite to the European Regional Development Fund in this because the North of England Development Council is a very active body. They said:
"We consider that a Fund which transfers money from an EEC budget to a national budget without necessarily increasing the amount spent

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on regional development is, therefore, claiming more than is justifiable when it is called a Regional Development Fund".
That really leads me to try to review what is the position. In paragraph 36 of our report we set out what we consider the three alternatives. I could not quite come to the same conclusions as the rest of the Committee because I interpret the European Regional Fund rather differently from the others. I think there is a very strong case for a European regional policy. What is "regional policy"? It is the co-ordination of regional programmes. It is stimulating the member countries to working more and more to try to reduce the disparity between the regions. I think that for once I would disagree with the noble Lord, Lord Sherfield. I think it is not fair to say that there has been no regional policy but only a regional fund, because the noble Lord, Lord Thomson, did a tremendous amount of work on this idea of a European regional policy, and it is not fair to him to say that there is no regional policy.
Lord SHERFIELD: My Lords, if the noble Lord would forgive my interrupting him, I think it was Lord Thomson himself who made that remark.
Lord TRANMIRE: My Lords, I have already disagreed with some of the remarks of the noble Lord, Lord Thomson, and I certainly disagree with that one because I think that in himself he provided a wonderful stimulant for regional policy, through the others. But I believe that if you intend to work this system out by quotas then you do not really need a fund with the additionality factor. I would far rather it was done with a strong regional policy and then have the Commission saying what relief from contribution you should get because of the extent of your regional problems. I think that if you did it in that way, by reducing the contribution by regions, it would solve the problem of Germany wanting to have her slice of the regional cake because it would then be quite clear that a very rich country like Germany was not really needing to have the money from the European Regional Fund. I think this matter has to be considered very quickly because, as other noble Lords have said, f we are going to expand the Community
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by the addition of Greece, Portugal and Spain, it is vitally important that we get the right way of running our regional policy and of financing our regional policy. I think that, with the addition of the other three members, it will be easier to do it by a system of relief from contribution rather than by giving this quota.
The final point I want to make, my Lords, is this—and I hope I will find the majority of your Lordships in agreement with me. There is something terribly wrong, when you have the disparity between prosperity and poverty growing so much all over Europe, to find that we are devoting 72 per cent. of the Community budget to the Common Agricultural Policy and, this year, 5½ per cent. to the European Regional Development Fund.
5 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, may I join with other noble Lords in thanking the noble Lord, Lord Cobbold, for giving us the opportunity to hold this debate this afternoon. We are all indebted to him and to the Scrutiny Committee for the work they have put into the consideration of the First Annual Report on the operation of the Fund. With commendable speed they have produced an excellent report on a difficult topic. In rising to intervene at this stage, I do not want to defend the indefensible, and I hope I will not seem to do so. There are many things that have to be changed and noble Lords have drawn attention to them, particularly the noble Lord who has just sat down. We all acknowledge that changes have to be made. Let me look first at the report itself. It pays tribute, as noble Lords did, to the smooth administrative operation of the Fund during its first year. Applications have been selected, submitted and approved within a matter of weeks, as have payments from the Fund. The managers of the Regional Fund have benefited from the experience of the Community with other funds and have avoided some of the pitfalls. This is something upon which we, as a Government, and, I hope, as a House, will join in congratulating the administrators of the Fund.
The Scrutiny Committee referred to the division of the British share, if I may so call it, between assisted regions in the

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United Kingdom. I want to make this point: in accordance with the Regulation (Article 3) the money must be concentrated on projects in the Special Development Areas, Development Areas and Northern Ireland; but Intermediate Areas are also eligible and have received assistance from the Fund—some 10 per cent. of United Kingdom commitments. I hope that noble Lords will agree that is right.
The Commission's report and the report of the Scrutiny Committee, and noble Lords in their speeches this afternoon, have dealt with the question, the will-o'-the-wisp, if you like, of additionality. This is the concept that the Fund should enable more to be done for the regions than would be done in its absence. It is a principle which the Government and other Governments accept. Nevertheless, there are compelling reasons why the money from the Fund cannot be given in all cases to the promoters of particular projects; and the Regulation itself specifically provides that it is for Governments to decide how the money shall be used.
Turning first to industrial projects, I understand that no member-country of the community pays the Fund receipts on top of (that is, in addition to) national aids. We do not do so for three reasons. The first is that the two subsidies—one from our own regional development programme and aids, and the other from the Fund—might carry the total beyond the ceiling laid down by the Community and agreed by ourselves. In that context, I might mention that the noble Lord, Lord Elton, spoke of the possibility of changing the topping-up Regulation. I think that the aid ceiling derives from the Treaty of Rome itself (Articles 92 to 94) and from the Commission's activities under those articles relating to State aids.
The second reason is that projects selected for submission to the Fund are those which comply with the Community's criteria as contained in the Regulation. They are not necessarily, in terms of our own regional policy, the most meritorious. We cannot readily accept a system in which there is arbitrary discrimination in the treatment given to projects that we see as of equal merit. That would constitute unfair competition and might destroy some of the employment that national aids were creating. Thirdly,
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the Community system requires that only projects which have already received national aid can qualify for the Fund's assistance. This means that the subsidy already paid or submitted has been enough to encourage investment to take place. In that sense, it will be unnecessary to pay a further subsidy on top.
I might refer to the other matter spoken to by the noble Lord, Lord Elton: his suggestion about changing the procedure for application. That suggestion will be considered (as will everything else that has been mentioned today) but my preliminary reaction is that the investor might be unwilling to face the extra delay likely to result from adopting such a procedure.
Lord ELTON: My Lords, I think that in fairness to the noble Lord, Lord Thomson, and his men, to reiterate what I have said earlier, the delay is quite an astonishingly short one in bureaucratic terms. I hope that the noble Lord will bear that in mind when weighing that in the balance.
Lord MCCLUSKEY: My Lords, I do bear that in mind and I am happy to accept it; but perhaps investors might shy away from any procedure which might make delay less endurable.
My Lords, turning from the industrial projects to infrastructure projects, the Fund's receipts are paid to the sponsoring body, whether a local authority, water authority or other public organisation. These receipts enable those authorities to reduce the cost of their borrowing and thus contribute to the regions' well-being. There is a directness about the application of the Fund's money there. If it were not necessary to limit the resources being devoted to public expenditure, we should be prepared to consider authorising additional projects to match the receipts of the Fund; but at the present time this is impracticable. I think I can properly say that public authorities of various kinds are taking an increased interest in the Fund as they see the possibility of direct benefit; and we welcome this interest.
The Commission have recognised that the ways in which we handle these matters are consistent with the principle of additionality as embodied in the Regulation. I would refer noble Lords to

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paragraph 53, page 16 of the First Annual Report itself. It says:
"… the Fund's task is not necessarily to make more aid available to each investment, … but to increase the total amount of new investment undertaken. The difference between these two concepts should be borne in mind …".
I recognise however that the Scrutiny Committee have put their finger on an important point when they say that it is difficult to demonstrate what additionality has been achieved. In order to demonstrate that the principle has been complied with there would have to be clear evidence of what would have happened as well as what did happen. I cannot hope to express this problem any more clearly than did the Scrutiny Committee in paragraphs 17 and 18; and I will not attempt to do so. The House was moved by the plight of the noble Viscount whose birthday fell on Boxing Day. Perhaps on another occasion consideration might be given to awarding him an official birthday. We certainly get from that example a clear illustration of the difficulties in dealing with additionality.
We are glad that the Scrutiny Committee's report recognises these problems and acknowledges that the solution adopted by Her Majesty's Government—that is to say, to increase regional expenditure overall; for instance, through the Advance Factory Programme—is reasonable. In this context I would remind the House that the Chancellor of the Exchequer announced in September 1975 that he was taking into account receipts from the Fund in setting the size of the Advance Factory Programme which he then announced.
I turn briefly to regional development programmes. These are intended to have an important role in the administration of the Regional Fund by providing a development context for consideration of individual applications for assistance. An outline of the desired content of these programmes has been prepared by the Community and was published in the Official Journal on 24th March, 1976. Clearly defined plans for the development of particular areas have an important part to play in guiding the progress of areas changing from a heavy dependence on agriculture to a more industrialised economy. The United Kingdom regional problem, on the other hand, is largely the problem of areas which industrialised early. Their long-established industries
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are now being modernised and demand for labour is falling. In that context, we offer financial incentives, some automatic and others selective, to encourage new industry to provide new jobs. We do not know far in advance what new projects will come forward. Infrastructure in these problem areas needs some renewal and expansion; this is planned and carried out by the different public authorities concerned in response to local requirements. Thus, both for industry and infrastructure these development processes do not lend themselves to comprehensive planning of the same kind which may be possible in primarily agricultural areas.
This is the background to the regional development programme which the Government have sent to the Commission. It is a substantial document, and noble Lords may have seen it published in Trade and Industry last month, when it was published in three instalments. In preparing that programme, Departments consulted the various public authorities concerned. I am pleased to be able to acknowledge the help which they gave, especially in identifying projects which are possible candidates for future Fund applications. Our document sets out the economic background, the general objectives of regional policy, the various measures and the financial resources on a general United Kingdom basis and goes on to deal in some detail with individual regions. The document necessarily deals in broad terms with the types of project which may be put forward for contribution from the Fund; none the less, it provides the context for our selection, and Community consideration, of the applications which will be made. At this stage I am less hopeful than the Committee was (and I refer to paragraphs 26 and 44) about the benefits which may result from the system of regional development programmes.
As we have seen, the year covered by the Annual Report is 1975, and we are all now involved in thoughts regarding the future of the Fund which is due to be reviewed in the course of this year. But in the light of some of the criticisms which have fallen from the noble Lord, Lord Tranmire, I want to emphasise what is said in the first sentence of the Annual Report:
"It must be stressed that the Fund is not to be confused with Community regional policy."

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Before we can decide in the future how the resources available can make the best contribution, a Community regional policy must be evolved, otherwise the Fund—and other funds—is operating in a vacuum, with no stated objectives and no way of measuring how far these are achieved by the projects to which it contributes.
As we have also just been reminded, the Annual Report states that regional disparities between the Member States are increasing, rather than decreasing, and it is this problem with which the Community must try to deal. For some of the Member States, as I have already said, the problem is one of converting agricultural areas to industry, but for us it is a question of industrial renewal, and both facets are important to the future prosperity of the Community. This week we have taken the opportunity to bring our problems—their character—to the attention of visiting members of the EEC Regional Policy Committee, who are visiting some of the areas of the United Kingdom which are worst affected by regional problems. This follows a similar visit paid last year to the assisted regions of Italy. We would hope to see the Community take account of the particular problems of the peripheral areas, which in the United Kingdom may even have been aggravated by entry to the Community, as was suggested in evidence to the Committee.
The Commission will be putting forward their own proposals for a future Fund in the near future. The amount of money available for allocation from the Fund will certainly have to be increased from the present 500 million units of account. On that matter, I agree with the noble Lord, Lord Banks, and, indeed, the noble Lord, Lord Tranmire. The noble Lord, Lord Tranmire, expressed disappointment, which largely derived from the small sum available for payment from the Fund under the present dispensation. But we would hope to see the sum increased rather more than by that amount which was simply sufficient to take account of inflation.
May I turn to the quota system. I have sympathy with the criticisms that have been expressed by the noble Lord, Lord Banks, and the Committee about the quota system. Ideally, the Fund should be
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allocated according to objective criteria which would reflect the intensity of each Member State's regional problems. But it is appreciated—the Committee certainly appreciated—that this would involve a difficult job of selection for the Commission among a wide variety of eligible projects from all the Member States, and it would be very difficult to devise criteria which ensured that the most needy areas were the most successful. The practical problems are such that we think that quotas must, at least for some time, remain the basic instrument for dividing the Fund. The present quotas have the merit of ensuring that the countries with the major problems are those getting a net return. That, I hope noble Lords will agree, is right.
The noble Lord, Lord Tranmire, referred to the fact that Germany receives a substantial amount from the Fund—or in some terms a substantial amount—and compared the amount received by that relatively prosperous country with the amount received by Ireland. There are two points I want to make here. First, the only three countries which get a net receipt from the Fund are Great Britain, Ireland and Italy. Therefore, although Germany receives money from the Fund, the amount received is less than the amount that Germany contributes to it. My other point is that paragraph 50 of the report of the Committee says:
"It has been suggested that in future the beneficiaries of the Regional Fund would be reduced to three, the UK, Italy and Eire. While this would concentrate limited resources on the countries with the gravest regional problems, the Committee consider that it would have serious disadvantages, for it would be politically divisive …".
I think we would accept that.
Finally, on that matter, one has to recognise that, albeit that Germany is a prosperous country compared with Ireland or Italy, none the less it has regional problems as well.
Lord TRANMIRE: My Lords, would the noble Lord suggest therefore that, for getting some form of assistance, a millionaire could be justified because he was actually making a greater contribution in tax? Surely, Germany ought to be able to look after her own problem areas from her own wealth.
Lord MCCLUSKEY: My Lords, I have to turn that round and suggest to the noble Lord that he is losing the European dimension, because the European Regional Development Fund is concerned with European problems. If it identifies any part of Europe as a regional problem, it ought to be able to apply some of the resources of the Fund to the solution of that problem. I agree with the point made by the noble Lord, Lord Tranmire; that is, that regional disparities have widened. They have not narrowed. It is the countries and regions on the periphery of the Community which have the greatest problems, and it is to these that we hope the Community will direct its special attention. Of the ideas which are being discussed both here and Brussels, one of the most interesting is the possibility of using Regional Development Fund money to provide an exchange risk guarantee for loans to private industry from the European Investment Bank. The Committee looked at this problem. At present, the exchange risks are too great for most prospective borrowers in the private sector in this country, unless they have overseas earnings which can be used to service the European Investment Bank loans. We look forward to seeing proposals by the Commission on this matter, but we recognise that, in some forms at least, it would be difficult to reconcile with a rigid scheme of quotas. If a satisfactory formula can be found, it may be a means of diverting substantial funds to the neediest regions.
In conclusion, my Lords, I should like to reiterate the Government's view that the Fund can be a useful instrument of the Community and one to be valued. We should like to see the Fund have a much greater impact, for example in the way I have described. We must however be realistic about the scope for this. Our own national effort, whatever the precise figures may be in support of the assisted regions, is so very much larger than the main impact on regional problems is bound to come from what we do ourselves. Apart from an increase in the size of the Fund, we should also like to see changes in the Regulations which would remove some of the difficulties revealed by experience and identified by the Committee in their report. We should certainly be glad to see the Fund rather more closely co-ordinated with other Com
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munity instruments, although the scope for this may prove to be relatively limited. It is important to avoid any increase in bureaucratic processes. However, we think that the Committee's suggestion of a regional development certificate is the kind of idea which merits further attention, and I should like to express our gratitude to all those in industry and in the public authorities who have helped so readily in the preparation of applications to the Fund.
We are now thinking of the second stage in the life of the Fund, and this debate is primarily to review the work of the first year of the first stage. I think the debate has shown, as the Select Committee accept, that the Fund is a worthwhile initiative. It has had a good administrative start, but we can hope to make it much better in time. I am happy to have the support of the noble Lord, Lord Sherfield, for the gradualist approach. I would also say that the whole process, starting with the publication of the Annual Report; the critical appraisal of it by the Select Committee; the examination of witnesses and the collection of evidence, especially from bodies with an intimate knowledge of regional problems and a shortage of rose-coloured spectacles (people like the HIDB) and culminating in this debate and the suggestions it has brought forth, has made an essential and invaluable contribution to our thinking about the review of the Fund's working and purposes, a review which is essential if it is to fulfil the hopes engendered by its creation.
5.22 p.m.
Lord COBBOLD: My Lords, I shall not detain your Lordships for long, but I should like to thank all those who have taken part in this debate. I should like to start with my two colleagues on the Sub-Committee, the noble Lords, Lord Sherfield and Lord Tranmire. I thought it was very useful that the noble Lord, Lord Tranmire, should make here a point which he made on a number of occasions during our sessions about the lag between actual payment and commitments. That is referred to in the last sentence of paragraph 19. It was also useful that he should emphasise his slightly different view as to the best solution to some of the problems. I was very appreciative of the speeches made by the noble Lords, Lord Elton and Lord Banks. The noble Lord,

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Lord Elton, made particularly valuable comments on the difficult subject of additionality and topping up, and the noble Lord, Lord Banks, emphasised the value of the co-ordination of regional policy and the enlargement of the Fund.
Finally, I should like to thank the noble and learned Lord, Lord McCluskey, for his interesting and on the whole, I think, hopeful and encouraging comments, together with his very generous references to the work of the Sub-Committee.
On Question, Motion agreed to.