Lords Sitting of 12 December 1978

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Saint Albans.
The Lord Forres—Sat first in Parliament after the death of his father.
The Lord St. John of Bletso—Sat first in Parliament after the death of his father.

FLIGHT TRANSFERS: PASSENGER FACILITIES
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether in the event of all flights to and from the Iberian peninsula now based on Heathrow airport being transferred to Gatwick either on 1st April next or at some other date they are satisfied that adequate facilities will be available for passengers; who will be responsible for seeing that this is so; and whether they will make a statement.
Baroness STEDMAN: My Lords, Gatwick airport has been completely redeveloped at a cost of £100 million and its extensive new facilities are among the most modern in the world. The airport has a capacity for 16 million passengers a year, although last year it handled only 7 million. The Government are satisfied that Gatwick offers a high standard of service to both passengers and airlines, and are working closely with the British Airports Authority to ensure that the transfer of air services from Heathrow is effected as smoothly as possible.
Baroness BURTON of COVENTRY: My Lords, while hoping I do not sound rude, may I ask my noble friend if she is aware that none of that Answer is relevant to the point I am pursuing? Is she further aware that on 18th January we shall be
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able to look at this matter in detail and that I wish to be helpful? Is she also aware that there are no facilities at all for passengers with luggage to get from Victoria to the airport at Gatwick short of going up two flights of stairs, that they are not able to take trolleys through the gateway where tickets are issued, and that there are very few porters?
Baroness STEDMAN: My Lords, I do not want to enter into an argument with my noble friend about whether she is or I am being rude in not answering or asking the right sort of Questions, and I look forward to 18th January when we can go into the matter in more detail. To answer the last point of her supplementary, that is primarily a matter for British Rail and I have no doubt they will take note of what she said. More generally, the British Airports Authority maintains a close liaison with British Rail, and the present redevelopment of Gatwick Railway Station includes the installation of escalators from the station platform to the overhead walkway into the airport terminal.
Lord HAILSHAM of SAINT MARY-LEBONE: Without seeking an immediate reply, my Lords, but in order to stimulate the well known zeal of British Rail in their independent functions, may I ask the Minister to make inquiries as to what facilities they provide for those who, like myself, are unable to walk very far?
Baroness STEDMAN: My Lords, I will certainly make inquiries as to what are the present proceedings, but as to future proceedings I am sure the noble and learned Lord will be able to use the escalators that are being provided.
Baroness BURTON of COVENTRY: My Lords, is my noble friend aware that the noble and learned Lord, Lord Hailsham of Saint Marylebone, would be able to go up in the goods lift whereas ordinary passengers are not able to do that?
Baroness STEDMAN: My Lords, I should hate to associate the noble and learned Lord with goods, whether at airports or on British Rail.
Earl AMHERST: My Lords, in view of the reply which the Minister gave last week to my noble friend Lord Gladwyn, may I ask her to say if and when we shall

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be able to know the detailed plans which she mentioned for the improvement of the services, and perhaps debate them? Shall we know them before they become finalised for implementation?
Baroness STEDMAN: My Lords, at the moment I am not in a position to give the noble Earl an answer as to when we shall know the exact plans, but I will make inquiries and if it is possible to get further details out before our debate in January, I will make sure he is advised.
Baroness BURTON of COVENTRY: My Lords, is my noble friend really telling the House that the escalator will be in service by 1st April?
Baroness STEDMAN: No, my Lords.
Lord WYNNE-JONES: My Lords, is my noble friend aware that it is only as a result of the Questions put by my noble friend Lady Burton that there has been any amelioration in conditions for passengers travelling from the centre of London to either airport? Is she also aware that the position at Gatwick is totally unsatisfactory from the point of view of passengers with luggage?
Baroness STEDMAN: As I said, my Lords, we are trying to do something about passengers with luggage and I hope to be in a position to give more information about that on 18th January. I yield to no one in my admiration of the tenancity of my noble friend in the way in which, on behalf of passengers using British Airways, she pummels away at British Airways, British Rail and me and other Ministers who have stood at this Dispatch Box before me.
Lord BALFOUR of INCHRYE: My Lords, the Minister has given a good description of Gatwick of the future, but that will take several years to achieve. Should there not be a review here and now to see what can be done to improve travel and the comfort and facilities of passengers during this interim period? That is what we should like to know.
Baroness STEDMAN: My Lords, up to the present we have spent £100 million on improving facilities at Gatwick. They may not be as good as noble Lords and
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others would like, but the fact remains that Gatwick can cope with twice as many passengers as it has to at the moment, whereas at Heathrow the position is becoming even more congested the whole time we go on with this situation and do not transfer traffic to Gatwick. Surely it is in the consumers' and clients' interests that we should have an easier transfer of some of the airlines to Gatwick and not completely break down at Heathrow.
Earl AMHERST: My Lords, is the noble Baroness aware that, quite apart from the expected 900,000 passengers, the present situation regarding the rail facilities is quite unsatisfactory? This is because most of the trains servicing Gatwick in each direction are through trains to other destinations. Therefore, when it comes to getting a seat the air passengers have to take their chance with the other passengers. However, the air passengers frequently have a considerable amount of bulky baggage which perforce is dumped into the aisles of the trains, making entry into the trains and departure from them a very disturbing and time-wasting procedure. Should there be any kind of emergency, this situation makes it quite impossible for sections of the train to be evacuated quickly. Does this not——
Noble Lords: Too long!
Earl AMHERST: May I continue to ask a question?
Noble Lords: No!
Baroness STEDMAN: My Lords, I am not sure whether I have got the entire train of all the questions which the noble Earl asked, but this is primarily a matter for British Rail. I am sure that British Rail take note of what is said in this House, and I shall certainly see that the noble Earl's comments about the present conditions are brought to the attention of British Rail.
Lord BYERS: My Lords, may I, as one who uses Gatwick and lives near there, press the noble Baroness on this matter? The impression is given not that this is a matter of £100 million but that no one has a grip on the problem and the buck is being passed from one organisation to another, with nothing happening in the end as a result. This is a matter which ought to be taken very seriously indeed.
Baroness STEDMAN: We do take it very seriously, my Lords. I was under the impression that the buck was beginning to stop with me at this Dispatch Box, but I shall certainly bring the matter to the attention of my right honourable friend the Secretary of State, who is responsible for the Department, and to the attention of British Rail.
Lord SEGAL: My Lords, is my noble friend—
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I sense that the House is probably waiting for me to express the feeling of your Lordships to the effect that we should move on to the next Question.

NORTH SEA OIL: EXPLORATION DRILLING
2.46 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many exploration drilling rigs were working in the British sector of the Continental Shelf in October 1977, and October 1978, respectively.
Lord STRABOLGI: My Lords, there were 16 mobile drilling rigs engaged in offshore drilling on 30th October 1978, plus one engaged in onshore drilling. This compares with 26 engaged in offshore drilling, plus one engaged in onshore drilling, at the same time last year.
The Earl of LAUDERDALE: My Lords, in thanking the noble Lord for that reply, I wish to ask him whether he is aware that my Question related to exploration drilling? Is he aware that he appears to be taking the same line as did the Minister of State in another place yesterday in confusing the figure for exploration drilling with the figure for appraisal drilling? My Question related to exploration.
Lord STRABOLGI: My Lords, of the 16 mobile rigs active offshore, nine were engaged in drilling exploration wells,
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four in drilling appraisal wells, and three in drilling development wells.
The Earl of LAUDERDALE: My Lords, is the noble Lord aware that his figure of nine—which is what I was asking for—compares with 26 in the same period last year?
Lord STRABOLGI: My Lords, during 1977—particularly the second half of the year—the companies undertook a substantial amount of drilling for relinquishment purposes under the fourth round initiated by the noble Earl's Government, and so some decline from the previous year's extremely high level of activity was to be expected.
The Earl of LAUDERDALE: My Lords, I thank the noble Lord for that reply, which I am sure he will know I expected. Is he aware that it is a matter of some surprise that this year's exploration drilling includes only four rigs drilling under the latest round, the licences for which were provisionally allocated about 16 months ago?
Lord STRABOLGI: My Lords, there is simply less territory under licence, and much of it has already been partially explored; so I agree that the companies are adopting a more cautious attitude.
Lord CAMPBELL of CROY: My Lords, is the noble Lord aware that, however many licences there are, much oil is likely to remain below the North Sea because it will not be economically worth while for marginal fields to be developed unless the Government change their present attitude?
Lord STRABOLGI: My Lords, I do not think that the argument of the noble Lord is supported by the successful response to the sixth round of licences. Ninety-four companies applied, and there was a hundred per cent. response.
Lord CAMPBELL of CROY: My Lords, is the noble Lord aware that the situation precisely conforms with what I said? I said that however many licences are applied for and are granted, it is a quite different matter whether or not the fields that are later discovered are developed. Is the noble Lord aware that North Sea oil may be a gift from God,

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but it is likely that it would not have been discovered until the next century had not international resources of technology and finance been used?
Lord STRABOLGI: Of course, my Lords, the crux of the problem is depletion control, and how it should be exercised. The Energy Commission are looking at this problem. They looked at it at their meeting on 1st December, and they will discuss it again within the broad framework of energy policy as a whole.
Lord AVEBURY: My Lords, quite apart from the inadequacy or otherwise of the incentives to the companies to explore in the North Sea, is it not likely that, as the major oil provinces have been discovered and explored, the rate of drilling will decline? Do the Government think that we are now at the stage where the activities of the companies in the way of fresh explorations could for that reason be expected to decline?
Lord STRABOLGI: My Lords, that may be one of the reasons—I do not know—but I may tell the House quite frankly that the Government take this decline in activity very seriously. The Department of Energy is presently engaged in discussions with the industry in an attempt to throw further light upon the reasons behind it.
Lord WYNNE-JONES: My Lords, would my noble friend not agree that there may be a positive advantage in delaying the exploitation of oilfields, rather than exploiting them now, when there is a glut of oil? In another 20 years' time there will be a scarcity of oil. Therefore, is there not a positive advantage in delaying exploitation?
Lord STRABOLGI: Yes, of course, my Lords; and this is one of the factors which was gone into very thoroughly in the Government's Green Paper on Energy Policy. I must say that the important thing is that this Government, by the arrangements we have made, are able to control the depletion, which was not so in the case of the arrangements made by the previous Administration.
The Earl of LAUDERDALE: My Lords, could the noble Lord enlarge on
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his previous reply, when he referred to the increasing caution of companies, and say whether the fact that exploration drilling is now taking place on only four out of the 44 blocks licensed 18 months ago is due to the British Government's application of a policy of depletion, or is it just bureaucracy and delay?
Lord STRABOLGI: My Lords, I do not think there is any bureaucracy or delay. Why should this country be the only one in the world that does not control its own oil?
Lord HAILSHAM of SAINT MARY-LEBONE: But, my Lords, will the noble Lord not reflect upon the extent to which his answers are inconsistent with one another? Does he not realise that, by saying that he is taking the shortage of exploration drills very seriously indeed, he is saying one thing, and that, by replying in a reassuring way to his noble friend that there is great virtue in not exploiting oil, he is saying another?
Lord STRABOLGI: My Lords, what I said was that all these factors were being considered by the Energy Commission and were being discussed with the oil companies.
Lord HANKEY: My Lords, could the noble Lord give any sort of breakdown of the interesting figures he has given the House as to the drilling rigs which are in operation on the East of the United Kingdom and those which are in operation on the West and South-West?
Lord STRABOLGI: My Lords, I can say with regard to the Celtic Sea that 14 wells have been drilled, but no oil has been discovered so far.

TRADE UNIONS AND SECRET BALLOTS
2.54 p.m.
Baroness SHARPLES: 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 sort of encouragement they are giving to trade unions to hold secret

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ballots rather than mass meetings when deciding matters of national importance.
Lord WALLACE of COSLANY: My Lords, the Government are aware of criticism of mass meetings as a medium for taking decisions, and share some of the reservations that have been expressed about these. They have said on several occasions that if the trade union movement as a whole were to seek Government financial assistance for postal ballots they would be prepared to consider the matter. The Government, however, do not think it would be either effective or helpful for them to intervene unilaterally, or to introduce legislation making strike ballots compulsory.
Baroness SHARPLES: My Lords, while thanking the noble Lord for that reply and trying to be helpful, may I ask whether the noble Lord would agree that ACAS might be able to play a part in this matter, in that, if the employers and the unions agreed, they might be able to supervise a ballot at the place of work?
Lord WALLACE of COSLANY: My Lords, there are several ways in which ballots, where they take place, are supervised. A number of unions have ballot rules, and when their ballots take place they are properly supervised; so I do not think ACAS could come into the picture. ACAS are more concerned with the settlement of disputes and with advising people on how to conduct negotiations.
Lord DUNCAN-SANDYS: My Lords, could the noble Lord say whether this is one of the reforms which is being pressed upon the Government by the National Executive of their Party?
Lord WALLACE of COSLANY: My Lords, that is a matter upon which it is not my province to pass comment.
Lord TAYLOR of MANSFIELD: My Lords, is my noble friend aware that there is one union which cannot call a stoppage of work without there being, first, a secret ballot and, secondly, a 55 per cent. vote in favour of a strike? Is he further aware that none of the officials, from national level right down to branch level, can be elected without there being a secret ballot?
Lord WALLACE of COSLANY: My Lords, I thank my noble friend. He is referring, of course, to the National Union of Mineworkers, but I would remind him that there are other unions which have such rules and conduct a postal ballot.
Lord BARNBY: My Lords, bearing in mind that in the United States big firms have to negotiate with far fewer unions than is the case in this country, can the noble Lord say to what extent, if any, what is recommended by the noble Baroness in her Question is the practice in the United States?
Lord WALLACE of COSLANY: My Lords, I would rather concern myself with our domestic trade unions and industrial matters, the subject with which the House is actually concerned and is debating.
Lord HARMAR-NICHOLLS: My Lords, could the noble Lord answer the Question that my noble friend put down on the Order Paper? She specifically asked whether any encouragement is being given, and the noble Lord has not answered that Question. By now the Government should have a view whether secret ballots are good or bad. Are they prepared to encourage them if they think they are good, or are they prepared to announce that they think that secret ballots are not good?
Lord WALLACE of COSLANY: My Lords, I can only ask the noble Lord to read Hansard tomorrow and see the Answer that I gave. The Government have expressed their view and the Prime Minister has expressed his view; and if the noble Lord had turned up for the debate on the Unstarred Question last Wednesday he would know that I answered the question, too.
Lord CARR of HADLEY: My Lords, does the noble Lord not realise, if I may refer to his first reply, that the noble Baroness's Question does not ask for compulsory legislation or anything like that, but asks for encouragement? Is it not possible for the Government to give a much more positive lead in encouraging other unions to follow the example of the few in using a proper ballot, rather than a show of hands at a mass meeting, as a means of deciding whether to start a

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strike or to stop a strike? Do the Government not realise that the great majority of the people in this country demand such encouragement?
Lord WALLACE of COSLANY: Yes, my Lords; and the people in this country do not want legislation introduced such as was introduced in the past. The Government can give encouragement, as noble Lords themselves can give it, but in the last analysis—and here I state quite definitely that the British trade union set-up is quite democratic—
Several noble Lords: Oh!
Lord WALLACE of COSLANY: Yes, my Lords. Noble Lords opposite may not have belonged to a union or understand the ramifications, but in our British democracy it is possible for a trade union branch, when the members turn up and demand a ballot, to pass it on and eventually change the union rules. This is what is wanted, because some strikers have expressed that hope. It is up to them to get on with the job and organise themselves within their own union.
Lord CARR of HADLEY: But, my Lords, will the Government encourage this, on which I believe, quite across Party boundaries, this country has a strong wish to be encouraged? Governments do have a duty to encourage as well as just to legislate.
Lord WALLACE of COSLANY: Yes, certainly, my Lords, Governments do encourage, but some do not want to force anything by legislation. That is the difference between us; and although the Party opposite has dodged the issue, it has been stated that in the last analysis they will introduce legislation on ballots in their policy for the next Election. If that is so, they will repeat a very serious mistake that happened last time.
Lord ROCHESTER: My Lords, will the noble Lord accept that the response to the Question asked this afternoon is an indication of the very warm welcome that is being widely given to the statement of the Prime Minister in another place on 7th November, when he agreed that a mass meeting concerning the Ford strike was not a satisfactory way of conducting
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our affairs? Will he further agree that it has also been shown this afternoon that there would be wide support from all sections of the House if the Government were to give a more positive lead in this matter?
Lord WALLACE of COSLANY: My Lords, I thank the noble Lord for his contribution. The Government and the Prime Minister have already set an example; and ACAS, as the noble Lord and others may be aware, are considering several issues with a view to bringing out another industrial charter. We can give every positive assurance that we are encouraging as far as possible. I would also ask that noble Lords who have been critical should themselves do a little encouraging instead of trying to obstruct the progress of well-intentioned people to get some better state of industrial democracy.
Lord KINNAIRD: My Lords, is the noble Lord aware that three or four days ago there was a mass meeting of workers at one of these firms like Ford or Leyland? They had taken a show of hands and, from the balcony, whoever was in charge said, "In favour", while somebody down in the crowd said "No!" Is the Minister aware that there was a television camera and team present there and the man in the crowd was asked: "Why are you not satisfied?" He replied: "Because you cannot possibly count these tens of thousands of people—and a great many people hold up two hands to vote instead of one."
Lord WALLACE of COSLANY: My Lords, I am not such a constant student of television as all that, but in fact the trouble is that the media has not been helpful in these matters. If the trade union member concerned complained that it was not a fair result then he should press for a ballot system if he can get support for it. There are times when a mass meeting like that can give a very good indication of support and there are times when it is doubtful. We want, as far as possible, to remove any possible doubts.
Lord ENERGLYN: My Lords, is the noble Lord aware that in the absence of secret ballots there is evidence of intimidation among technical staffs even in our universities?
Lord WALLACE of COSLANY: My Lords, evidence of intimidation has to be advanced to be studied. If the noble Lord has any clear evidence of intimidation, I should be glad to receive it and send it on for investigation.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, is the noble Lord aware that, to modify the famous words of the Duke of Wellington, "He may be encouraging the unions but, my goodness! he is discouraging me."?
The Earl of ONSLOW: My Lords, if the noble Lord is so keen on these shows of hands at mass meetings why does he not recommend it for Parliamentary elections? I think we abolished that about a hundred years ago.

ALCOHOLIC LIQUOR DUTIES BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to introduce a Bill to consolidate the enactments relating to the excise duties on spirits, beer, wine, made-wine and cider, together with certain other enactments relating to excise. I beg to move that this Bill be read a first time.
Moved that the Bill be now read la. (The Lord Chancellor.)
On Question, Bill read la; and to be printed.

HYDROCARBON OIL DUTIES BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to introduce a Bill to consolidate the enactments relating to the excise duties on hydrocarbon oil, petrol substitutes, power methylated spirits and road fuel gas. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read la.— (The Lord Chancellor.)
On Question, Bill read la; and to be printed.

MATCHES AND MECHANICAL LIGHTERS DUTIES BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to introduce a Bill to consolidate the enactments relating to the excise duties on matches and mechanical lighters. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read la.— (The Lord Chancellor.)
On Question, Bill read la; and to be printed.

TOBACCO PRODUCTS DUTY BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to introduce a Bill to consolidate the enactments relating to the excise duty on tobacco products. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read la.— (The Lord Chancellor.)
On Question, Bill read la; and to be printed.

AGRICULTURAL STATISTICS BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to consolidate certain enactments relating to agricultural statistics which are to be found mainly in the Agriculture Act 1947 and the Agriculture (Miscellaneous Provisions) Acts 1972 and 1976. The Bill makes no changes in the existing law. If it is read a second time by your Lordships, it will be referred to the Joint Committee on Consolidation Bills in the usual way.
Moved, That the Bill be now read 2a.— (The Lord Chancellor.)
On Question, Bill read 2a and referred to the Joint Committee on Consolidation Bills.

ELECTRICITY (SCOTLAND) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I understand that no Amendments

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have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Recommitment be discharged.
Moved, That the Order of Recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

CUNNINGHAME DISTRICT COUNCIL ORDER CONFIRMATION BILL
Lord STRABOLGI: My Lords, on behalf of my noble friend Lord Kirkhill, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.— (Lord Strabolgi.)
On Question, Bill read 3a, and passed.

MONKLANDS DISTRICT COUNCIL ORDER CONFIRMATION BILL
Lord STRABOLGI: My Lords, on behalf of my noble friend Lord Kirkhill, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.— (Lord Strabolgi.)
On Question, Bill read 3a, and passed.

DISTRICT COUNCIL OF RENFREW ORDER CONFIRMATION BILL
Lord STRABOLGI: My Lords, on behalf of my noble friend Lord Kirkhill, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.— (Lord Strabolgi.)
On Question, Bill read 3a, and passed.

EUROPEAN ASSEMBLY CONSTITUENCIES (ENGLAND) ORDER 1978
3.8 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich)The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich) rose to move, That the draft European Assembly Constituencies (England) Order 1978, laid before the House on 28th November, be approved. The noble Lord said: My Lords, it may be for the convenience of the House if, in speaking to the Motion, I speak also to the two remaining Motions standing in my name. Our debate can then range over the three draft orders now before the House.
The European Assembly Elections Act 1978 provided that the Parliamentary Boundary Commissions for England, Scotland and Wales should each submit a report containing recommendations for European Assembly constituencies. The number of seats for each part of the United Kingdom was specified: 66 for England, eight for Scotland and four for Wales. The draft orders implement the Commission's proposals without modifications. The Commissions were required to submit their reports as soon as might be. To that end, the procedure was truncated to one round of representations upon their published provisional recommendations. The full procedure which must be observed by the Commissions on any future occasions following a review of Parliamentary constituencies includes provision for local inquiries and the publication of any revised recommendations on which representations may again be made.
The Commissions completed their task with, I think, commendable diligence and speed. They were required to recommend constituencies composed of two or more whole Parliamentary constituencies, each having an electorate as near the electoral quota as possible save where special geographical considerations were appropriate. The electoral quotas were 516,436 for England, 473,256 for Scotland and 513,793 for Wales.
There were, as I mentioned in your Lordships' House on 27th June, opportunities for people who were dissatisfied with what the Commissions proposed to make representations. It appears from the Commissions' reports that many did so. The English Commission received over

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800 representations. Understandably, the Commissions for Scotland and Wales received rather fewer, 46 and 31 respectively.
Some of those who wrote raised matters, such as the number of representations and observance of local government areas, which were not within the competence of the Commissions. In particular, the English Commission received nearly 200 representations about their proposed Cornwall and Plymouth Assembly constituency from those who clearly felt very strongly that the county should be separately represented in the Assembly. However, the Commission felt that the county's electorate of 40 per cent. below the electoral quota necessitated the inclusion of Parliamentary constituencies from outside Cornwall in this European Assembly constituency.
Elsewhere, the Commission responded to the views expressed in some of the representations that had been made to them by making five modifications of their original proposals affecting the area of eight constituencies and the name of another. The Commission for Scotland similarly changed two of its original recommendations affecting the area of two constituencies and the name of a third. This last is the Highlands and Islands constituency which, because of its geographical nature, has the smallest electorate of the Assembly constituencies in the United Kingdom.
The majority of all of the recommended constituencies, however, have electorates within 5 per cent. of the electoral quotas. Clearly, they will not all equally commend themselves to those who think that other solutions would have been preferable. To a certain extent, the absence of local inquiries made it difficult for the Commissions and those who would have participated in them to assess the merits of the alternatives or the degree of support that existed for the various proposals. However, the Government consider that the final recommendations provide a sensible and balanced scheme of constituencies for the direct elections to the Assembly to be held on 7th June next year and I recommend them to the House. I beg to move.
Moved, That the draft European Assembly Constituencies (England) Order
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1978, laid before the House on 28th November, be approved.—(Lord Harris of Greenwich.)
3.12 p.m.
Baroness ELLES: My Lords, we on this side of the House welcome the appearance at last of these draft orders and agree with the findings of the Boundary Commissions as contained in their reports. We take this opportunity of thanking the Minister for his detailed explanation of the reports and the conclusions to which the Boundary Commission came, taking into account the limitations imposed upon them by the European Assembly Elections Act 1978. They have done a remarkably good job, considering the time factor and limitations imposed upon them. Reading from the reports and the reasoned replies, they have paid considerable attention to the many recommendations and comments made both by individuals and members of political Parties, including of course the Conservative and Unionist Party. We welcome these draft orders and recommend approval of them.
Despite the more romantic name of Highlands and Islands instead of North of Scotland, and in view of the fact that we do not have phonetic spelling in our language, I was wondering how easy it was going to be for other members of the European Parliament from other countries, Dutch, Danish, and, eventually, Greek or Portuguese, to pronounce Highlands and Islands as they do in the Highlands and Islands. That might lead to a little local difficulty. Apart from that, we very much welcome these draft orders. The Parties—and our Party in particular—have made plans to be ready for 7th June next year to proceed with direct elections to the European Parliament. The Euro-constituencies can now be formally set up and get on with their work.
There is one question that I should like to put to the Minister. As he will know, this is only part of the procedure which is necessary in order to prepare political Parties for these elections. The draft regulations for the conduct of European Assembly elections in Great Britain, which were published as a White Paper (Cmnd 7323) in August 1978, seems to have fallen by the wayside. Although comments were invited from the public,

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we have not heard whether any conclusions have been reached; whether there is any document in print; whether they are lying in HMSO's warehouse, and when the Minister and his Government intend to lay these orders and regulations before Parliament. I shall be grateful for a reply on this matter.
3.16 p.m.
Lord BANKS: My Lords, I, too, should like to thank the noble Lord, Lord Harris of Greenwich, for his explanation of these orders. There is no need for me to remind the House that we on these Benches were strongly opposed to the electoral system which necessitates drawing up these boundaries. The main reason for that was that we believed it would lead to a distorted and unfair result. Another reason was that it left no time for a proper boundary procedure. I noticed that the Minister of State at the Home Office, Mr. Brynmor John, said, when this order was discussed in another place, that the Commissions obviously to some extent felt the absence of the assistance which local inquiries and further representations would have given them in gauging the strength of support for and opposition to both their proposals and any amendment put forward. The noble Lord, Lord Harris of Greenwich, has confirmed that statement. He has told us that the Commission for England alone received over 800 submissions. Yet, only four revisions of its draft proposals were made, affecting only eight European constituencies out of 66.
In the announcement of the draft proposals which the Boundary Commission for England issued, they mentioned the need to get as close as possible to the electoral quota but failed to mention the qualification in the Act about special geographical considerations. It was largely these which led the Liberal Party to present objections to and alternatives for 46 out of the 66 constituencies proposed by the Boundary Commission. Naturally, we are somewhat unhappy that the final proposals contained in the order differ so slightly from the original. In particular, we objected to the inclusion of Plymouth in a single-Member constituency with Cornwall. The noble Lord has told us that some 200 of the 800 submissions to the English Commission
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were about that inclusion. I know a little about that part of the country, having been a Parliamentary candidate in Cornwall for some years. I am well aware of how much the people of Cornwall prize their separate identity and how they talk of going to England when they cross the Tamar to go to Plymouth.
I mention only one other area in England: I understand that the proposals before us will result in there being four official Cheshires, all completely different from each other. There is historic Cheshire; local government Cheshire; postal address Cheshire (which broadly follows local government boundaries in the West and historic boundaries in the East); and with this order now there is Euro-Cheshire, which is roughly the reverse of postal address Cheshire. What a mess that seems to be!
Turning to Scotland for a moment, may I, in spite of the difficulties of pronunciation referred to by the noble Baroness, welcome the change of name of the North of Scotland constituency. The change to Highlands and Islands describes much more accurately a constituency which stretches from Shetland in the North to the Mull of Kintyre in the South; and from Stornoway to Dunoon in the Firth of Clyde, from which the tail of the bank at Greenock is clearly visible. I know that for Dunoon was my father's home town. It will be very difficult indeed for one man to represent so wide an area. It will involve a great deal of travelling, and one can only hope that proper provision will be made for that to be done. May I conclude by saying this: we are promised a full boundary procedure next time but not, I trust, for a revision of these single-Member, first-past-the-post constituencies. I hope we shall not be using them again.
3.20 p.m.
Lord DAVIES of LEEK: My Lords, while congratulating the Government on the difficult task of mapping out these areas, I should like to say that nothing I have read in the White Paper, or anywhere else, seems to show a realisation of the responsibility involved in trying to get fair and democratic representation. For instance, there is no advice on the question of whose law an agent works under in the contest. If I am contesting an election—and I have no intention of doing so—

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whose law is the agent subject to?—because the agent in an election is responsible for all the finance.
Secondly, nowhere is it made clear where all this money is coming from. Thirdly, if anybody has witnessed an election in the United States, God save us from that kind of racket where we shall have people running around vast constituencies and lobbies pushing finance. None of this is clear. I think all this should be clear and we should know under whose law it is to be done. Do not let us call this a Parliament to which these new members will be elected: it is an assembly of pantaloons of different colours, with no real responsibility and no real power, but which nevertheless will take away some of the power of this noble Parliament—both Houses. Consequently, I believe there should be greater research in depth into the finances and the legal working of these elections. I do not want to delay the House any further; nor do I want to object to the order at the moment, but I think that caveat should be made. I have made it.
3.22 p.m.
Lord KENNET: My Lords, this order is the second last step in the statutory preparation for the European elections, and clearly the whole House will and should welcome it. We on this side of the House might perhaps have commented on the fact that both the changes in the boundaries in England which have been made by the Commission as a result of the representations have penalised the Labour Party, but nothing is perfect in this world and I know that the House will pass this into law following approval by the other place, within a few minutes. I certainly go along with that.
It is not altogether the last step before the State steps back and hands over to the political Parties to get on with the battle. That will be the regulations order which has already been mentioned. There is also the question of possible State finance for the Parties. Here I fear the difficulties that may arise in the transition from British Government control of things to the first European political fight.
For years the European Commission and the European Assembly have been agreed that each should spend large sums of money on a so-called neutral information
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programme in each of the member States of the Community in advance of the direct elections. It would be a programme which would say "Look out: you have a vote. Learn what your constituency is and remember there is a Euro-vote coming." I imagine this order now before the House will be very much part of that neutral information programme.
A sum was agreed between the Commission and the European Assembly, which was carried forward year by year. First, it was thought that they would go 50–50 on it, but then the European Assembly got its democratic claws into the matter and switched that to 65–35 in its own favour. The total sum is quite unclear.
It is hard for ordinary Members of the European Assembly to keep track of what is happening. The administration is carried out by a joint committee of officials from the Commission and officials from the Parliament and it is not too happily known as"The Organ of Contact." European Assembly officials on the Organ of Contact can draw on the advice of three members of the E uropean Assembly, who are my noble friend Lord Ardwick, the noble Lord, Lord Bethell, and Mr. Jahn of the German Bundestag. I am sure that these three have discharged their duties diligently and according to their best lights, but I have to say that it is not clear what their duty was. It is also not clear why it was thought appropriate to have, from all the 18 Parliamentary chambers in the EEC, two Members of your Lordships' House and one Member of the German Bundestag. Nor is it clear in fact to whom this three-man group should report. Certainly they do not report to the European Assembly as a whole.
Last summer we in the Assembly heard of a film in connection with the direct elections and some rank-and-filers—I was one—tried again and again to find out what was being put in this film which was being made in our name. I wrote to everyone I could think of, including the President of the Assembly. I raised the matter under an emergency procedure at a plenary meeting of the Assembly, and I got nowhere. At last after four months of importunate pressure, I managed to see that film and I realised there were certain things in it which would not have been correctly understood against

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a British political background. Accordingly, I wrote again to the President of the Assembly to point that out and to ask whether changes could be considered. My letter was neither asnwered nor acknowledged. I have no complaint about that; the dual mandate does make life difficult out there. You cannot get good internal communications working under a dual mandate.
This story with which I am boring the House simply reconfirms, in my view, the need for the elections we are discussing today. Even now, since that time it is still impossible to know what the Commission and the officials of the European Assembly are to spend in Britain on the information programme for the direct elections. I have heard several sums mentioned, including £1·2 million for Britain alone. I have heard the sum of £600,000 mentioned for a single contract to a single advertising agency. I do not know, and I am not asking the Government, because they probably do not know either; but I am telling this story because I think it should be made clear in Britain, and to this House, that what is being done is not being done on any proposal of the European Parliament, any more than the recent opinion, or whatever one likes to call it, of the Council of Ministers about what would be a proper salary for directly-elected Members was put forward on a proposal from, or with the approval of, the European Assembly. It was not.
The House will have seen the news from Paris this morning; namely, that the Gaullists and the Communists in the French National Assembly have formed an alliance which obtained a majority for the proposition that none of this money in France was to be spent; that is, they appear to have created a new crime under French law, which is for anybody to accept the Commission and Assembly money in advance of the direct elections for a neutral information programme. Whether that will really be turned into a new crime I do not know, but there exists a Parliamentary majority for it in France. In any case, a considerable red herring has been drawn across the trail, with obviously far-reaching and undesirable effects. I think we want to take what steps we can to avoid red herrings of that kind arising here.
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I should like to turn now to something I have proposed before more than once; that is, the idea of an all-Party committee to supervise the expenditure of this money by the Commission and the officials of the Assembly in London. Possibly—who knows? I am not the person to suggest it—the Speaker might have a part to play. This is what is known on the Continent as the "Dutch Solution", for obvious reasons: it was adopted in The Hague. I have never been clear myself why the Parties themselves in this country should not be trusted to do some neutral informing up to a certain date. The all-Party committee I am suggesting could ensure that that too was really neutral, if it came into existence. If anyone is afraid of the National Front problem, if you get an all-Party committee and the possibility of State finance, then, of course, we have the Houghton formula, which is familiar to all Members of this House, to hand. The whole argument shades off into State aid to Parties.
Perhaps that is going too far, but without even the minimum precaution of an all-Party committee to supervise the expenditure of the Commission and Assembly Euromoney, I believe that we may be standing into danger. If British Parties are not informed of what is being done in this neutral information campaign, and if what is done is, when it comes to the light of day, attacked, they may find it impossible to dissociate themselves from those attacks—either the Parties as a whole, or certain wings of the Parties—and this is a position which, I submit, it is worth taking some trouble to avoid.
So will the British political Parties—and perhaps I am speaking here especially to the Party of noble Lords opposite—think seriously about this idea, and favourably? There is a clear area for co-operation between the Parties in preparation. After that, we should, of course, be quite free to stand back and fight as wholeheartedly as usual. The House has been tolerant in allowing me to range a little wide. As I said, the matter is connected with the order before us and the news from Paris is, in my view, grave and alarming.
Baroness ELLES: My Lords, before the noble Lord sits down, can he say whether, in view of his very interesting suggestion

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about an all-Party group to control information, he has the support of his Party, or is this an individual proposal?
Lord KENNET: My Lords, this is an individual proposal. I have no formal support from my Party. I know that many members of it would support such a proposal, and I hope that many members of the noble Baroness's Party would, too.
3.32 p.m.
Baroness WARD of NORTH TYNE-SIDE: My Lords, in order to help me, I should like to ask one question, because people like myself have not had time to look at these papers in detail. It seems to me extraordinary that in South Tyne and Wear my old division of Tynemouth is added on to constituencies which are all on the South Bank: Blaydon, Gateshead East, Gateshead West, Jarrow, South Shields, Sunderland North and Sunderland South. But Tynemouth is not in South Tyne and Wear. Tynemouth is in North Tyne and Wear, and I should like to know whether an explanation can be given.
When I look at Northumbria, I find my old division of Wallsend which is in some parts linked with Tynemouth. But here I find that Wallsend goes into Northumbria, and Tynemouth goes into South Tyne and Wear. I should have thought that Tyne-mouth would have gone into Northumbria. Why is it transferred to South Tyne and Wear when, for all the years that I represented it, it was on the North side of the river? It would be very helpful if we could be told the basis on which these papers have been made out. I am sorry to ask this question, when I have not had time to read the papers in detail. But I always like to get to the reasons why action has been taken, before discussing a matter. Tynemouth is not South Tyne; it is North Tyne.
Lord WIGG: My Lords, it is clear that there will be no Division on this Motion. The statement has been made that it is welcomed on all sides of the House. My trouble is that silence means consent. I do not consent, and I am opposed to it, lock, stock and barrel. I believe that, sooner or later, the truth about the Common Market and our entry into it, and all that relates to it, will not be able to be disguised from the
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British people. When that happens there will be a political row in this country the like of which we have not seen for many hundreds of years. That will be the catalyst which will break Parties asunder. It may even break the nation apart.
I believe that it is disastrous. I believe that it is bogus. Nothing that is ever associated with it is either straight or honest. The jamboree that was held in Brussels last week is a very good example. Of course, we have decided to enter the EMS if the Labour Party wins the Election. Occasionally I have a bet, and I am open to any Member of the House to have a bet, that if Mr. Callaghan wins the next General Election we shall enter the EMS. That information is already in the possession of Mr. Giscard d' Estaing, Mr. Helmut Schmidt and, doubtless, Mr. Carter. That is the way it has been handled—shuffle, shuffle, shuffle. The British people are confused and beguiled.
The other day a noble Lord said that he wished that the power of the Common Market would be used externally to force the people of this country to face up to what he regarded as economic reality. That is what it is all about. I believe that the British people live only by freedom. I do not believe that any group of bureaucrats in Brussels can solve the problems which face Great Britain. The problems of Great Britain can he solved only by the British people, and the essential precursor to that is that they must understand what those problems are all about.
The truth, if history means anything at all, is that the British people have never failed to believe in themselves and to act accordingly when they have realised the truth. There is not a Member of this House who is not old enough to remember those tragic days of 1940. Nobody believed that we would survive. We did not even stop to ask ourselves. But we did survive, because we believed in ourselves and because of our sense of unity. That unity is now being denied to us by the machinations, the chicanery and the Machiavellian concepts which are implicit in this order today. I will have none of it. I am opposed to it. If I have any justification for speaking today, it is the hope that I may live long enough to be able to say: "I told you so".
3.37 p.m.
Lord O'HAGAN: My Lords, I do not wish to comment on what the noble Lord, Lord Wigg, has said.
Lord SHINWELL: Why not?
Lord O'HAGAN: That is all that there is to be said about it. I want to ask the noble Lord, Lord Harris of Greenwich, a question which reverts to a matter that has been commented on by other noble Lords. It might be called the Cornish question. Can he reassure noble Lords, and the audience outside Parliament, that at the next drawing of the boundaries for the European Parliament there will be plenty of time for those to be heard who are anxious that the new boundaries should be different from what we are, I hope, going to assent to today? I do not think that those who have had a chance to express their anxieties, and who have not had their views accepted, are likely to feel any less strongly on the matter in a few years' time. Therefore, would it not be helpful for the noble Lord to spell out precisely what the difference between the procedure that we are agreeing to today, and that to be adopted in future, will amount to? Can the noble Lord tell us precisely the difference in the number of representations and in the amount of time that will be given to those people living in areas with objections to the present constituencies, the next time round?
3.38 p.m.
Lord HARRIS of GREENWICH: My Lords, may I begin by saying that I am grateful to all those who have participated in this short debate this afternoon. I will do my best to answer the various questions which have been put to me. May I start with the noble Baroness, Lady Elles? I should like to join with her in her expression of thanks to the Boundary Commissions for England, for Scotland and for Wales. The members of the Commissions have done an extremely good job of work in a remarkably short period of time. It is right that on an occasion like this we thank them. I am glad that the noble Baroness did so, and we—and I am sure that I speak on behalf of Members in all parts of the House—join with her in what she said.
Secondly, she raised, perfectly reasonably, the question of the draft regulations
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for the conduct of the elections, and this deals with the point made by my noble friend Lord Davies of Leek. The question which he put to me was on the position of the agent in these elections. That will be dealt with in the next set of regulations which, like these, will be subject to the Affirmative Resolution procedure. We hope that these will be available to us very early in the New Year.
If I may turn to a number of other points which were made, I take note of what my noble friend Lord Kennet said about his interesting proposals to have some form of all-Party committee to supervise the information campaign. I think that it is generally recognised that it is desirable to have an information campaign about these elections. This is the first time that the people of the European Economic Community will have the opportunity to choose their representatives, and it is clearly desirable that people should be made aware of this as a result of some form of information campaign. As my noble friend realises, this issue goes rather wider than the issues which are raised in the Motions which are before the House this afternoon. However, I will gladly draw the attention of my right honourable friend the Leader of the House of Commons to what my noble friend has said, for I am quite sure that my right honourable friend will be extremely interested in this proposal.
Also, I take note of what was said by the noble Lord, Lord Banks. I do indeed recall the vigorous criticism to which the proposed electoral system which is now incorporated in the Act was subjected by the representative of the Liberal Party. I do not want to go over all that ground again. Nevertheless, I realise that there are strongly held feelings about the system of election. However, as I pointed out during our discussions on the matter—this deals with the point which has just been raised by the noble Lord, Lord O'Hagan—when we come to the next set of elections, one of the issues which will undoubtedly be argued out again on that occasion will be the system of election, not just the question whether Cornwall and Plymouth should be in the same Assembly constituency but whether there should be a totally different arrangement. That issue will undoubtedly occupy a very substantial amount of Parliamentary time.

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The noble Baroness, Lady Ward of North Tyneside, asked me why the Boundary Commission—I am delighted to say that it is the Boundary Commission rather than the Home Office—have put Tynemouth into the constituency of South Tyne and Wear. I should very much like to be able to answer her question this afternoon, but I do not have the advantage of being a member of the Boundary Commission—which will no doubt reassure a very large number of people. All I can say to the noble Baroness is that the Boundary Commission had the exceptionally difficult task of bracketing together groups of existing Parliamentary constituencies, and undoubtedly they decided that the right and appropriate thing to do was to put Tynemouth into this group of constituencies. They then chose this name for it. Certainly I think that it is appropriate to bear in mind the matter which the noble Baroness has raised for any future discussion that there may be on this range of issues.
I come, lastly, to the speech which was made by my noble friend Lord Wigg, who expressed his strongly held opinion about the undesirability of this country being a member of the European Economic Community. It always saddens me to differ from my noble friend, but as he and I will recall we had different opinions on this matter during the referendum campaign. As I recall, the British people, by an absolutely overwhelming majority, decided that this country should become a member of the EEC, and I am delighted that they did so. I think that this decision which we are asked to implement today—namely, the decision to regularise the arrangements that have been proposed by the three Boundary Commissions—gives the British people the opportunity of democratic representation in the new Europe, which is highly desirable.
Lord GLADWYN: My Lords, can we assume that the Government do not share the view of the French Gaullists and Communists—that the funds apparently to be made available by the European Parliament should not be distributed in this country? If the Government do not share that view, have they any view as to how exactly these funds should be distributed among the political Parties in this country?
Lord HARRIS of GREENWICH: My Lords, as I tried to indicate a few moments ago, the position is that my noble friend Lord Kennet made a proposal about some form of all-Party national committee to supervise this information campaign, and I said that I would draw that proposal to the attention of my right honourable friend the Leader of the Commons. No, we certainly do not share the view of the French Gaullists and Communists.
On Question, Motion agreed to.

EUROPEAN ASSEMBLY CONSTITUENCIES (WALES) ORDER 1978
Lord HARRIS of GREENWICH: My Lords, I beg to move that the draft European Assembly Constituencies (Wales) Order 1978, laid before the House on 28th November, be approved.
Moved, That the draft European Assembly Constituencies (Wales) Order 1978, laid before the House on 28th November, be approved.—(Lord Harris of Greenwich.)
On Question, Motion agreed to.

EUROPEAN ASSEMBLY CONSTITUENCIES (SCOTLAND) ORDER 1978
Lord HARRIS of GREENWICH: My Lords, I beg to move that the draft European Assembly Constituencies (Scotland) Order 1978, laid before the House on 28th November, be approved.
Moved, That the draft European Assembly Constituencies (Scotland) Order 1978, laid before the House on 28th November, be approved.—(Lord Harris of Greenwich.)
On Question, Motion agreed to.

ARBITRATION BILL [H.L.]
3.46 p.m.
The LORD CHANCELLOR: My Lords, this short Bill proposes significant changes in the law of commercial arbitration. Its purpose is to remove certain legal obstacles which at present stand in the

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way of London being used to its full potential as an international centre for arbitration. Arbitration is, of course, a method of settling disputes by referring them for adjudication to a private tribunal of the parties' own choosing rather than to the courts of law. The speed, informality and privacy of arbitration proceedings, coupled as they frequently are with the advantage of having a judge who is himself an expert in the field concerned, make arbitration a normal feature of commercial life, and an essential part of international trade. All the major trading nations are bound together by agreements for the enforcement of arbitral awards.
All this means that arbitration is an important subject for a country like ours, which lives by trade: and the City of London is in fact one of the world's leading centres of arbitration. "London arbitration" is a term that has been used in international contracts for very many years. A high percentage of the world's shipping arbitrations are carried out in London and there are also numerous commodity arbitrations carried out by members ofthe various London Commodity Exchanges, such as the Grain and Food Trades Association. Efficient arbitration arrangements are important to the United Kingdom for the protection of its own traders, as a valuable source of income and foreign exchange, and as a part of the range of legal, financial and trading services offered here, and particularly by the City of London.
In these circumstances, it is important to ensure that our law of arbitration conforms with the needs and wishes of the commercial community, so far as public policy allows. Our law on arbitration is largely contained in the Arbitration Act 1950 (which consolidated earlier enactments) as amended by the Arbitration Act 1975, which was passed to enable us to accede to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Part I of the 1950 Act lays down the circumstances in which arbitration agreements are to be recognised by the courts, and a framework for the procedure to be followed in arbitrations and the powers of the arbitrator. It also provides, in Section 21, a procedure, called the case stated procedure, by which the courts can control arbitrators and ensure that their awards conform with the
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general law. It is this case stated procedure with which we are mainly concerned in the Bill today, because it has recently been the subject of a good deal of criticism.
Your Lordships may recall that last May we had a well-informed and useful discussion on this subject which was raised by the noble Lord, Lord Hacking. Several noble Lords then observed that the case stated procedure under Section 21 of the 1950 Act had become a serious deterrent to the use of London as an arbitration centre, and they urged that something should be done as soon as possible to remedy the position. In response, I informed the House that I had recently received the draft Report on Arbitration by the Commercial Court Committee, which discussed the workings of Section 21. I undertook that the Committee's recommendations would be studied urgently. That has been done, and this Bill is the result.
In it, we propose to give effect to the recommendations in the Committee's report, which was published as a Command Paper in July. We have moved quickly in this matter and have followed the recommendations of the Committee pretty faithfully, with the exception of some of the minor proposals which it did not seem feasible to implement in the time available. I should like to pay tribute to the rapid and workmanlike way in which Mr. Justice Donaldson and his colleagues have dealt with this problem, and also to the previous contribution made by Mr. Mark Littman and a number of judges and practitioners who collaborated with him.
I should now like briefly to explain the origins and purpose of the much-criticised case stated procedure in arbitration. As the noble and learned Lord, Lord Diplock, explained in his admirable Alexander Lecture on the "Use and Abuse of the Case Stated", it was a 19th century adaptation of a similar procedure used by the criminal courts of quarter sessions, and was originally applied to arbitration under the Common Law Procedure Act 1854. Until then, a decision could only be upheld or quashed by the Court of Queen's Bench. If the decision was quashed, the arbitration had to be started all over again. The case stated procedure, by contrast, allowed a point of law to be determined without putting the whole proceedings in jeopardy and it was thus at the time a useful reform.

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The present procedure provides for an arbitrator to state, in the form of a special case for the decision of the High Court, his award or any question of law arising in the course of the reference to arbitration. Although the arbitrator has the discretion whether or not to state his award in the form of a special case, and the High Court has the discretion whether or not to order an arbitrator to do so, the practice has developed that the arbitrator generally adopts the special case procedure on the application of any of the parties to the arbitration, even if there is no great sum of money in dispute, even if no point of general importance is involved and even if the answer is reasonably clear. The procedure is therefore capable of being used by undeserving parties for the sole purpose of postponing the evil day when they have to meet their liabilities. It is difficult to discourage unmeritorious applications, since a decision has to be taken on the use of the special case procedure at a stage when often the arbitrator has not yet made any findings of fact upon which such a decision might be based. In this situation, it can be very difficult to be certain whether a serious question of law is in issue, and the doubt is usually resolved in favour of the applicant and the special case procedure adopted.
In the past, the penalty of costs and interest on awards was a sufficient discouragement to unmeritorious applications. Now, however, the large amounts of money in issue, the importance of liquidity to the cash flow of companies, and fluctuations in interest rates and exchange rates, have, despite such penalties, led parties to arbitration to use the case stated procedure as a means of postponing the eventual date of payment of any award made against them. This procedure facilitates such delay, since until the court has decided the point at issue there is no decision and consequently, at any rate prima facie, no award on which enforcement proceedings can be based. Further delays can be engineered through appeals from the High Court to the Court of Appeal, and even to your Lordships' House.
Furthermore, there is no provision in English law for the parties to contract out of the case stated procedure. This position follows from the judgment in the case of Czarnikow v. Roth, Schmidt & Co.in 1922, when the Court of Appeal held that
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it was against public policy to allow parties to an agreement to oust the jurisdiction of the courts. The availability of the case stated procedure, and the impossibility of contracting out of it, has had the advantages of keeping the law as administered by arbitrators and that developed by the judges in line, and of enabling the United Kingdom commercial law to develop in a uniform and coherent way which has given it great international prestige and authority. However, on the evidence which has been presented to us, the existence and un-avoidability of the case stated procedure now acts in two ways as a substantial deterrent to parties who might otherwise be willing to arbitrate in London.
First, there is the knowledge that in many cases the other party to an arbitration can successfully use the case stated procedure and subsequent appeal for the purpose of postponing payment of an award. A principal objective of arbitration—the achievement of a speedy and final decision—can in this way be thwarted.
Secondly, there is the increasing number of large supranational development contracts. The parties are often consortia which directly or indirectly include foreign Governments or their agencies. Such Governments, perhaps understandably, are reluctant to submit to the jurisdiction of foreign courts. Accordingly, although they might prefer English law as the proper law of a contract and prefer to have their disputes resolved in England by English arbitrators, who have high standing, they are nevertheless deterred by the case stated procedure.
This new Arbitration Bill, which I now recommend to the House, contains provisions which would remove these deterrents, while at the same time allowing the continued development of commercial law. It does this by abolishing the special case procedure and introducing instead of it a new limited right of appeal on a point of law only; and by allowing the parties to most international arbitration agreements to exclude that right of appeal if they so wish. Clause 1 of the Bill therefore repeals Section 21 of the 1950 Act, and with it the case stated procedure, and sets up instead a limited right of appeal to the High Court on points of law. It also puts further limitations on appeal from the High Court to the Court of Appeal. The clause also

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empowers the High Court to order arbitrators to give reasons for their awards, a practice which would bring us more in line with other countries, and ensure that the new right of appeal will be effectively and properly exercisable. Clause 2 gives the High Court jurisdiction to determine preliminary points of law arising in the course of reference to arbitration. Clause 3 is particularly important, since it provides for the right to make agreements excluding the jurisdiction of the High Court altogether.
However, this question of exclusion is not entirely straightforward. I have already referred to the judgment which held that it was against public policy to allow parties to an agreement to oust the jurisdiction of the courts. That is under the law of England and Wales. But, under Scottish law, the position is different, as is so often the case in regard to Scottish law. Section 3 of the Administration of Justice (Scotland) Act 1972 allows parties to an arbitration agreement to contract out of a case stated procedure. Clause 3 would also therefore have the effect of moving English law in that direction. But the Commercial Court Committee recommends that the law in England and Wales should reflect the different circumstances of the various types of arbitration.
Accordingly, Clause 3 of the Bill provides that in the case of domestic arbitrations—that is, arbitrations not involving foreign nationals or companies—where one of the parties, such as a consumer or small trader, may often be in a weak bargaining position, the right of appeal to the High Court can only be excluded after the arbitration has begun. By this means the consumer or small trader will be protected by Clause 3 from being bullied by a stronger party into agreeing in advance to forgo the benefits of the new right of appeal to the High Court should a dispute arise. However, when a dispute has already arisen, the need for protection is less, and accordingly the Bill would allow the parties by agreement to exclude the right of appeal once that stage had been reached.
There is also separate provision for certain "special category disputes" as they are described, and they are so described not because they are some rare species of dispute but only because that is
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the name adopted for them in the Commercial Court Committee's report. The term is used to describe disputes arising out of maritime and insurance contracts and contracts relating to commodities. In fact such disputes form a very large proportion of the disputes arbitrated in London each year. Usually the parties to such contracts, where they are international in character, are of more equal bargaining power than in the case of the domestic arbitration agreements to which I have referred, and it might be suggested that all such parties should be free to enter into exclusion agreements before, as well as after, arbitration has commenced. The Commercial Court Committee considered, however, that the retention of a right of recourse to the courts from such arbitrations is very important to the proper development of English commercial law and its maintenance as the first choice of law in international commerce.
The Committee, therefore, recommended that for a two to three year period the right of appeal should be entrenched in these special category disputes to the same extent as in domestic arbitration agreements. In other words, there should be no power to exclude the right of appeal by agreement before any dispute arises. However, Clause 3 introduces a measure of flexibility by enabling the Secretary of State by order to remove this so-called entrenchment so as to allow parties to special category disputes to have a right of exclusion even before arbitration has commenced.
Finally, Clause 3 provides that parties to all other agreements—that is, apart from domestic agreements and special category disputes—should be free at any time to exclude the right of appeal to the High Court. This provision would mean that parties to such agreements—for example, foreign Governments involved in supranational development contracts—could ensure that they could use English arbitration without fear of having to submit to the jurisdiction of the High Court.
The other clauses in the Bill involve minor, if significant, amendments recommended by the Commercial Court Committee. They provide for sanctions against parties who fail to comply with the orders of an arbitrator, the appointment of arbitrators and arbitration awards, and the application of certain provisions of Part I of the Arbitration Act 1950.

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My Lords, in conclusion, I should like to thank again those noble Lords who earlier this year so clearly argued the case for amendment of the Arbitration Act 1950. I hope your Lordships will be generous enough to think that the Government have responded quickly in the face of the propositions that were put to them. It is important that the City of London and other centres of arbitration in England and Wales should not be hampered in the maintenance and expansion of their important and historical role in arbitration matters. As I have said, the contribution of the City, particularly to our balance of payments, from the City's services, is very considerable. The Bill should remove the deterrents in our arbitration practices that have recently emerged, and I believe that the procedures now envisaged should be attractive to all potential parties to arbitration proceedings. I hope, therefore, my Lords, that the Bill will have a speedy passage through Parliament, and I commend it to the House.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
4.7 p.m.
Lord RAWLINSON of EWELL: My Lords, one of the spin-offs of a Parliament lasting into the fifth year and a Government perhaps living off borrowed time is that the Government have the opportunity of doing very sensible things. The noble and learned Lord, the Lord Chancellor, is indeed to be thanked for having used the opportunity of this, the fifth year of this Parliament, for responding, as he said, swiftly to the representations which were made to him earlier in the year and for introducing this Bill. It is a Bill which I believe will commend itself not only to both sides of your Lordships' House but to a much wider audience and a much wider class of persons who will be making use of it.
It is, as the noble and learned Lord said, based on the Commercial Court Committee's report. That report is expressed, if I may say so, with the lucidity which is expected from Mr. Justice Donaldson and which was the hallmark of his judgments in another short-lived court over which he presided, but also of the judgments which he usually gives in all matters with which he is dealing.
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I think it would be right, too, if I may, to pay a personal tribute to the noble Lord, Lord Hacking, for his initiative in pressing upon the Government and upon my noble friends the need for this Bill, and for the persistence which he showed in urging the Government of the day—because that was in the summer and it might have been a different Government—to legislate in this field. He has the advantage of practising the law, and as a practising and experienced lawyer he sees the problem from overseas, he can recognise the need, much better perhaps than those of us in this country, for removing what was a needlessly self inflicted wound. Therefore to him goes a great deal of credit for having been a spur behind everybody to see that this Bill was introduced.
My Lords, the international community, unlike some persons in this country, have a very high respect and admiration for the administration of the law within the United Kingdom. We hear many voices in this country continuously critical of the practice and the administration of the law. But there is no doubt that overseas they have a very wide admiration, not only for the administration of the law generally but also for the manner and mode and the men who are employed in resolving disputes. I believe there is a great need to exploit and utilise in the modern world those skills which we in this country still possess, and to harness those talents for a public benefit which could bring and would bring great advantage to this country.
My Lords, as the noble and learned Lord, the Lord Chancellor, has said, the arbitration law, or the practice of it, has been marred by the special case procedure with the two different forms of judicial review; the first, the motion to set aside the award for error on its face, and, secondly, the reference to the High Court of an award in the form of a special case. In the first case, often English arbitrators avoid giving reasons, with the result that when an arbitration has to be given effect to overseas doubt arises because it is said that the award, with no reasons, is unmotivated. Secondly, with regard to the special case concerning Section 21, as the noble and learned Lord, the Lord Chancellor, has pointed out, there will be the opportunity for questions of law to be reviewed by the High Court and from

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the High Court to the Court of Appeal and then to your Lordships' House.
Most people would agree that the effect has been to give the English commercial law an opportunity to develop so that it has become the popular choice for commercial interests throughout the world. However, it has introduced an additional stage of judicial review, and it will be obvious to noble Lords that it is speed and finality which is often sought and which is the purpose of the arbitration. And, with the advent of that which the noble and learned Lord, the Lord Chancellor, spoke about—the supranational development contract—it has been a major disadvantage. The result has been that parties have reluctantly been going elsewhere for arbitral purposes, with the loss to this country—as my noble friend Lord Cullen of Ashbourne pointed out earlier this year—of a vast sum of money.
So we come to the Bill. The noble and learned Lord, Lord Diplock, is to take part in the debate and I would point out that his Alexander Lecture was of the greatest importance. I wish to hear his comments—as I have heard those of the noble and learned Lord, the Lord Chancellor—regarding the special categories disputes group. I see that it is said in the Committee's report that it is proposed on the grounds not only of economic interest but also of the contributions which this group makes and has made to the development of English commercial law and to its popularity in the commercial world. The purpose of such a reservation is given in the Committee's report, but I personally should certainly be interested to hear what the noble and learned Lord, Lord Diplock, has to say on that matter if he proposes to advise the House.
These are simple reforms but they are urgent. There is a problem nowadays with commerce throughout the world and the influence thereon of the Third World and of many countries especially in Latin America and the Middle East which do not conform to the international agreements in respect of arbitration. Indeed, many countries in Latin America consider arbitration a rival to the courts and therefore not admissible, and in the Middle East it is only Israel, the Lebanon and Syria which have adequate arbitration laws.
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However, it is certainly in the interests of the commercial life of this country that more and more nations should be encouraged to adhere to the New York Convention of 1958 and that the wider use of fair and ordered arbitral proceedings which are efficient and enforceable, should be more and more widely used, because that will undoubtedly redound to the prosperity of the United Kingdom. Therefore, I congratulate the noble and learned Lord, the Lord Chancellor, for having had the opportunity to bring forward the Bill, which is most important. It sets our domestic house in order. It is a major step to attract back much of what has now gone elsewhere. It is for those reasons that I wholeheartedly welcome the Bill.
4.14 p.m.
Lord LLOYD of KILGERRAN: My Lords, may I join in congratulating the noble and learned Lord, the Lord Chancellor, on his detailed and lucid summary of the terms of this very important Bill. It is important because it introduces significant steps towards facilitating the settlement of disputes on a national and international scale. If I may also say so without being thought to be presumptuous, I should also like to congratulate the Commercial Court Committee on its report of July 1978 on arbitration, particularly because it has recognised, at least in some degree, how the system of English arbitration awards differs from that of most other countries in Europe and that there are many disadvantages in the English arbitration system which have been accentuated, particularly during the last decade, with the advent of the vast new supranational contracts. That proliferation of arbitration in relation to such contracts has happened quite apart from our entry into the EEC. Whether the Bill modifies adequately our existing practices regarding arbitration procedures in England and Wales in the context of the recent EEC conventions and practice is a matter to which I shall come presently.
As the report states and as the noble and learned Lord, Lord Rawlinson, has indicated, English law has become very popular—as I well know—for commercial contracts and interests throughout the world. But the one great stumbling block to the conducting of arbitration under English law, was the entrenched

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right, so far inherent under English arbitration law, that the High Court can review the award of an arbitrator by way of case stated to the High Court. As the noble and learned Lord, the Lord Chancellor, has indicated, there have been complaints about this procedure which has mitigated against speedy and final decisions. It has caused arbitrations to be held elsewhere, and I join in praising the noble Lord, Lord Hacking, for the initiative he has taken in pressing that the matter of arbitration law should be reviewed.
Indeed, the time had come to replace the English courts' system of judicial review based on the special case procedure in modern arbitration practice. Accordingly, as the noble and learned Lord, the Lord Chancellor, has explained, Clause 1 of the Bill enacts that Section 21 of the Arbitration Act 1950 regarding statements of case for decision of the High Court shall cease to have effect. But there seems to be serious qualifications to that situation arising in Clause 3 which the noble and learned Lord Chancellor has indicated is a complex clause.
However, before I come to consider Clause 3, as far as I can understand the report of the Arbitration Committee and indeed, the speech of the noble and learned Lord Chancellor, specific developments in the Jaw under the European Economic Community have, surprisingly enough, had nothing to do with the origin of the Bill. But, the Bill comes, certainly to my mind, at a very apposite time in the context of EEC developments, in that at least it diminishes the power of the English courts to intervene in arbitration matters.
To all lawyers in the commercial area the EEC Judgments Convention of 1968 has been a most important community instrument. Article 220 of the Treaty of Rome provides for reciprocal recognition and enforcement of judgments of the courts in all the Member states. When the United Kingdom adhered to the Treaty, we were required to agree, and did agree, that we would adhere to the Judgments, Convention. Since our entry into the Common Market there have been extensive negotiations with which the noble and learned Lord, Lord Kilbrandon, has been closely associated for a number of years. Those deliberations have resulted in a further draft of a judgments convention.
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That has recently been signed by the noble and learned Lord, the Lord Chancellor, on behalf of the United Kingdom Government. There will inevitably still be considerable delays, of perhaps two or three years, before the new convention forms part of our law, but, in my view, the EEC convention must have considerable effect on the thinking about the jurisdiction to be applied to contracts and the recognition and enforcement of judgment in international commercial matters.
The relevance of this new EEC Judgements Convention to the English arbitration procedures, and perhaps to this Bill, is that it states in paragraph 1 that it does not apply inter alia to arbitration. Apparently, under Article 1 of this new Convention arbitration procedures are excluded. Therefore, the exclusion of arbitration is very significant.
It has never been clear what precisely is comprised within the word "arbitration". Arbitration is governed by other conventions, such as the New York Convention of 1958, which is now embodied in the United Kingdom Arbitration Act 1975. In my submission, therefore, if the EEC Judgments Convention proves unsatis factory in practice to international com mercial lawyers and industrialists, it may be that in the field of contract, and particularly perhaps in the field of insurance, there will be a very considerable increase in the number of cases which go to arbitration rather than to the national courts. Therefore, in the light of this Convention it seems to me to be desirable, even at this stage, to consider to what extent we should modify our existing practices on arbitration within the United Kingdom, and particularly in relation to the EEC countries and to the: United States of America.
With that somewhat lengthy introduction, I ask your Lordships, briefly, to consider the scope of—and I use the words of the noble and learned Lord the Lord Chancellor—" the significant"Clause 3 of the present Bill. It is a most complex clause and very difficult to understand. For its main purpose, it has to exclude rights under subsections (1) and (2). To put it briefly, it serves to give the courts some jurisdiction, albeit limited, over arbitration under English law. The complexity of this clause is really due to the real concern, that on

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contracts under English law, if arbitration in the United Kingdom become entirely free of control by the courts, in effect they may set up their own system of commercial law, apart from that of the courts. As the noble and learned Lord the Lord Chancellor has indicated, this would be contrary to public policy, particularly in view of a Court of Appeal decision of 1922, to which the noble and learned Lords has referred, and which still remains the law.
To my mind the question for consideration is whether the scope of Clause 3 as it is at present drafted is too wide, and whether the class of contracts as regards contracting out of the right of appeal should be enlarged. At this stage it is not appropriate to go into the details as to the way in which to my mind there should be enlargement of Clause 3. However, in my view this Bill is still too tightly drawn in relation to control of arbitration matters by the High Courts in this country, although of course it is an enormous improvement on the past.
I should like to welcome another clause in the Bill, which may have considerable practical value in the future; it is a part of Clause 5. In many of the disputes with which I have been concerned and in the contracts giving rise to disputes, it has been the habit to include a clause that the arbitrator shall be appointed by, say, the Chartered Institute of Patent Agents or by the chambers of commerce. Often serious delays have arisen because there has been no agreement between the parties as to who the arbitrators should be. In the future, under Clause 5, where there have been serious delays in the appointment of an arbitrator it will be possible for the High Court to appoint an arbitrator.
I should like to refer specifically to page 6 of the Bill. Line 22 refers to a period of time of seven clear days after the service of the notice when the High Court or a judge can act on the application of the party who gave the notice. This is quite a small point, but it seems to me that perhaps the period of seven days is rather short in view of the complexity of some of the disputes which may have to be dealt with. In conclusion, may I also thank the noble and learned Lord the Lord Chancellor and his Department for the
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speed with which they have acted upon the Commercial Court Committee's Report.
4.26 p.m.
Lord DIPLOCK: My Lords, it may appear upon the face of it that this Bill deals with a highly technical facet of law, intelligible only to lawyers and of interest only to them. However, in reality it is of practical importance to all concerned and interested in the commerce and industry of this country and—as my noble and learned friend upon the Woolsack has already said—of great economic importance to this country, a matter which was stressed in the debate which we held on 15th May last on the proposal of the noble Lord, Lord Hacking, and which it is unnecessary for me to repeat now.
Arbitration is, of course, generally the preferred method of settling commercial disputes, for the reasons given by my noble and learned friend the Lord Chancellor. But the purpose of the case stated procedure is the important one; that in arbitrations as well as in courts the rule of law shall prevail. If the contract is governed by English law, that law ought to be correctly applied whether the application is before an arbitral tribunal or before the courts; because unless that is so, no one entering into a contract can know what his rights and obligations under that contract are until a dispute arises, and then what they are depends upon the whim of the arbitrator, unless it is subject to some control.
The case stated is a device by which mistakes of law by an arbitrator can be detected and corrected by the court. In the past it has served us well, for it is through this procedure that we have been enabled to work out a corpus of commercial law, more detailed and more comprehensive than that in any other country. It is largely for this reason that English law has become the law which is most often chosen by foreigners to govern their contracts, because under it they know better where they stand than under any other system. It is largely for this reason that London has become the pre-eminent centre for international arbitrations. But the present procedure by way of case stated is open to abuse in domestic as well as in international contracts.

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The demand for a case stated which, in practice, it is almost impossible to resist, holds up the enforcement of the arbitral award and, under the present system, imposes no real limitation upon the right to make that demand. Once that demand is made and the case has gone to the High Court, there is an automatic right of appeal to the Court of Appeal. So the possibilities of using this procedure not for the purpose of correcting mistakes of law but for the purpose of securing delay in the payment of the amount awarded are very considerable.
Clauses 1 and 2 of this Bill are designed to cure this defect as regards both domestic and international arbitration. The leave of the Court will, in future, be required before there can be an appeal to the Court against a mistake of law made by the arbitrator and it will, I hope, be granted—indeed I am sure it will be granted—only in serious cases where there is a genuine point of law which is important to the rights of the parties to be decided; and appeal to the Court of Appeal will lie only where the judge in the commercial court has certified that the question of law involved is of wider interest than those of the parties alone—that it is a matter which needs to be decided in the public interest in order to bring certainty into a particular part of the law.
Most important, the Court is empowered to impose conditions upon the grant of leave to appeal upon a point of law. I contemplate that those conditions will include the right to require security to be put up by the appellant, or the obligation to bring the amount at stake into court in order to ensure that delay will not be profitable and will not be a motive for asking for an appeal. There are one or two Amendments which I should venture to suggest to Clauses 1 and 2 in relation to conditions, but those can best be left until the Committee stage.
I turn, then, to Clause 3, which has been mainly discussed up until now. It applies to international contracts only. Foreigners who resort to London arbitration and wish to have their contracts governed by English law may want finality more than anything else, and be prepared to take the risk that English law may not be accurately applied by the arbitrator they have chosen. This is particularly so in the case of the vast contracts, the multimillion
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pound contracts—what are called in the report the "one-off contracts"—in which governments or governmental agencies are often parties. For understandable reasons of national pride, though happy to have consensual arbitration, they may not wish to submit themselves to the jurisdiction of the English courts. There is no reason, in my view, to compel them to do so if one can be sure it is by their free choice that they have elected for finality at the risk of some mistakes in law. So Clause 3 permits the parties to exclude appeal—recourse to the courts—in all categories of international contract except what are called the special category disputes.
Why, then, was it necessary to have the special category contract, in which recourse to the courts under the reformed system of appeal should not be allowed to be excluded? I was intimately concerned with the discussions and negotiations which took place and which resulted in the report of the Committee. My reason for accepting this special category and indeed for thinking it desirable that, for the time being—because this is capable of alteration later—we should retain the case stated was that those contracts, unlike the one-off contracts, are not in practice freely negotiated between the parties to the contract.
What I wanted to exclude for the time being was what I should describe as the standard term contract. There are many branches, or at any rate several branches of commerce in which it is impossible in practice to trade, or to enter into a transaction, except upon a standard form prepared by a trade association, customarily on the Baltic, or whatever it may be. If you want to enter into that kind of contract, that kind of transaction, at all, you are, for practical purposes, forced to contract upon the standard terms. The danger is that the standard terms will include an exclusion term to which the other party to the contract, or indeed neither party to the contract, has an opportunity of saying, "No, we want to reserve our normal rights." That was the reason why I, at any rate, took the view that the special category contract ought to be excluded for the time being. Those are the contracts which raise questions of law of general importance, whereas the one-off contract specially entered into for a particular transaction

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does not generally raise matters of wider import than the particular contract itself.
The dividing line between the two types of contract represents a compromise which was hammered out after very detailed consideration and discussion by, I think I may say, all the interests—commercial, legal and that of arbitrators—concerned with this kind of problem. As one who has taken part in these discussions and in my capacity as President of the Institute of Arbitrators, I have had representations made to me some saying the special category should be enlarged, others saying it should be reduced; they cancel one another out.
At present I do not think the division which the Committee has settled on can be improved, remembering all the time that this is not permanent; there is provision for a greater exclusion when the time comes. The notion of the Committee was that we should let it run for another two or three years under the reformed procedure for the case stated to see how it works and to see whether there is a demand which does not exist now among those who enter into contracts in the excluded category.
I strongly recommend the House to accept the principles of the Bill and indeed its details, subject perhaps to some very minor drafting Amendments in Committee. If the House does so, then I believe we can retain London's pre-eminence as an international arbitration centre. If it does not, and the Bill is not passed quickly, we are in danger of losing that pre-eminence to other commercial centres who would be only too glad to inherit it from us.
4.43 p.m.
Lord HACKING: My Lords, this Lord is most happy to express generous feelings towards Her Majesty's Government (on this subject) and most willing to express satisfaction and thanks—satisfaction for the good progress that has been made in so short a time and thanks for the speed and quality of the work of senior officers' of the noble and learned Lord's Department and of the Department of Trade, led by the Solicitor himself, who have given an enormous amount of time and effort to bring us so quickly to this
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stage. The noble and learned Lord, in a mild reproach towards me during the May Debate, said I had "jumped the gun". May I, in return use an American metaphor, and thank him for "biting the bullet" so firmly.
Our reputation in international arbitration is much worse than our wrong. This Bill takes us a long way down the right road. As I have argued several times recently in America, the strength of our arbitration laws lies in the support which those laws provide for arbitration—the support arbitrators receive from the courts. Indeed, it is the weakness of institutional arbitrations—for example, the International Chamber of Commerce arbitrations—that they are not directly supported by national courts. In the last debate, I took a little time to draw the attention of noble Lords to certain sections of the Arbitration Act 1950 to illustrate that point. It is therefore nice to record, as other noble Lords have, that this Bill represents a joint effort by judges and arbitrators to put matters right. Indeed, before this matter came before the House, earlier credit must, as the noble and learned Lord said, go to Mr. Mark Littman, who, among his other responsibilities, is an international arbitrator, and Sir John Donaldson, a senior judge in our Commercial Court.
This is not the Committee stage, but I believe there is still progress to be made on the Bill and I think it would be helpful if I drew certain matters to the attention of the House. The Bill, in the treatment of arbitration law, divides, on the one hand, domestic arbitrations and certain categories of international arbitrations referred to in the report as "special category disputes"—and I refer of course to commodity, insurance and maritime arbitrations—and, on the other hand, the remaining international agreements which are sometimes referred to by that curious phrase, "one-off contracts". It is a rather curious phrase when one considers that these contracts concern the building of airports and sometimes the building of entire cities.
There is no logic in law in either of those divisions and, for this reason, I have been long concerned over the proposed different treatment of these arbitrations. But I have come to the firm conclusion, for the strong practical reasons voiced by

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the noble and learned Lord, Lord Diplock, that we should accept this division. It will ensure, in international arbitrations, that the bridge between the arbitrators and the judges is still used. It will also give opportunity to test the new proposals in international arbitrations as well as in domestic ones and, after all, the Bill leaves the future open. However, I ought to place on record that I have received correspondence showing that there are substantial bodies overseas in the commercial and shipping communities who use London arbitration and who express a desire to contract out, a right which is not given to them under the Bill; yet as I said, let us see how it works for the Bill leaves the matter open.
Considering other parts of the Bill, I believe it to be most important that we should get our arbitration law right and be seen to get it right. Dealing just with international arbitrations—the one-off agreements to which I referred—I ask your Lordships to consider what might be described as the "contracting in-contracting out debate." Noble Lords will be aware that it was the advice in the Commercial Court Committee's report that the contracting out procedure should be used. On the other hand, noble Lords will also be aware that the London Arbitration Group's advice was that the contracting in procedure should be used.
For existing contracts, there must, as the Bill proposes, be a procedure of contracting out because, if we had it any other way, the parties would be deprived of their existing rights to enter into the judicial process via the case stated procedure. Is it right, however, for all future contracts that the parties should not be free of judicial process unless they focus on the problem and contract out? The danger is that parties will still find themselves against their will subject to judicial process.
Laying aside the foreign law contracts—I shall come to thos contracts shortly—of course parties negotiating an English proper law contract should obtain full English law advice. However, the reality is that these parties sometimes do not. Indeed, decisions on the arbitration clause and on the proper law clause often come at the very end of the contract negotiations. Sometimes parties do not even select a law at all to govern the contract. Hence,
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there remains the danger with "contracting out" that parties will, unwittingly still be caught. All this would be avoided if the rule was the other way round: no judicial process unless the parties expressly contracted in; and that was the recommendation of the London Arbitration Group.
I turn now to a foreign law declaratory clause. At the moment, against the recommendations of both the groups to which I have referred, there is no foreign law declaratory clause. I recognise the view that it may not be necessary, but is this always right, is the matter almost cut and dried? Above all, it is most important—is it not?—that the matter should be put on record right and be beyond doubt.
Next, I turn to another recommendation made by Mr. Justice Donaldson's Committee; namely, the recommendation of the Arbitration Rules Committee. Indeed I hope to have a little support from the noble and learned Lord, Lord Hailsham of Saint Marylebone, because when I discussed the matter with him some time ago last May it was his immediate view that many of these matters could be dealt with under rules of court. The: recommendation, in outline, by Mr. Justice Donaldson's Committee is that there should be set up an Arbitration Rules Committee, similar to the Supreme Court Rules Committee, under Section 99 of the Supreme Court of Judicature Act 1925. Such a committee would deal with all matters of procedure; for example, the recommendation that there should be a power in the courts to consolidate arbitration proceedings. Also it will provide an ongoing review of arbitration procedural law.
Another matter for your Lordships' attention, which is not included in the Bill, concerns fraud. Under Section 24(2) of the 1950 Arbitration Act, on an allegation of fraud a party has the right to go to the courts and have the arbitrator deprived of continuing the arbitration proceedings. As every member of the English Bar knows, an allegation of fraud is not made—and this is a matter of ethical standards of practice—unless that member of the Bar, or the pleader of the document, has seen documents which have the appearance of fraud.

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I have also had certain experiences in the United States of America—and we are dealing here with international matters and international parties. I am bound to tell your Lordships, in matters of litigation and arbitration in America, that allegations such as fraud are very easily made, and are made upon grounds which would be considered quite insubstantial in England. A danger here is that the unscrupulous opponent, who saw advantages for doing so, could make the allegation of fraud, and hence bring the matter back again into the venue of the courts, despite the passage of this Bill.
Since 1934 it has been the belief that matters of fraud in civil proceedings should be handled by the courts. Is this judgment right, my Lords? The truth is—is it not?—that judges do not have special qualities in dealing with matters of fraud, but different qualities. They have the experience of trying many cases, and of assessing and valuing evidence. On the other hand, arbitrators have a knowledge of the trade, and therefore have an easier ability to spot the wrong, and if needs be, the fraud. An example has recently been given to me concerning a log book which was fraudulently entered up. It was a matter which an experienced maritime arbitrator could see with great ease. The importance here, as with other matters which I have brought before your Lordships' attention, is that we must get it right, and we must not allow this to be a source of abuse.
I refer now to Clause 4 of the Bill where more extensive powers are given for interlocutory orders to be made. I will not go through the detail. It will suffice to say that these powers are designed to give the arbitrators extensive power which would, I suppose, include the striking out of defence under certain circumstances. I put this again in question form: have consultations been held with other countries? We do not want to lose the efficacy of this provision by finding that our arbitration awards are not enforceable abroad; contrary, for example, to Ordre Publique under Napoleonic law. I do not know the answer, but I believe this to be an area for inquiry.
Finally, I draw your Lordships' attention to smaller, but still important, amendments to arbitration law. If there
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is to be no Arbitration Rules Committee, we ought to use the Bill to get other matters right. I have in mind, for example, the absence—to which I have already referred—of any power to consolidate arbitration proceedings. I also draw your Lordships" attention to another point which comes out in Mr. Justice Donaldson's report; namely, the language that is used in Section 23, in which for "misconduct" an arbitrator can be removed from office, and those arbitration proceedings terminated. This is a highly offensive description for a procedural error by an arbitrator, and it would seem here that a small amendment could provide assistance.
I end, as I began, by thanking Her Majesty's Government, and the noble and learned Lord personally, for all that has been done, and all that has been done so swiftly. I thank also the noble Lord, Lord Rawlinson of Ewell, and others for the kind compliments directed towards me. This is indeed an excellent opportunity for us to re-assert our position in international arbitration, and, in the meantime, I anticipate that I will be a regular client with the Laker Skytrain.
4.56 p.m.
Lord DENNING: My Lords, I regret not having been here earlier owing to my iudicial duties. I wish to say a few words in welcome of the Bill. I have been concerned in arbitrations for many years at the Bar, both as counsel and as arbitrator, and I have spent many years on the Bench dealing with cases stated. Owing to arbitrations and cases which are stated for the opinion of the court, the commercial law of England is the commercial law of the world. Other countries do not have a procedure like ours by cases stated to get the points of law before their courts. They end with the arbitrators.
The Bill will make one of the most important improvements in our procedure for getting cases before the courts of law. The cases stated by arbitrators could be productive, and were productive, of infinite delays, not only through the courts of first instance but through the courts of appeal and the House of Lords, and people who were owing money could invoke this system so as to cause great delays and, in these days of inflation, get off very cheaply.

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The procedure in the Bill is simply to have reasoned decisions by the arbitrators which can, if they are wrong in point of law, be taken with leave to the High Court, and with special leave to the Court of Appeal, and they will be decisive. This would be rather similar to the tribunals which now throughout the country have to state their reasons and on points of law can be taken to the higher courts. That simple improvement in procedure will be a great advance altogether.
Perhaps I may illustrate the importance by showing how cases from all over the world come to London. Commercial contracts of shipping, or for commodities, and the like, all contain the clause "Arbitration in London". Here I should like to mention one illustration—and we have had many lately. In 1973 Soya bean meal traffic from United States ports to Europe was all on the clause which we call"Incorporated GAFTA form 100"—Grain and Feed Trade Association. Those cargoes from the United States to Europe were held up because of the Mississippi floods. There were prohibitions on exports from the United States; there were string contracts from the shippers to the buyers, and every one was subject to arbitration in London. Several hundred arbitrations were started because the soya bean meal was not supplied and not shipped to Europe. Those arbitrations have been held in London, and they have been and are being held up on cases stated to the courts on the construction of the contract. That is an instance of how, from all over the world, commercial disputes are decided in London.
There is one great drawback in our system which has been felt by those abroad, and that is that, by case stated, they can be taken on against their will and cannot contract out of the arbitration clauses. The great improvement contained in this Bill is that it allows contracting out when the initial contract is made and, in many cases, after the dispute has arisen. They can contract out in regard to all our domestic arbitrations; they will be able to contract out, after the dispute has arisen, in regard to commodities and the like. These provisions for contracting out will, I hope, attract many people to the use of our system, especially those concerned in the great international contracts. At the moment, great firms and some countries
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do not come to London for arbitration because they fear the process of case stated. If they are allowed to contract out, I hope that those arbitrations will come to London. The arbitrators in London, with their expertise, their integrity and their impartiality are trusted throughout the world; and if the provisions of this Bill are passed through quickly, as I hope they will be, it will mean, I hope, that in future many of these concerns will come to London for their arbitrations and to have their disputes settled. My Lords, I greatly welcome this Bill.
5.2 p.m.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I do not want to detain the House long. Indeed, on Second Reading it is perhaps only necessary for me to say that, as the noble and learned Lord on the Woolsack knows, I myself would have been prepared to introduce a Bill of this kind as a Private Member's Bill if the Government had not kindly indicated to me their intention to do so, for which I thank them and congratulate them. There are important commercial interests of this country at stake here, as has been said again and again. It is thought that the abolition of the case stated procedure will attract a great many commercial arbitrations to this country. If this be the case, that alone would be a strong reason for accepting the Bill; and I hope it has the effect which is predicted for it. If I go rapidly through a number of points which might otherwise be thought to be Committee points, I do so in order not necessarily to prolong the debate or to ask the noble and learned Lord to reply to them in detail, but in order that he may think about them and, if indeed be, write to me about them or possibly discuss them in Committee.
In the first place, I should like to say that I thought, despite what the noble Lord, Lord Hacking, persuasively said, that the Government had got it about right in regard to contracting in and contracting out. I think the Bill as it stands is probably the right balance to be taken at the moment. I personally rather dislike the phrases "contracting out" and "contracting in" because, as the noble Lord, Lord Hacking, found in the middle of a sentence, they are rather

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muddling phrases in this connection. Do you contract into the jurisdiction or contract out of the jurisdiction of the courts? In your contract, are you excluding reference to the courts, or are you including it? I think they are confusing phrases to use, and I hope a rather happier terminology will have been discovered before the Bill has completed its passage. But I personally think the Government have got the body of the thing quite right.
Secondly, I should like to support what the noble Lord, Lord Hacking, said about some sort of rules committee. As to whether it could be a sub-committee of the existing Supreme Court Rules Committee or a separate committee, I should like the Lord Chancellor seriously to think about it. I think it is rather a pity that we should have to hold a full-dress Second Reading debate on so technical a subject if Parliament were prepared—and I hope it would be prepared in a matter of this kind—to do the same thing in regard to arbitration law as it does to a great many procedural questions under the Supreme Court Rules. With the Lord Chancellor in the chair and rules which are subject to the scrutiny of Parliament, I rather wonder whether we would need a full-dress debate every time we wanted to alter arbitration law. Thirdly, as to fraud, I think we have to remember that it is not simply the importance of the issue to the parties which matters here. At the moment, fraud is reserved for the courts because it is possible for a fraudulent party to achieve complete secrecy during the course of arbitration proceedings; it is not possible to achieve complete secrecy when the matter comes before the court. I think that there is therefore a public interest in securing publicity here.
There is one major point that I should like to make. This has very largely been a debate between grandees. One need hardly do more than look at the list of the names of the speakers who have taken part in this debate to realise that we are dealing with a very specialised class of professionals and business interests who deal in millions and sometimes in hundreds of millions of pounds. But I would ask the noble and learned Lord to comment upon my own submission in this respect. In the middle of all this, we must not lose
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sight of the prevalence of small arbitrations of a domestic character, and in dealing with the grandees and the great commercial interests involved here we must be very careful not to prejudice the small arbitrations which are constantly coming before the small arbitrators in the London Court of Arbitration and elsewhere. Incidentally, I have forgotten to disclose an interest. I am a Fellow of the Institute, and as I subscribe I suppose I ought to say so; so I am not entirely without an interest in this matter.
My Lords, under present procedure, very often the small arbitrator does not give reasons for his award—he tends just to make his award—and I think there is no general demand that he should. If your Lordships look at this Bill, it will be seen that in place of the case stated there is an appeal by leave and on a matter of law under Clause 1; and, of course, a corollary of that is that under subsection (5) of Clause 1 the arbitrator has to state his reasons. I quite understand that, as a substitute for the case stated procedure, this may be a very sensible thing—it was all dealt with in the Donaldson Committee Report—but I can conceive that in relation to a small arbitrator, where the arbitrator gives a plain award without stating either any or any sufficient reasons, subsection (5) could be used as an instrument of deliberate delay. I should like the noble and learned Lord, not necessarily to deal with this in his reply to this debate but to give the matter some thought and perhaps tell me what he thinks.
At the moment, the provisions about judge arbitrators, owing to the legislation by reference in the clause relating to it, are not absolutely plain to me. I am referring to subsections (3) and (4) of Clause 4 of the Bill. I should like them explained at some stage in a little greater detail; and the same applies to the reference in the Bill to the county court arbitrations which are becoming, I hope, an increasing feature of small claims in the county courts. How, if at all, will they be affected by the Bill?
In the meantime, I should like the noble and learned Lord to meditate on the two following short points. First, he and I had a difference of opinion (if he will remember) about the Unfair Contract Terms Act when it was a Bill before the House, I claiming that arbitration

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was an increasingly desirable form of settling disputes and he claiming, on behalf of the Government—and ultimately, of course, prevailing because the Government always do—that arbitration clauses should be brought within the terms of the Unfair Contract Terms Act. I wonder whether he would not meditate, now that he is bringing in a Bill for the improvement of arbitration, for its increasing popularity and for its increasing detachment from legal procedures, as to whether he was right in his original opposition to my view, which was that it was quite wrong to include arbitration clauses in the Unfair Contract Terms Act.
Finally, I should like him to meditate on this, a point about which we have not hitherto had any difference of opinion. He will be aware, as we all are, that the case stated procedure is not confined to arbitrations. It is perhaps used over an increasingly wide field of tribunals and other forms of reference to the High Court and elsewhere. If we are right to abolish the case stated procedure in relation to arbitration throughout, which is the purpose of this Bill, are we right to retain it elsewhere? It has been my experience, both at the Bar and on the occasions when I have been happy enough to sit in the Appellate Committee, to find that cases stated have become worse and worse as time goes on. More and more magistrates and other persons who have to state them state the evidence and then in effect say to the court, "Now get on with it and tell us what the legal consequences are". This is not what a case stated is about. When I first went to the Bar one had to be extremely cautious and careful about the draftsmanship and that the thing looked like a workmanlike, professional job. It now looks less and less like a workmanlike, professional job and more and more like a recitation of the evidence followed by an appeal to Heaven in the shape of the High Court.
If we are going to abolish the case stated procedure here, I wonder whether the Government, or particularly the noble and learned Lord who sits on the Woolsack, would not be good enough to reflect and to meditate about the philosophy of the case stated in relation to other forms of litigation in disputes.
Lord DIPLOCK: My Lords, we are not abolishing the case stated procedure
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as far as domestic arbitrations are concerned. The jurisdictions to which the noble and learned Lord is referring are domestic.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I was just looking at Clause 1 of the Bill and wondering whether perhaps—despite what my noble and learned friend has said—there was not a trace of that in Clause 1, which I think is of more general application than he thought. I may be wrong in my reading of it and perhaps I am wrong in giving it that general application. At any rate, the point is generally a valid one, that if we are now looking at the case stated procedure, we ought to reflect—whether it is either restriction or abolition, whichever of us is right about this little difference of opinion—upon whether it is limited to arbitration or whether a new philosophy might not be applied to it in other matters as well. Having said that, relatively briefly and, I hope, in such a way as to be acceptable to the House, I sit down, wishing the noble and learned Lord all good fortune in his legislation.
5.15 p.m.
The LORD CHANCELLOR: My Lords, I am grateful to the noble Lords who have spoken and who have put me in the agreeable position not only of having a Government Bill approved of but of the Government actually being congratulated on the speed with which they have done what is commonly and generally thought to be desirable. It is not always a weekly experience of a Minister in this Administration or, probably, of many others. I am particularly grateful to noble Lords who have raised matters that they have conceded may be more appropriate for later discussion as the Bill takes its course through your Lordships' House and who accordingly have indicated that they do not expect me to answer points of detail which were made. I shall take advantage, if I may, of their forbearance.
There were sins of omission that have been raised which we will look at. The noble Lord, Lord Lloyd of Kilgerran, was perhaps the most critical and he confined his criticism principally to Clause 3 of the Bill; but I hope that he was reassured by the explanation of the need for it which was given by the noble and learned Lord, Lord Diplock. Like him and like the

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noble and learned Lord, Lord Hailsham, I think that we have got the balance about right in the Bill—and, in any event, there is provision for changing the procedure by order in due course in the light of experience of how the thing works.
I share the gratitude that has been expressed to the noble and learned Lord, Lord Hacking, who has flown all the way across the Atlantic to give us the benefit of his views and to express his concern that we should move in this way. I blame him for "jumping the gun" because he raised the debate before I had had the advantage of reading fully the report of the Commercial Court Committee. But all is well. I am happy to have "bitten the bullet", indigestible as that operation sometimes proves to be. It is reassuring that the noble and learned Lord, Lord Denning, has given his approval to the Bill in the light of his vast experience in this field—as, indeed, has been the experience of other noble Lords who have spoken, the noble and learned Lord, Lord Diplock, himself and the noble and learned Lord, Lord Hailsham, who is the author of one of the leading works in this difficult field. Therefore, it is a great reassurance to me that that degree of expertise has been available to us. We will certainly protect the position, or seek to do so, at any rate, regarding the small arbitrations. We certainly do not want to diminish the value which has been attached to small claims procedures by suggesting that reasons for decisions should be required. They are rarely given and now are given only when an appeal on a point of law is contemplated.
A more general question has been raised (as he so often properly raises questions) by the noble and learned Lord, Lord Hailsham, as to whether we should look at the case stated procedure as a whole. That is worthy of consideration. We will have a look at it, but I am not sure that I can give any promises of movement in that direction in the near future. Other points of detail were also raised, such as the seven-day period; but we are advised—I am advised, at any rate—that that follows Section 10 of the Arbitration Act 1950, and I do not think it has proved to be difficult in its operation.
My Lords, there is another important matter to follow this debate. I repeat
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my gratitude to the noble Lords and the noble and learned Lords who have spoken and I am reassured by their wish that this Bill should make its way through your Lordships' House at high speed.
On Question, Bill read 2a and committed to a Committee of the Whole House.

INDUSTRY: CREATIVE WORK OPPORTUNITIES
5.20 p.m.
Viscount ROCHDALE Viscount ROCHDALE rose to call attention to our apparent failure as a nation to convince more of our young people that creative work in industry offers a vocational challenge of the highest social order; and to move for Papers. The noble Viscount said: My Lords, when I first started to consider how I should approach the subject of my Motion, I suppose inevitably I remembered the large number of very important debates that have been held in your Lordships' House over the past 18 months or so on industry and how it could be improved. There was the debate initiated by the noble Lord, Lord Rochester, in February of last year on industry and society; there was Lord Selsdon's debate in February of this year on North Sea oil and the economy; then there was Lord Cooper's debate also in February on pay and the public sector. My noble friend Lord Trenchard moved a motion on collective bargaining and the noble Lord, Lord Baker, had a Motion on industry and growth. My noble friend Lord Amory moved a motion in only July of this year on productivity and job opportunity.
I have no doubt that there were other debates on this subject. They were very impressive debates and I am very glad that at least three of the movers of them are taking part in this evening's discussions, All these discussions looked at industry from a different angle, some of them no doubt overlapped—perhaps usefully—but all clearly pointed in the same direction and had a very similar ultimate objective. It occurs to me to wonder whether I am not being rather impertinent in introducing yet another debate on this general subject, but with all humility I suggest that the particular subject of my debate can be regarded as complementary to all the others.
The question that I am discussing is this: How can we encourage more of our really outstanding young people to come into industry? These earlier debates to which I have referred, taking place in a comparatively short time, are in themselves significant. I can call to mind no series of debates quite like it in the 30 or more years in which I have been privileged to be a Member of your Lordships' House. I ask myself whether it does not suggest that at last we are waking up to the fact that industry cannot be taken for granted by the nation and that our industrial weaknesses—and it will be foolhardy not to recognise that we have some weaknesses in industry—are not just a passing hiccup that can easily be corrected or be expected to correct themselves, but something very much more deep-seated.
It is not, for instance, the result of wishing to sit back after 1945; or war weariness; or because of the intoxicating effect of present-day affluence or the Welfare State, or some political bias. I do not believe it is because of any of those reasons, although they may have had some effect on it. But this weakness is the coming to the surface of a far more deep-seated situation, which is far more difficult to reverse, something that is perhaps endemic to the British attitude of work, something which has been with us over a great many years even if often it has been rather deceptively overshadowed by other counterveiling advantages. However, lest I be misunderstood, let me say quite clearly what I see the weakness to be. I am quite sure that it is not an inability for us in Britain to produce good managers. We have every evidence to show that we can produce in this country managers second to none. Our weakness is something quite different. It is an all too frequent and deep-seated disinclination of our most brilliant young people even to consider industry as a career.
I shall do my best to make the subject of my Motion non-Party political—it may be controversial. Noble Lords may disagree with the way I analyse the situation. It is a very difficult subject but I do not believe it has to be discussed on Party political lines. I start from the premise that manufacturing industry is the major contributor to our national wealth. That may sound obvious enough—it has
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been said often enough in your Lordships' House—but I suggest it is all too often, and sometimes rather conveniently, forgotten. If we look back a century or more at the time when British industry was said to be the workshop of the world and dominated the world, although clearly industry was an absolutely essential ingredient to the growth of the Empire it undoubtedly had to play second fiddle when it came to attracting more of our most able and promising young people. Whether there was an element of social or intellectual snobbery in that, I am not going to pursue although that is an interesting subject. But the glamour and prestige of the Empire, and the many varied and interesting opportunities that flowed from that, have continued to flow both at home and overseas. They have no doubt excited and still excite the ambitions of many people and attracted an undue proportion of our most promising young people, leaving—and I say this with great regret—a bias against industry and often against commerce.
They leave a bias against it in favour of more respected, more elegant, perhaps cleaner and—if I dare to say so—more gentlemenly occupations. Although the concept of the Empire probably means absolutely nothing to the youth of today, the bias against industry, however subconsciously, seems to remain. Of course we have always had in industry some outstanding men of great ability, leaders, great inventors, designers, entrepreneurs, administrators; men endowed with tremendous foresight, skill, drive and energy working at the highest ethical standards. As one who has been privileged to have spent most of my life associated in or with industry, I yield to no one in saying that we have a very great deal to be proud of and of which to be grateful in our industrial heritage.
I must not be unfair to those who are working in industry today. There is a great body of men and women today working devotedly in industry, often with considerable success, though too often success that is unsung. Sometimes those men and women who work so hard and do so well have almost to be regarded as a forgotten legion. One can only applaud their efforts; they are first class. But we cannot stop there; we have to look to the future. In present-day circumstances—

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which are totally different from the circumstances in which our forebears in industry had to operate—we need a great deal more of these fine men and women. The demand is there; the demand is unfulfilled and is growing.
For all the problems which our industrial forebears had to overcome—and they no doubt seemed considerable to them—they operated in a climate very different from the climate in which industry operates today. There was no affluent society. There was no welfare state and there was—I say this with no sense of criticism—perhaps regrettably, a climate which must almost have amounted to a discipline of hardship. I have no doubt that many good employers acted with a sincere sense of compassion in that harsh climate, but I would submit that it made it much easier for managements' plans to go ahead without too serious question, without too much interruption and at times even when their own planning was not always by any means perfect.
Today, every facet of management—technical, commercial, administrative and not least, in human understanding—is far more difficult and far more exacting, but far more important. We have far more sophisticated and rapidly changing technology. There is the greater independence of the individual employee that comes of a relatively affluent and certainly better educated society. There is a work-force today backed by a highly organised trade union system. Again, there is no Empire and there are no captive markets. Industry has to stand on its own feet and measure up to the intense and indeed growing competition, not only for markets but also for raw material. So the successful performance of industrial management is not only far more important but it is far more difficult.
This surely throws down a tremendous challenge to all who might enter industry. It is a challenge that has to be met, and to achieve that it needs not only the whole-hearted effort of those in industry but equally the support and conviction of society itself. Clearly, the idea of industry playing second fiddle is today completely untenable: it must be put right at the top of the list. The fact that this is not generally so today is not just an excuse for industry to blame the world of education
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or for the world of education to blame the image that industry sets for itself. Certainly both education and industry have a special task to fulfil, each in their own sphere, and they must also get together. Everyone has a task to do here, particularly those who can be styled "opinion formers". They have a great responsibility, whether they be in industry or in education, whether they be "the media", the so-called "intellectuals" or politicians or—perhaps at least as important as any—parents.
We hear a lot about the need to achieve greater productivity, lower costs and more-sought-after products. But while these may have been discussed in your Lordships' House and outside very deeply and at great length, even if we have the most brilliant designers, the most modern and efficient machinery and the most imaginative marketing, together with all the cash required for investment—and I believe there is available more than some people may think—at the end of the line it is people who count. It is people who can make or mar the whole enterprise. It is people who determine the initial research and design; it is people who alone can exercise the care and attention all along the production line, whether the quality is right and whether the goods are produced in time. It is people who provide the ultimate customer service and, at the risk of my being labelled as completely out of touch with some modern thinking, may I say that it is an in-bred competitive instinct of people throughout a company that in the end will determine whether the day is won or lost. On that, my Lords, in passing, I sometimes wonder whether our education system really puts enough emphasis on the need for a competitive approach to work, whatever the work may be.
Again, by "people" I mean not only our present-day leaders in industry, though I yield to none in recognising that in industry, as in any other occupation, leadership is as important as ever. I mean everyone, from the bottom to the top—everyone who is determined, by his ability, his skill, enthusiasm, loyalty and pride, to get up the ladder on his own, one way or the other. Of course we cannot expect everyone to be a prima donna or for everyone in industry to have a first-class honours degree, any more than we should be surprised if we found some black sheep

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or weaklings in every flock; but, as never before, we need a higher proportion of our best young people in industry; and I use the word "people" particularly, because there is no sex discrimination in this. That is what my Motion is all about.
Somehow we have to get it across that industry must be regarded as the prestige occupation, an occupation offering an intellectual and professional challenge of the highest order and at the same time—this is very important for many of our young people—an occupation of great social value, because it is an occupation on which virtually everything else depends. Education itself, social services, defence, housing and indeed all our sports and leisure pastimes and everything we do depend on the contribution which industry can make. Therefore we want the best people to do it; and if industry can only be seen to offer ambitious young people such a challenge, whatever their bent may be, then fashion among young people causing them to be as pronounced and sometimes rather imaginative in what they do as well as in what they wear, I sometimes believe it would have a snowball effect. Parents must talk to their children in these terms. Schools need to build upon it, together with colleges and universities. We want to encourage everyone to accept and indeed take for granted that we need in industry more of our best young people; and that the effort to get there must be natural and spontaneous. There must be no hint of the press gang.
So far in what I have said I have omitted any figures, but, may I say, in order to try to give some perspective from talks I have had recently with the Central Services Unit of Universities and Polytechnics—and it is after all from those that the cream of the young people come when they start a career—that it would seem as if the current rate of first degree graduates going direct from universities and polytechnics into industry in the United Kingdom is about 18 per cent. of the total outflow from those organisations. It is important to realise that that represents a 1½ per cent. annual increase year by year over recent years. That figure needs to be looked at with a little caution—T have studied the figures very carefully with the Director of the Unit—because this really goes rather wider than
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manufacturing industry itself. It includes also public utilities, such as electricity, gas and others. I must apologise to your Lordships for the fact that I have been unable to get specific, comparable figures for our competitors overseas, but I have been assured on fairly good authority that that figure is significantly lower than that of many of our competitors, particularly Germany and France, and probably also Holland.
But although this increase of 1½ per cent. shows a welcome improvement, it leaves a continuing demand for graduates, a demand which is never fully met and a demand which, curiously enough, is growing when the overall unemployment situation remains unsatisfactory. It is curious, but healthy, that there are firms which, at the same time as they are announcing substantial redundacy in their overall employment figure, are advertising for a considerable number of these first-grade people. When one comes to think, it is only logical, because they are looking not only with an eye to the future but with an eye to trying to secure the employment of those remaining at work today who are not being made redundant. To meet this serious situation, industry has a major role to play, and many firms are taking immense trouble not just to wait for good recruits to come along and apply for jobs, but to go out and find them. I suggest that this is more frequently found in the larger firms, and it is probably very much easier for them than for the medium and smaller firms, although it is just as important in each case.
But why is it that these young people hesitate to go into industry? I believe that there are a number of things that put them off. There is uncertainty about the initial pay that they will receive and whether it will be competitive with what they are offered by other sources. There is uncertainty about security in their jobs. There is disquiet and bewilderment about unrest and strikes in industry. There is concern over the effect of stop-go, as well as serious worry about unemployment. They ask themselves whether today's high level of unemployment can be accepted as something cyclical that can be expected to right itself reasonably soon, or whether it is something that might be regarded as structural. They ask whether the alarming reports—

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for example, on the effect of silicone chips and micro-processing—are as devastating as they sometimes appear in the Press and elsewhere.
Then, of course, they sometimes hear—and this is very disturbing—rumours of impropriety which, whether genuine or alleged, the media seem prone to build up into a good story, and that is very damaging. All these fears—and I have mentioned only one or two—can but exacerbate the feeling that many young people seem still to have, that there is something to be avoided in industry, and to be avoided not merely out of self-interest. Some go even further, as if they saw something even improper, something almost degrading, something perhaps immoral in the profit motive; something not in keeping with the most advanced social thinking by which so many of our young people are influenced today.
What those people are perhaps unaware of is the fact that in choosing a career in creative industry they may well be doing more to safeguard and develop the social services in which they are so interested and the well-being of their fellow countrymen than they could do in any other career, and I am glad to be able to say that this outlook appears to be gaining ground. Leaders of industry—and here I include management and trade unions—have a great responsibility today to do all they can to understand and to try to minimise these fears.
I am not for one moment suggesting that these special young people—they are just ordinary people, but they are rather able—should be given any idea that they will have a job for life. That could well prove to be the very antithesis of challenge. Nor am I suggesting a policy of feather-bedding for new recruits. Even graduates with first-class honours degrees must be prepared to accept hard work, sometimes unpleasant work, sometimes dirty work, and they must be prepared, both actually and metaphorically, to roll up their sleeves and get down to it. But if they give loyalty with enthusiasm, let them in return, at the end of the day, have the satisfaction of being able to point to a job well done and well rewarded. This last point of being well rewarded is an important one, and is not to be overlooked. I am glad to be able to say that,
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so far as I can find out, the differential between offers from industry and from other occupations is narrowing.
I must mention for a moment the impressionable years at school and college. While I believe that the purpose of schooling is to educate for life in what life means, and not to act as a vocational course, I also believe that there is room for industrial needs to have a rather greater influence on education policy than has always been the case. In this respect, I get the impression that, again, we do not compare very favourably with some of our Continental competitors—perhaps Germany and France—where management seems to be more academically qualified and to enjoy a more respected status and prestige.
Whether the responsibility for this lies more with education, with industry or even with Government—and Government have a very important part to play—I shall not speculate. But it reflects a national attitude to industry which is less favourable in Britain than elsewhere, going back a century or more; an attitude stemming, perhaps, from some degree of snobbery, but also from a lack of humility in the country to come right down from our imperial pedestal and face facts as they are today.
Whatever the reason, the years at school are highly sensitive ones. It seems to me, therefore, that among teaching staff there must be some knowledge of the importance and needs of industry. Whether this knowledge is gained from early personal experience of teachers, from temporary secondment or from special courses, it is important that there is some knowledge of this so that, inadvertently, they do not lay in this very fertile young soil the seeds of an anti-industry prejudice. Like weeds in fertile soil, they are often very difficult to eliminate later on. On the other hand, no school-teacher or university lecturer will speak enthusiastically of industry, or take the trouble to see that the students are given some proper mental preparation for a life in industry, unless he himself is really convinced that such a career seems likely to offer his best students, of whom he will naturally be proud and jealous, a career which will do justice to them and show them off to the best advantage.
When I first put down this Motion, I had not realised the tremendous amount of effort that was being bestowed on this subject by a great number of different organisations, and I have been tremendously encouraged and impressed by what I have been told. I do not want to take up much more of your Lordships' time giving you the whole list of what is being done, but I should briefly like to mention one or two examples. I would first mention that most excellent consultative document, produced in the summer of last year by the Department of Industry and the Department of Education and Science, onindustry, education andmanagement. It is a first-class consultative document. Then there is the work of the CBI in its "Understanding British Industry" organisation.
In the schools there are various projects. There is "Young Enterprise", a scheme for 15 to 18 year olds who are given the opportunity to run their own businesses, with local industrial help. There is the twinning of schools with local industry and the work that the Industrial Society does with its"Challenge of Industry" conferences. I understand—and I hope that when he speaks the noble Lord, Lord Donaldson of Kingsbridge, will be able to confirm this—that as a result of a lead given by the Secretary of State for Education and Science, headmasters and headmistresses of both State and private schools are asking for industrial projects to be brought into their schools: something entirely new and very encouraging. The Institute of Directors are also doing work on this.
Turning to the universities, again the Industrial Society is doing a great job by installing and sponsoring a number of industrial societies in individual universities up and down the country. In this connection, I am particularly interested in something which came to my notice only a week or so ago. It is a quotation from a letter from the Chairman of the University Grants Committee which was written in 1977 and addressed to vice-chancellors. He invited proposals for new courses—and here I quote:
"with a pronounced orientation towards manufacturing industry".
That is very satisfactory, and I believe that it has been taken up quite significantly.
Therefore, a great deal is being done. We cannot, however, stop there. What is being done must be supported and developed even further, if the needs of industry are to be allowed to occupy the paramount position which they deserve in our national thinking and esteem. It is an attitude of mind which needs to be changed. We all know that to change attitudes of mind can take a very long time. In my view, however, the situation can be said to be adequate only when, after addressing to any young man or woman the question, "What are you going to do when you start your career? "the answer is not, "Well, I'll go into industry if I can't get a job elsewhere", but, rather, "I want to go into industry. That is where the great challenge lies. It is up to me to see whether I can make the grade".
Having said all that, it is most encouraging that the most recent statistics published this summer show that over the last year or two there have been significant percentage increases of entrants into industry from the universities and colleges. Whether this is due to more openings being available there than elsewhere, or whether it is due to a better understanding of the importance of wealth production and to a genuine change of heart, I do not know, bat it is interesting that in the fifth report of the CSU, to which I have already referred, it is said that:
"There has been a fairly fundamental change in student attitude. Denigratory reflections upon the profit motive seem now to have given way before cogent arguing of the case for the wealth producing sections of the economy".
This is excellent news. It needs to be built upon and developed and, with a view to encouraging and stimulating that work, it is surely right that the subject should be one for discussion in your Lordships' House. I am most grateful to all noble Lords who have put down their names to speak. I beg to move for Papers.
5.55 p.m.
Lord CARR of HADLEY: My Lords, I am sure that the first thing noble Lords wish me to do is to thank the noble Viscount, Lord Rochdale, for having chosen this important subject for debate today and for bringing to it in his opening speech such obviously great knowledge and experience of industry, as well as an

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understanding of what makes people "tick" and influences their choice of career. May I also say how much we are looking forward to the maiden speech of the noble Lord, Lord Reilly. May I assure him that if it can be said that to speak anywhere is a pleasure, he will certainly find that it is a pleasure to speak in your Lordships' House.
As the noble Viscount, Lord Rochdale, has said, this debate today is one of a series of debates, and I think it is important that this should be so. In the case of all the subjects to which the noble Viscount referred, it seems to me that your Lordships' House has been identifying some of the most fundamental economic and social problems which face this country. In doing so, and in doing it in perhaps a calmer and more reflective way than may be possible in another place, I believe that we are indeed serving a valuable purpose.
In choosing this particular subject for today's debate, the noble Viscount, Lord Rochdale, has certainly gone right to the root of the problem. We shall only be able to halt and then reverse the relative decline in British standards of living compared with standards of living in other industrial countries, and similarly we shall only be able to halt and then reverse the unacceptably high increase in unemployment in recent years, particularly among young people, if we can improve the overall performance of British industry relative to the overall performance of industry in other countries. We shall be able to do this only if we can persuade a larger number of the most able and dedicated of our young people to make their life careers in industry at every level. We need to stress "at every level". We are not just looking for the great industrial leaders, the ones who hit the headlines. We are looking for people at every level, because industrial success depends in the end upon the human factor—as, indeed, the Balfour Committee on Trade and Industry pointed out as long ago as 1929. As the noble Viscount, Lord Rochdale, has stressed, it is people who count and who, in the end, determine success.
How, then, does the intake of young people into industry in Britain compare with that intake in other countries? I
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found, as the noble Viscount, Lord Rochdale, found, a great lack of any statistical information to make overall quantitative comparisons. However, I certainly agree with him that the qualitative evidence is very strong indeed: that, compared with other countries, industry in Britain ranks low as an attractive career to people at school and to students in further and higher education. Any of us who have had experience of speaking in schools, particularly at sixth form meetings, know the shock that one experiences if one asks young people what they are going to do. If one asks those who are going into industry to put up their hands, it is terrible how small is the number of hands that go up. I have had a similar experience at meetings in colleges and universities. All of the qualitative evidence points that way.
In addition to qualitative evidence, however, there are some things that we know. We know that in 1977 only 27 per cent. of all newly qualified graduates entering employment in this country went into manufacturing industry. As the noble Viscount has just said, that is an increase and an increase to be welcomed, but it is still a low figure. We also know that at the top in British industry there is a far smaller proportion than in other major industrial countries of directors and managers who are fully qualified engineers and scientists or who are graduates in any kind of academic discipline.
If British industry at the very top does not appear to offer the best lifetime career opportunities to the most highly qualified and best educated young people, it seems to me to be equally unlikely to appear as a highly attractive career prospect to the best, even though less academically trained and gifted, young people who should be seeking their job fulfilment as middle and junior managers, as technologists, technicians and skilled craftsmen. Therefore, industry has got to make its career prospects much more attractive from the top to the bottom. The noble Lord mentioned material rewards and I agree with him. I simply do not see how we can expect a sufficient number of our young people of the highest capacity and dedication at any level or kind of skill to go into industry if they can see that by going into central or local government service or into the academic world, for example, they can, over a lifetime, earn

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virtually as much in salary—sometimes more—with much greater security, far better pension provisions and higher social esteem on top of all that. So we must do something about the material conditions of careers in industry. Also it seems to me that we must do more in industry to improve the opportunities for training as the visible road to increasing job satisfaction, to the chance of higher responsibility and promotion of all kinds. This is partly a matter of numbers and partly a matter of quality and relevance of training.
Let us take numbers first. In Western Germany some 85 per cent. of all those who leave school at the minimum school leaving age go into some form of formal apprenticeship. The figure in this country is 12·5 per cent. Of course there is a difference between what is meant by apprenticeship here and in Germany and the gap is not as big as it appears. But whatever we do about making allowances for the differences in definition, no juggling of that kind can anything like close that gap. If we look at the gap another way, it is estimated that no less than 40 per cent. of school leavers in this country enter employment without any type of formal training of any kind. In Germany no more than 10 per cent. have to enter employment without any formal training to help them to make the critical and difficult transfer from school or education into working life.
So it is partly numbers but it is also quality and relevance. If you want to be a skilled craftsman in this country it is difficult to do so unless you start at 16. Stay on for a year or two more of education, technical or whatever kind you like; and then if you want to become a skilled craftsman you will still find great difficulty. Traditionally in this country you start at 16 and you serve a set time. Then look at the length and the method of training. Why should young people have to follow a fixed length of training by some laid down method rather than train until they have reached a particular standard and be tested on that standard? Until we get that changed not only shall we suffer in the skill and the quantity and quality of skills in our country, but we shall make entry into industry unnecessarily unattractive to many young people, both boys and girls.
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Then I believe that industry must take a more idealistic approach to the careers it offers. Industry must do what it can to try to make a career in industry seem to be a natural stepping-stone to various kinds of public service. We make a great mistake if we underestimate the amount of idealism that exists in young people and I suspect that it is a growing proportion of young people who have this idealism. Yet really—and I speak from some experience—when one gets into industry one finds very few companies which encourage or even permit the giving of service. Try wanting to go into Parliament and see what happens! Try wanting to be a magistrate and see what happens! Of course, there are many examples but, by and large, industry fails to realise that it would expand its recruiting base if it would pay more attention to these things. It also fails to realise that those whom it recruits and allows to do these things will become better workers in industry, again whether it be managers at the top or production workers at the lower end of the scale. There are a few companies which are now beginning to help, for example, in schemes for community work and so forth. They are contributing greatly to the community while they are doing it, and I think they are finding that those of their staff whom they second to this sort of work come back better and more effective men and women in the purely industrial sense than when they went.
So in these and other ways the leaders of industry—and for the moment I am talking about the employer and managerial leaders of industry—have the responsibility, which no one else can take on, for making a career in industry seem more attractive to young people, more rewarding and more purposeful in every way. But the leaders of industry cannot do it without help from government. In particular they cannot do it if government discourage, or even actually prevent, industry from making higher profits and attracting more capital, because all, or nearly all, of the things we have been talking about cost money; and if industry as a whole is only making 3 per cent. return on money invested there is not much money to spare for longer-term constructive thinking and action of the kind we need.
Leaders of industry among employers and managers cannot do it if high and

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steeply progressive taxes on earnings and unduly egalitarian incomes policies, kill incentives and differentials, for skill, responsibility and enterprise. Nor can the directors and top managers of British industry do it without a lot more help from the trade unions. I am glad to say that we are getting that help in many ways. For example, there is growing co-operation in approach between the two sides of industry in the attitude to the schools and to many aspects of educational and training policy. Only within the last few months it has given me (and I am sure many people) great pleasure to see that the CBI and the TUC were able to present a joint paper on this subject to the National Economic Development Council. It registered disagreements here and there, but the great thing was that there was the move to make a joint approach and when the move was made it was surprising on how many things there was agreement and on how relatively few there was disagreement.
So I do not want to belittle what the trade unions are doing and I particularly want to preface what I am about to say by stressing that fact because I am going to refer to industrial disputes, as the noble Viscount, Lord Rochdale, did. I would not blame trade unions entirely and would not even put a particular portion of blame on them for the strife and nonsense that goes on in industry today, but I think we are burking the issue if we do not register the fact that the image of industrial unrest which surrounds certain big sectors of British industry, the talk of strikes and threats of strikes, the scenes at mass meetings and on mass picketing lines, the scenes outside hospitals—to take a topical example, the illiberal and occasionally the blatantly tyrannical application of the principle of the closed shop—do enormous damage to what parents and their children themselves feel about industry and the attractiveness of going into it. While we should not over-emphasise that, we must equally not be afraid to talk about it and not pretend that it does not matter.
It does matter. It influences many parents and their children when one comes to discuss the possibility of going into industry. The fact that what happens is no doubt exaggerated by the media
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reports, and the fact that bad news is the only news and the great areas of British industry where these things do not happen never hit the headlines, is beside the point. It is the impression that we have to deal with and trade union leaders could, and I believe should, do a great deal to help to still those fears and false impressions, given the fact that in many cases they are false impressions.
But much more is needed than simply to improve career opportunities at all levels of industry in the kind of ways I have been speaking about, important though that is. Above all, as the noble Viscount, Lord Rochdale, said, we must have a change in national attitudes. Who would now believe that we were once the workshop of the world and proud of it? Is not industry still the principal activity by which we in Britain earn our living in the world? I do not see any other principal activity by which we could earn our living in the world. Yet work in industry in Britain has now for many decades enjoyed much lower esteem than work in the public service and the non-industrial professions, and this is in marked contrast to attitudes in almost every other major industrial country. This is an attitude we must change. Indeed, a society which on the one hand continues to have strong expectations for higher material standards but on the other hand fails to recognise and honour the principal activity by which it earns its living seems to me to be in dead trouble, not only materially but I think I might also say morally as well. Yet this is the position we have got ourselves into in Britain.
What we have to think about is why this is so and what to do about it. One thing is certain and that is that the causes are long-standing and the trouble is not new. I think it was very important that the noble Viscount, Lord Rochdale, should stress this as he did. It is no post-war phenonemon. Even when we were the workshop of the world and indisputably the world's industrial leaders, many perceptive people in Britain were pointing out the dangers ahead and realising that these dangers lay in our attitudes, in the social esteem attached to careers in industry and to truly professional training for such careers. As long ago as 1835 Richard Cobden, after a visit to America, wrote:
"Our only chance of national prosperity lies in the timely remodelling of our system so as to

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put it as nearly as possible upon an equality with the improved management of the Americans".
In 1853, just two years after the Great Exhibition which seemed to spotlight Britain's industrial supremacy, Doctor Lion Playfair, in a book on industrial education on the Continent, warned that we were bound to be overtaken by other countries unless we altered our whole industrial outlook and methods. The Schools Enquiry Royal Commission in 1868 and the Royal Commission on Technical Education in 1884 both pointed out the urgent need for Britain to match other countries in realising our need to associate careers in industry at all levels with better and more widespread general and technical education.
I wonder how widely realised it is that in 1902 Germany already possessed ten technical universities with 14,000 students, while Britain had none—only technical schools with a mere 3,000 pupils. By the outbreak of the First World War in 1914 Germany already had 24,000 students studying science and technology at university level. Yet 25 years later than that, as late as the outbreak of the Second World War in 1939, Britain still only had 10,000 such students, under half what Germany had had 25 years earlier. The great Doctor Arnold of Rugby epitomised the outlook and philosophy when he said
"Rather than have science the principal thing in my son's mind, I would gladly have him think that the sun went round the earth".
Of course, we need other things than science and technology in our children's minds, but this is the age, and the last century at least has been the age, of the scientific breakthrough, and manufacturing industry is based and has its very being on the application of science and technology. A culture which has for so long in Britain rated at least the application of science and technology and engineering so low in its social educational and career priorities is bound, it seems to me, to have made far too many of its young people feel that a career in industry is nothing but an undesirable second best to be avoided, as the noble Viscount said, if something better can be found, and it ought to be found. Of course, as the noble Viscount also said, we have had and do have many people who are at least equal to the best in any country in the world, at managerial, scientific, engineering and craft level, from
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top to bottom in British industry. But we do not have enough of them; we do not have as high a proportion of these best young people as other countries. The bias of our culture has been anti-industry and anti-business, and it must be changed if we are to prosper.
I well remember personally how in the middle 'thirties my headmaster tried to persuade my father that I should read classics and that he should not let me do what I wanted to do, namely, for better or worse, read natural sciences. It might have been for worse, because I discovered rather late that my mathematical capacities were not good enough for what I wanted to do, but that is another story. I also remember how at Cambridge I felt defensive and almost inferior among many of my own contemporaries in talking about my decision to go into industry as a career. I do not think my feeling and experience were untypical. On top of that bias against science and technology, at least in applied forms, has been the social status of trade and industry to which the noble Viscount referred. So our problem of attitudes is deep-rooted in the past and it cannot be changed easily or suddenly, but changed it must be.
At last there are some clear signs that the need is realised and an attempt is being made, and let us hope this debate will help to magnify this realisa.tion and these changes. There is now greater political leadership in all Parties about the importance and necessity of making industry successful, about the need to create wealth by industrial success before we can spend it to provide higher personal standards of living or better community services in health, education and housing and welfare generally. There is, too, beginning to be educational leadership, both in the changing emphasis in the content of education and in the attitudes of teachers and educationists themselves. I am delighted to see that the right reverend Prelate is going to contribute to this debate, because I believe the leadership needs to come from the churches and all who have responsibility for giving a lead in ethical and moral standards in this country. Success in industry is not just a matter of living it up personally in material terms; it is the only way in which we provide the wealth for making our own community a better one in the

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proper caring sense for the good of everybody. It is also the only way in which we can make our proper contribution towards solving the problems of the Third World, the poverty which besets the overwhelming majority of mankind.
Industry itself is, too, clearly now making much more effort, as the noble Viscount mentioned. In my closing few words I want to speak about industry's role in this process. Much is beginning to be done by many people and interests in industry, as well as in companies, by bodies like the Industrial Society; also by industry in co-operation with Government, the Trade Unions, increasingly the schools and colleges and bodies like the City and Guilds Institute and many others. If I speak about the CBI's effort it is not because I belittle these others but because I happen to be the chairman of the CBI's Education and Training Committee and also a member of the CBI Council.
I think it is worth stressing the increasing effort which the CBI has been making for many years' in this field. For example, we started the scheme to accept teachers into industry for training as long ago as 1964. For some years we have been encouraging individual companies to build up close contacts with local schools; we have encouraged companies to make members of their staff available to act as school governors, and we warmly welcome the likely provisions in the new Education Bill to give all Secondary Schools at least the right to have people from industry, trade unions and managers on their boards of governors. We will try to see that industry responds in quality as well as quantity to that opportunity.
However, the main effort of the CBI, of a much greater and more concentrated kind than anything attempted before, is its project called"Understanding British Industry" (UBI for short). That is sponsored by a specially set up charitable foundation called the CBI Education Foundation. Almost £2·5 million is being raised from industry to fund it, and it is being organised on a working basis regionally. Organisations are already established and operational in four region and a fifth is in active preparation. Others arc to follow including Scottish and Welsh UBIs. I understand that the project's
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National Advisory Committee is not only a committee of industrialists, but includes teachers and Her Majesty's Inspectors of Education. Its regional advisory committees also include trade unionists, and the active help of the trade unions at working level is of immense value and importance to the success of the project. At present the project is properly concentrating as its first priority on secondary schools—on the pupils and teachers in them. It only became active a year ago in the first region, so it is early days, but the effort is great and the first signs of success are encouraging.
One of the main and most effective efforts so far is that to promote the secondment of serving teachers for as long as a year to work in companies. While those teachers are in the companies they continue to receive their education authority salaries, but in one main experimental scheme the companies employing them contribute the equivalent of their salaries—the amount they would have to pay to get the same work done—to the local education authority, thereby offsetting the cost to public funds.
At another level there is an experiment involving the Liverpool Polytechnic and the Homerton Teacher-Training College in Cambridge, where a considerable period of service in industry is being made an integral part of the teachers' training course. The CBI's UBI project is still new and still needs to be fully expanded. It is just one example of the constructive ferment of activity which is now taking place. I hope that this debate will help to stimulate that ferment still further.
Tonight we are talking about an agenda for action. I believe that we can support that action. I hope that we can show to the country at large, to those in industry and on all sides and in education, that as regards this matter Parliament and politicians, regardless of Party politics, are accepting their duty to give a non-political lead to achieve the very nuts and bolts of what is going to make Britain work.
6.23 p.m.
Lord ROCHESTER: My Lords, I should like to join from these Benches in thanking the noble Viscount, Lord Rochdale, for having introduced this debate and also to say how much we are

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looking forward to the maiden speech of the noble Lord, Lord Reilly. As has been said, in the past year or two much has been done to influence the attitude of young people to industry. There has also been some improvement in the number and proportion of graduates going into industry. The higher quantity and quality of school-leavers who I understand are entering university departments of engineering is particularly encouraging, for it appears that the great majority of those taking a job immediately after graduating in that important subject are likely to take up an industrial career. The noble Lord, Lord Baker, will know very much more about this subject than perhaps any of your Lordships and I am so glad that he is later to take part in this debate.
A question, however, remains as to whether these improvements represent a change in the attitude of talented young people to industry, or are simply an indication of fewer jobs being available elsewhere. There is evidence which has come to my notice of students now regarding the creative and intellectual demands of a career in industrial management more favourably. One such instance of which I have heard concerns a body called the"Careers Research and Advisory Centre", which is one of those organisations trying to bridge the gap between industry and education. It is running courses for final year university students on the same lines as its long-established post-graduate courses, making use of realistic industrial case studies. Those activities are attended also by young managers already in industry and by non-university tutors. I understand that the nine courses which have been run this year have been heavily over-subscribed. For example, at Cambridge for 120 places there were 250 applicants and that evident interest is matched by corresponding courses run by large companies—for instance, Unilever had 500 applicants for 150 places.
Nevertheless, I am sure that the noble Viscount, Lord Rochdale, is right to remind us that the problem is far from being solved. I agree with him that there is still plenty of room for improvement in the standing of industry on society. It is vital that it should be more highly esteemed, for it has been wisely said that the nation cannot take a positive view of
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its future if it does not take such a view of the activities on which that future mainly depends. Perhaps I may say that in talking of" industry"I mean it to include commerce, large and small businesses, manufacturing and service industries.
The problem becomes more difficult in a way to present and to understand when it is set against the background of the high current and potential levels of unemployment; technological advance; the prospects of jobs in manufaturing industry at least, being available to a small proportion of the total population; and changes that are now taking place and will in future occur in the age distribution of that population. However, precisely because a smaller proportion of the population will be required to engage in manufacturing activities, there is all the more need, as I see it, for people to be reminded of the fundamental importance of those activities. Instead, we sometimes hear of what is called the "post-industrial society", almost as if within it there were no longer any need to produce the food, clothing and houses which will still be required.
In my view such talk is dangerously unrealistic for a number of reasons, but particularly because of the one that was touched on by the noble Lord, Lord Carr of Hadley, in conveying the impression that such a society can produce knowledge without need for that knowledge to be practised. That is not how the realities of the market place actually operate—for example, we used to be leadens in the manufacture of motor-cycles, but we have lost that leadership to the Japanese. If people today want to have the most advanced knowledge of motor cycle development, they no longer look to us for it. They go instead to Japan. Therefore, it is imperative that we heed that lesson and that, of course, is why it is of such vital importance—as the noble Viscount, Lord Amory, reminded us in the debate he introduced last July—to improve our productivity in as many industrial activities as possible so that we lose no more ground to our international competitors.
I am glad that in his Motion the noble Viscount, Lord Rochdale, attributes to the nation as a whole such failure as there continues to be in influencing the attitude of young people to industry, and that he

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resisted the temptation—or any temptation to which he may have been subject—to place the blame for our failure on any particular element or elements in society. I remain firmly of the opinion that responsibility for the predicament in which we still find ourselves rests on us all: on Government, employers, trade unions, education at a number of levels, the media and, certainly not least, parents—there are not many people left when we come to think of it—and that there are things we all need to do to help put matters right.
It seems to me that at all costs we must avoid placing the blame for our troubles on anybody but ourselves; for, in my experience of trying to help solve problems involving a number of different groups, that is invariably counter-productive because it immediately invites a defensive or even a retaliatory response. Rather, in my view, do we need to think more about what the elements in the society in which we find ourselves can do to help.
In trying to face the problem posed by the Motion in the name of the noble Viscount, Lord Rochdale, in that way and relating it to my experience in industry and in higher education, I find myself asking these questions: What activities are now being undertaken that are directed towards convincing talented young people that an industrial career is worthwhile? Which of them is proving most successful and why, and how can that success be reinforced? Perhaps at this point I could say how glad I am that, although in his Motion the noble Viscount referred to failure, in his speech he also spoke of ways in which the situation has recently improved. For again, from painful experience, I have learned that in trying to solve complex problems it is very much more productive to identify and try to build on success than it is unendingly to analyse and to deplore failure.
Clearly, answers to the questions that I have posed depend to a large extent on subjective judgment. However, for what it is worth, my view is that the activities in this field that are proving most successful are those that have been embarked on jointly—and, again, the noble Lord, Lord Carr of Hadley, made some reference to this point—by more than one of the elements in society that are involved in the problem, and that they are activities
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which, as far as possible, are directed towards objectives that have been jointly agreed.
An example of what I have in mind—and, of course, as has already been said, there are many others—is a conference which was recently held at and under the auspices of St. George's House, Windsor; it was aimed at improving the effectiveness of the relationship between schools and industry and relating to that part of the Government Green Paper on Education in Schools—which was referred to by the noble Viscount—which states one of the aims of education to be:
"To help children to appreciate how the nation earns and maintains its standard of living and properly to esteem the essential role of industry and commerce in this process".
I suggest that the very fact that the Government have explicitly stated such an objective in a consultative document of this kind is in itself a most encouraging development.
That particular conference was chaired by the Permanent Secretary to the Department of Education and Science. It was attended by some of the most senior people in industry and education, and was contributed to by representatives of some of the organisations doing most to forge closer links between industry and education, such as the Schools Council, the Trident Trust, the Industrial Society and not least the CBI, to which the noble Lord, Lord Carr of Hadley, has already referred.
However, of even more significance are those activities which are being conducted at what might be called the level of the grass roots, such as an activity recently held at the instance of a committee representing local schools and industrial firms for school pupils in an area near to where I live in Cheshire. It was directed towards helping those young people to answer for themselves such questions as: why does industry matter? I believe that there is an Oriental proverb which runs,
"Let a thousand flowers bloom".
Surely that is exactly what should happen here.
In my view, another field for joint productive activity lies within industry itself. For I believe that one reason why industry is not more highly esteemed than it is, is that two often it is seen by people outside as an arena for conflict rather

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than for common endeavour. This matter has already been touched on. Most helpful, therefore, are those activities which are sponsored jointly by employers and trade unions, and which aim to meet the urgent need for management and employee representatives to stop being "us" and "them", to share an understanding of how a business is run and the effects of alternative uses to which money can be put and the relationship between productivity, prices, investment, pay and employment. I phrase it in that rather anodyne way but, of course, it can be put very much more starkly: we cannot go on consuming that which we do not produce. Of all the figures that have recently been quoted in this connection, I find most alarming the fact that in the United Kingdom in the last five years earnings and prices have risen in each case by more than 100 per cent. whereas production has risen by less than 1 per cent.
Somehow, we must achieve this shared understanding of the need to create wealth before bargaining about how it is to be distributed. I would particularly implore trade union leaders to do more to enable shop stewards to be persuaded of this need. The vital part that trade unions have to play in determining the industrial future of this country was rightly emphasised by the noble Viscount, Lord Trenchard, in the debate which he introduced in your Lordships' House earlier this year. The indispensable responsibility of their role in our independent society has been made even more evident since then.
Where joint activities of this kind are taking place, the results appear to be most encouraging. Only the other day I heard of one such activity in which managers and shop stewards were together presented with a problem where they had to decide how a certain capital sum should be spent, and in so doing they had to weigh the relative merits of a number of competing claims involving long and short-term benefits for various interests. But, on that occasion, the roles were reversed, and shop stewards became the managers for the day and vice versa.I am told that the experience contributed very greatly to the shared understanding of which I have spoken.
In conclusion, I should like strongly to support the emphasis of the noble
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Viscount, Lord Rochdale, on the high social worth of an industrial career. The number of young people who will be needed in manufacturing industry may become fewer, but the dedication that they bring to their work will be all the more crucial for that. In the last resort, of course, it is a matter of national attitude and of will. Shall we continue with borrowed money and, by squandering our resources, squabble over what sectional interests will, in the short-term have the largest share of the wealth that, in real terms, will constantly diminish? Are we going to oblige our children to repay more and more debts that we incur? Or are we as a nation going to face up to our responsibilities by determining to live within our means so that we can actually earn the houses, hospitals, schools and other social services that are so badly needed, and are we thus going to be able to help in the development of an impoverished world? I believe that the attitude of young people towards industry will be determined by what we actually do in response to those questions.
6.41 p.m.
Lord REILLY: My Lords, I am grateful to the noble Viscount, Lord Rochdale, for this my first opportunity to address your Lordships' House—and I of course invite your Lordships' indulgence, while thanking the noble Lords, Lord Carr of Hadley and Lord Rochester, for their kind words of welcome. I am also grateful to the noble Viscount, Lord Rochdale, for his having touched in his Motion on a problem which has puzzled me for many years—for it has long seemed strange to me that a country like Britain, which is so well endowed with institutions of further education directed at stimulating creativity, should at the same time so often make such a poor showing in the competitive market places of the world.
I realise of course that the words "creative work" may be interpreted in various ways, ranging perhaps from simple job satisfaction to entrepreneurial initiative but I hope your Lordships will allow me to interpret "creative work" in terms of design, for that is the field in which I have spent most of my working life; and in that context there are, I fear—quite apart from those uninviting, unappetising aspects of industry and commerce so often portrayed on television—plenty of explanations why

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our idealistic, creative young people fail to be convinced by the vocational challenge of industry and thus plenty of candidates for blame, such as the abysmal gulf between British studios and British board-rooms, which has been rightly cited as one of British industry's major handicaps; or the relative dearth of imaginative people like inventors, or engineers, or entrepreneurs, or even salesmen at the top of our industrial ladders, but equally perhaps the abundance of accountants; or the absence of design directors or even of design managers from most of our boardroom tables; or the low status of designers, well below the salt in many British companies; but equally, as the late Sir Robin Darwin used to point out, the apparent willingness of so many designers to eat in the corporals' mess; or the stultifying predominance—in this nation of shopkeepers—of the middleman, with his sure eye for the mediocre, his preference for last year's successes and his timidity in face of something new; or, or course, the misguided prejudices, often indeed political prejudices, of many young designers against industry as a whole, but equally their frequent frustrations once they get there.
There are indeed plenty of candidates for blame, but also some candidates for praise, to which I shall refer in a few moments. But to take the negatives first and to start at the beginning, the real problem for creativity in British industry is surely one of education, not just of vocational education or of further education for professional standards of competence, but of general education starting at secondary or even primary levels.
I well recall the Leader of Her Majesty's Opposition in another place once telling me, when I was still director of the Design Council and she was still a Back-Bencher, that my Council would never achieve its goal unless and until we were able to win the battle for design in the country's classrooms. I did, of course, remind her of that conversation a few years later when she became Secretary of State for Education, but unhappily funds were not available to do more than finance at the Royal College of Art some modest but quite promising reseach into the problem of Design in General Education, the aim of the research being to find ways to
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stimulate a national awareness of design, since, alas!, we Britons, as has often been said, are today by and large a visually uneducated, under-educated—that is a euphemism, I suppose, for tasteless—people, which puts us at a grave disadvantage, particularly in consumer goods markets, in comparison with our more sensitive, visually literate European and other foreign competitors—as import after import sadly demonstrates.
There are, though, some encouraging signs that a belated reassessment of our educational attitudes is under way—a reassessment that, in the words of Doctor Patrick Nuttgens, Director of the Leeds Polytechnic, should upgrade, in our educational thinking, homofaber as distinct from homo sapiens—a point of view well expressed by Professor Bruce Archer in his addition to the three R's, his fourth R being R for wroughting, as in wrought iron.
And is there not that promising new educational movement, sponsored by, among others, the noble Lord, Lord Brown and supported, I am glad to learn, by at least 10 Members of your Lordships' House, which lays emphasis on craftman-ship and on the making of useful artefacts—in other words, on education for capability. A by-product of that might well, to my mind, be a decline in aimless vandalism, since people who make things tend not to break things, which is, I think, a further good reason for demanding the maximum government support for the craft—a demand to which I am sure the Minister, the noble Lord, Lord Donaldson, would personally be sympathetic. Not that this country has too much to be ashamed of in that direction, for, as I have learned since succeeding the noble Vis-count, Lord Eccles, in the presidency of the World Crafts Council, Britain is in a sense a model for the rest of the globe in the official support, however modest it may be (and it is still modest), that is given to her young artist craftsmen—just as this country has for long been a model for the rest of the world in its official promotion—again however modest—of creative design in industry, a feature of our national life which will, I sincerely believe, grow in influence and reputation now that the Department of Industry and the Design Council are working closely together within the framework of our national industrial strategy.

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And I believe we should take further encouragement from the fact that all who are involved with design in industry, whether in government, in the Design Council, in the professional institutions or in the universities—all such students of design are today taking an increasingly comprehensive view of creativity and are no longer—or at least not so often—falling into the error once described by that great teacher of design, the late Professor Lethaby, as"Our dear mistake of watertighting," for creative design is today quite properly becoming recognised to be one continuous spectrum from handwork at one end to advanced technology at the other, or if you like, from the decorative at one end to the functional at the other. Moreover design, or rather design management, is at long last being recognised as a proper subject for study in our business schools—and Britain can, I believe, in that connection also boast another first—the first university chair of design management; namely, the one endowed by the Wolfson Foundation at the Royal College of Art, but one soon, I hope, to be emulated at other institutions.
Having opened my short speech on some fairly pessimistic notes, I close it on those rather more otpimistic ones, while hoping that your Lordships will always keep the important issues raised by the noble Viscount, Lord Rochdale, under close critical scrutiny, for there can surely be no doubt that Britain's future welfare depends on the attractions of British industry for our most creative young people.
6.50 p.m.
Lord MANCROFT: My Lords, I am happy that the luck of the draw should give me the opportunity and honour of congratulating the noble Lord, Lord Reilly, on his most instructive, informed and arresting maiden speech. Fortunately, I did not have to look up Who's Who before deciding what I should say about him because I have known the noble Lord well for over 50 years. He and I were at Winchester together where he was extremely kind to me, a kindness which I greatly welcomed and by which many others were considerably surprised. I then had the honour of serving with him on the Council of Industrial Design, as it then was, when he taught me a great deal which I have not forgotten, and I was glad to
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hear some of the lessons he gave me then repeated in the provocative remarks he made today.
This is, of course, a provocative subject and the noble Viscount, Lord Rochdale, made it perfectly clear in the mere wording of his Motion that he is highly critical, as was Lord Reilly, and rightly so. We all know there is a serious problem here. We can all recognise it, but the trouble is to know the correct solution. There has been no lack of effort and every speaker has given examples of the work done by this and that body, this school and that university. I fear that some of those efforts cancel each other out; I am afraid that if one looks through them carefully one finds that much of the effort is contradictory and conflicting and that young people are still confused and ignorant about what the problem really is.
It is easy to define, if one is recruiting young people, the problems that face a potential barrister, doctor or soldier—and the Army is probably as successful as any in putting its message over to young people—but to try to explain what business is about is very difficult indeed. I was glad to hear Lord Rochdale widen the subject matter of the Motion as originally drafted into the bigger terms of trade, industry and commerce, as well as that of heavy engineering that was discussed earlier in the debate. They all represent the same problems. As the noble Lord, Lord Carr of Hadley, pointed out, the schools and universities that are grappling with these problems differ greatly, but it is perfectly clear, though the figures differ, that it is the professions which dominate, not business, commerce or industry, and that the progress being made by industry to overtake the professions is still lamentably slow.
As I referred to Winchester, perhaps I may be permitted to use that as an example, though it is not a good one because we are obviously an extreme example on one side because 85 per cent. of our boys go on to university and therefore an A-level in business studies is hardly appropriate. However, we occasionally have exceptions from our usually rather traditional pattern. At a social function in the school only a few days ago, I asked the senior prefect what he was going to do when he left school and he replied that he intended to dig out antiquities in the Yemen. I then asked the senior scholar

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what he was going to do and he said that he, too, was going out to the Yemen—to dig out the senior prefect.
In opening the debate, Lord Rochdale twice mentioned the word "snobbery" and I thought he skated over it a little politely. I believe it is a great deal more serious than he was prepared to let us think; I am sorry to say that, but I believe there is still a strong feeling among young people of all classes, of both sexes and in all types of educational establishment, that there is something about industry, business and commerce which is "not quite nice", and I put it more strongly than Lord Rochdale.
Your Lordships may remember that in one of the Palliser novels of Anthony Trollope there was a conversation between the Duke of St. Bungay and the Duke of Omnium about a mutual friend of theirs who was blessed with four sons. The eldest son of course was going to look after the estates, and would eventually come up to your Lordships' House and enter the Cabinet as one of the seven Members, I am glad to say, they had in the Cabinet in those days, and quite right too—would we could go back to that! The second son, the noisy one, went to the Bar. The third son, the silly one, went into the Army. The fourth, the black sheep of the family, went into business. I think Trollope had his tongue in his cheek when he said that, but that feeling still runs fairly strong.
The noble Viscount mentioned the number of debates we have had on this subject in the last few months. If one looks through the speakers, it is interesting to note how few of the very large number who spoke with authority about business, commerce or industry actually started off in industry; they were like the sons in the Palliser novel. I have a guilty conscience myself. My father was in commerce, in the boot and shoe trade, but he did not send me into that trade. He sent me to the Bar; he probably thought, like Trollope, that I was too noisy for the boot and shoe trade, and he was probably right, too. Having now spent nearly 20 years in commerce, I am amused to discover how few people I know—there are two obvious exceptions in Lord Carr and Lord Rochdale—who actually started off in business, commerce or industry. Why
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should this be the case? It is one of the problems with which we must deal.
The Institute of Directors, who unfortunately are this very day in the middle of an internal dispute among themselves, have been making an inquiry into this matter among the leading headmasters of the day. Mr. John Rae of Westminster touches on this matter when he mentions, a little apologetically, the life-style of certain businessmen as being a handicap against those who are thinking of following in their footsteps into industry. I think he means it politely, but nevertheless he regards it as a serious point. Mr. McCrum, the Headmaster of Eton, differs and says:
"People hear from old friends of inefficiency and lack of opportunity. There is not enough money in it".
That is the opposite of what Mr. Rae says. I wonder how many noble Lords recall the last speech which Lord Sieff made in this House shortly before his death. He was talking about the change of approach by young people going into Marks and Spencer today compared with his day. He said that when he was a young man the question they all asked was, "What arc the prospects?" while today, unfortunately, they ask, "What are the pension rights?". That is a very considerable change.
One sees if one studies the inquiry by the Institute of Directors that there is a conflict of advice, and that conflict emphasises the point I am trying to make—namely, that there is confusion in the advice and need for co-ordination of the wealth of advice being given to young people today. Who should do it I do not know; I presume the Government because they have the last word and the financial upper hand. They themselves have taken a considerable lead in this matter and I am glad to hear the appeals made from these Benches to the trade unionists and particularly to the senior members of trade unions on the Benches opposite—who carry considerable weight—to lend that weight to help overcome this problem. Again, I quote Mr. McCrum of Eton. He was asked if he would like to go into business and industry and he replied—and this must have considerable influence on those who read his words—
"I would not want to be involved in a set-up where the mainspring was profit"

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But, he added helpfully that the country would sink financially if it were made up of people like him. Lord Rochdale urged us not to become involved in party politics when discussing this matter; I would only say that far too many people opposite have agreed with those remarks in the last few years for my liking. I go back to the Headmaster of Westminster, who I think gives the answer in large degree to the question which Lord Rochdale asked. He says:
"We must show our pupils that a man creating wealth for the nation is doing as much to develop a more humane society as a man doing social work. We must challenge the prevailing attitude that sees the professions as the layer of green grass that makes the slag-heap of industrial society bearable to contemplate".
Having sat on the slag-heap for 20 years, I am very glad to read those words from the headmaster of Westminster School.
The examples which I have quoted to your Lordships all emphasise the point that I am making: that it is ignorance amongst the young people that causes much of the trouble. They are confused. They are given a wealth of advice, much of which cancels itself out. They are not clear what we are trying to say to them.
In conclusion, I wish to make some practical suggestions. They are small suggestions, but I hope that they may commend themselves to your Lordships. I believe that more masters and more boys and girls should make more trips around the whole of the commercial world, from big industrial concerns to small commercial concerns. They should not go just for a day, when one can learn nothing. They should not go just haphazardly, but rather on a concerted plan. This is why I am making the point to the Government about the need for co-ordination; and that co-ordination should be joined by all the organisations whose names have been mentioned this evening. That will certainly bring in the small firms who are so important to our industrial prosperity and who would not otherwise be able to participate in such an organisation.
Further, I hope that the careers masters will go with the boys and girls. I also hope that in many schools the careers masters will be better chosen. I hope that the job ceases to be given to old Mr. Chips, who is really a bit past doing anything more useful and who, because everyone likes him, is thought to make a good careers
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master. Of course he makes a good master, but not quite what is wanted in solving this very difficult problem.
Conversely, my next suggestion is that many more businessmen, of all sizes and shapes, should get around to the schools, universities, and polytechnics and see the material they have to work upon. It is no good just throwing in one industrialist one afternoon for one lecture. That will probably do much more harm than good. There has to be a concerted programme of getting businessmen around, looking at the schools, seeing the problems, and seeing where the material can be obtained. I believe that much more can be done in that way to clear up some of the confusion which exists.
My last point concerns my hobby horse, which I hope I may ride in my concluding minutes. Anybody contemplating a business career should certainly be taking mathematics in the sixth form, and, further, knowledge of a balance sheet should be included in the curriculum of all sixth form mathematical classes. It is the golden key which opens the door to the whole of commerce and industry. If Mr. McCrum at Eton is right in his remarks about profit and not being entirely in favour of it, then at least if one can read a balance sheet one will know in ample time when a firm is about to make a loss. That certainly is "a vocational challenge of the highest social order", as expressed in the words of the Motion.
7.3 p.m.
The Lord Bishop of GUILDFORD: My Lords, first, I should explain that I have little experience of industry, and little technical experience of the educational processes. Perhaps, to make the disavowal complete, I should say at the outset that I am not speaking on behalf of any Church committee or group. I put my name down to speak in the debate entirely upon my own initiative, and I should like to explain why I did so. I did that because I believe that underlying the Motion is a point of quite fundamental importance to which we ought to give a little attention. The point is how we are to see industry as part of the whole wellbeing of our society.
Let me put it to your Lordships in personal terms. I am a Minister of the

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Gospel, and as anyone seeks to do in the 20th century, I seek to build bridges with the whole life of the people for whom I have responsibility. But it is very difficult to build bridges with people in industry as industrialists. The Scriptures which we use were written in an almost entirely agricultural setting in Palestine. The festivals of the Church are related almost entirely to the agricultural world. In the old times, the saints' days were the times when tenancies were terminated or farming operations began. At Rogationtide we pray for the crops and so on in the fields. Harvest Festival—the greatest folk festival of all—is almost entirely associated with the harvest of the land, even in urban areas. The great festival of Christmas to which we come is, in a sense, withdrawn from the technical world in which we live, because for the Christmas story there must be a stable, and we must think about shepherds on the hillsides taking care of their sheep. If it was near Easter, I should have to say that Easter was concerned with Passover, lambing, and the new crops in the fields. In the agricultural context, work and worship as two fundamental areas of life have been within a common universal discourse, and this made it easy for people to see life whole.
Despite the sterling work of industrial chaplains and the Board for Social Responsibility, for example, in the Church of England, the Church as a whole has not yet been able to build such close and direct links between industry and worship. I have taken that example from the religious field, but I believe that it can have application also within the educational field, especially where schools are situated either in agricultural land or in residential areas, and not in the midst of industry, or where the curricula of schools are traditional, concerned largely with literature, the arts, or the pure sciences, rather than with the application of science to engineering and so on.
Indeed, a headmaster to whom I spoke about the debate a few days ago, said to me that in his opinion many people were living within two different spheres. They live one life at work, with its own set of values and its own circle of colleagues and acquaintances, and an almost entirely different life at home in the context of
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their personal lives and the cultural and religious activities which they follow in their leisure time.
I can corroborate that opinion by saying that I have noticed how difficult it is for priests in my diocese to make effective contact with the working lives of even their most articulate and responsible church-going parishioners, particularly those engaged in industry. In our Surrey commuter villages it sometimes appears as if it is the deliberate intention of many people to leave work and its problems behind when they come back to the life of the village at the weekends; yet many of these people are leaders in industry. One cannot blame them for this situation, but the result is that their work in industry can so often be thought of as something separate from those areas of life which are most highly valued. Their work may often be valued as no more than an activity which is necessary in order to earn the wages or the salary which makes it possible for them to engage in their spare-time activities, which for them are more highly desirable, or perhaps more socially valuable.
Other noble Lords have already made this point, and I do not want to belabour it. However, I want to draw attention to it because I believe that young people simply mirror the attitudes of their elders, and that the basic problem is how to see industry as playing an integral part within the whole activity of the community. We need, as it were, to achieve a reinte-gration of all areas of life, including the industrial ones, because it is only in this way that industry will play its full part, as it needs to do, in the development and the wellbeing of human persons. I found it very interesting that a book by Robert Bocock entitled, Ritual in Industrial Society, makes the point that many of the counter cultures of Western society have as their aim the reintegration of the different areas of personal experience.
It seems to me, therefore, that it is important that schools should try to do two things in dealing with industry. The first is that they should recognise the enormous contribution which industry and technology have made to human growth and human progress. We must not overstate the case, because there have been, and still are, many areas in which industrial development depersonalises

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many of those who are engaged in it. I do not refer simply to this country, but to countries across the world. But, at the same time, technology and the industry associated with it has made it possible for large numbers of people to live more sensitive, greatly enriched and more extended personal lives, and these benefits can be extended widely with socially just policies. I think young people need to be helped to see the part that industry has played in the development of mankind or in, to use Bronowski's phrase, "the ascent of man". That is one thing.
The second thing, I think, is to make the point which has already been made in this debate; namely, that unless wealth is produced one cannot have social services. We cannot have an adequate Health Service and we cannot have education, especially in its ministry to deprived children or those in need of special remedial care, which takes a lot of money, unless the wealth is produced to make it possible. But this is not so only on the national scene. It is so also on the international scene. Many young people are conscious of the need to build a world community and to meet the needs of the Third World for food and medicine, and for resources to build up their own economies. There is a much-quoted saying of St. Paul in the Acts which goes:
"It is more blessed to give than to receive",
and one can make great play with that in thinking about the Third World, and so on. But he prefaces those words, "It is more blessed to give than to receive", with some others, saying:
"With my own hands I produced what was necessary for the sustenance of myself and those who were with me".
He could give generously because he had produced wealth; and I believe that young people need to be helped to see that, in our interdependent world, wealth must be produced by industry at some place by some people if the whole human community is to have the resources which it needs for health, for food, for development and for education.
The Green Paper on Education made great play with the need to educate children in our schools to be citizens of the world and to prepare them for life in the community; and I very much welcomed the community orientation of that Green Paper. I believe that these two particular
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things about industry—exploring its role in the development of mankind and explaining the relationship that industry has as the wealth-producer making possible all other development—is part of the task facing education today. In fact, the industrialist, the worker at the bench, the person who produces wealth, whatever his rank within industry, stands side by side with the social worker, the nurse, the doctor and the teacher in the development of a true human community, and I believe we need to help young people to understand that.
Perhaps I may finish by quoting some writings of Kenneth Adams, the Comino Fellow of St. George's House, Windsor Castle, to whom I am greatly indebted when I try to think about this subject, as I am sure are many others as well. He said:
"Our industrialised society has failed to break through to an understanding and acceptance of the goodness of the industrial and commercial activities on which it depends for its survival … We have no symbols, images and folk tales which assume and assert the underlying goodness of industrialised society".
He made that comment in contrast to what I said earlier about the agricultural context in which work and worship marched together. I believe that industrial development and work has no essential goodness on its own; it is only good if it helps human people to be good, human persons. But I believe this question about the goodness of the industrial society is a very relevant one. I was almost encouraged by the kind remarks of the noble Lord, Lord Carr of Hadley, earlier to make a kind of positive declaration at this point, but I shall refrain from doing that for I have little experience and it would be impertinent of me to make a kind of peroration of a highly moral tone.
I would finish, my Lords, simply by saying this. I believe that young people ask many questions about industrial society when they consider whether it is worth while to enter it, and that many of those questions are about the ethics of our industry. They ask questions about the responsibility of shareholders, for example, for the terms of employment of those from whom they derive their profits, perhaps not in this country but in other countries across the world; questions about the relationship between work and leisure, and the obligation which those in work

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have to those who, because of technolgical progress, cannot have as much fulfilment for themselves in work as is possible to others—in other words, the sharing out of work and the sharing out of wealth which comes from work—questions about the use of natural resources, and whether we are using them in a responible way; and questions about whether the different sides of industry keep their contracts and fulfil obligations. Many questions like these are being asked because young people are aware of the world and know the issues that face us all as we build for a new world community of justice and peace across the world. Therefore, this question of the goodness of industrial society is a very important one. My Lords, I am pleased to have had the privilege to speak in this debate.
7.17 p.m.
Lord MORRIS of GRASMERE: My Lords, may I join in the congratulations to the noble Lord, Lord Reilly, on his fascinating maiden speech. I am afraid that, to my shame, I have not, like the noble Lord, Lord Mancroft, heard him speak before, but it is a very great pleasure and very satisfying to hear him speak in your Lordships' House. I hope we shall hear him again before too long. My Lords, I am venturing to have my speech written out on this occasion because otherwise as I get older and older I tend to speak too long. I feel very strongly indeed that the noble Viscount, Lord Rochdale, ought to be congratulated on the terms in which he has put forward his Motion. I am sure he has them right; and this in itself is a very remarkable and promising achievement. If, this afternoon, we try to stick to his approach to this important and tantalising question, and to use his language, some very constructive conclusions ought really to emerge, I think, from our deliberations.
When the country goes to war, the undergraduates and graduates at the universities pour themselves into war service, putting everything else out of their minds; and, nowadays, after the ignorant and disastrous choices of the First War, they get themselves pretty well (all things considered) into the right places for the country's needs. In wartime it is reasonably clear what the country's needs are, and graduates and undergraduates press
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forward to supply them. Today, in peacetime, there is no clear picture of what really are the country's needs. Indeed, the picture is more muddled and confused, I think, than it has been for more than 50 years. In a rapidly changing world, no really persistent and decisive thought has been given to the question of what employments the highly educated manpower of the nation ought to be entering; what jobs they ought to be seeking. Of course, this is a difficult question, but like other difficult questions it could yield to hard thought and research; and there are some important things which could be said now, even as things are. But they are not said—or, at least, they are not put together, as they need to be, into a clear picture. If you want the young to get themselves into the employments where the Britain of today needs them to be, they must have before them a clear, up-to-date picture of what the country needs of them. First things first! But what are the first things? Is British industry one of them; and what sort of British industry?
As a college tutor for 20 years and a university teacher and administrator for nearly all my working life, I have no doubt at all that the young give a great deal of thought, especially during their university years, to their future life and work. And their motivation at this time of their life, is within the limits of human nature, more high-minded than their decisions and choices will be likely to be in later life. As they get older they will find themselves more harassed by the day-to-day troubles of working life, more cribbed and confined, more incapable of breaking away from the inevitable trivialisations of the media and, of course, more nagged by the need for money. At the undergraduate age, they commonly believe what is, of course, the case: that the nature of the work they are going to do and the style of life they are going to have are more important than money.
They are practically minded enough to want to choose an employment in which they can make a success of themselves, of course; but in choosing between the employments that they think are open to them, they make their decision on grounds other than money. They consider what their working day will be like, what their style of life will be outside their working day and last, but far away from least, they

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form their own view about where the interesting things are going to happen in their generation; where the urgent problems of the world and of the country are going to be located in their time and what they themselves may be able to do to help. Reflections on this latter point are more hesitant and often, in the young, over-modest; but it is this which they talk about and it is this that they will be willing to take advice on.
I know, of course, that there are a large number of undergraduates today, perhaps even a large majority, who believe that the employment situation at present is to all intents and purposes hopeless and that any suggestion that they might be able to make a choice of employment is sheer moonshine. They think that they will be very lucky to get any employment at all and must simply take any job they can get. This is a terrible state of affairs. Neither the universities nor anyone else can do very much to help the country to get the right people into the right jobs until we get far nearer to the full employment situation which we enjoyed for 20 years or so after the war. But this, I think, is another question and not the one that we are debating today. For the undergraduates who do think that they have some choice—and these are the ones who will give and follow leadership in the undergraduate world and be the makers of undergraduate opinion in the coming years—your Lordships will have seen that I think it very important indeed that they should have a clear picture in front of them of what the real needs are. Let the dog, as they say, see the rabbit. It must be a clear picture and even, I think, a dramatic picture.
In the present confusion every young man and young woman must be—as we, their fathers and grandfathers, know they are—terrified of starting out on a course of life and work in which later they will come to find they have been trying to fight the last war but one. This was not, of course, a fear which confronted me and my contemporaries and most of your Lordships when we left our universities all that time ago. We had the Indian Civil Service, the Colonial Service; with the help of the 1918 Act, education in the country, production of food all round the world and so on. But what about today? What about the picture of British industry? I mean, what does the country need from
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British industry? What can it reasonably expect to get? I am talking about what the country needs from British industry. It is the picture of British industry that I want to emphasise as necessary. Are there problems here to fire the imagination of the young, as the Indian Civil Service and the Colonial Service and so on used to do?
Let us try to put things together into a picture. We have been told off and on in the last two or three years—and nobody says these things to the young—by thoughtful people in the thoughtful journals, a number of highly significant things most of which, perhaps all of which, are probably true and all of which set us urgent problems. We have been told that, whatever else may happen, the number of people who will sooner or later be thrown on the employment market through the liquidation of overmanning in British industry is very large indeed in relation to the present number of unemployed. There is a big enough problem to fire anybody's imagination. We are told that there is no future—that the die is now cast—in this country for mass production in the sense in which the production of cheap popular motor-cars is mass production. The set-up does not suit the English and cannot now be made to suit them. There is certainly a big enough problem there. We are told that not only in mass production but in any part of industry where the methods of production have settled down, we, and no doubt the West in general, will always lose out to the Far East. We in Britain shall have to rely on the production of such goods as need new inventiveness and constantly-advancing products of a very sophisticated and highly technical kind. This will certainly require brains, imagination and sophistication; and it will require youth.
We are also told that the possibilities of employment growth for Britain must, in general, lie not in production but in international services or exportable services. Certainly there is a problem there. Again, we are told that power in industry in a country like ours with free institutions now lives on the shop floor, that both sides of industry are extremely short of ideas for adjusting their organisations to this irreversible fact, and that we have fallen behind other countries in some cases by more than one generation of ideas.

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Finally, we are reminded that this country more than almost any other country, and enormously more than the United States or Germany or France, depends for its life on maintaining itself successfully in world trade; that there simply is no substitute for this and that this will make more and more demands on British industry which are still not sufficiently unravelled by experts, let alone popularly understood. Here there are big challenges for the younger generation to face; and Heaven knows! we do not see the answers to them. They are as big of their kind as any generation has ever had to face. The resolution of them will require brains, imagination and will power. We ought surely to "throw the book" at the young with confidence that, if we do, they will get themselves into the right places and the right jobs to attack these problems—which are certainly big enough and intractable enough to fire their enthusiasm, provided they are rightly and clearly seen.
In recent years we have thrown the book at the young in other fields: for instance, about the shortcomings of the social system, and the intractability of the social services. They have poured themselves into the employments required. Any shortages here of the essential workers is due, not to any lack of willingness or enthusiasm, or of strength of will on their part, but to a shortage of places for traning. In general, in fact, this has been a success story—the canalisation of the right people into the right employments. We have gone out into the highways and by-ways and, so to speak, compelled them to come in.
Why have we not done the same with industry? I am sure that we have not told the right story. We have not got across the right picture of the urgency and the drama of the industrial situation. I am sure that, even today, up-and-coming undergraduates generally still do not think of industry as the right place for them. I do not mean merely that they think that the management of industry, like the trade unions, does not really want them. A lot of them have the courage and determination to face up to this, if they thought it was important enough. But actually even where they recognise the problems, they do not think that industry is the
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place where they will be solved. They think that the problems will be solved, not in industrial firms or corporations, but in Parliament, in the Civil Service, in the technical professions, in the banks, in the City and in the offices of consultants.
We know of course that this is not entirely true. Can the young not be led to understand that many of the problems—and perhaps many of the most urgent ones that provide the sticking places or trouble spots in the way of advance—can be solved only within industry itself? Industry itself must include, within its own manpower, the people, and the groups of people, who will solve many of these problems. Without imagination and resource inside industry itself, the problems of the country can never be solved. Can we not tell this story, my Lords? Can we not set up a proper picture? Can we not appeal to the imagination of the young? I do not think we should have much to fear, so far as the subject of this debate is concerned, if we could do so.
7.33 p.m.
Viscount TRENCHARD: My Lords, my noble friend Lord Rochdale has indeed done us a service by introducing this debate. With his usual great modesty, he spoke of a range of debates in which his becomes the latest in the series. It will hold a considerable pride of place in that series. The contributions that have already been made have ensured that—particularly his own.
My Lords, let me add my congratulations to the noble Lord, Lord Reilly, whom I was very glad to see chose a fairly controversial subject on which to make his maiden speech. May I comfort him by telling him that I chose the Bullock Report and found myself with the same problem. His contribution is certainly of an order of which we hope to have many more. I intend to concentrate on what I believe would be the view of graduates and school-leavers of industry. Perhaps the modern jargon would call it their perceived future job satisfaction. I do not intend to concentrate to any degree on the rewards and taxation system which have so often been mentioned in the other economic debates in this House. I say that because they have been so often mentioned not because they are not extremely important in this context but

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perhaps because they are but the final sign of the status which industrial management and skilled work is accorded.
I, too, shall concentrate on what I term line management and skilled workers. I agree with the noble Lord, Lord Reilly, that we have plenty of accountants, and some of them high quality ones, some of whom have made positive contributions in industry. But they have a field day in what they call the restructuring of industry, which usually means cutting back. We are also well supplied—probably with arts graduates to a high degree—with people who have made a career in personnel management. Some of our personnel managers are of the highest standard in the world. Our problem lies in the line management areas, buying, sales, production—particularly production and the application of science and engineering.
I agree with other noble Lords in saying that, even though there is apparently some upturn in the number of graduates and technical graduates joining industry, we are very far from having solved this problem. This is in spite of all the valiant efforts that have been mentioned (which I will not mention again) including the CBI's efforts now with its school education programme. I also agree that there has always been in the British establishment a kind of tradesmen's entrance view of industry. Perhaps I may have a moment to tell an anecdote on that line. When I started making soap in Toronto—and I did really start off in industry apart from the fact that there was a war when I left school—and it was a very good experience making and selling soap, I could not persuade my wife's grandmother to tell the family what I was doing. She told them that I was working in a secret diplomatic job.
I was somewhat horrified to hear the quotation from my noble friend Lord Mancroft of the headmaster of Eton's statement on profit. I had thought we had got beyond that stage. It is extraordinary that someone with such wisdom, knowledge and intellectual power could still talk of the profit motive like that. Probably most of the management in industry have fewer shares than even some of our academic heads. Profit is the yardstick by which management judges success and is, to the extent of over half its content, the source of direct reinvestment in further
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growth, whereas under half its content is an indirect investment by rewarding capital for further investment and growth. It is extraordinary that this attitude clings on. I suppose that it stems from having had the Industrial Revolution before other countries and in a setting of a very successful country which was fixed in its attitudes. As my noble friend Lord Rochdale has said, it has taken us a long time to get over that. I also agree with those who have mentioned the retention from the heights of our education world of snobbery in relation to business. It is still there. I know of young men today in our finest educational universities who are still being advised not to go into industry.
Although all these historical factors are still there, I do not believe they are the strongest factors today in putting young men off going into the "nitty-gritty" in industry. I believe that the image that our young men can gather from the radio, the Press and by word of mouth from those who are a few years ahead of them will be the important line of communication today. I believe that for a large part of industry the image created is one of declining industries, of uncompetitive and not very competent industries, of large units where the real decisions all seem to be taken at the top, where there is a danger of getting lost in the size of these units and where there is perhaps little scope for initiative or for applying the skills that have been learned. In addition, they all too often see—and it is played up by the Press—widespread industrial strife. They probably get a picture, and those who have joined industry a few years before them tell them that their boards of directors seem to be out of touch, that they do not see enough of them and that they suspect them to be reactionary. There are of course exceptions to this, and some large businesses have good images. In smaller businesses these things are less of a problem, but unfortunately—and this would have to be the subject of a separate debate—our small businesses are not growing enough.
Why is there this image still today, as industry is viewed by the school-leaver and the graduate? Is it a vicious circle that we have bad management and therefore that industry is incompetent and so it looks awful and we have industrial

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trouble and therefore they will not join? I do not believe it is this, because, notwithstanding all the criticism that has been made today, certainly my own experience of management in many different countries and of British management working abroad and of foreign management working here, is that, in spite of all these problems, by and large, our management standard, with all the variation that all countries have, is not dissimilar. I think of the back-up that industry has given in two wars and of the period to which the noble Lord, Lord Kaldor, has drawn our attention before now—that is, from 1925 to 1937, where our productivity and growth outpaced the world—of the successes currently in agriculture, in smaller businesses and, not so very far back, in industry, and of our successes in many technical areas which are world famous.
Unfortunately, we have been slipping. I believe the main reason lies in what is really happening in industry. I believe it is this which is putting off the young. I believe, in a summarised sentence, that the main task of industry in the creation of new wealth both through new ventures and through the introduction of new methods in old industries—this central main task—is being forced off the agenda of the week's work, of the week's management or board meeting. This has been happening week after week, month after month and year after year, for certainly the last decade and probably well before that.
What, my Lords, is forcing this main task off the agenda—the positive side of management's task? It is the so-called new responsibilities, new tasks and new pressures. Why is this happening and what are these new pressures? It is happening because we have to realise and fully absorb that the time factor of our management is severely limited and that the essential routine duties of a factory manager in an undisturbed atmosphere will take 80 per cent. of his time, and that even if he is very efficient he will only be able to spare some 20 per cent. at the very most for forward movement. I believe that the new and increased pressures of the last decades, and particularly of the last decade, have taken more than that 20 per cent. of such spare time.
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Consequently, I believe that our management becomes and appears more incompetent than it is. That in turn produces all the problems and the image that management in industry is a thankless task.
What are these new pressures? Greater responsibility towards employees, consumers, the environment. Of course, these were always there but, with the pressure groups and the legislation behind them, their force and time-consuming nature has increased greatly. Then there are the actual controls. There are price and other controls and there are controls on product, pack, content and advertising. These stem in large part from a remark that I have often heard in the last two decades in Britain from people who say"I believe in the private enterprise system and the market economy, but"—and they then proceed to outline a social factor or an environmental factor or a situation which they perceive where prices might temporarily be too high and they say: "That must be controlled". When one adds all those individual "buts" together one has a situation where the manager's time is more and more diverted away from the prime task of business, which is to create new wealth.
This is happening in other countries in my experience, but it is less often crowded off the agenda there than it is here. Perhaps the biggest time-consuming factor of the lot in factories is the unstructured nature of our collective bargaining and employee organisation. As regards the time spent in negotiation, many multinational companies have pointed out—indeed, the Ford Company did so recently—that their management are spending far, far more time: 50 per cent. here as against 15 per cent. in Belgium and Germany. They have not got 50 per cent. my Lords.
What suffers? What suffers is something that does not have to be attended to that day or that week, something that is not at crisis point at the moment. This is why, in my experience also, the first thing that suffers is research and development, the application of new designs which are very often there waiting to go in.
My Lords, you might say that these problems would be a challenge to our young men from the universities and schools, and indeed, for some, they are. But there is a problem about these new

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tasks and new pressures. They are very often political and companies can only afford one stance. It is thus very hard to decentralise or delegate real authority to deal with them. The task of management tends in practice to be negative, to ward off the worst effects of these constant pressures, crises and other interferences. Job satisfaction is, I believe, closely allied to achievement, to forward movement, to positive tasks and not to negative. Our management is forced to defend for too much of its time and has no time to push forward.
I have experience of losing some of the best. The figures of emigration may not show any picture very clearly, but we have certainly lost some of our very best people overseas to countries where they are more likely to get the job satisfaction that they are looking for. We have also had problems in multinational companies in getting management whom we have sent overseas for a period to return. In too great an area, the image is of a thankless, negative task. There is a feeling that, though the country has now paid much lip service to the main purpose of creating new wealth and applying new methods, nevertheless it is lip service and does not, in fact, reflect the mood of the country. They also know that the rewards, which, as I said earlier, are a final sign of the status in which industry and management are held, do not begin to be commensurate with the rewards for management overseas.
Skilled labour rewards are vitally important. In the past, we have simply not given sufficient incentive for ordinary school-leavers to start long apprenticeships in skills, and we are now paying for it. I do not believe that our shortage of skilled labour is quite so big as it seems, and I believe here that incentive could bring them back from other occupations to quite a large degree.
We need a new industrial revolution. We need to give real priority to wealth creation and not just to pay it lip service. We need to get social policies separated from wealth-creation policies. If things go well, our social problems will tend to disappear. So many of them are, in fact, caused by poverty. With prosperity, they will automatically be solved. With higher status and higher quality management in industry, they will also tend to be
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automatically solved. I believe that in such a situation, and if we provide the atmosphere and give the status which is needed for industry, we shall get the best of the British outturn of the educational system coming into industry. We shall get a number flooding back from countries where they have gone.
Furthermore, and this is a point that has not yet been made, we shall fill the gaps which exist—and we have gaps—from abroad, which we cannot begin to do at the moment, not because German engineers do not like living in Britain, as I know from experience, but because one cannot possibly remunerate them. If we get the atmosphere right, if they are able to see that they can apply their skills and get their job satisfaction here, and if we put right the rewards and the tax system, we shall be able to plug the immediate gaps—and we must do this, because the urgency is too great to wait for the training schemes to come to fruition—and we shall be able to solve our problems.
I should like to make a final plea that we should really take on board, as an attitude, a humility towards the ability of a few to plan wealth creation, and a belief that we must harness all the brains we can in order to create wealth. We can do that only by ensuring that the atmosphere in industry is such that they can apply their skills in a constructive way to move industry forward, and not go into a negative battleground where all kinds of other pressures and priorities make it impossible for them really to apply what they have learned.
7.55 p.m.
Lord BAKER: My Lords, in the June debate, to which reference has been made, I concentrated almost all my remarks on the subject of today's discussion. Somewhat to my disappointment, small attention was given by subsequent speakers to the problem of people. Much more attention was paid to taxation, labour relations and management—all important, but not, in my opinion, so crucial. We are therefore most indebted to the noble Viscount, Lord Rochdale, for bringing us back tonight to fundamentals, to consider why we have failed to attract more young into creative work in industry, and for giving us this opportunity

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for further debate. I must congratulate my noble friend Lord Reilly on his elegant and important maiden speech. I hope that he will speak often. We need to hear much more here about design and creativity.
In introducing the June debate, I sketched the reasons, as I saw them, for our serious failure since the war. Unfortunately, the evening is too far gone to justify my repeating anything of that, but I will take up the story where I said that, at least 28 years ago, some perceptive people saw that we were going very seriously wrong, and that the plans that had been made in the educational world, between education and industry, were not working out as we had expected. This resulted in the University Grants Committee providing unrivalled facilities for engineering education, and the Committee went further. It did what I never remember it doing for any other subject; it embarked on a long programme of propaganda. Many of us were involved. I can remember appearing on two occasions to address the Headmasters' Conference, and three times appeared before Commonwealth University Conferences, drawing attention to the very subjects that we have been discussing in these last three debates—the importance of creativity, of engineering, and of industry.
I was then almost as tired of the subject as I am now. It is not surprising, when you realise how we have gone from bad to worse in this field, that I said in June that I no longer had faith in exhortation. However, my main reason for speaking tonight is to pay tribute to those who continue such work, and I really cannot agree with my old friend the noble Lord, Lord Morris, that the young are not informed of the position. I should be surprised if there were any university professors of engineering, or heads of polytechnic departments, who did not go out regularly into the schools, telling the young the position as it is and how it can be rectified. I do not know whether other disciplines do this. I doubt it very much, because the schoolmasters do that work for them.
I am sure your Lordships will realise that every child of first-class ability who reads engineering in university has fought and won one battle with his schoolmaster—
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though he may have fought one with himself—who would much prefer to see him take the easy way, and continue at the university to study the academic subject in which he had shone at school. I may be unduly hard on schoolmasters. I know that some of them have seen the light. Of course, these excursions into the schools have to be done well. I can remember many years ago, when we were planning one of our extensions of the engineering faculty, that we thought it would be interesting to see where our raw material came from. A study of the archives showed that there was an enormous spread of schools from which we drew our undergraduates. Most of them, of course, were small and irregular contingents. My own, for instance, had the distinction of providing an average of one and a quarter boys to read mechanical sciences per annum. It was only the large and, may I say, the responsible schools which sent regular large contingents.
Eton was one of these. I am sorry to say that I do not have the figure for Winchester. However, a study of these Eton figures showed a remarkable drop over a period of about four years. We asked the school whether they had any explanation for this. They could not think of anything until an assistant master remembered that just before the time of that drop there had been a lecture in the school, given by a most distinguished engineer whose name fortunately escapes me, who had made engineering and industry sound so desperately dreary that the master wondered whether any Etonian would ever take up the subject again.
If one is looking for recruits, it is quite useless to talk to sixth forms, as was probably done then. In these sophisticated days, the young settle their future very early. This has been recognised by the engineering institutions who have developed an interesting scheme, known as"Opening Windows on Engineering." It springs from the initiative of Malvern College which encouraged one of its masters, Kevin Walton, himself an engineer, to talk to the school about engineering. This was so successful that it has been taken up by the three major professional engineering institutions. Carefully selected young engineers, trained in the art by Walton, now visit schools to talk to middle school pupils—that is,

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13 and 14-year-olds—about young engineers, their jobs and the sort of life that they lead.
These visiting engineers are not trying to push their own brand of engineering, or, indeed, engineering as a whole—not in a recruiting way. However, they aim to show that engineering is not applied science but an amalgam of people and communications, the understanding and application of scientific principles to solve real problems, and other matters which would appeal to the young. The scheme has operated for nearly two years in Birmingham, Manchester, Brighton and the East Midlands, and a start is shortly to be made in London.
I know that many other similar schemes have been mentioned tonight, and I really do not think that we can excuse the young by saying that they do not know what is happening. I will say this about the engineering institutions. While I welcome what they are doing in the schools, it would have been easier for us all if during the 150 years of their lives they had come out of the shelter of their Royal Charters, which made them learned societies, and found a way to ensure the worldly status of their members.
I had a sad experience during the summer. I happened to be in a provincial town on the day of its university's degree congregation. A professor, the head of one of the engineering departments, invited me to the sherry party that he was giving for his young graduates before the ceremony. Of course I went and he said, "You must meet the star pupil. It's the first time that a woman has headed the list." I was delighted and said to the girl, "Congratulations! Now what are you going to do?" meaning what branch of engineering, what firm was she going to for her training. She turned to me and said, "Oh, I'm going to be an accountant."
Ten years before, when I was responsible for the education of engineers, this would not have saddened me in the way that it did at that party. I was pleased all those years ago when pupils of mine went into the Church, or became schoolmasters or merchant bankers, because it showed that we were educating them and not merely giving them a vocational training. Perhaps I was shocked this time because
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girls in engineering are still precious as pioneers; so it was hard to lose one. However, I found out later that she was not alone in this move; there were others in the department who had chosen accountancy. In fact, nearly 10 per cent. had gone that way, and it is not difficult to see why. Not only would these entrants receive at least as much during their training period as they would as engineers but they were being offered and would be achieving by the time they were 30 twice the salary they could have hoped for in a consulting engineer's office.
When I returned home to Cambridge I made further inquiries and found that although this 10 per cent. figure was not common in other universities, a very large proportion of engineers finishing their university courses were opting for accountancy. I learned also that the confident young men who had completed their engineering courses were beginning to look slightly askance at industry because of doubts about the low status of the profession. Therefore, my reply to the noble Lord, Lord Rochester, is that although, of course, I am pleased to hear of the increase in numbers reading engineering—that in itself is good, because I believe it is as good an intellectual discipline as any and better than most—whether they are going into engineering or into other (shall I say?) less creative activities remains to be seen.
In reply to the debate in June, the Minister, the noble Lord, Lord Melchett, remarked on the conditions in France and Germany—and I quote him—
"where engineers are more highly paid, are more often to be found in boardrooms and, by comparison, form a more highly respected profession asawhole".—[Official Report; 19/6/78; col.900.]
I cannot remember any reference to this in the July debate that followed a fortnight later. We were told that we could learn something from West Germany about industrial relations, but nobody suggested, so far as I remember, that we might be guided to higher productivity by following our more successful European competitors in their attitude to the engineering profession—that despite the fact that the terms of the debate were
"to call attenton to the dangerously low level of productivity in this country in relation to that of our main international competitors…".—[Official Report; 3/7/78; col. 644.]

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Yet it must be common knowledge that in France it is the engineer who is looked up to. Other groups match their success by comparison with his. In Sweden, over half of the graduates in the top jobs in manufacture are from the technical universities. In Germany, the reputation of technical education is high and secure. Engineers, more commonly than members of other groups, fill top positions in manufacture. The managing director of a large German manufacturing concern is often a Doctor of Engineering, and sometimes a professor as well.
Our engineering education in this country is every bit as good as that in Continental countries. The firms in what we can call our first league know this. They know how to use and enthuse those who have benefited from that education, and they also know how to pay them. But generally in the second league and below in manufacturing and production engineering we have had our priorities wrong for generations. So that, as Lord Lee of Newton said in the July debate, the engineer is almost made to feel a second-class citizen; and I hope the CBI will do something about that. If we are to survive we must change this attitude and change it rapidly.
The only way to get more of the ablest into creative work quickly is to offer to pay them handsomely—and I mean handsomely. Let us mark the importance and the difficulty of the work by the rewards; I believe the noble Lord, Lord Carr of Hadley, referred to this. Salaries and status go hand in hand and status is important to all of us but the most insensitive. All other professions and wordly occupations realise this and act on it: why should the most crucial to our material survival be treated differently and its members imposed upon, as they certainly are?
My Lords, I am sorry to be so blunt and crude. My engineering colleagues will not be pleased with me for speaking in this way. In fact, probably I should not have had the courage to do so if there had been any chance of a report of the debate in The Times tomorrow! I know I shall be told that it will not be easy in these days of incomes policies and inflation, but it must be done. This is a productivity agreement of the first importance. If we do not make
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this one we need not trouble about those further down the line because there will be nothing to produce.
Lord LYELL: My Lords, before the noble Lord, Lord Baker, sits down I wonder whether he will be able to answer two questions that have arisen in my mind as a result of following his speech very closely. I was very impressed with his speech but speaking as a young Member of your Lordships' House who is an accountant I wonder whether the noble Lord, Lord Baker, would agree with me on two small points. First, I would say that at school I was considered to be too stupid to do science. Nevertheless, I gained entry to one university and I obtained an honours degree. I was told that I should go to Scotland to read accountancy. Being young I did not ask questions; I did as I was told. I am sure the House will be aware that in Scotland engineers and accountants are equally highly thought of, and I believe that my accountancy training polished my BA degree in no small measure.
Secondly, I would say that accountancy training has helped me to do the kind of work that I am able and privileged to do in your Lordships' House, even to the degree that the noble and learned Lord who normally sits upon the Woolsack takes care when I rise to my feet and say, "I am not a lawyer, but …". The noble Lord, Lord Baker, will appreciate that engineering training would also give young men such an opportunity, but will he not accept that accountancy is not just training in itself but is a very useful discipline together with engineering? I am an accountant but I would dearly love to be an engineer; although I am afraid that although it is never too late to learn, nevertheless it is a bit late.
Lord BAKER: My Lords, of course I talk a little wildly on these occasions. Accountants are extremely useful, and most certainly the best and the essential combination for many jobs in industry is engineering with sufficient knowledge of accountancy to understand accounts. Perhaps I may leave it at that.
8.14 p.m.
Lord HEWLETT: My Lords, I crave your indulgence. I came to listen to this debate with no intention whatever of

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speaking but after having heard so many good contributions to what I consider to be a most important subject I should like to add a very little in a short time. The noble Viscount, Lord Rochdale, was right: there is not just an apparent failure to attract young people to industry as a worthy and worthwhile challenge; there is an actual failure, and few can escape the blame. I have listened carefully to what the noble Lord, Lord Baker, has just said in regard to the attitude, certainly from his background, of the academic and indeed the teaching profession, but I have found in truth that on a wide front they have tended to look down on industry and commerce as being really rather unworthy activities. If I may say so, many politicians have denigrated industry and wealth-creation while happily using and consuming the earnings of industry and all too often abusing them, too.
The noble Viscount, Lord Trenchard, has stated that politicians have overloaded industry with a vast volume of legislation, some of it useful but, alas! all too much of it restrictive, terribly time-consuming, particularly for the medium and smaller sized companies, and diverting attention from the true purpose, which is the creation of wealth for the benefit not just of the enterprise and the industry but of the country at large. I do not let management escape criticism because I believe that it has done little to advocate the really worthwhile nature of our work in industry and the sense of challenge and opportunity that it affords.
The challenge of responsibility for the creation of wealth and particularly, these days, for the maintenance of good human relations in industry, does not seem to be news at all. Alas! the media must bear a fair measure of responsibility for concentrating so much attention on the really bad news. There is much success in the vast majority of the industrial enterprises in Britain but in my opinion our present national sickness is not nearly so much our industrial relations difficulties as it is our writing ourselves down, selling ourselves short and almost relishing through the media the opportunity for grumbling and groaning over our misfortunes and, worse still, broadcasting them worldwide. I listen frequently to the Overseas Service of the BBC and I am sure they are faithful in reporting what
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they believe to be the news items in the local national media of Britain in all their various forms.
So I plead for a better perspective and to the media to cease over-exaggerating the bad aspects. When there is bad news, all right, it is bad, but when there is good news, for goodness' sake let us give it equal billing and let us not write ourselves down. We are by no means down and nor are we in industry inclined to feel very favourably towards those who are constantly knocking us when in many cases their own houses are in a far worse state of disorder. Frankly, any form of over-exaggeration is distortion and it should be seen as such.
After the last War, I proceeded from the Royal Marines to Cambridge to read economics and politics and, as regards what the noble Lord, Lord Carr, said in regard to being a first intention entrant into industry, I was, like him, put into the chemical industry. While I am active now in no less than three enterprises and in one of them am both chairman and chief executive, I honestly and genuinely try to make time to bridge the gap between the worlds of industry and education. Of course these worlds are much too far apart. The noble Lord, Lord Mancroft, made particular play with this point, and quite rightly so. There should be much better exchange and interchange between the two worlds because we each have so much to benefit from if only we will co-operate more and try to understand our problems to a better degree.
Frankly, it should not be for the academic world to try to encourage people to enter industry unthinkingly. As industry, we have to convince the academic world that we mean what we say and I believe the content of this debate tonight is ample proof of the absolute sanity of our approach towards the problem. It is not just to encourage schools to try to be fair to possible entrants to industry more successfully than is the case today. We need, as Lord Mancroft suggested, a whole shift in our attitude towards positive encouragement to entry into industry and commerce at all levels.
Like the noble Lord, Lord Baker, I had a shock recently in the academic world. Last year, on being very kindly asked to

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present degrees to successful candidates in a great Lancashire town's technical college—and I shall not mention its name—I found that, of the 50 successful graduates, a mere three were coming into British industry—yes, from Lancashire, only three out of 50. All the rest were going into the money-spending, not the money-earning activities—very worthy and high-minded, I am sure, and I am the last one, to use a colloquial expression, to want to knock them. But let us face it, those pursuits are a great deal safer than industry; the challenge and the opportunity is not there in those safer pursuits, and nor are the risks either. We must understand that, when we are talking of enterprise, particularly of free enterprise, we are talking of a high element of risk, and it is therefore only right, as the noble Lord, Lord Baker, said, that there should be high rewards to compensate for high risks. Taking my figure from central Lancashire, that a mere 12 per cent. should take up the challenge of industry from our own good technical college is a failure of a very serious magnitude and we must recognise it.
I am pleased to say that my old school Clifton, well known in generations gone by for providing a great flow of entrants to the professions, the Army, the Civil Service at home and the Colonial and Indian Civil Service abroad, is turning itself much more towards industry. We pioneered scientific education in public schools, I think I can say, with the creation 50 years ago of a complete science school, and now we are pioneering a maths and technical centre, among other things to encourage and prepare far better entrants towards British industry, obviously with the intention of management responsibilities in mind.
I could not more strongly support the noble Lord, Lord Mancroft, in the three suggestions he made. I shall not take up your Lordships' time by repeating them, but I honestly think that they deserve the most careful study, and, if possible, prompt implementation. Let us try to change the atmosphere and the attitude towards industry and commerce. We can do much in our lives outside this House, in all our activities, to try to shift this emphasis. The creation of wealth is a worthy pursuit, indeed an indispensable
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one to our national success. I would say that we in management and everyone in British industry must be worthy, by our conduct of affairs, of the much stronger entry that we seek into industry.
Again, we must think of the political influence of what we do in the field of industry. I make no denigrating comments on either House, but it is significant that there are comparatively few who are actually full-time executives in British industry—alas! they cannot be with heavy political duties—who are Members of either House. I think the temptation is to look at industry in a theoretical capacity, not with a really genuine understanding, and particularly not with an up-to-date view, for, with the pressures of political life, it is all too difficult for a politician to be in better touch than some of us think the academic world itself is. We in industry must do much more to make our views known and understood, and we must be met at least half way by the political world, which it sometimes seems is endeavouring almost blindly to legislate on industry, with results that are incalculably bad, though they need not have been so had we thought out the legislation and the background to it a great deal better. So there is much to be done from both sides. I think we in Parliament, in stopping over-legislation, must give real and genuine encouragement to all in industry to succeed.
My Lords, I am more than grateful to your Lordships for allowing me these few moments to make this contribution. I feel most strongly that the contributions of all the other noble Lords who have taken part in this debate only demonstrate the great value of this Chamber in trying to help this country to a more successful position than it presently enjoys.
8.25 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Donaldson of Kingsbridge): My Lords, as the only speaker from my Party, I have had the curious experience of hearing I think eight or nine speakers say practically nothing I disagreed with. This makes my summing up more difficult, but possibly shorter. There is one thing which fills me a little with despair, and that is when people keep saying attitudes

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ought to be changed. It is what the Church has said for 2,000 years; it has been absolutely right and it is still absolutely right, but it achieves very little. But I think a debate of this kind which has had such absolute unanimity in its diagnoses—I have only Lord Mancroft to thank for three suggestions as to what we ought to do about it, which we shall certainly follow up—is in itself extremely useful.
I want to say a few things about what we are doing, but I want to make a few remarks about the debate, if I may. Everybody has congratulated Lord Rochdale, and nobody was more pleased than I was that he raised this very interesting debate and raised it in such a very lucid and non-Party way. He made one remark to which I want to draw your Lordships' attention which I think is significant to the difficulties we have today. He said that in earlier generations there was a discipline of hardship and now we have the independence of relatively affluent and better educated people; we have none of us learned how to deal with the one without the other and we have got to. The absence of hardship is good; the affluence and belter education of people is good, but we have entirely failed, I absolutely agree, to bring these things together in the correct way.
I was particularly interested in the historical side of what the noble Lord, Lord Carr, had to say. He was quite right to quote Dr. Arnold. I think Dr. Arnold has a good deal to answer for. I believe that the public school system, of which I am a notable product, has maintained snobbery, by mistake, not on purpose, and this is to some extent due to Dr. Arnold. I am quite sure that the dislike of profit is a reaction to the snobbery which three or four speakers have said was or had been at the bottom of our present trouble. I do not believe that the early Fabians disliked profit because it was evil. They disliked a society where some people were rich and others poor, which most of us do, and I am astonished but amused to find that the headmaster of my late school, which I share with the opener of the debate, should have taken this very-old-fashioned view, It is not the Labour Party's view, but there are no doubt a few people in the Labour Party who hold it. The Labour Party's view is very clearly and
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dominantly stated, that we believe that industry has got to make profits and it has got to distribute them in a proper way, among other things in wages. This is our whole philosophy. I do not think there is any difference here.
The other thing which the noble Lord said which I think was most important was his reference to the UBI, the CBIs contribution, which I was going to talk about but I will not; I think it is a very significant and important one. And the secondment of teachers and payment of them by industry is something of which we are very proud, as can the CBI be. Lord Rochester referred to the Careers Research and Advisory Centre, and I am glad to say that the Department of Industry is making some financial contribution to that. I think it was Lord Rochester who said that the only things that work are joint activities. I think that that is true. These are two instances of joint activities of the kind we want particularly to develop. I think that the result of today's debate will be that the three Departments concerned and their Secretaries of State will study what we have said. I think that they will agree with the line that we have taken and try to develop it further. Indeed, I believe that that was the noble Viscount's objective in bringing the matter forward.
I come to my noble friend, Lord Reilly. He may not sit on the right Bench but I still class him as a friend. I have known him for a very long time and admire him very much. It is a great triumph in a maiden speech to make one or two statements which are remembered. I remember a very damning statement which he made—namely, "the sure eye for the mediocre of the middle man". That is probably something from which we suffer more than anything else. He also said that we might be able to eliminate or reduce vandalism if we taught people to make things, because people who make things do not want to break them. I thought that he made an admirable speech and I congratulate him.
The noble Lord, Lord Mancroft, talked about snobbery. He made three very useful suggestions which are not entirely "undone". There is some work taking place on this already but not, I think, as regards teaching the balance sheet as a part of mathematics. I learned to read

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a balance sheet, but it has never done me much good. However, it is useful to know whether one is going up or down and I entirely agree that it should be part of mathematical training. The other matter which he mentioned which interested me particularly was that few of our top industrialists started in industry. That is perfectly true and I have no doubt whatever that it is because of the old snobbery. I was very interested that he spoke not too highly of the Careers Service which I believe will have a key role in what we are trying to do and I shall say a word about it later.
The right reverend Prelate the Bishop of Guildford said something which we have always known but personally I have never thought about. He said that the whole of the Gospel and indeed the Old Testament is associated with agriculture and not industry, which leads one to a great deal of interesting thought. I could not agree with him when he said that in his view it was wrong for people who work in industry to leave their work behind at the weekend. That is the one thing to which I look forward in my job—and I am sure noble Lords opposite do too—and I certainly propose to do it as much as I am allowed, which is not completely. He also said something which struck a chord—" no social services without wealth." Actually, he reminded me of my old and much lamented friend Tony Crosland, who became so very angry when people attacked growth. He said: "Do you think you can have social services without growth?"Of course, he was right. It was all very interesting.
The noble Lord, Lord Morris of Grasmere, was concerned that the picture was muddled and he was clearly right, He was also right in saying that there are other things that are more important than money. Young people are very aware of that, and his analogy that if we had a war there would be no difficulty in getting them to come in was perfectly clear. The problem has to do with muddled thinking but he did not tell me how to put it right, and I do not know. He asked"Can we not tell the story?"We are trying in a way to do so tonight.
The noble Viscount, Lord Trenchard, also referred to snobbery and again I thought that the snobbery came first
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and the anti-profit came afterwards. That is the syndrome with which we are confronted. I think that it is beginning to change, but it is extremely serious and awkward. His criticism of negative management was very interesting as well as his reasons for it. The new pressures and difficult tasks are something about which I should like to hear him say more. I am not sure what they are and we cannot go into the matter now.
The noble Lord, Lord Baker, said something with which I was going to begin my remarks—namely, that he has no faith in exhortation: nor have I. It seems to me counter-productive and we must be careful not to tell young people what to do because they certainly will not do it. My children and my grand-children are not interested in what I think they ought to do and they are absolutely right.
The noble Lord, Lord Hewlett, said something with which I must agree—he said that this is not apparent failure; it is actual failure. However, what I shall say very quickly to your Lordships—and it must be quick—is that there is rather more going on and rather more change taking place than the Hansard of this debate will show.
Clearly the lack of skilled manpower in a time of high unemployment is an intolerable anomaly and one which cries out for solution. However, we have discussed its origin. When I was a young man it was part of our Labour Party complaints that school teachers used to steer boys to white collar jobs instead of to blue collar jobs. Equally, I must remind the noble Viscount, Lord Rochdale, that Waterloo was won on the playing fields of Eton—in other words, they all went into the Army. In fact, they pretty well did unless they were clever enough to do something else. When I was at Eton all the ablest of my colleagues went into the Stock Exchange or banking. That may be all right, but I am sorry that the noble Viscount, Lord Rochdale, widened the matter; I want to keep to industry. I do not think that banking, the Stock Exchange or merchant banking have any difficulty in attracting people. The difficulty for some reason is in industry and I want to stick to that.
The demand for unskilled labour is getting smaller, but the demand for high

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ability is insatiable. New products and processes have to be developed and that takes brains and initiative. But it also takes training and that, I think, is something for which the Department of Education and Science, of which I am a humble member, must take some responsibility. Therefore, let us look first at schools. They clearly play a crucial role both in the formation of young people's attitudes to industry and in providing them with the appropriate technical educational base. We have made major efforts in this Government over the past few years, particularly since the Prime Minister's speech at Ruskin College in 1976 which all of your Lordships will remember. There was then the "great debate" which was started by my Secretary of State and as regards which people from all sides of industry came and spoke. Then there was the resultant Green Paper which suggested measures which could be taken to make the school curriculum more relevant to the needs of working life.
The Secretaries of State followed that up with a circular asking local education authorities to report, among other things, on their arrangements for encouraging and facilitating links between schools and industry. Then my Department sent a letter to chief education officers in July 1978, inviting authorities to review their arrangements for promoting and maintaining links with industry and commerce. The letter drew attention to a number of the initiatives which we have been discussing and I shall not go through them all—such things as "Opening Windows on Engineering"; the Industrial Society's conferences; PETT: "Project Engineers and Technologists for Tomorrow"; "Young Enterprise"; the UBI of the CBI, and so on. Most of them I think we have mentioned, but we circularised these to all chief education officers with the idea that they should get in touch with them and have liaison. I think that this has been happening.
Further education has always had a closer approach to industry and a closer responsiveness, and I think that most people would agree with that. Further education provides a major proportion of craft and apprentice training in direct response to the requirements of the various sectors. Industry is strongly represented on the Technician Education Council.
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My Secretary of State and her colleagues have been exploring every possible way of enhancing the status of engineering studies in polytechnics and universities. A scheme of enriched engineering courses has been launched at seven universities, and another university and two polytechnics will probably join in next year. Side by side with that, we have introduced a national engineering scholarships scheme carrying an award of £500 per annum, on top of the mandatory grant, to selected young people undertaking engineering studies with a view to a career in industry. This is not quite what the noble Lord, Lord Baker, meant, but it is a bribe—and a perfectly deliberate one—to try to persuade people to go in. Actually, we had made arrangements for 100 but we only found suitable people for 62. However, that was the first time and I think it will improve.
There was a sticky time in the 1970s, as we all know. But there is every sign that we have turned the corner on the question of engineering and technology students. In 1975 there were 10,800 admissions to university engineering courses; in 1976 there were 11,500 and in 1977, 12,300. That is quite a decent increase year by year. The figures for applications in 1978 are equally encouraging: they are 6·7 per cent. up on last year as compared with an increase of 2 per cent. for all subjects.
On the question of management, about which the noble Viscount, Lord Rochdale, spoke particularly, we shall only get our management of engineer training people from those who are going to university for engineering courses. Therefore, to some extent, this is an answer of a genuine improvement in what the noble Viscount was, quite rightly, worrying about. At the moment we are experiencing a major and worldwide change in industrial technology which will fundamentally affect the products and processes and organisation of industry in ways which, for better or for worse, will affect the quality of life of all of us.
Noble Lords will not be surprised to hear that I speak of microelectronics. This is a challenge for society in general and industry in particular. But it is an exciting one which should capture the imagination of young people entering the world of employment. To some extent I

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believe it is an answer to those worries and frustrations of which a number of noble Lords have spoken. I think that it is sufficiently risk}' and exciting to counteract the natural worries which young people have about the security of their jobs in industry. Therefore, we should ensure that it works; we must be sure that the workforce of the future is properly equipped at all levels of employment to understand and to adapt to the rapid and profound technological changes in prospect throughout their working life.
As noble Lords will have seen, on 6th December the Prime Minister announced a full programme of action to take advantage of this new technology. I shall not go through it because it has all been in the papers, but it is a very thorough programme. We are totally dedicated to the belief that the kind of change we are talking about today and are hoping to achieve can come very largely through our catching up on microelectronics. We are studying the longer-term needs for specialists of all kinds—engineers, designers, technicians, computer analysts—versed in the applications of the new technology, and the implications for the education and training system. But, of course, it does not stop at the provision of specialists. There will be an added premium on versatility and adaptability, and we must improve the essential educational groundwork to equip the young for the microelectronic era.
This will call for a faster pace, rather than a change of direction, in promoting these measures. Action is being taken to increase the supply of teachers in the necessary basic subjects and to improve their professional equipment. The skilled technician of the future will have to be prepared to move and to retrain, otherwise the sheer pace of technological progress will leave him behind. This fact enhances the need for something which is a fashionable topic today; namely, continued education.
I must say a few words about the authorities' Careers Service. It is based in the education system and its officers do a great deal of their work in schools. It is strategically placed to act as a bridge between the world of education, on the one hand, and the world of work, on the other. Able pupils must be given a feel
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for the sort of work done by people in jobs they will aspire to after they have qualified. It is no good showing a potential graduate design engineer or production manager the sort of jobs open to 16-year-old leavers. They need to see the interest and challenge in the higher level jobs and be motivated to take suitable subjects at school and relevant courses.
However, I believe that the Service's major contribution to the problem of industrial recruitment lies in its work of promoting liaison between schools and industry, and not in its work with individual children or youngsters. Careers officers co-operate with teachers inplanning the careers education syllabus in schools. This function of advising industrialists—which they do as well—how best to find and interest the recruits that they want is of prime importance. Not all industrialists who are concerned about recruitment difficulties and about the general image of industry, realise that their local principal careers officer may be their best starting point. I am glad to remind them of this and to recognise the efforts of careers officers in this field over many years.
Then we have the Industrial Training Boards, which I shall not describe in any detail but which are extremely important and, on the whole, are doing a very good job. I think that many noble Lords present will know and recognise that. The Department of Industry has done one or two specialist things. It issued a paper called Industry, Education and Management (to which a noble Lord referred) for which there has been a demand for over 11,000 copies, which in industry is quite a lot. The Department has also formed the new Industry/ Education Unit which has two objectives: first, to improve attitudes towards manufacturing industry among all young people, irrespective of their choice of career, which is what our whole debate has been about. Its second objective is to encourage more of the country's young people, including the more able, to develop an interest in manufacturing careers and in the subject at school and courses in further and higher education which can lead to them.
That cannot be done centrally. It can only be done in this sort of way. However, unlike many Departments, the

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Department of Industry is prepared to consider applications for financial support to help to get relevant action started more quickly. It is also putting aside £100,000 over three years through the Standing Conference on Schools Science and Technology to help develop existing and potential Science and Technology Regional organisations. The Department has organised for the second year the Young Engineer for Britain competition. It is a very good thing. The only difficulty is that this year's winner has put in again for next year, and he may win it again.
I have tried to indicate the sort of effort which the three Departments—Education, Employment and Industry—are making to put right a situation which is clearly wrong, where we have a shortage of skilled labour at a time of high unemployment. I think that I have shown in a rather rushed way that a good deal is, in fact, being done and that, in relation at any rate to the key role of engineering, there is real improvement. The Industry Society is holding its diamond jubilee celebrations. Prince Charles spoke at it today and one of my colleague's advisers was present. He said that there were the most excellent speeches and approaches from sixth formers who were speaking in the right sort of way about industry, and from a senior trade unionist and others. He came away feeling that there was a real change here.
On the education, the employment and the industry side, my advisers are out dealing with the people concerned. They think that things are changing, and changing well. We have to push it further. We are certainly not satisfied. The problem has not disappeared. However, if we, in this debate, can have made some practical and useful suggestions for further effective action, no one will be more pleased than my colleagues, the three Secretaries of State principally concerned.
8.50 p.m.
Viscount ROCHDALE: My Lords, fortunately in debates like this it is the custom in your Lordships' House for the mover, when he closes the debate, to be extremely brief. I propose to follow that custom. In fact, it would be quite impossible with a debate of this nature, with the immense amount of experience and thought that has been put into the
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many contributions that have been made, to do justice if one did anything more and tried to pick up details.
I must refer to Lord Reilly's maiden speech. I was delighted when I heard the other day that he was doing me the honour of putting his name down to make his maiden speech on the Motion moved by me. Listening to what he said I felt privileged at his participation. I was extremely interested when he referred to the "battle of design". I felt that summed up, on that particular aspect of our problem, what the Motion was about, because we have to win all these battles of design, and every other battle, and get the right people in to do the right designs.
I referred at the beginning of my remarks to the many debates that have taken place here, and I made the point that it was not fortuitous that those debates had taken place here earlier, but had been here because we were coming to appreciate how we really stood and what the problems were. As I listened to the noble Lord, I thought the fact that he has come to be a Member of our House, and has brought the importance of design to our deliberations, had much the same significance. I am most grateful to him, and would like to add my congratulations to him.
May I thank all noble Lords who have taken part in this debate for what they have said, and the deep thought that they have put into it. It would be invidious to pick out any particular noble Lord except that I must of course refer to my noble friend Lord Carr speaking from the Opposition Front Bench, and to the noble Lord, Lord Donaldson, for all the trouble he has taken speaking for the Government. As he rightly said, over half a century ago we used to meet in other contexts. At those times we were not classified by political considerations and we could call each other friends, and I hope outside this Chamber we may still continue to do so.
What have emerged from this debate are an enormous variety of interests, important points of view, and so on, but despite all this variety there has emerged a tremendous degree of unanimity on the basic problem and what is to be done. I am grateful to everyone for bringing it to that conclusion. I finish feeling greatly

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encouraged at what is being done. I agree that we cannot stand on our laurels; we must go on and press forward more and more. The consultative document to which the noble Lord referred, and to which I referred earlier, went into 11,000 copies. I can hardly hope that your, Lordships' Hansard will go into that number, but I hope a great number of people will read the debate, and not least the university industrial societies and polytechnics. With those few remarks, and again thanking everyone who has taken part, and also those who have listened and other noble Lords who wrote to me saying how sorry they were that they could not come to the debate, I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

TAMAR BRIDGE BILL
Reported with Amendments.
BRITISH RAILWAYS BILL
Returned from the Commons with the Amendments agreed to.