Lords Sitting of 15 May 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 Peterborough.

BINGHAM INQUIRY REPORT
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when the investigation of the Bingham Inquiry into allegations that Shell and British Petroleum have evaded oil sanctions against Rhodesia is likely to be completed, and whether their report will be published.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, Mr. Bingham's Inquiry has entered its concluding stages, but we cannot yet predict when he will be ready to submit his report. So far as publication is concerned, the Southern Rhodesia (United Nations Sanctions) (No. 2) Order 1968,
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under which the Inquiry was established, places certain restrictions on the disclosure of material produced for the purpose of the Inquiry. My right honourable friend the Foreign and Commonwealth Secretary will not be able to reach a decision on this until he has received and studied the report.
Lord BROCKWAY: My Lords, I should like to ask the Minister whether, in view of the urgency of the present situation in Zimbabwe, it is not desirable that the report should be published as soon as possible? Secondly, regarding publicity, is it not desirable that the public should be aware of the influence of corporations in applying sanctions which have been enacted by Legislatures?
Lord GORONWY-ROBERTS: My Lords, my reply to the second point is, Yes, certainly. With regard to the first point—publication—I can only repeat that the order itself contains provision for care to be taken with regard to the disclosure of material produced for the purpose of an Inquiry such as this. I repeat that my right honourable friend will very carefully consider the report from the point of view of how much should be published, and what form publication should take.
Lord BROCKWAY: My Lords, is the Minister able to say whether the terms of reference of the Inquiry cover what has

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happened since the Inquiry was established? Has he seen the charges by the Haslemere Group—responsible researchers—that sanctions are still being broken privately by subsidiaries of these companies?
Lord GORONWY-ROBERTS: My Lords, I am sure that the terms of reference are wide enough to embrace the sources and the considerations which my noble friend has mentioned.

MR. ZULFIKAR ALI BHUTTO
2.39p.m.
Barones EMMET of AMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have made any representations to the Government of Pakistan over the future of Mr. Zulfikar Ali Bhutto.
Lord GORONWY-ROBERTS: My Lords, as was stated by my honourable friend the joint Minister of State for Foreign and Commonwealth Affairs in another place on 22nd March, my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs discussed the matter with the Pakistan Foreign Affairs adviser in London on 20th March.
Baroness EMMET of AMBERLEY: My Lords, I thank the Minister for that reply. In view of the fact that two American Presidents have been assassinated, as well as the President of Afghanistan and the late Prime Minister of Italy, Aldo Moro, would it not now be conducive to a good opinion being held of Pakistan if it was to show clemency in this particular case? Although I understand that Mr. Bhutto has stood trial and been convicted, I think it would be useful if we could support the pressure of public opinion.
Lord GORONWY-ROBERTS: My Lords, I am sure that everybody will share the noble Baroness's profound concern about recent, and not so recent,
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acts of public assassination. When my right honourable friend discussed with the Pakistan adviser on foreign affairs the death sentence imposed on Mr. Bhutto, he pointed out that while trial and sentence was a matter which fell within Pakistan's own jurisdiction, there would, however, be many people in Britain whose concern could affect our relations with Pakistan. Beyond that, my right honourable friend of course could not go without running the risk of interfering in the internal affairs of a sovereign State. The noble Baroness can be assured that our proper concern has been conveyed in appropriate terms to the Pakistan Government.

HOLLOWAY PRISON: REBUILDING
2.41 p.m.
Baroness VICKERS: 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 is the total cost of rebuilding HM Prison, Holloway, and when the building will be completed.
Lord WELLS-PESTELL: My Lords, the latest estimate of total cost, including £1·8 million for staff housing, is £11·3 million. The remaining buildings should be completed by 1983, and the transfer of certain facilities from their interim location will then follow.
Baroness VICKERS: My Lords, in thanking the noble Lord for that reply, I should like to ask whether he would agree with me that at present this prison is overcrowded and this forces many women who should be in it to be sent North? Will he look into the question of the many unstable women who, I think he would agree with me, should not be in this prison at all, to see whether other accommodation can be found for them?
Lord WELLS-PESTELL: My Lords, with respect to the noble Baroness, I cannot enter into a discussion on whether or not these women ought to be in this prison. I should point out to your Lordships that there are very real difficulties with regard to this prison. This

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is a case in which it is necessary almost to create a new prison around an existing prison, which is never an easy thing to do. This has meant that there has been—and still is—a certain amount of overcrowding because some of the inmate accommodation has had to be used for administrative purposes. But this situation is known, and early steps are being taken to remedy it.

THEATRES AND INNER CITY REVIVAL
2.43 p.m.
Lord HARMAR-NICHOLLS: 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 an instruction could be given to local authorities that an agreed proportion of any Exchequer grant designed to facilitate the revival of inner cities be used to preserve or improve existing live theatres, whether civic or privately owned.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, under the urban programme the Government and local authorities judge applications on the basis of local need and merit. Therefore, theatre projects could certainly be supported, but we would not set aside a fixed proportion for theatres or, indeed, any particular purpose.
Lord HARMAR-NICHOLLS: My Lords, is the noble Baroness aware that, while her Answer gives some hope, it would be helpful to the rebuilding of inner cities in its fullest sense if something a little more specific could be envisaged by the Government? The shops, houses and offices need something such as the culture which the live theatre presents, and yet in places such as Bristol and Manchester, and in many other cities, we see the risk of it falling out. Is there any possibility of further consideration being given so as to ensure that when grants are made for reviving the inner cities this important part of our nation's culture is taken into account?
Baroness BIRK: My Lords, as the noble Lord is probably aware, he has my very strong sympathy on the whole question of theatres, but so far as urban programme projects are concerned we are looking primarily for projects which will be of most direct benefit to those living in the deprived inner areas. Therefore, typical examples are industrial estates, environmental improvements, recreational projects and social service schemes, and these include also voluntary body projects. Officials in my Department discussed the urban programme with a representative of the Theatres Trust last year, and at that time the Trust undertook to provide information about the employment advantages of theatres to the inner areas, but nothing has yet been received. We are still awaiting that information.

ORKNEY ISLANDS COUNCIL ORDER CONFIRMATION BILL
Brought from the Commons on Thursday last; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
CO-OPERATIVE DEVELOPMENT AGENCY BILL
Brought from the Commons on Friday last and printed pursuant to Standing Order No. 47; read 1a.

PRACTICE AND PROCEDURE COMMITTEE REPORT: TACKING
2.45 p.m.
Lord HARMAR-NICHOLLS Lord HARMAR-NICHOLLS rose to call attention to the Second Report from the Select Committee on Practice and Procedure of last Session (HL 256) with special reference to tacking; and to move for Papers. The noble Lord said: My Lords, my Motion is:
"To call attention to the Second Report from the Select Committee on Practice and Procedure…".
Stated baldly like that, this may have the appearance of being a formal, dry-as-dust examination of the detailed operation of the machinery of Parliament, and this may

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put a lot of people off. But on this occasion, despite the title, nothing could be further from the truth as regards it being as dry as dust.
The matter involved here is a matter of high principle, and I believe that it truly affects the status of the House of Lords in the formulation of general legislation affecting the whole of the country. Moreover, as will be seen, I think, at the end of this debate, I believe it can have the effect of interfering with the freedom of the individual in our society and can interfere with the law on trespass; and I believe that, if this can be established, then this is a matter of full Parliamentary concern. What I mean by "full Parliamentary concern" is that they are matters which ought to be debated in detail through their Second Reading, Committee stage and Third Reading by both Houses of Parliament, so that everything may be taken into account on this matter of individual freedom and the law of trespass.
The wording of my Motion is,
"To call attention to the Second Report from the Select Committee on Practice and Procedure of last Session … with special reference to tacking; …"
The key to the argument that I wish to present, the significance of it, is in those words at the end of the Motion,
"with special reference to tacking".
"Tacking", in its Parliamentary sense, means an attempt by the Government of the day to tack on to a tax Bill or a Money Bill proposed legislation which is not strictly a tax-levying matter. That is what tacking is, and it is with that meaning in mind that I wish to pursue the matter.
For tacking to be done—and I believe it has been done on two occasions within the last five years: not deliberately, not with any ulterior motive; I think it has been done perhaps inadvertently, and through a certain amount of carelessness—is contrary to Standing Order 49, under which we work. Standing Order 49 spells out very clearly:
"The annexing of any clause or clauses to a Bill of Aid or Supply, the matter of which is foreign to and different from the matter of the said Bill of Aid or Supply, is unparliamentary and tends to the destruction of constitutional Government".
One could not have stronger words: that that which is outlawed may possibly
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bring about the destruction of constitutional Government.
Since 1671, any legislation to do with the levying of taxes has been the sole prerogative of the House of Commons— and that is right. They are the elected Chamber; they are the ones who have to answer to the citizens for any taxes they levy upon them; and they possess the prerogative in terms of bringing forward anything which involves the taxation of our people. The House of Lords has no power at all to amend any such tax legislation. That is the situation which is accepted and which, as a basis, is perfectly correct. We can refuse in this House to pass a Finance Bill, refuse to pass it as a whole; but we cannot amend part of it. The House of Commons can. Indeed, over the last week we have seen where the House of Commons has amended three times the Finance Bill which is at present in front of them. So, we cannot amend and they can amend.
If we cannot do that, then whatever powers have been given to us ought to be looked at very jealously and very carefully. We can refuse the whole Finance Bill; but to do that would bring a great deal of disruption to the running of the country. It would mean that eventually the tortuous Parliament Act procedure would have to be used to get the Bill through as a whole. That is why, quite properly, your Lordships and your Lordships' forebears in this House have been very reluctant—indeed, it has been very rarely contemplated—to refuse a Finance Bill as a whole. It is because the Parliament Act procedure is so tortuous and because our passing of the Bill has become a mere formality—and it has—that one approaches the Finance Bill on its entry into this House on the basis of, "We have no powers on this; we must go through it in order that the procedure should be correct to the letter" Because of this, it has been treated as a formality over many years.
My Lords, there has been (and is) a risk that, taking it as a mere formality, and for pragmatic reasons, the House of Lords either did not notice or was prepared to turn a blind eye to the fact that we have had a Finance Bill passed which, while it was mainly a tax-levying instrument, has had tacked on to it a matter of principle which affects the citizen, his freedom and

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his general way of life. If there is such an element tacked on to a tax Bill, I believe we should not be doing our duty if we did not tighten up the procedures which make it more difficult, or impossible, for this to happen; because such a Statute—one that affects freedom and trespass—should not be passed without going through the sieve and examination of both Houses of Parliament.
It is because this can happen and, in my submission, most likely has happened in 1974 and 1976, on the significant matters of freedom and trespass, that I balloted for this debate, and I use it now as an opportunity to ask the noble Lord the Leader of the House, in his capacity as impartial, non-partisan Leader of the House, to take steps to see that the protection afforded to the status and standing of this House by Standing Order No. 49 is complied with both in the spirit and in the letter. That is the purpose of pursuing it (as I have) through a Select Committee, through Questions in this House and through this special debate today—and I am delighted that the noble Lord, Lord Peart, among his many other duties, has felt it important enough to come here in person to listen to the arguments and, I hope, as a consequence, possibly to do something about it.
Your Lordships may remember, as is reported in col. 1225 of the Official Report of 7th July, 1976, that I objected to the 1976 Finance Bill because, in addition to its tax proposals, it gave, in Schedule 6 to that Bill, power to revenue officials to break into private premises, into private desks, to open private safes and cupboards and take away papers and possessions in order to arrive at an individual's or company's tax assessment. That is what was tacked on, in my submission, to what was otherwise a clean Finance Bill.
My Lords, these are powers which are not even possessed by the police in their role of crime detectors; and any powers that the police have have had to go through very rigid examination by both Houses, where all of their aspects and those of the consequences that might flow from them have been taken fully into account. So that when this was brought in as part of the Finance Bill, I argued in this House that it was tacking; and that such powers should be given only if they had been
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approved and passed by both Houses. I am not arguing on this occasion whether such powers ought to have been given at all. There are many arguments for and against that; and I would tend to think that there are more against it than there are for it. But that is not the purpose of my argument today. I am merely saying that, even if it is considered and accepted that such powers are desirable, they should not be tacked on to a Finance Bill which cannot be discussed or amended by your Lordships' House; but that they should be brought forward in a separate Bill which can have that proper watch-dog attention given to it that only both Houses can give.
It may be interesting to remind your Lordships that originally a Finance Bill was not a consolidated Bill such as it is today. Originally, a Finance Bill had a separate Bill for all of the parts of it which brought about any alteration in our laws and legislation; and it meant that when they came as separate Bills, your Lordships could discard one without intefering with the other. But under usage and generally accepted procedure today, it is all brought together in a Finance Bill so that we are in a position that we cannot deal with one section of it without having to turn out the whole of' it—which could cause the disruption that none of us would want or would contemplate.
I argue—and I believe I would have your Lordships' support on this—without in any way being critical of the other place, that when freedom within the law and trespass are involved (as I claim they have been on these two occasions) and when questions of that sort are involved, then detailed examination in this House in many ways is more authoritative than in the House of Commons. I say that because in this House we possess the learned Law Lords, we possess experienced administrators from a wide range of Government Departments, with years of experience behind them in a way that the other place has not got nor could it have. On matters of this sort, therefore, it is not only a matter of preserving the rights, the status and the standing of this House; it does so happen that, so long as we exist, the formation of this House is such that we are in a position to give more authoritative examination of these things than perhaps the other place can give.
My Lords, at that time, in 1976, I suggested that this infringement of Standing Order No. 49 might justify refusing the Finance Bill altogether, reluctant though one is to do so. But because of the possible disruption to vital tax collection needs, I was prevailed upon to accept the promise of the noble Lord, Lord Shepherd, then-Leader of the House, that he would have the whole matter looked into, and that he would have Standing Order No. 49 and its relationship to this particular problem examined by the Select Committee on Practice and Procedure. True to his word, this was done on 12th July 1977; and in the report of that Committee, dated 26th July 1977, on page 21, there is set out in detail my evidence to them upon which my case today is based. I do not want to repeat that. The generality of it I have given in paraphrase; but if the noble Lord, Lord Peart, wants any extra support for the plea that I am making to him to try to carry the protection of this House and its rights a bit further, then the reading of the Select Committee's Minutes of Evidence and report may be worth while.
I have to say here, as is quite clear, that there is no element of Party bias in this. I think that it is confirmed by the fact that in addition to my objection to what I would call one-Chamber legislation by the present Government relating to the 1976 Finance Act, I am equally suspicious that the Standing Order 49 protection was also brushed over by the previous Government in 1974, when they gave similar powers to those to which I am objecting now, regarding the collection of value added tax.
I was not a Member of your Lordships' House at that time, but I must say that I believe it was a pity that, in what then took place, someone did not object to the possibility of the infringement by tacking in 1974. If it had then been done, such an alert may have prevented a repeat of what I think is the dangerous monstrosity that is now being unfolded flowing from the 1976 Finance Bill. If we had looked at it in 1974, we may have avoided the current apprehensions regarding the unfair pre-publicity which may well undermine justice in the William Press and Company case which is now under investigation, and an injustice,
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which was well underlined by the debate initiated by the noble Lord, Lord Houghton of Sowerby, the report of which begins at column 2019 of Hansard for the 27th April. Perhaps it would help if I read a note which I received from the noble Lord, Lord Houghton. It is dated 11th May and he says:
"I have to be in America and Canada for three weeks so I will not be able to give you support in the short debate on tacking. Had I been there, I would certainly have joined in, and I hope you make progress".
The feelings in 1974, plus Lord Houghton's debate and the letter which I have quoted, clears away any suggestion that there is any partisan approach to this. It is strictly and properly a matter of whether or not your Lordships are preserving—as it is our duty to preserve—the rights and powers of this House in watching over the correctness of the legislation which is forced upon the people of our country.
However, on 12th July, in giving my evidence to the Select Committee, I asked them to support three suggestions as to the way of dealing with it because there is not much point in complaining about anything unless one has constructive ideas as to how such complaints can be dealt with, or, at any rate, the results flowing from it can be minimised. I suggested to the Select Committee that every Finance Bill must have the Certificate of Mr. Speaker to designate it as a Money Bill, to make certain it was a correctly worded tax Bill. If this were mandatory, if Mr. Speaker had to give a Certificate to every Finance Bill, it would at least ensure that it had been impartially looked at by Mr. Speaker.
I have to tell your Lordships that, rather surprisingly, since 1911 fewer than half of the Finance Bills have carried the Speaker's Certificate. Fewer than half of the Finance Bills have shown that at any rate they have had this impartial view of them by Mr. Speaker, who we know would be objective in his general outlook. So I ask first that we should find some way—and I am afraid that this is a task for the Leader of the House—of prevailing upon another place to insist that, in taking away from us the right to examine these matters in detail, they see that Mr. Speaker looks at every Finance Bill before it comes to us. Secondly, Mr. Speaker should have the assistance of two officials, similar to the

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Examiners which decide whether or not a Bill is hybrid, in order to make certain that if there has been tacking, and it has been done in an intricate and difficult way, there are expert minds on these matters to help him come to a decision. At present, Mr. Speaker may call in two assistants, who are Members of his Chairman's Panel, but they are just laymen in the sense that they are ordinary Members of Parliament. They are very able, I have no doubt, and are desirous of being objective and impartial; but without the expertise that the Examiners would have. We experienced recently the problem of a Bill which came to this House which was eventually judged hybrid because the Examiners' panel was strengthened in order for experts to look at the Bill.
Thirdly, I asked the Select Committee that an attempt be made to negotiate the right for a Member of your Lordship's House, who suspects tacking on a Finance Bill, to have access to Mr. Speaker to put forward his point of view. This is not to interfere with the Speaker's ultimate decision and not to have any power other than to be able to ensure that a point of view has been submitted to Mr. Speaker for him to decide what weight to attach to it once he has heard about it.
Your Lordships may remember that I tried to do this in 1976. I was considered perhaps a bit of a nuisance in hanging on to this when the Finance Bill was before this House. It was sent back again to Mr. Speaker. Up to that point he had not given his Certificate. I went along to try to argue a point which I think was justified and which would not be easily taken into account by cursorily looking at the Bill. That is in the Select Committee's Report which can be examined if your Lordships find it a point of interest. I was not allowed to see Mr. Speaker, very properly, because the general procedure was that Mr. Speaker could not be approached. I did not object to that. I am merely saying that in instances of this kind it could well be that it would be in the interests of good government and sound interpretation of our Rules if one had access. Following Lord Shepherd's promise—I am afraid too late to do anything about the 1976 Finance Act—the Select Committee met, I submitted evidence and made the request that I have just outlined to your Lordships.
Sadly, at that time—and I like to feel perhaps it would not be so today, and we may learn something—the Select Committee did not agree to support the three suggestions that I made. They contented themselves with complimenting me on my assiduity. I remember a similar incident when I was a local councillor. I tried to do something similar, and the chap with whom I was dealing on that occasion silenced me at once. He said: "You have given me a basin of broth and hit me on the head with a spoon".
I did not feel that the Select Committee had hit me on the head with a spoon, but I hope that my children's children will feel that the compliment was worth something. I should much rather have had the Select Committee's support on that occasion. That may be there now. Since then, three events have happened which I think justify this new request to the Leader of the House to take up my first three suggestions plus others which arise from my new understanding of the position—an understanding not known to me when I gave evidence to the Select Committee.
The new points that I should now like to underline to the noble Lord, Lord Peart, in addition to the ones about which I have already informed him and which were in front of the Select Committee, are as follows. The first, as I have said, is the danger to justice shown by the unsavoury pre-publicity of the William Press and Company Limited case. We cannot disregard that. Before coming into your Lordships' Chamber, I was reminded that a Member of this House has had a similar experience which may well interfere with his being able to present his case to the Inland Revenue when the matter has to be examined.
The second point is the strength of feeling from all sides of the House, as recorded in the debate initiated by the noble Lord, Lord Houghton, on 27th April. That showed it could well be that the House as a whole would not come to the same conclusion as the Select Committee did, that the three suggestions I made were not worthy of being pursued in some way. The third matter—which I think is perhaps the most important and which represents knowledge that I had not got at the time—is that I now discover that Mr. Speaker's Certificate, designating the

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Finance Bill as a Money Bill or a tax Bill, does not necessarily, if at all—I do not know which is right: it may be that he cannot—take into account whether tacking has taken place or not.
I thought, when I submitted my evidence to the Committee, that when the Certificate of the Speaker was attached that denoted (a) that a Bill was a tax Bill and (b) there was no tacking. But now I discover in fact that the investigation by Mr. Speaker in giving that Certificate does not necessarily—and in fact I do not think it does —take into account whether or not tacking has taken place. I discovered that the only custodians of the Lords protection in regard to tacking in Clause 49 are the officials of the Public Bill Office. They are expected to scrutinise Bills for the purpose of seeing that they are "clean" as regards tacking.
I do not think, in the light of recent happenings, that this is a good enough protection. I am not being critical of the Public Bill Office; I am merely saying that with the cursory way in which it is now done, because of this general acceptance of our having no powers and of our being almost prepared to accept that, this protection of the Public Bill Office is not strong enough. I believe we have to strengthen it in some way so that we are not in a position of having to lock the door after the horse has bolted, as happened in 1974 and 1976.
Therefore—if I may have the noble Lord's attention, because I think this is perhaps the most significant suggestion I want to make—I suggest that, as in the case of the Examiners and the recent hybrid Aircraft and Shipbuilding Industries Bill, the Clerk of the Parliaments or some similar official in the House of Lords should have access to the Public Bill Office, with the express responsibility of giving advice in order to avoid tacking. I believe that, in the light of what has happened, and in the light of the special powers that Governments now seem to have to take over people's rights and freedoms, we cannot go too far in seeing that at any rate the rules which are laid down to prevent excesses are adhered to.
I know that I am pushing at an open door when I put these points to the noble Lord, Lord Peart. I know that, as Leader of the House, he is as jealous as any of us
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of the rights and privileges of this House. I can think of no more doughty champion to deal with the matter, if he feels that in some way there is something amiss, than the noble Lord. It is in his impartial role as Leader of the House as a whole that I ask him to try to find some way of providing safeguards now clearly seen to be necessary, and to do so in the knowledge not only that it is a matter of preserving the privileges of this House—though that is important enough—but that in doing so we are looking after the freedom of ordinary citizens and preventing unnecessary pain and harassment.
Finally, having argued against tacking, may I tack on to my plea a point of view which I know the noble Lord, Lord Molson, would have made had he been present. Indeed, I promised that I would say a few words on the submission that he made to the Select Committee. The suggestion that I think he would approve is that the noble Lord the Leader of the House should take early steps to implement the Select Committee's suggestion regarding Lord Molson's submission on 28th January 1977; namely, to put his point of view to a Joint Committee of both Houses for it to be dealt with. Indeed, I am eager to tack on something which I know the noble Lord, Lord Molson, will find helpful, for this reason. It could well be that in submitting his point to a Joint Committee of both Houses, the points that I have put to your Lordships could also be submitted. That would mean that the matter could be looked at with the minimum of administrative preparation, because the two things could be taken together.
The words on the Order Paper sound technical, but I believe that my Motion is much deeper and much wider than merely protecting a narrow rule. In this fast-moving day and age, where interference with the way of life of ordinary people (with very good intentions behind such interference), in the shape of new legislation, is growing every day, I believe we have a greater responsibility than ever to see that the fullest possible examination is made, as laid down in the Rules of your Lordships' House and in another place. I have confidence that your Lordships will be able to indicate in some way to the Leader of the House that they think there is some merit in this argument, and that such an indication will result in his being

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able to give the protection which I think, in the interests of good government, is really vital. I beg to move for Papers.
3.16 p.m.
Lord O'HAGAN: My Lords, we have two short debates today which look quite different but which are in fact linked. They are about the liberty of the subject and they both underline the need for updating our Parliamentary procedure and making sure that it is still flexible enough to cope with the complexity of modern life. I would submit that the case put forward by my noble friend Lord Harmar-Nicholls underlined once again that, if we wish to secure the fundamental freedoms that we need to make sure that our democratic system survives, then the best guardian of those freedoms is an active and vigilant Parliament, with procedures that can cope with all the increasing complexities (and sometimes absurdities) that legislation seems to bring upon us.
I should like to thank my noble friend Lord Harmar-Nicholls for bringing the attention of your Lordships to the Second Report of the Practice and Procedure Committee. I should like to thank him for what he said and for the way he said it, because I think he was looking at this subject from a broad non-partisan point of view, attempting (and succeeding in the task) to stress some of the longer-term goals that we must keep in our minds when looking at the way this House works. I cannot thank the Committee whose report we are now debating because I was a member of it, although I must confess that I was not as active in my attendance during the part of its proceedings which dealt with the matters we are discussing today as I was in the earlier part of the Committee's activities. But perhaps I may say that I am very glad that the chairman, the noble Lord, Lord Shepherd, with his own experience as a Leader of this House in recent times, is joining in today's debate.
I say that because it is essential that, when we are examining this matter of tacking, we should not be content to assume that because matters appear to have gone reasonably well in the past they will always continue to do so in the future. We must look at the Rules and at Standing Order No. 49; we must look at the protections that have been evolved
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over the years. I often find it intriguing to see the different dates in the Companion to Standing Orders, showing how some of them have been there for four hundred or five hundred years, whereas others are of recent origin. We must continue that process of looking at the way we govern ourselves in this House, if we are to make sure that there is a proper balance in the Parliamentary duties that are discharged by our two Houses. We must keep our eyes on new things as they emerge, when these developments call for a development in our own procedure in response.
This Second Report of the Select Committee on Practice and Procedure is not only about tacking, as my noble friend said, and I should like to leave my remarks about tacking to the end of what little I have to say. That is because there are two other matters on which your Lordships may wish to know the feelings of the Government as to how they should develop, if at all. This is something on which I shall certainly welcome the views of the noble Lord, Lord Peart.
My noble friend Lord Harmar-Nicholls has mentioned the submissions of my noble friend Lord Molson. These are extremely intricate subjects. They are a kind of potpourri of Private Bill procedure, planning committees, planning inquiries and a whole range of matters which, it might be thought, deserve a complete debate in your Lordships' House. But what I shall restrict myself to doing is this. As I understand it, what my noble friend Lord Molson is concerned about is the occasions on which local public inquiries and administrative decisions, particularly those relating to planning applications, give rise to problems and concerns of more than regional or local interest.
There are occasions when a local matter suddenly assumes national, regional or even international importance and interest, and my noble friend has campaigned for years, particularly when we have been discussing in this House the provision of new reservoirs and other extensions of land acquisition, through the Private Bill procedure, that there should be a mechanism for giving Parliament a better look at these matters. Without my going into this subject in great detail, I hope that the noble Lord, Lord Peart, can use today's debate to give us a

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progress report on the thinking of the Government.
This is a subject to which I am sure the noble Lord, Lord Shepherd, will want to refer, so I shall not go into it in any more detail. But can the Government give us a cleat statement about their views on the proposals of my noble friend Lord Molson; how do they respond to the Clerk of the Parliaments' Paper about these proposals, and what is their attitude to the recommendations of the Select Committee on Practice and Procedure, which have already been mentioned by my noble friend Lot d Harmar-Nicholls?
As my noble friend who introduced this debate said, these matters sound dull, dreary and dry, but they are not. They affect the lives of hundreds of thousands of people. They can alter the way our country looks, if some of these planning decisions are of enormous environmental consequence. So when we are looking at the functions of Parliament, and seem to be deciding that certain functions may be devolved, it may be right to say at the same time that there are certain matters at which we need to ensure that Parliament can look, if and when, in the very rare cases that it is necessary, a Parliamentary procedure is needed to confirm a planning inquiry.
As I said, today's debate provides an opportunity for the noble Lord, Lord Peart, to bring us up to date on the thinking of Her Majesty's Government on this subject. I hope that they have been thinking about it, because this report came out on 26th July 1977, so that there has been time for a thorough study and examination of the ways of proceeding with the next stage of this difficult problem.
Another subject in this report is the examination of a proposal by the noble Lord, Lord Kennet, for setting up a Foreign Affairs Committee of your Lordships' House. I do not want to go into the merits of this proposal, because I feel that it is better to look at the development of the Select Committee structure of this House as a whole. I do not think that a piecemeal examination of one subject after another for Select Committee scrutiny is necessarily the best way of approaching these matters. But I would stress to the noble Lord, Lord Peart,
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that there is a huge expertise in this House, which he himself knows very well, particularly on foreign affairs, with political experience, diplomatic experience and commercial experience.
Bearing in mind the success—and I must declare a Parliamentary interest, if not a financial interest—of the EEC Scrutiny Committee, when there were many predictions that it would interfere with the process of negotiation, or cause embarrassment to our officials abroad and tie the hands of the Government, may I ask whether the Government, and the noble Lord, Lord Peart, in particular, are likely to be able to come forward with some constructive proposals in this field when the House of Commons Select Committee has reported? I understand, as the Committee itself recommended, that one cannot examine these matters in detail until the House of Commons have reported. But has the noble Lord any idea when the House of Commons Committee will report, so that we can have a proper debate about how we can develop our Select Committee structure and match it with theirs, so that, if possible, there is more overlapping? There are already the successful beginnings of joint work in the EEC Scrutiny Committee. Again, it would be very useful to know how the Government feel about a wide range of these matters, and not necessarily merely about the proposal put forward by the noble Lord, Lord Kennet.
I turn to tacking, and I am not sure whether there is anything left for me to say. I certainly do not want to attempt to interfere in the expertise of those from another place, who are familiar with the way in which Mr. Speaker works, and I am a little hesitant, standing where I now am, of tying myself in knots in attempting to understand and interpret all the intricacies and procedures of another place; for example, as to how Bills are certified to be Money Bills and vice versa. So that I am simply not in a position to begin to compete with the knowledge of my noble friend on this subject. He has studied it for many years and knows a very great deal about it.
But will the noble Lord, Lord Peart, accept that it is necessary for this procedure to be constantly examined to make sure that it works? Is he satisfied that,

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as the nature of Bills has evolved, as they have become consolidated and have tended to have more and more delegated legislation inherent within them, with more and more Statutory Instruments flowing from them, that the present procedures to cope with tacking are adequate? Also, will he ensure that the proposals which have been put forward by my noble friend, with considerable care and after obvious thought and due consideration, are given a thorough examination? I do not think that this is a matter which can be dismissed as a peripheral subject.
As my noble friend rightly said, it is vitally connected with the liberty of the subject, and if your Lordships' House does not continue to act as a watchdog, as a scrutineer, and as a focus of examination on the implications of some of this legislation, as it charges through Parliament with ever-increasing rapidity, then we are beginning to deny one of our most essential functions. As well as a detailed reply on the particular subject of tacking, I should like to hear, and my noble friends would, the attitude of the Government to the matters raised in this Second Report.
We had a good debate (if I may use a phrase sometimes used by the noble Lord opposite) on 5th July 1977 on the First Report from the Practice and Procedure Committee. That was a most enjoyable occasion, even if it was not as promising as it might have been in the commitments to which it lead at the end of the debate, friendly though it was. When the noble Lord is winding up and dealing with the points which have been raised in the debate today on the Second Report of the Practice and Procedure Committee, could he bring us up to date on what has happened on the First Report? I must express I am sure a quite unjustified anxiety because, in spite of the heart-warming and benevolent words of the noble Lord the Leader of the House on 5th July,
"There is evidently a strong current of opinion in favour of an experiment to try out the Select Committee's recommendation for scrutiny procedure"—
and then later on—
"I am prepared to accept the proposal for an experiment and that the recommendations should go to the Procedure Committee for detailed consideration …",
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I am still unaware of what has happened. Has anything happened at all? If nothing has happened could we be told when it is going to happen?
This is a subject about which it is extremely tempting to indulge in all sorts of endless ramifications without coming to a real point, and I want to avoid that danger. My noble friend Lord Harmer-Nicholls has rightly spotlighted a particular and vital role of your Lordships' House as a second Chamber, as a revising Chamber, as a Chamber which must look in detail and with greater leisure at the intricacies of our constantly growing volume of legislation, particularly finance legislation. In so doing he has given your Lordships an opportunity to look at the report which is an indicator of some of the ways in which we need to develop this House in order to make it work as a Parliamentary assembly in the latter half of the 20th century. It may at first blush be a little inward-looking; it may be rather incestuous to spend an afternoon talking about our own procedures. But I think that these two criticisms are very trivial compared with the much more serious obligation which I believe we are discharging this afternoon. That obligation is constantly to re-examine our way of working as a deliberative Assembly, to look at the way we make our procedures work.
I believe that the debate initiated by my noble friend Lord Harmer-Nicholls will provide the Government with an opportunity of saying how they feel that the process should go on, and for making a Statement about the particular points which the Practice and Procedure Committee looked at. I shall quite understand if all the points raised are not capable of being answered today; perhaps the noble Lord the Leader of the House would like to make a Statement later on, or perhaps write to noble Lords, though I hope he will not indulge in that procedure more than he needs to. My Lords, I end on that note because I want to emphasise once again that we are not today indulging in part of the Party political football game. The need is something we all share. It is part of our constant endeavour to make sure that this House continues to provide a useful Parliamentary function for the people of this country.
3.35 p.m.
Lord AIREDALE: My Lords, the noble Lord, Lord Harmar-Nicholls, in the course of sounding loud and clear his warning notes this afternoon, has paraphrased the compliment which the Practice and Procedure Committee have paid to him in their report. Their actual words in paragraph 26 were that,
" … they take the view that Lord Harmar-Nicholls has performed a service to the House …"
My attention was drawn to that because I had intended to quote the immediately preceding words where the Committee say that they
"consider it is necessary for the House to guard its privileges …".
In saying that I do not believe that the Committee were thinking of the House guarding its privileges from any sense of vanity or jealousy or self-satisfaction, but from a sense that the House has been entrusted with a duty to perform on behalf of the people and shows a determination not to be obstructed in the performance of that duty entrusted to it. I suppose that the underlying mischief which has brought about this debate is the continual tendency on the part of the Executive to be chipping away, gaining power for itself at the expense of Parliament on the one hand, and the courts on the other. In passing, it is worth bearing in mind that Parliament has to fight both these battles, because it is to Parliament that the courts have to look for the preservation of their jurisdiction against inroads made by the Executive. The example given by the noble Lord, Lord Harmar-Nicholls, of the Inland Revenue being given power to enter people's homes and ransack their papers is found also in delegated legislation; that being so, if it is necessary for Money Bills to be scrutinised for instances of tacking, in the same way do the Statutory Instruments need to be scrutinised from the same point of view.
The Statutory Instruments share with Money Bills this quality of not being subject to amendment in your Lordships' House. That being so, I think I may be permitted very shortly to refer to one of the reports of the Joint Committee on Statutory Instruments, to one Statutory Instrument upon which they reported, to show that the kind of thing that goes on in Statutory Instruments is somewhat akin to the example given by the noble Lord,
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Lord Harmar-Nicholls. In any event, it is not much good sweeping the floodwaters away from the front door if the waters are flooding in at the same time through the back door.
The Joint Committee on Statutory Instruments in their 15th report referred to the Seed Potato Regulations of 1978, which was Statutory Instrument No. 215, and criticised some of the expressions used in those regulations. They criticised the expression:
".… where the Minister is satisfied that certain conditions have been fulfilled …",
which was used instead of saying:
"… where the Minister is reasonably satisfied …".
This means that the court has its hands tied if a case ever reaches the court. The court is able to decide only whether the Minister, in so far as he considered the matter, was acting in good faith. Unless the word "reasonably" is introduced, the court is virtually prevented from itself examining the facts upon which the Minister made his decision in order to decide whether the Minister went deeply enough into those facts.
The committee further criticised the expression, "any disease or pest considered by the Minister to be harmful" and the expression, "grades of seed potatoes acceptable to the Minister If I may quote a few words from their report, they say:
"The committee consider that both these examples would enable the Minister to legislate by circular or otherwise outside the scope of Statutory Instruments, which is particularly serious since there is no appeals procedure provided for in the regulations. Decisions can be taken under the regulations by reference to circulars issued by the Minister, decisions taken by the Minister or opinions held by the Minister—for instance, as to the harmfulness of a particular disease or pest—which are not specified in these or any other regulations. Indeed, there is no statutory obligation to publish or publicise such circulars or decisions".
That is the kind of problem one comes up against in the course of considering Statutory Instruments. We need, therefore, to be thankful for the diligence and hard work shown by the Joint Committee on Statutory Instruments. And when it comes to Money Bills and the device of tacking, we should be thankful for watchdogs like the noble Lord, Lord Harmar-Nicholls. Both he and the noble Lord, Lord O'Hagan, used the word, "watchdog". If it were in any noble Lord's

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mind to say that, with a name like mine, I ought to be a pretty good watchdog, too, I apologise for taking the words out of his mouth.
3.42 p.m.
Lord SHEPHERD: My Lords, I intervene only for a few moments as chairman of the Select Committee on Practice and Procedure and also because I had to deal with the noble Lord, Lord Harmar-Nicholls, in 1976 when I was Leader of the House and responsible for the Finance Bill.
Both the noble Lord, Lord O'Hagan, and the noble Lord, Lord Harmar-Nicholls, referred to the memoranda that had been submitted to the Select Committee on Practice and Procedure by the noble Lord, Lord Molson, and I very much regret that he is not present today. The memoranda which the noble Lord submitted were identical to those which he submitted to the Joint Select Committee on Delegated Legislation in 1973. Both committees felt that what the noble Lord, Lord Molson, was putting forward was of very great importance, but neither committee could proceed because it was a matter for both Houses.
Although there is a Committee for Practice and Procedure in another place, they could not consider this matter unless their terms of reference were altered. Certainly nothing could be done unless the Government undertook to introduce legislation. Therefore, we hope to hear from my noble friend the Leader of the House what the Government have in mind in this important respect. I do not know what the position is in regard to our sister Committee on Practice and Procedure in another place, but this matter is worthy of very careful consideration by both Houses.
The noble Lord, Lord O'Hagan, also referred to the Foreign Affairs Committee of the House of Lords. Again your committee felt that this matter is worthy of very careful consideration, but they would much prefer to wait until another House has reported. The noble Lord, Lord O'Hagan, is quite right in saying that there is a great wealth of experience in your Lordships' House, and since the publication of this report I have wondered whether we need to wait for the setting up of a Select Committee.
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During my period as Leader of the House I was under very great pressure to set up a Select Committee on Defence. Like all good Leaders of the House, I resisted that pressure to the hilt. However, I did suggest—because I was, I hope, a constructive Leader of the House—that if the feeling was that there should be a committee on defence, there was nothing to stop noble Lords from setting up an all-Party unofficial committee. That is what has happened.
From all that I have heard, this committee has played, not only to itself but to the House as a whole, a very notable performance. It has been able to receive both military and political personalities whom I suggest to your Lordships might not have been willing to appear before a Select Committee of this House. I wonder whether an American general would have been willing to appear before a Select Committee of your Lordships' House? That American general was, however, perfectly willing to appear before an all-Party Committee of your Lordships' House. Therefore, I wonder whether those who are interested in this matter should consider whether this is a better approach in the short term—although in the long term it may perhaps prove to be better to continue in the other way—in order at least to get started in this field.
I turn now to the noble Lord, Lord Harmar-Nicholls. The noble Lord said that he is a nuisance. I am sure that it will come as no surprise to him to hear that to some he is known as a damned nuisance. The noble Lord is persistent. But that is what the noble Lord, Lord O'Hagan, has said Parliament is about. Since I have been chairman of the Select Committee on Practice and Procedure I have become very concerned—or my concern has become crystallised—about the imbalance that exists between Government and the Executive and Parliament. It is true that Parliament still remains sovereign but, as the noble Lord, Lord Airedale, said, unless the watchdog can bark it is of very little use.
I believe that last year I said that one cannot help but feel that over the last 10 or 15 years the balance has swung quite appreciably against Parliament regarding its control and examination of Government and the Executive. The balance has swung for one reason, and

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the noble Lord, Lord O'Hagan, touched upon it: that Parliament resists any change in its procedure. It is only through its procedure that Parliament can exercise its sovereign right of control over the Government, but Parliament does not like change.
I join with the noble Lord, Lord O'Hagan, in asking my noble friend the Leader of the House what has happened to the proposals made by the Select Committee on Practice and Procedure. I know that those proposals were sent to the committee. Some noble Lords may know from experience that there is no better way of quietening and submerging any proposal than by sending it to either the Select Committee on Privileges or the Select Committee on Procedure. But it is no good talking about this imbalance unless Parliament is willing to do something about it, and, thank goodness! there are people like the noble Lord, Lord Harmar-Nicholls, who will continue, and persistently continue, to be a nuisance.
May I say to the noble Lord, Lord Harmar-Nicholls, that I agree with him. I have an increasing worry about the powers that Government and the Executive take to themselves or give to their officers. Only some 14 days ago there was a debate on a Bill in your Lordships' House with which all noble Lords could agree; namely, the protection of children from pornography. The whole House was on the side of the noble Baroness, Lady Faithfull, and it turned with great hostility on a speech of very great courage that was made by my noble friend Lord Houghton of Sowerby. He referred to setting the safeguards for perhaps one or two children against the tremendous power that one would be giving to the police to enter any individual's home because somebody had reported to the police that perhaps photographs were being taken of a child who was undressed. Your Lordships were hostile to my noble friend, but I think that he raised a very serious point regarding freedom.
So far as your Lordships' Committee was concerned and so far as I as Leader of the House was concerned, the question was whether, first, the proper procedures had been gone through in regard to the Finance Act 1976 and, secondly, whether
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the existing Standing Order of your Lordships' House is adequate. I must say, as I did in 1976—and I had to examine it carefully as Leader of the House, and since as Chairman of the Committee—that I believe that the procedures in another place are adequate, provided Members are vigilant. I think it would be wrong for us to suggest to the Speaker, who is the servant of another place, what steps he should take in the way in which he arrives at his judgment, whether he has Assessors or Examiners to assist him. In the end, as I am sure the noble Lord, Lord Harmar-Nicholls, will agree, it would have to be the Speaker's decision; it could not be anybody else's. Therefore, whatever decision he comes to, it is as a servant of another place, and he must take his advice as best he can.
Lord HARMAR-NICHOLLS: My Lords, if I may intervene, does the noble Lord give any weight to the last point I made, that I discovered that it is not Mr. Speaker who actually decides on tacking, but an official? So the considerations the noble Lord has in mind, with which I agree, do not apply when it is the Public Bill Office and not the Speaker.
Lord SHEPHERD: My Lords, the noble Lord knows more about this than I do, since I have never had the privilege of being in another place. My understanding is that when a Bill is introduced it is looked at and examined to see whether it comes within the wording of Erskine-May, that there is no foreign matter within it, but if it is challenged a decision is then taken by Mr. Speaker.
The noble Lord, Lord Harmar-Nicholls, wondered whether there should be some mechanism by which Members of your Lordships' House, who have Standing Order No. 49, might make representations to Mr. Speaker. I have to say to the noble Lord that I would regard that as utterly unacceptable, just as I would have regarded it as utterly unacceptable when I was Leader of the House, or now that my noble friend Lord Peart is Leader of the House, to receive representations from a colleague, no matter how senior he may be, as to what your Lordships' House should be doing and what advice, as Leader of the House, I or he should give to this House.

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My Lords, Standing Order No. 49 has stood the test of time; it has not been open to challenge since, I think, 1807. I do not believe that the case which the noble Lord has made in any way infringed Standing Order No. 49. It may be that the powers taken in the Finance Act are powers that ought to be considered separately; but if they are in the Bill, so far as your Lordships' House is concerned, provided that they meet the Rules of another place and our own Standing Orders, then we have to find other ways in which they can be debated and examined. As the noble Lord knows, there are ways and means by which it can be done. Your committee looked at the case made by the noble Lord, Lord Harmar-Nicholls; we reached a view, and I see no reason to depart from it.
My Lords, the noble Lord said that we patted him on the back for his assiduity. It was not done lightly. The noble Lord taught me a lesson, because I have to be frank with him. Until he raised the question of tacking and Standing Order No. 49 in 1976 I had heard of neither of them. So, as Leader of the House, perhaps there is something to be said for the vigilance of a Back-Bench Member so that an important Standing Order can be drawn to the attention of the authorities, because that, I am sure, is the only way in which we can maintain our rights and privileges.
I think it was the noble Lord, Lord Airedale, who spoke about the privileges of this House. We speak rather lightly of them, but so long as we are part of Parliament the privileges of this place are the privileges of Parliament as a whole. I would hope very much that in the next few years we can see a greater move in the field of procedure, not only by adhering to our Standing Orders but looking at the way in which we process legislation, the way in which we examine the great issues. Unless we do that, then Parliament slowly will ebb against the power of the tide of Government.
3.58 p.m.
Lord HALE: My Lords, I have known the noble Lord, Lord Harmar-Nicholls, even long before he became a noble Lord; and he and I have worked without much dissent, or at least without much expressed dissent. I would not go so far as the
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noble Lord, Lord Shepherd, in thanking the Deity for him as an especial favour. I have my own views about that; it may be that if we referred to whatever gods may exist we could select whichever one is responsible for controversy. I should also like to say this: I regarded this as likely to be a pleasant historical discussion but, if we are going to speak about the rights of individual Peers and so on, we could start by not producing Instruments for discussion on the day they are printed, by not asking Back-Benchers to try to deal with a mass of Amendments which they have never had a chance of seeing until an hour or two before the debate commences, and really considering some of the procedure of this House which is open to objection.
I say to the noble Lord, Lord O'Hagan, with whom I very rarely find myself in disagreement, that it is perhaps overstating the matter to say—I quote from memory, and probably from an inaccurate memory—that he suggested that it was essential that we should now begin to refer to a matter about which, so far as I know, no serious question has been asked since 1911. Finance Bills have come and Finance Bills have gone. Some of them have contained other matters and some of them have not.
There has been no attempt to raise the question of tacking. The only time that we have rejected it was, I think, in 1966, although that was not a Finance Bill in any sense of the word. The word "tacking" of course is philologically obscure and difficult and has a number of meanings, all of which seem to have become disreputable except the navigational meaning, which I believe caused some trouble for Sir Thomas Lipton during one of the America Cup contests; but generally speaking it is a navigational practice which has some advantages. In law it meant the wholly objectionable rule that by acquiring a third mortgage on property one could amalgamate it with a first mortgage and squeeze out the second mortgagee. That was abolished in 1874, although some less objectionable parts were included in an Act in the following year.
The noble Lord, Lord Shepherd, suggested that the Standing Order had not been challenged since 1807. At any rate it was made, and, so far as I know,

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has lasted continuously since 1702. The gravity of tacking is exemplified by the precise circumstances in which that Order was made. William III, after returning triumphantly from signing the Treaty of Ryswick, overburdened with work, undergoing bitter hostility, found himself confronted, as the Report states, with a threat from the faithful Commons to tack on the essential Land Tax Bill, as it then was—a Bill for considering William III's distribution of the confiscated Irish estates which even Macaulay, the great defender, admits were certainly on an appalling scale and threatened almost to anticipate Bismarck's solution of the Irish problem. Bismarck is reported to have suggested that if the Dutch would re-populate Ireland and the Irish would re-populate Holland two great European problems would be solved, because the Dutch would make a garden of Ireland and the Irish would forget to repair the dykes. But in the circumstances which prevailed in England at that time this was a bitter threat, a bitter fight—a fight which brought William III to make arrangements to leave the country for good. But his health was already impaired and the Tack Bill was accepted. The report of the hostile commissioners was the subject of bitter controversy and Parliament was dissolved. Then in November 1700 the whole history of Europe changed in a few months with the solitary horseman's ride to Fontainebleau bearing news of the death of the Spanish King and of Louis XIV's acceptance of the Spanish throne on behalf of his grandson, having repudiated his word (not for the first time) in the Treaty of Ryswick.
When James II died in the Palace of St. Germain, all within 18 months, and when Louis XIV again repudiated his word after saying that the Pyrenees had been destroyed for ever, he was guaranteeing support for James II and, on his death, for his heirs, and when William III died in March 1702 it was not surprising that in the first few months of the reign of Queen Anne, which some historians tell me was very glorious, the House of Lords enacted this Standing Order which has remained ever since. It is an important Standing Order, but it has to be considered in the light of today.
I think the noble Lord, Lord Harmer-Nicholls, slightly over-estimated its present
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importance, as I think the Committee did. During the evidence of the noble Lord, Lord Harmar-Nicholls, the Committee might have been recalling from time to time, as I was thinking during his speech, the familiar observation of Talleyrand: "Surtout, pas trop de zèle". In some of the observations that have been seriously made today, one may think we are slightly disregrading some of the practical and general implications. They were raised in a recent debate.
With his great ability and in a very fine speech, the noble Lord, Lord Houghton, raised some of the implications of the provisions which were incorporated in the Fianance Act of 1976, which had partly been on the Statute Book before the enactment. I supported him without any qualification. We were examining the matter with conspicuous reticence, because we had no desire to criticise people who were temporarily under accusation on account of reports in the Press which might or might not have been greatly exaggerated, and we received an admirable reply from the Minister responsible for Home Office affairs, who is always conscious of the needs of liberty. But the question of what can or cannot be incorporated in the Finance Bill is naturally a considerable constitutional difficulty, and most certainly rendered rather oddly apt by the strange events which have been happening in another place.
Ignoring all threats, and showing, in my view, much more wisdom than they did sometimes in the past in possible constitutional conflicts with another place, the Lords have been pursuing with unexampled diligence many of the problems that divide the nation and many of the constitutional problems which have been rather suddenly and, as some think rather unnecessarily imposed upon us. Their Lordships have certainly won acclaim for their labour in the European Economic Community. Possibly they were, in the event, justified in having some temporary conflicts with another place. I am thinking, for example, of the Aircraft and Shipbuilding Industries Bill. Not for the first time I probably voted on the wrong side. I often vote with the Government which involves a good deal of voting on the wrong side these days! I am just beginning to wonder how long that process can continue.

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However, the Committee has admirably presented to the Commons the question raised by the noble Lord, Lord Harmar-Nicholls. It is being dealt with before a Committee and there are matters for temperate discussion. There are many Members of the other place who I am sure realise—indeed I have heard them say so— that the life of a Member of the House of Commons these days is one of complexity and difficulty. Constituency problems manifestly occupy a great deal of time. To discharge one's duty fully is as wholly impossible for a Member of another place, as it is for a Member of this House, especially when one considers the Order Paper which we receive every day containing items about which the most learned, able, active and supporting Member can have little or no knowledge.
We can only do our best as Members of the other place can only do their best and we do so in the best of spirits. In that sense I support what the noble Lord, Lord Harmar-Nicholls, has said. He has shown a perspicacity and a discernment as regards this matter which the Court of Appeal once declared was rarely to be found upon the county court bench.
Of course, there are bigger issues involved—for example, the disappearance of the equitable outlook. It may well be that before long our problems will present matters in which some measure of co-operation between the two Houses will be essential and should not be lightly impaired. I should like to quote a passage which I have extracted from the works of two writers of great distinction on the law—Levy Ulmann and Allen in the last half-century. They are talking about equity which once brought something of great value to the courts:
"The root is dead, the stalk is dry, the leaves withered, the fruit rotten. Les oiseaux s'envolent et les fleurs tombent.
The latter talked of equity having reached a rigor aequitatis.
I regard it as a great privilege to take part in this debate. I hope that I have done so with commendable brevity. I shall listen with great interest to what my noble friend has to say, for it will not be easy for him to reply.
4.14 p.m.
Lord MORRIS: My Lords, I must ask your forgiveness for intervening in this
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debate without putting down my name on the list of speakers. However, I shall be very brief. We owe a great debt of gratitude to the noble Lord, Lord Harmar-Nicholls, for raising this very important issue. I wish to make the point that Standing Order No. 49 of your Lordships' House, has, in fact, been emasculated by the Parliament Act 1911. Standing Order No. 49 states:
"The annexing of any clause or clauses to a Bill of Aid or Supply, the matter of which is foreign to and different from the matter of the said Bill of Aid or Supply is unparliamentary and tends to the destruction of constitutional Government".
That is quite unequivocal, as is the Parliament Act 1911 which reflects the same spirit when it states:
"A Money Bill means a Public Bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects, namely, the imposition, repeal, remission alteration or regulation of taxation".
Unfortunately it goes on to say:
"or subordinate matters incidental to those subjects or any of them".
That is the key.
I maintain that that is an immense power for a unicameral parliament and it is under that power that we have seen what I consider to be certain abuses which have been pointed out by the noble Lord, Lord Harmar-Nicholls. As Erskine May quite rightly states in the 19th edition, page 791:
"The scope of Finance Bills is not limited to the imposition and alteration of taxes for the purpose of adjusting the revenue of the year. It normally includes many provisions of a permanent character for the regulation of fiscal machinery and other purposes".
I think that the central point that the noble Lord, Lord Harmar-Nicholls, has raised—namely, that a unicameral Chamber has this statutory power to impair the freedom of the individual—is a vital point which needs very careful consideration.
4.17 p.m.
The LORD PRIVY SEAL (Lord Peart): My Lords, I can only say to the noble Lord, Lord Morris, that we have a bicameral system and it is working. I should say to my noble friend Lord Hale who implied—
Lord MORRIS: My Lords—
Lord PEART: My Lords, I allowed the noble Lord, Lord Morris, to make a short intervention and he made it very well. I hope that he will not delay my speech. My noble friend Lord Hale implied that a great many matters come before the House without proper notice. As Leader of the House I have always discouraged the late tabling of Amendments to Bills. Also, no other Papers come before the House late, except in very unusual circumstances, when discussions always take place through the usual channels. However, I enjoyed the speech of my noble friend. I was glad that he defended both Houses and advocated co-operation. I do not want confrontation.
As an ex-Member of another place, and, indeed, as an ex-Leader of another place, I believe that this House, of which I am now, and have been for nearly a year and a half, a Member, makes a major contribution to our democratic life in the best sense. I mean that and I think that that view was echoed by the noble Lord, Lord O'Hagan, who I thought made a very effective speech not only in defence of his noble friend (with whom I shall deal) but—and I do not wish to sound patronising—as a young Member of the House. I thought that he was quite right in his concept of Parliamentary democracy and the role which we play.
Noble Lords will recall that the First Report of the Select Committee on Practice and Procedure was debated on 5th July last year. The Second Report was not published until later in that month, and consequently it has not, until now, been debated in the House. I am sure that the House will agree that the opportunity provided by this short debate serves as a useful postcript or addendum to the debate of last summer. The report covers three subjects, all of which have been discussed this afternoon; but perhaps I may begin by taking the last part of the report first and commenting upon the proposals of the noble Lord, Lord Harmar-Nicholls, on tacking.
I should like to congratulate the noble Lord, Lord Harmar-Nicholls, on making a first-class speech. He has taken a great interest in this subject and, quite rightly, from a Parliamentary point of view he has raised it. He has been assiduous; he appeared before the Select Committee,
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even though it did not quite accept all he said. However, we admire him for it. The noble Lord was good enough to indicate in advance of this debate the suggestions which he intended to put forward today, in addition to those which he had already proposed in his oral evidence to the Select Committee.
In order that we can be quite clear what we are talking about, I should like to say what I mean when I refer to tacking. I mean the annexing of any clause or clauses to a Bill of aid or supply, the matter of which is foreign to and different from the matter of the Bill. As we are dealing with a technical subject, I think that it is important to be precise, and noble Lords will have observed that I have followed the words of Standing Order No. 49 in this definition. This Standing Order has been quoted by several of our noble friends today.
I should like to make one other general comment before discussing the proposals of the noble Lord, Lord Harmar-Nicholls. As will be clear, we are talking about Bills which are about money, whether or not they are certified as Money Bills by the Speaker; for as the noble Lord, Lord Harmar-Nicholls, has pointed out, more than half the Finance Bills in recent years have not been so certified. At the risk of stating the obvious, I should like to emphasise that when discussing such Bills we should always be most scrupulous in respecting the financial privilege of another place. I say this not because I wish in any way to inhibit the debate of financial issues in this House. Far be it from me as Leader of the House to do so. No, it is my belief that this House is respected when it discusses such matters, precisely because it is recognised that noble Lords acknowledge the special authority of the elected Chamber in matters of supply.
I see on the Opposition Front Bench the noble Lord, Lord Soames, who was a distinguished Minister in my old Department. No doubt he will add his authority to what I have said, because an order was raised by the noble Lord, Lord Airedale, affecting Ministers of Agriculture and their desire to push matters through quickly and effectively. I thought that that was no criticism of good Ministers of Agriculture, who I think use these orders —especially the one in connection with, I think, seed potatoes—very well and

37
effectively. No doubt the noble Lord, Lord Soames, must have done so on many occasions, as I did when I was a Minister like him.
Therefore, I should like to preface my comments on tacking by saying that I am very strongly of the opinion that (and here I am quoting from Erskine May at page 802):
"as for the modern equivalents of Bills of aids and supplies namely Consolidated Fund and Finance Bills the Rules of Order of the House of Commons exclude the possibility of foreign matter being tacked to such Bills by way of amendment; and respect for constitutional practice prevents the inclusion of such matters among their original provisions".
I am sure I am doing no more than giving expression to the established wisdom and practice of this House in saying that I could not affirm too forcefully that it would be improper for any Member of this House to suggest that the procedures of another place, or their exercise, are in any way inadequate. Having said that, I shall now comment on the proposals of the noble Lord, Lord Harmar-Nicholls.
As I understand it the noble Lord, Lord Harmar-Nicholls, does not feel that the House of Lords should rely solely on the procedures and conventions of the House of Commons to protect it from tacking. It is his contention that, if Standing Order 49 is to be properly observed, some machinery must be established by the House of Lords to make it effective. He has made a number of proposals in this connection.
The noble Lord proposed that the Public Bill Office of this House should scrutinize Finance Bills while they are still before the Commons in order to consider and advise on possible tacking. It is open to any Member of this House or, indeed, of the public to examine legislation in another place and the proceedings upon it. However, I do not think it would be appropriate to require the Clerks in our Public Bill Office or the Clerk of the Parliaments to give an opinion on financial legislation which is before the Commons. I believe that this would constitute an intolerable interference with the privileges and procedures of another place and would, in my opinion, do great damage to the relations between the two Houses. Of course when such a Bill reaches this House our Clerks will be available in the usual way to give advice on whether
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Standing Order 49 appears to have been infringed, though any decision on the matter would be for the House itself. I hasten to add that the role of the Clerk of Private Bills as an Examiner does not provide a meaningful analogy with the role the noble Lord proposes for the Public Bill Office. Each Examiner is an Officer, as he knows, of both Houses and, therefore, has an established role in relation to each.
So far as the noble Lord's remarks on Mr. Speaker's Assessors are concerned, I can only say that it would be impertinent of me to cast any aspersion on their combined abilities and the resources of Mr. Speaker's Office. I would doubt very much whether any change in the present procedures of the House of Commons in scrutinising financial legislation is needed. I certainly do not think it would be appropriate for such changes to be proposed in this House.
I hope that the noble Lord will not think that I am being unnecessarily destructive if I take a similarly unaccommodating view of his suggestion that Peers should have a special right of access to Mr. Speaker in connection with the certification of Money Bills. I realise that the noble Lord feels that he is on the horns of a dilemma. On the one hand, there is no machinery to enable this House to express a view on financial legislation before it reaches this House. On the other hand, as the noble Lord has recognised, it is perhaps closing the gate after the horse has bolted to try to do anything after the Speaker has certified the Bill and it has reached this House. Nevertheless, the noble Lord will know as well as I do, as we were both Members of another place for many years, that Mr. Speaker comes to his decision without consulting Members of another place except his two Assessors. He has the expertise and advice which he may require at his disposal. I am sure that the noble Lord does not mean to imply that the Speaker's decision is ever ill-founded. As this is the case, there is no need for Members of this House to have access to him, even if this was appropriate.
The noble Lord has also suggested that all Bills of aid and supply should be endorsed with the Speaker's certificate. My Lords, Section 1(3) of the Parliament Act 1911 defines what is a Money Bill for

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the purposes of the Act. I do not see how a certificate could be applied to a Bill which was not a Money Bill within the terms of the Act. I certainly could not accept that there is any need to amend the Act to enable Mr. Speaker to certify all Supply Bills.
I have felt it right to deal with the various proposals which the noble Lord has put forward. However, I wish to stress that I, like the Practice and Procedure Committee, am satisfied with the position as it is at present. In addition to the points he raised with the Committee, I have commented on his further suggestions put forward today. I should like to thank the noble Lord again for giving me advance indication of these new suggestions. I do not accept that the noble Lord's anxieties are well founded or that any measures need to be taken to protect the interests of the House in this area. I am sure that we can rely on the regard which Mr. Speaker and Officers of the House of Commons have for constitutional and Parliamentary proprieties to prevent the occurrance of tacking. But like the Select Committee—and I say this to him sincerely—the noble Lord has performed a valuable service by reminding the House of the provisions of Standing Order 49.
May I now deal very quickly with Lord Molson's proposals dealing with local public inquiries. I have spoken at some length on tacking, and I should now like to turn to Lord Molson's proposals—I am sorry that he is not here, but they were raised by the noble Lord, Lord O'Hagan— on local inquiries. The Select Committee recommend that the Government should give careful attention to these proposals, and recommend a course of action for Parliament. The Government recognise the importance of the issues raised by Lord Molson, and I should like to pay tribute to his skill in discussing them and his insight into matters of public concern, which are all too easily obscured by complex Parliamentary procedures.
He has drawn attention to the need to ensure that amenity societies have proper access to Parliament to put their views on local matters of national importance. He has also thought very carefully about the procedures which apply to Private Bills, Provisional Order Confirmation Bills, and Special Procedure
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Orders. I will not pretend to be master of these procedures, and I do not propose to evaluate now the detailed remarks of Lord Molson and the Memorandum submitted by the Clerk of the Parliaments to the Select Committee.
A full inquiry into the matters raised by these proposals would, I believe, be a considerable undertaking. It would be necessary to receive evidence from a wide range of local authorities, Government departments, and other interested bodies. It would also be necessary for both Houses to conduct the inquiry jointly, as the proposals would require legislation and the alteration of procedure in both Houses. Circumstances in the immediate future do not appear very auspicious for an inquiry of such complexity. The present Session has seen Parliament engaged on three major constitutional Bills. The first elections to the European Parliament will be held next year. Subject to the passage through Parliament of the Scotland and Wales Bills, and subject to the results of the referendums, devolved Assemblies will be in their infancy and Parliament and local and central Government will be adapting to devolution.
In short, my Lords, we will all of us have a great deal to digest and adapt to. For these reasons, I can only say to noble Lords that I do not think that I can hold out much hope that either House, or the Government, would wish to embark upon such an inquiry in the immediate future. Nevertheless, these proposals ought to be carefully looked at, and I pay tribute to Lord Molson for conducting his campaign so assiduously and for his work on the Select Committee.
Let me turn to a proposal by the noble Lord, Lord Kennet: the setting up of a Foreign Affairs Committee. I know a number of other noble Lords—Lord Avebury, Lord Bethell, Lord Greenhill of Harrow, Lord Kennet and Lord Weidenfeld—have proposed this. I should like to say only that I concur with the recommendation of the Select Committee, which suggested that it would be sensible to defer any decision until the House of Commons' Committee has reported, in view of the possibility of setting up a Joint Committee on Foreign Affairs.
My noble friend Lord Shepherd came back to proposals which we debated last

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year: the need to have monitoring committees, with or without Public Bill Committee functions. I know that he feels disappointed that we have not really come to grips with that, but no doubt he will pursue it again and we will have to come to it. This Session the House has been extremely busy.
Lord SHEPHERD: My Lords, which hare do I pursue? The Leader of the House? The Chairman of Committees? Who?
Lord PEART: My Lords, speaking as one who is not a hare, I would say my noble friend can make his choice. I think he should take it to the Select Committee. I think that that would be sensible. I hope that my noble friend will not think that I am pouring cold water on his suggestions. I agreed in principle on the last debate we had, and I hope that it will be followed up. But, as he will appreciate, the House has been extremely busy on this matter.
The noble Lord, Lord Harmar-Nicholls, referred to a case. I hope that he will give me the information, and I shall look into it and write to him. Again may I say in reply to another point which was raised, that tacking is examined as a matter of course in the Commons. In this House the Public Bill Office will advise on any question raised about tacking. Mr. Speaker's certification of a Bill as a Money Bill depends on whether the Bill contains only provisions about taxation, or matters subordinate to it. If the noble Lord looks at paragraph 10 of the Clerk of Parliament's memorandum, page 40 of the report, he will see that that is discussed there. If other matters are contained in the Bill it cannot be certified as a Money Bill.
The Public Bill Office, like all the procedural offices and officers of another place, work under the authority of Mr. Speaker. I find it hard to believe that Mr. Speaker would not be aware of their opinion on such an important question. The noble Lord, Lord O'Hagan, also asked me about the Government's thinking on Lord Molson's proposals. As I have said, the Government are considering public local inquiries in the light of the public interest, which has grown recently, in planning decisions. Matters like Windscale, which I know well because it is in my old area of Cumbria, have excited controversy. We shall carefully look at
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this. I cannot go beyond that at this point.
A question was asked about an experiment on the lines of the First Report on Practice and Procedure. This Session would not have been a good Session for an experiment because of the devolution Bills. I think that we have had a good debate. It has served a useful purpose. Procedure can be an extremely dry subject, but it is the stuff of politics. It is important, and noble Lords have made excellent contributions.
4.38 p.m.
Lord HARMAR-NICHOLLS: My Lords, even if he tried very hard indeed the noble Lord, Lord Peart, could not avoid being very courteous. Even if he tried he could not avoid giving the appearance—indeed, not only the appearance, but the fact—of being very friendly. It is in the nature of his make-up and general stance, that modest sort of feeling that "Everything is all right. You needn't bother your head about it." That is one of the most dangerous things that can happen on a topic such as this.
The noble Lord has advised your Lordships that nothing ought to be done about this question; that it is not important enough, and it is all right. I am going to invite your Lordships not to accept that. I am going to invite your Lordships to use every opportunity to have this matter looked at, because the facts really disprove the satisfaction that the noble Lord has expressed. It is a fact that under the guise of a tax Bill, under the guise of a Budget, which can only be discussed by another place, there has been legislation put on the Statute Book which enables people to walk into your house, break into your desk or your safe, and have more power than the police in conducting a criminal investigation. That was done without your Lordships being able in any way to amend it or to mitigate its consequences. As long as that is the situation, I invite your your Lordships not to accept the guidance given by the noble Lord.
Lord PEART: My Lords, may I have permission to intervene? I hope that noble Lords will remember that this was discussed by our own Committee here, and the Committee say that they do not endorse any of the suggestions made by

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the noble Lord, Lord Harmar-Nicholls, hut they pay tribute to what he did.
Lord HARMAR-NICHOLLS: My Lords, I was going to deal with the chairman of the Committee because he comes into a similar category. I remember the noble Lord as Leader of the House. He was very forceful, and he had the skill which resides in the Leader. Was it MacGregor who said,
"Wherever sits MacGregor, there is the head of the table"?
Likewise, where e'er sits the noble Lord, there is the head of the table, and he was certainly at the head of the table on this Committee. He forcefully joined in the giving of evidence and expressed a point of view that was very impressive. Then I learned, about half an hour ago, that he was almost not aware of Standing Order No. 49 and the protection necessary until the matter was raised. That is the sort of thing I am afraid of and I hope noble Lords will bear it in mind.
Because this protection has been in operation for two or more centuries, and because it worked when the government of this country was on a different plane and was conducted at a difference speed from today's, one can be cajoled into thinking that it is working today; but it is not, and the evidence of what a Conservative Government did under that Act and what the Labour Government have done under the 1976 Act cries out loud for something to be done. The noble Lord, Lord Shepherd—I respect his view —did not think my suggestions were the right way of going about it, and of course I accept his view. I do not know whether or not they are. Nevertheless, I believe that some way should be found to look at this and to bring up to date the protection that Standing Order No. 49 should give us. Indeed, that is all I wanted Lord Peart to do. He does not feel able to do that at present, and I respect his point of view, but I hope noble Lords will find every opportunity to try to make him change his mind.
It is suggested that by even looking at the issue we are in some way attacking the powers of the other place. I have made it clear that they are powers which they should have. Indeed, I do not think your Lordships are entitled to have anything to do with the taxing of the people of this
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country because we cannot be dismissed if we do the wrong thing, whereas the Members of another place can. Therefore, as they must carry the responsibility, they should have all the powers necessary, and I am not concerned with that point. However, I say that if they use those powers, which have been properly given to them, to tack on things which should not be completely within those powers—I refer to such matters as freedom and items which this House should look into—then we should make certain that the protection that was built in when they were given those powers is used. At present it is not being used. I am not saying that that is happening deliberately or michievously; it may be happening inadvertently, or perhaps because they cannot find the time to change it. I believe we should find the time to do something about it, otherwise we may find other things coming through. Perhaps the very fact that one almost tried to persuade your Lordships to throw out the Finance Bill 1976, and the fact of this debate, have drawn to the attention of a few people the need to look at things more carefully than was the case before we had this exchange. Although that may be making a contribution, I do not think it will be enough.
There is no question of attacking Mr. Speaker; he is absolutely superb and his impartiality and objectivity is above question. The House of Commons can look after itself and it is for your Lordships to look after yourselves. They have the power to do all these things. It is written in our Standing Orders that we can have the power certainly to look after freedom and trespass if we wish to do so. At present the protection is not being used. I hope the Leader of the House has not heard the last on this. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
LOCAL GOVERNMENT ACT 1974 (AMENDMENT) BILL
RATING (DISABLED PERSONS) BILL
THEATRES TRUST (SCOTLAND) BILL
Brought from the Commons; read 1a, and to be printed.

THE DEMOCRATIC SYSTEM: PROBLEMS
4.45 p.m.
Viscount HANWORTH Viscount HANWORTH rose to call attention to the fundamental problems which have to be faced by any Government in the future if our democratic system is to survive, and to the need to discuss what measure of inter-Party agreement might be possible in devising solutions; and to move for Papers. The noble Viscount said: My Lords, we have a large number of speakers today and, allowing some 20 minutes for the reply from the Government Front Bench, this gives us an average of 11 minutes per speaker. I hope to keep my remarks down to just over 10 minutes, and in case there may not be time at the end I shall make a few remarks now which I should otherwise have made then.
First, I wish to thank all noble Lords who have put their name down to speak I am particularly pleased and honoured—I use the latter term advisedly because it is not one I normally use—to have a maiden speech in this debate from the Opposition Front Bench by no less a person than the noble and learned Lord, Lord Rawlinson of Ewell, who, as noble Lords are aware, was Attorney-General. The idea for this debate I owe in great measure to the noble Earl, Lord Halsbury; we discussed the subject one evening and went over the various points, and I decided to put the matter forward for debate.
The purpose of initiating this debate in broad terms is simply that I believe the chance of any one Party alone solving the sort of long-term problems I have in mind is even less likely than getting some measure of inter-Party agreement. We must face the fact that over the last few years the status of this nation has declined progressively until it ranks in many respects near the bottom of the European league. We cannot hope for perfection in our institutions and political life because, as President Kennedy once said:
"Politics is a field in which all action is second best and the choice frequently lies between two blunders".
Nevertheless, our ability even partially to solve problems, admittedly common to other European nations, is unsatisfactory
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by comparison. It has been rightly said, first, that our present Party system is resulting in the nation taking a very convoluted course on major policy and, secondly, that the differences between the two major Parties are being accentuated to the nation's disadvantage. The reversals of policy by both Parties on, for example, wage restraint, the nationalisation and denationalisation of steel, illustrate the first point. Most noble Lords would, I think, concede the second assertion. Although we may individually start from different points of the compass, the room for manoeuvre in finding sensible and practical solutions is relatively small. What I am suggesting, therefore, is that an attempt be made to reach some measure of inter-Party agreement to at least some of the major intractable problems facing any Government in the future.
The major argument which may be raised against the approach I am advocating is that electioneering necessarily requires some diversity of policy between the Parties. But what the electorate objects to is, first, being taken for a ride on specious promises and, secondly, having to decide between Parties on a basis of what then becomes a mandate to do many things which the majority of the public do not support. We have dodged this issue for far too long and my plea is to raise Party politics to a level where they embrace a greater degree of wisdom and statesmanship.
It is strange that, in spite of the enormous changes in our society and the decline of this nation, politicians should be so isolated from popular feeling that they seem to imagine that a purely selfish Party system which worked reasonably well many years ago can be perpetuated without change. In this context I again quote the method of electing the American President. What more perfect system was there when it was devised? But look what it is today. We have to change our methods and our institutions, and I hope that we change them gradually, but we can do that only if we start the change in time.
The subjects which I particularly have in mind for inter-Party discussions are as follows. I shall deal first with unemployment. Increased efficiency in the manufacturing process (automation et cetera) is necessary if we are to remain competitive without lowering standards of living. It

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follows that an increase in unemployment is inevitable unless we can redeploy labour so as to increase the GNP. A shorter working week, or earlier retirement, are undesirable palliatives. Fundamentally, more people working efficiently for the optimum number of hours makes the nation more able to afford the things that we cannot now afford—for example, modernisation of hospitals, better old age pensions. In other words, we want an increase in GNP. A longer term problem will be to find useful work for those in the lower intelligence bracket. So many of the things that they could do before are now being automated—automatic petrol pumps are just one example—and today not many people are needed to dig trenches; the work is better done with an excavator.
The next point is that of wage restraint and wage leapfrogging. Here there are several measures which could be taken, but all of them involve rather fundamental changes in our existing thinking, and can hardly be adopted without a measure of inter-Party agreement. Next I turn to social benefits and taxation, in which the present situation is a jungle where those most in need often do not benefit. The take-up of benefits by those entitled is well under 50 per cent. Our taxation system is an invitation to dishonesty. Now I turn to the colour problem. All indications are that in spite of effort by the Government, this will be a continuing problem—certainly accentuated when the second generation of immigrants comes to maturity.
Now I wish to refer to the unions in this list of subjects. I believe that on this question the two major Parties are not so far apart on this matter as might appear. The Conservatives have previously stated that they want strong, responsive unions who can take a useful part in our modern society. To achieve this end much needs to be done to help them to meet the needs of the 20th century.
The next subject is social insurance. Here the present situation is unsatisfactory. If there is negligence, substantial damages can be claimed; if not, broadly speaking, nothing—in fact it is a legal lottery. Do we want an insurance for which everyone pays one way or another (for example, on the price of
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goods) or do we not? Certainly the American situation, where doctors have to pay enormous premiums against excessive damage claims, all of which is passed on to their clients, is unsatisfactory. I would suggest that this could be a subject for useful debate between the Parties.
The next point concerns Northern Ireland. This is an intractable problem in which there is in fact a large increase of inter-Party accord. Is this a useful precedent for other agreements?
Lastly, but to me most importantly, because so much else depends on it, there is Parliamentary reform. Despite my view that reforms are urgently needed, what worries me is that without at least a partially written Constitution, major changes could be made almost overnight by a Government brought into power by a minority of the electorate. The abolition of a Second Chamber—however constituted—is a possibility, and seems to be a pertinent example of this danger.
Looking rather further afield, I think that it ought to be apparent that our present form of Government, which has nothing to do with democracy in its popular sense, is simply not a practical alternative to Communism in most countries. I earnestly hope that in solving our own problems we may find something more dynamic which could provide this alternative. My appeal is for men of good sense to talk together and to find a common path of solid ground which is in the national interest.
4.55 p.m.
Lord RAWLINSON of EWELL: My Lords, this is the second occasion in a very few days that from this Dispatch Box someone has sought the indulgence of your Lordships in making a maiden speech. When I do so I am very conscious of how rich your Lordships' House is in legal experience and expertise, which is the field in which I have spent the whole of my life. In another place, because I became a Law Officer as long ago as the time of the Administration of Mr. Harold Macmillan, I could there present myself as a reasonably sized fish in that particular pond, but in your Lordships' House, where lurk Lords of Appeal in Ordinary, quite apart from Lords Chancellor past and present, I revert to being a minnow among trout. On reflection, I trust that as I

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am counsel and appear from time to time before the Lords of Appeal in Ordinary, they will not take exception to that description; though I think they are probably too busy preparing their speeches on the London forum for international arbitration—I hope to read the Official Report tomorrow. But I want to convey to your Lordships my sense of craving for your indulgence in making my maiden speech in this House today.
I hope that the noble Viscount, Lord Hanworth, will forgive me if I approach this subject in the light of those matters which concern me personally the most. I believe that the future of our democratic system depends upon maintaining and sustaining by everybody in the country, and those in public offices the rule of law. The rule of law is an expression which trips very easily off the tongues of lawyers and legislators, but it is not a fancy catch phrase. It is really the great principle—which is often extremely inconvenient to Ministers and administrators—which distinguishes the Western World from the mode of life and government in the East. For them, of course, the will of the ruler is the law. Oliver Cromwell, on being told, "Nine out of ten men will be against you", replied, "But what if I give that tenth man a sword?" That exemplifies the difference between the tyrant and those who believe in the rule of law. So any discussion of fundamental problems must he dominated by the totalitarian dimension.
I can understand, and sympathise with, those who urge the introduction into our Constitution of a Bill of Rights, but I feel that it is of very limited value. We should not forget that on paper the citizens of the Soviet Union live under a Constitution which affords them freedom of speech freedom of worship, freedom from arbitrary arrest, and which limits detention before trial. But in practice, of course, it is a total sham, as Mr. Yuri Orlov is probably experiencing at this moment. It is the arbitrary rule of the ruler, the man with the sword.
Therefore, I do not put any great over-reliance upon declarations. We are witnessing now in this country, apparently, a recent revival of the Nazi philosophy. However, I do not forget that I have seen it before. When I first stood for Parliament in 1951 as a candidate in Hackney,
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there were members of the British Union of Fascists and the Communists marching through the East End, and I recollect that it was my Labour opponent—a very kindly and agreeable opponent, too—who was the principal target of the Communist abuse. But at that time, of course, the Union of Fascists was led by a powerful leader figure. It is not now. Therefore, I do not believe that, overall, the National Front presents a great threat.
I say that in particular for this reason. On the 6th April, for some arcane reason which was decided by others, I asked for, and was given by the Chancellor of the Exchequer, appointment to the Office of Steward and Bailiff of the Chiltern Hundreds. I may say (and I hope it is not controversial to say this) it is the only favour that the Chancellor of the Exchequer has ever extended to me; and I am not certain whether I in fact hold that office as I speak to your Lordships here today. But in the election which arose in the constituency which I vacated because of my appointment to that Office, the National Front polled less than one-third of the votes which were given to a "Pop" star who toured the constituency in a white Rolls-Royce. Of course, I appreciate that they will attract marginally more support elsewhere, where there are special problems. So much for the Right: but, likewise, for the Left. In the General Election of 1974 the Communists attracted only 0·1 per cent. Of the votes cast throughout the country. So when people express their opinion by secret ballot, the totalitarians of the Left and the Right are massively and humiliatingly rejected.
That is not to say, however, that it is not clear that determined, skilful and unscrupulous minorities outside the major Parties, not belonging to any of the major Parties in the State, have penetrated some of the trade unions, which nowadays exercise great political influence; and, such is the indivisibility of the totalitarian creed, it is impossible to believe that their political aims will not influence their conduct towards any Government, whatever Government may be in office, of either of the major Parties. For their political aims are totally unrepresentative of their membership; and, equally, their influence is quite out of proportion to their real representative value. My Lords, I notice that the Communists now have the

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position of leadership of the largest Civil Service union; and that was a power obtained, not through postal ballot, but by delegates mandated at branch meetings. Compare that with the recent presidential election of the AEU, which was conducted by postal ballot for the first time, where the turnout doubled since the previous election and where the candidate who fought, as he said, the Communists and the Marxists triumphed. My Lords, does that not indicate the imperative need to introduce a compulsory obligation for postal ballot, if necessary paid by the State, for all elections to offices so influential to the public interest?
But, my Lords, for those in public life it seems to me that our major duty in defence of the democratic system is to ensure that we avoid giving opportunity to the enemies of democracy to exploit legitimate social grievances, and to ensure that the institutions of the State function fairly and efficiently. That is our responsibility; and with Government now dominating so much the lives of every citizen, and despite the existence of a Parliamentary Commissioner or a Local Government Commissioner, I cannot believe that the citizen of this country yet feels that he presently enjoys sufficient and appropriate remedy to redress grievances or to secure impartial review of decisions by Government, be it local or be it central. It is, as your Lordships well appreciate, a sense of grievance against authority which leads inevitably to a festering resentment against a system which may have genuinely treated that person unfairly. It is a field of law, my Lords, which I believe requires development.
But if the citizen is better able to challenge and to have reviewed the decisions which are made by authority, then I also believe that Government decisions and Government policies ought to be less reticent and less secretive. I do not refer to matters of State security, but I do believe that Section 2 of the Official Secrets Act ought to be repealed and ought to be replaced by a new Official Information Act in which there should be provision for classification rules made by a Minister with the approval of a Select Committee of the House of Commons and with a certification in a particular case that the information lies within that particular class, given by some body outside the
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Ministry. I believe there should be reform of the law of contempt, broadly in accordance with the Phillimore proposals, and that reform of the law of defamation is overdue. I say all those matters because it is my view that, if the democratic system is to be successfully defended, such liberalisation of approach by modern Government is essential.
My Lords, if I might follow one point which was raised by the noble Viscount, Lord Hanworth, I, too, have felt concern for long over certain aspects of our Parliamentary process, particularly with regard to the enactment of law. Generally, the system that we have gives good opportunity for debate and a splendid opportunity for the confrontation of Ministers. But it is in the quality of law enacted that there has been the failure by successive Governments over the years. I wonder whether every Parliamentary stage in the enactment of law needs to be conducted through the adversary approach, and whether some more informal, consultative stage could not be introduced. Because major law, as we have seen, can be, and is, enacted with relative speed and ease. I appreciate that the noble and learned Lord the Solicitor General for Scotland and my noble friend Lord Ferrers, and both the Chief Whips, might not agree that we legislate with relative ease and speed, but, on the whole, we do; and the opportunity and the power to legislate has produced over recent years swollen and ill-digested Statute Books which, despite hours of Parliamentary time, produces law often unintelligible to the practitioner and (may I dare say so?) sometimes unintelligible to the Lords of Appeal in Ordinary. But bad law, like every legitimate social grievance, is in itself a danger to the democratic system, for it decreases public confidence in the institutions and it decreases public confidence in the rule of law; and there are ever present those enemies, ready to exploit with great skill and with great determination the failure, and to offer and present false remedies.
My Lords, on the general matter of Parliamentary reform, I do not think it acceptable to isolate one of our institutions and call, as some do, for its reform or its abolition alone, because if that is seriously demanded then what is required is a full-scale, comprehensive review of each part of Parliament, of each part of

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Parliament's procedures and each part of Parliament's conventions, and, in particular, review of the manner, power and responsibility for the recommendation of the dissolution of Parliament within its five years. This could be done only by a Constitutional Conference, and to demand major changes of only a part of our Constitution and only one of the Houses of Parliament seems to me both frivolous and irresponsible.
The noble Viscount, by initiating this debate, has, I believe, served (if I may say so with the greatest humility in a maiden speech) the public interest, because these are matters which ought to be debated and ought to be considered. The times demand, obviously, continuous vigilance and unsparing energy in seeking to improve and enhance the modern machinery of democracy. We live in an age, as we all well appreciate, of international terrorism, where a small minority, trained and dedicated, can accomplish a very great deal. We have seen it in Europe; we have read about it and heard of it in Italy. At home, when I was Attorney General, I remember sitting in my car driving through the lanes of Hampshire when the car was blocked by a stalled vehicle. I looked up from the back where I was sitting reading my papers to see my detective in the front seat with his pistol in hand at the ready. I thought to myself how extraordinary that experience would have seemed to my predecessors of only a few years in the past.
But the prime battle must be in the hearts and minds of men. To win that requires, as I have said, constant effort, illuminated by a readiness to afford patient explanation, continuous information, continuous knowledge to the people whom we all serve. Edmund Burke said that all that is required for evil to triumph is for good men to do nothing. And even more true is that now than when it was first said 200 years ago.
5.11 p.m.
Lord ROCHESTER: My Lords, it is a particular pleasure and privilege for me from these Benches to be the first to be able to congratulate the noble and learned Lord, Lord Rawlinson of Ewell, on his maiden speech in this House—lucid, amusing in places, to the point throughout as we would expect from so distinguished a lawyer and Parliamentarian. I found
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particularly convincing his references to legislation, coining from so authoritative a source. We shall look forward to seeing him often "opening the bowling", if I may put it that way, for the Opposition. I found this afternoon that he and I have at least this in common—and, I am sure, much beside—that both of us are members of the MCC; but I hope that in future we may find his bowling is of a pace considerably faster than the medium kind that he very properly chose to give us this afternoon. I know that I speak for noble Lords in all parts of the House when I say to the noble Lord how much we welcome him.
Several noble Lords: Hear, hear!
Lord ROCHESTER: My Lords, the noble Lord will forgive me if I do not follow him. Like him, I wish to stick to my own experience, which is in the industrial field. However, like him, may I very much commend the noble Viscount, Lord Hanworth, for having introduced this debate. It seems to me to be of great significance that on several occasions recently there have been calls from the Cross-Benches for inter-Party agreement in the national interest; and I should like very much to give this one all the support I can.
The Motion is broad and it must be treated broadly. In the time available, it is not going to be possible for me to do more than add a few arguments in support of those advanced by the noble Viscount, Lord Hanworth, and to suggest a few ways in which a national consensus might be brought a little nearer. In my view, the noble Viscount hit the nail right on the head when he said that the fundamental point is that the measures needed to keep inflation, for example, under continuing control, to improve our lamentably low productivity and, ultimately, to reduce unemployment are so painful as to mean that neither of the major political Parties is going to be able to implement them on its own. In the end, however, international competition will dictate that the decisions affecting British industry (whether nationalised or not) will have to be based primarily on long-term commercial considerations and not on short-term political ones. For example, we shall have to accept that we cannot indefinitely go on borrowing and thus consuming more than

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we produce, callously and irresponsibly, in my view, obliging our children to repay debts that we have incurred. It was Mr. Harold Macmillan in October 1976, significantly, in the only major intervention he has made since he left active politics 15 years ago, who said:
"Do you think the world will forever lend you £10,000 million worth every year more than you earn? Why should they?"
My Lords, I think that also we shall have to restore adequate differentials for responsibility and skill so that the income after tax of senior and middle management and of craftsmen is no longer, damagingly, so much lower than that which can be obtained in other countries. If we do not act to remedy this, then such people will simply disappear.
Here, may I say that the Amendments that were recently made to the Finance Bill in another place should not be represented as alterations made to benefit the rich at the expense of the poor. It may be, to put it bluntly, that to treat them in that way is conceived to be to the advantage electorally of the Labour Party. But in my view it does nothing to solve the problem. The expenditure involved in those changes—which have to be made for the purposes I have sought to outline—should be met by increased taxation of an indirect kind on items that we may enjoy but which are not necessities. The expenditure should not, I believe, be met either by increasing corporation tax or by adding to employers' National Insurance contributions, thus simply increasing unit costs and, ultimately, throwing even more people out of work. Above all, we must learn how to unite for the purpose of increasing national wealth instead of spending so much of our time in squabbling over how such wealth as we have is to be distributed.
A further basic reason why there need to be agreed policies in the industrial field is that the time span over which industry now has to plan ahead is considerably longer than the expectation of life of a single Government. It follows that the Government of the day should not introduce legislation which is likely to be judged by other Parties to be so extreme as to mean that it is promptly reversed as soon as the Opposition become Government. Exactly the reverse has
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happened under both Conservative and Labour Governments recently. The noble Viscount, Lord Hanworth, drew attention to a number of examples; and I can quote one or two which I think he did not mention. Pensions is one, and help for industry a second.
My Lords, how, in these circumstances, is it to be wondered at that industry lacks the confidence to plan its investment programmes ten or more years ahead, as nowadays it needs to. The other day I was interested to learn that the central dilemma of combining representative democracy with good economic management was spotted nearly 50 years ago by Winston Churchill. He argued that Parliament was an excellent institution for resolving straightforward questions of interest, but that sound economic policy would often involve imposing unpopular measures on all major Parties. Even at that time he saw the risk of one Party claiming that such measures were unnecessary and of trying to steal an electoral march on the Government in power.
Churchill's solution was to set up an economic Parliament free altogether of what he called Party exigencies and composed of people having special qualifications in such matters. Mr. Macmillan called for a Government of national unity, and he saw the alternative as a slow slide down and down or the collapse of a democracy. In that respect, the noble Viscount, Lord Hanworth, was speaking in precisely similar terms. More recently, Sir Ronald McIntosh, formerly Director-General of the National Economic Development Office, in commenting on Britain's poor economic performance, said:
"It may also stem from our Party political structure with its obsessive concern with short-term measures and its destructive concept of adversary politics".
I believe we ignore such expert testimony at our peril; yet night and morning the sound on the radio of the way in which business is conducted in another place—in your Lordships' House more self-discipline is brought to bear--constantly suggests that if at the highest level on complex issues it is thought fitting for these problems to be dealt with by two quarrelsome factions, then it must equally be fitting for industrial relations to be conducted in the same way. Fortunately,

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in my experience in industry it is often the case that management set a better example in these matters from the top.
When and how are we going to learn? Coalition is clearly not practical politics at present; but, in my view, it is high time that agreement should he sought between the Government and both sides of industry, and between political Parties in Parliament as a whole on at least a few basic problems. I am convinced personally that these will not be solved until all those bodies having a stake in them and in which power resides, are prepared to confront them together. Some have been identified by the noble Viscount, Lord Hanworth, and I should like to single out particularly the need to establish soon agreed long-term procedures for the determination of wages and salaries generally. In this connection, I should like to pay tribute to Mr. David Basnett for the initiative that he took in relation to the public services six months ago, and also to the efforts being made on an even broader front in this respect by the CBI.
May I say that I thought the response of the Prime Minister, in reply to a Question last Thursday in another place on those efforts was, to say the least, highly disappointing. It is imperative also that we should find a consensus on the question of employee participation. I hope that the White Paper which is promised soon will provide a basis for progress. We cannot affort to stand still. It is essential that progress should be by consent and not imposed on unwilling employers. This is essentially a matter of starting from where progressive companies have reached in developing agreed participative procedures with their employees, and not from where it is thought they ought to be. We must act, but in doing so we must take account of what management and all employees actually aspire to, and not what politicians or even senior trade union leaders think may be good for them. I believe also that there is an urgent need in the industrial relations field for agreed codes of practice aimed especially at improving the methods by which we resolve our industrial disputes.
Meanwhile, under the present Constitution and our unrepresentative electoral system, the "haves" will not give an inch to the "have-nots". The Lib-Lab pact has provided at least a measure of
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economic and industrial stability and political consensus in the past year. It remains to be seen whether that pact will prove beneficial to the Liberal Party in terms of votes at the next General Election. Whatever the outcome in that respect, it was very gratifying to me to read in a letter in The Times two months ago from Lord Brown, writing as a loyal Member of the Labour Party, that had it not been for Liberal support of the present Government we would, in his view, have been in the throes of near economic disaster, and if at the next Election it should transpire that politics which put the nation first benefited Party interest also, he would rejoice. So would I, my Lords, and so I believe would millions of other people.
5.26 p.m.
Lord KILMARNOCK: My Lords, it is a very special pleasure for me to be able to start by congratulating the noble and learned Lord, Lord Rawlinson of Ewell, on a very genuinely notable maiden speech. I can assure your Lordships that this is no mere polite convention, as my late father enjoyed an extremely close personal friendship with the noble and learned Lord and his family and this still persists between our families. I know that my father would have been pleased that, in his sad default, this happy opportunity has fallen to me today. I am sure that we all look forward to hearing the noble and learned Lord with great frequency from the Front Bench of his Party.
I turn to the Motion of the noble Viscount, Lord Hanworth. I am sure that we are all grateful to him for affording us the opportunity of this short debate. I want to intervene only briefly and on one subject. I do not think that all subjects are ripe for the consensus the noble Viscount seeks. But some lend themselves more than others, and unemployment seems to me to he one of the foremost of these. I am convinced that unemployment is not merely cyclical but endemic in the world system which is now developing. Nothing that either of our major Parties can do will be more than midly palliative, unless there is a very radical rethinking of our attitude to work.
Since the beginning of the industrial I revolution we have been busy teaching

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the world that business is what life is about. That lesson has been so well and truly grapsed that an increasing number of producers all over the world are starting to compete for orders which are not going to increase in proportion to the extra capacity. This is what the new world economic order claimed by the non-aligned countries means. We cannot tell these countries to stop producing industrial goods and go back simply to raw materials or agriculture or to uncomplaining starvation. The process is irreversible. It is difficult to make so-called fair trading "stick" except inside a club like the EEC, and even that is not easy.
Shipbuilding is a case in point. We cannot tell the South Koreans to stop producing ships. Yet, after the huge spree of overbuilding of super-tankers demand is on the decline. So there is going to be a smaller percentage of a waning demand for the Association of West European Shipbuilders. This pattern is likely to be repeated in many fields. Yet, we go on pinning our faith to "export-led growth" as the way to recovery. I believe this to be naive—at any rate, so far as unemployment is concerned. For even if, in some sectors, there should be growth, or some skills in which we excel should flourish, these will probably be in the area of high technology; that is to say, in capital-intensive rather than labour-intensive industry. It will not directly help the unemployment problem. Even if trade as a whole were to pick up—which might I suppose be the end-result of aid on an ever-increasing scale to the Third World—our share of that trade would be diminished by the sheer number of newcomers in the field. At home the so-called service industries are not going to mop up all the surplus man and woman power—perhaps I should say "person power"— unless one includes the machinery of Government, the Civil Service, as a service industry and expand that, which goes against the current concern to cut back public spending.
Yet, despite all these pointers to the contrary, we go on bringing young people up in the expectation of a 40-year working life and with the additional implication, unchanged, that only work is moral and idleness is a sin. What is more, sin or no, few of us are equipped mentally to
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withstand the impact of large doses of leisure—small wonder that when rising unemployment takes its inevitable toll, those affected suffer savage disappointment and perhaps severe demoralisation.
Most social problems, I submit, stem from the moment at which energy goes sour. If we are to continue to bring people up as if full employment were just round the corner and its absence just a temporary aberration from the normal and natural order of things, that, my Lords, is a fraud upon society. But human beings are adaptable: that is why they have survived. If you give them such facts as you have and such reasonable forecasts as you can make, I believe they will respond imaginatively to the new situation. But it must be made clear to us all—or as clear as possible—what this new situation is.
Unemployment has only two solutions in broad terms. The first is a growth rate that can absorb it, which I do not believe will happen although I should be glad to be proved wrong. The other is a reduction or a redistribution of paid working life. Even the new Secretary-General of the Transport and General Workers' Union has suggested one sabbatical year in 10 for workers. Many people in universities already have one every four or five years. Then I remember the late Lord Douglass of Cleveland talking to me, movingly I thought, about voluntary work-sharing by employees against the wishes of the employers during the slump. In fact, as working hours decrease a great part of our lives is already lived in the so-called "gift" (that is, non-earning) economy.
If, as I suspect, there is a further expansion of our activities into the "gift" economy, it will be very important that the stigma of not being in the directly-productive or administrative sectors is removed and that proper financial arrangements are made for those who cannot get jobs or are prepared to surrender them to others, and that all the possible outlets for surplus energies are investigated to the hilt, possibly with the aid and advice of a multiplicity of voluntary organisations. Education will vitally affect, and be vitally affected by, all this. Also, now that we are accustomed to measuring our industrial energy requirements against likely sources 30 and even 50 years ahead,

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I see no reason why we should not attempt the same in the even more important field of human energy.
This area I have touched on is one which, in my opinion, ought not be be confined within the channels of Party politics; it is one on which we should try to reach that measure of inter-Party agreement which the noble Viscount, Lord Hanworth, desires. But I cannot see how we can begin to talk about a common policy without a prior, thoroughgoing inquiry into the whole phenomenon of unemployment in the developed world and in this country in particular. Evidence and views are obviously required from the Departments of State most closely concerned, particularly the manpower divisions of the Department of Employment, the career education and guidance section of the Ministry of Education, the Manpower Services Commission, and also from the TUC and the CBI—in other words, from the usual sources.
Then one would need to draw on the latest thinking in the universities by economists, sociologists, demographers and others; and perhaps one would need to commission studies from the academic world. But it is vital that such an inquiry should get as near to the grass roots as possible; and to that end it would be necessary to call on bodies such as the National Union of Students, the YMCA and voluntary and religious organisations active in the field, together with, I suggest, the various organisations representing the self-employed.
What would be the best body to conduct such an inquiry? I suppose it could all be farmed out to a Think Tank or Tanks. I have myself been an advocate of Think Tanks, but I do not believe that is a method very likely to commend itself to your Lordships' House. I think we should all prefer a more open and less expensive method of inquiry. In my opinion, therefore, there would be no better way of starting the ball rolling than by a Select Committee of your Lordships' House. These Committees, as we all know, are inter-Party, are served by extremely able Clerks and can engage specialist advisers. Of course, I am aware that there are staff, space, time and business problems and that the facilities available to this House do not permit it to sponsor Committees lightly; nor have
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I yet consulted the usual channels. I thought I would first take the liberty of floating the idea in this afternoon's debate. If any other noble Lord or Lords feel the way that I do, I shall be happy to hear from him or them and we can pursue the matter further. However that may turn out, I should like to put it on record that I feel the House of Lords could make an outstanding inter-Party contribution to a matter which must be of deep concern to practically every household and family in the Kingdom.
5.35 p.m.
Viscount TRENCHARD: My Lords, we are indeed indebted to the noble Viscount, Lord Hanworth, for putting down such a wonderful Motion, which gives one a passport to express one's own ideas of what is in the national interest and for everyone else to agree to them! I do not mean by that to dampen the highly desirable objective of trying to reach consensus on matters of enormous national importance, but I think it is perhaps already clear from the subjects that have been raised by speakers in the debate that points have been raised, each of which could produce a full-length debate in this House with very many different points of view. However, I agree with the noble Lord, Lord Kilmarnock, that perhaps this House has more hope of reaching, or contributing to, consensus than any other institution.
If it is not impertinent for a Back-Bencher to congratulate a Front-Bencher in his own Party on a maiden speech, I should like to take this opportunity to congratulate my noble and learned friend Lord Rawlinson on a marvellous speech and to express the hope that we shall hear many more speeches from him.
I tried, in making notes for this debate, to confine myself to points which could be loosely interpreted as compatible with the words of the Motion: namely, the essential points to defend our democratic system. I tried to cheat in the first of the four points which I headlined by writing that in practical terms I believed the most important thing was that we should cease the process of "going bust" and that we should maintain our economy, which at the moment is in severe danger. I felt that democracy could not stand the nation going further the wrong way down

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the economic path. I then put down "the freedom of individual choice" as a more theoretical second heading, which I believe is vital for the salvation of democracy. I put down as a third heading, which has been well and truly dealt with by my noble and learned friend Lord Rawlinson, "the rule of an impartial law"—for the weak, the powerful, for individuals and nstitutions—"right laws and their enforcement". Finally, I put down "protection from our enemies: defence".
Under the heading of not going bust and against the background that our standard of living in this country, relative to those of other countries, has declined and is now at half the level of many Continental countries that were once below us, I found myself headlining first and foremost our appalling productivity record. I found myself wishing that consensus could be reached on how to put it right, because I believe that there is consensus already showing in this debate on the record. Then I realised that there were potential scapegoats from investors through managers, through employees and trade unions and, finally, to Governments; and that many full debates could take place on which of these scapegoats was the most responsible and needed putting right.
In my own view, it is self-evident, but I do not know whether everybody would agree, that, since our main problems and our main lack of productivity lie in our large areas of labour unemployment, and since we have very many good areas where our performance is competitive with that of any country in Europe —in agriculture, in much of the retail and service industries, in small manufacturing industries and in the City of London—our problem lies mainly, as was debated recently in the Chamber, in the structure and atmosphere surrounding collective bargaining. I would add that it is in the large industries and organisations that the lack of incentive, mentioned by the noble Lord, Lord Rochester, becomes so important and is so blunted.
The noble Viscount, Lord Hanworth, suggested that there Were comparatively small differences of opinion on the subject of wage restraint; at least, that is what I understood him to say. But I believe that solutions are being advocated by men with
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good qualifications to recommend solutions, which range right through from permanent, though more flexible, incomes policies, to monetary controls and free collective bargaining, with major reforms of the bargaining system, to bring us more into line with—not to copy, but to parallel—those in other countries where the economic record is much better. Here I feel I must say to the noble Lord, Lord Kilmarnock, that we cannot totally hide behind the world slump and suggest that unemployment will for ever grow. Enormous growth has taken place in this century, and since the war, in the population of the world and in the world's domestic product. Through our inefficiency and, in many cases, through productivities half those of our industrial competitors, we have lost enormous shares of the market, and it is there that we must look, as well as in the restimulation of the world's economy, to put matters right.
If I may pass to freedom of choice, as I believe that this is a vital aspect of democracy, I do not believe that one can have democracy without freedom of choice; not just for candidates to go forward to Parliament, but throughout our economic system and our life. I believe that this needs the largest possible, most vigorous and competitive private enterprise sector. Many people, perhaps a consensus, say that they believe in a mixed economy and in the private enterprise sector of that economy. Then one hears them in conversation saying, "I believe in private enterprise, but…" and they continue by outlining an area which they believe requires special controls. The problem is that all the "buts" are different and, by the time you have added them up, you are very close to a situation, if they are all implemented, of control of price, of product, of label, of advertising, of factory type and of employment. Then there is not as much competition and as vigorous a private enterprise system as there should be, because the old adage is true, that you cannot have your cake and eat it.
We still have choice, and considerable choice, in our Parliamentary area and I hope that we always shall have. Whether or not change of our Parliamentary system would be beneficial, I leave to others to debate. But, again, it is a subject, regrettably, on which there are a tremendous number of different views,

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I can remember so well, as a boy, listening to learned Members of this House, and others, telling me that the reason why the French Government fell every three weeks was that it had a system of proportional representation.
In the time available, I shall not deal with the rôle of an impartial law, except to say that I really do believe, as I said on a previous occasion, that the rôle of our law in relation to some of our big institutions, which are in positions of monopoly powers, has to be reviewed, for it is way out of line with that of many other countries.
Finally, there is defence. I believe that this is a clear essential if our democratic systems are to survive, and that it is more urgent than, perhaps, the lack of mention of it in this debate indicates. Of course, we continually hear the difference of view between those who do not want to harm the détente, and those who want to build-up our strength to counter the build-up by some of our potential enemies. Again, it will be hard to reach a consensus. My own view, without reservation, is that those who are, or may be, the enemies of this country, and are also potential enemies of democracy, will only respect strength, which I recognise can be produced only within an alliance. Let us hope that debates in this Chamber will produce the consensus for which the noble Viscount very much hopes. It is interesting and ironical that our hopes in this respect are, perhaps, based on the fact that this House is not an elected Chamber, and that we do not have to look over our shoulders to see what our constituents think of what we have just said, and that gives us more freedom to move towards a possible consensus on these incredibly important points.
5.48 p.m.
Lord GORE-BOOTH: My Lords, it is a very great privilege and pleasure for me to speak this afternoon as the third member of the MCC, and in that capacity, and in a more general one to welcome the noble and learned Lord, Lord Rawlinson of Ewell, and to congratulate him on his extremely elegant and substantial maiden speech. If I may pay a personal compliment, it is that, while the noble and learned Lord's profession and mine have not exactly crossed, there was one occasion on which we had official dealings
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together, and it is a great pleasure to have this opportunity to thank him for his invariable skill and courtesy on that occasion.
May I, somewhat more unusually, refer to two points of substance in his maiden speech. I thought that he raised two extremely important and relevant points about Government in these days. One of these was the exercise of influence, political and general, by people who had no representative capacity in any sense to exercise such influence. The second was the undesirability of automatically assuming an adversary posture, or an adversary attitude—I slipped into Dr. Kissinger's vocabulary—in cases where there was no need for any such thing. May I add to that duet of ideas a somewhat similar one of another danger to democracy in our age, which is the discovery, by people with motives hostile to democracy, of methods of using democratic procedures and rights to produce anti-democratic solutions and conclusions.
I am also very happy to join noble Lords in their thanks to my noble friend Lord Hanworth for introducing this Motion. There had been some little fear that what he had to say would be too general for your pragmatic Lordships, but, fortunately, that was not the case. Indeed, the whole tone of this distinguished debate has been to emphasise how important are the issues which the noble Viscount has raised and how important it is that your Lordships should take a very forward part in discussions on this scale about these matters.
I myself have treated the subject a little differently from most of your Lordships in the sense that I have perhaps avoided the immediate things that each one of us may desire to be done quickly and thoroughly and tried to analyse a little some of the ideas and influences which bear on this whole question and its solution. I have done this—and I hope your Lordships will agree—partly because what we are saying today will be, in its official form, at least one of the authoritative works on the subject when it comes to be considered in its entirety and its profundity by people in politics, in academic circles and generally.
It seemed to me that we could profitably start from the consideration that much

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of what we are talking about rests on the history of this country during the last 30 or 40 years—and I make no apology for going back to some of that history because in fact it helps the analysis of what we are discussing today. In 1945 we had reached the summit of absolute power and absolute organisation that this country had ever achieved. I am not saying that we were top nation; I am simply saying that as a political unity we had reached that position. Almost at once, and I think absolutely rightly, the Government of Mr. Attlee and Mr. Bevin, as it has come to be called, resolved that the right policy was to withdraw from a position of empire. We probably carried through the most skilful intended withdrawal, admittedly under some pressure, that has ever been accomplished in history. While on the subject of that particular Government, I should like also to add that, as they go back into history, the more that Government seem to gain respect from readers of history for their integrity and their purposefulness and indeed their great measure of success.
From that period we became a much more humane country than we had ever been before. Also for the first time, through the educational reforms introduced by both Parties, we drew on a very much greater proportion of the population for the skills that we needed in the work that was to come in succeeding years. Also after certain setbacks we accomplished a remarkable economic recovery, and it is not often remembered that in the late 1950s we were not only paying interest on some of our wartime debts; we were actually reaching the point where we could repay a certain amount of capital. When one adds to this certain successes in industry—not in every industry but still certain successes—we are compelled to ask ourselves what has gone wrong, in the sense that we are not at the moment a wholly happy country. We are a little lost in our judgment and direction of where to go. How has it happened?
That leads us on to consider whether certain changes in Government handling of matters would help to set things right. May I give a few of the possible causes—because I think they still exist and they need some correction or eradication. First, may I say a word about doctrine.
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In the 1930s, which one remembers so vividly, I think we were veryshort on, doctrine. We thought too pragmatically We thought in terms of Hitler as a freakish man who could possibly be cajoled into being reasonable. We simply did not think in terms of the evil which the whole Nazi doctrine and system represented.
Today, by contrast, I would maintain that we have too much doctrine around, and it deflects us from the pragmatic methods in which this country is so skilled. I do not intend to argue about this. I would simply say that if we had not had this excess of doctrine, we would not now, have this sharp reaction in the educational field in favour of the quick learner and the gifted student, and we would not have the exodus from this country of a number of the highest skilled people in business and elsewhere because of the taxation system. Doctrine has taken over too much of practice in contrast to its absence in the pre-war period.
Another point that has affected our psychology, and which again somehow we shall have to seek to overcome, is what I would call the anti-hero fashion. Our literature of this period, popular and "classical", is very much permeated with an exhaustion with the good hero and a certain pampering of, as I say, the antihero, the person who is neither good nor skilful and who ends up somehow by being the hero of the story. This goes very wide and very deep. I think some of our defeat psychology stems from this and can be added on to an exaggerated description of our loss of power. We have lost power, but many people might be surprised at the degree to which we still retain influence, so that we have a psychological as well as a physical and political recovery to make. If we can do that then perhaps we can deal better with some events which happened in 1973.
Those of us who were present in this House at the end of 1973 when the recent economic crisis really and suddenly hit us with the multiple rise in oil prices, obtained a reaction from this House which was brilliantly enunciated by the noble Lord, Lord Diamond, that it ought to be possible for us to achieve a certain togetherness in the face of this sudden and indeed unexpected shock; and there were those of us who sought in a small way to work to that end. But somehow it did not prove possible.

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It is difficult to understand why perhaps our whole organisation—and this is what this debate is about—was not quite ready for the positive reaction which I think many of the citizens of this country would have liked. However, if we were disappointed in that we then had an interesting shock in the other direction, and this in a sense is the point of my story. When the Labour Government came into power there was renegotiation of the Common Market Treaties and the referendum—and I must confess to having been critical of both. I remain critical of the first. The referendum suddenly gave us, I think, a political cue to one thing which we were really looking for in the debate to which I have referred. The referendum produced a surprisingly positive reply. I am sure that this was because the reference was a direct appeal to what I would call not the silent majority but the "middle majority". Much of the problem of the period we had been living through is that it has been difficult in an atmosphere of asperity, if not antagonism, to find what the middle thought and the middle opinion would be.
Therefore we found—and I think that this should be catalogued among the possible ways of achieving more consensus —that a well chosen referendum on a subject where the instinct of the ordinary person is important is perhaps more positive and helpful a political institution than hitherto we in this country have believed. I say this because I think also that the extremisms, which are pronounced and which are unfortunately considered to be newsworthy, do not really represent, even in these much criticised days, the instinct and character of the normal British person. He or she, by and large, remains decent, law-abiding and helpful, not wanting to riot and, as one noble Lord has already mentioned, quite anxious to do his share of the country's work.
Having said that much, I have not answered the question which is posed; namely, whether there is a method for and the possibility of finding inter-Party harmony or inter-Party collaboration. I come to this debate upon this point with the major disqualification that I have never asked the electors of Much-Binding-in-the-Marsh to elect me to anything, because I foresaw the result. However, I venture to make the point
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that this is a subject which has to be approached with very great care. Surely in any democratic State there is almost bound to be a natural division—sometimes wide, sometimes narrow—between those who think that a State should hurry ahead with what it believes to be advance and reform and those who believe that that is all right but that perhaps we ought to go a little slowly and be tested as we go.
I think that any proposal to consider inter-Party getting-together in an age which, as we all know, has much more Whip power than the Victorian Parliament. cannot just be pushed on one side. One cannot solve the problem simply by wishing that politicians would behave differently. There is a perfectly reasonable, understandable difference in human character and human approach to political and other situations which up to a point makes genuine difference inevitable. The secret of the matter may well be not so much a general wish for general agreement as great judgment in deciding when a subject or a situation—like, for instance, a war—calls for instant agreement and when it simply is extremely difficult and when the timing of any kind of advance would be fallacious, if not disastrous. Those are just a few reflections upon some of the items which have influenced our character and which need to be kept in mind, and some of the items which can either help consensus or set it back, despite good reasons for going forward.
The last point that I wish to make concerns our constitutional arrangements as a whole. From all the discussions that have been launched and all those that will come, it seems that there is a feeling that some of the institutions which have served us extremely well over many years and which have been adapted are beginning to creak a little. I am not making allusion to any particular proposal or to any particular theory. Although I disagree with many of the bases of the argument, I have been very much struck by the suggestion of the noble and learned Lord, Lord Hailsham of Saint Marylebone, that perhaps the time has come when this country should have a look at its constitutional institutions, its constitutional doctrines, as a whole, to see whether they are really adapted to the rest of the 20th century.

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The noble and learned Lord suggested in his recent book, that a learned and, so far as one could get it, impartial and unprejudiced Commission might be appointed to study this fundamental subject, not in too much of a hurry and not with too much publicity, to take a real look at the Constitution. It could find out whether we do need something to be written down in order to protect our rights, to see whether we need to have a different disposition of Members of the Houses of Parliament, and so on. I find this to be an attractive suggestion, not as a method of wasting time but as something which I believe will be a subject for useful consideration. I hope that the suggestion will be further discussed to find out whether we as a nation can and wish to take this grave but I think positive step.
6.6 p.m.
Lord AUCKLAND: My Lords, this is not the first occasion upon which the noble Viscount, Lord Hanworth, has given us the opportunity to debate this subject, but it is none the less valuable for that. I should like to add my congratulations to those which have already been extended to my noble and learned friend Lord Rawlinson of Ewell. I do so for a particularly personal reason. For many years my noble friend represented in the other place the constituency where my family and I live. Aided by his very charming wife, he represented with extreme distinction all Parties in the constituency. My wife and Lady Rawlinson and my noble friend and I have become a very friendly quartet. During the time that my noble friend represented the other place it was my pleasure and privilege to be associated with him in some of the functions of the Epsom constituency. The work which he carried out there, in addition to his very onerous duties as a law officer, will long be remembered. Characteristically, my noble friend has today made a vigorous and convincing speech, and the more that this House has the benefit of his views the better the place that it will be.
In a sense, this Motion, to give it a medical connotation, is rather like an illness which needs to be diagnosed urgently, but the diagnosis is very much more difficult to provide than may seem at first sight. There is general agreement
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that at present—perhaps it is easy to say this in a non-elected Chamber—there is some measure of disillusionment, for one reason or another, among the electorate of this country with all of the main political Parties. It is perhaps due to this that such evil—and I use the word deliberately—organisations as the National Front and other bodies have tended to make their presence felt. It has been encouraging to see at recent by-elections, including the one in Epsom and Ewell, that they have suffered a very large rebuff.
But when there is this reaction towards great political Parties there is a tendency for a rather dangerous fringe concentration of less scrupulous organisations starting confrontations. This is why, as my noble and learned friend Lord Rawlinson of Ewell said in his maiden speech, law and order is such an important point. I believe that, on this important topic, there is a large measure of agreement between the main political Parties. It is perhaps frequent practice now to blame the media of communication for various things, but there has been a tendency for certain communications media to exaggerate the differences which take place. Of course, on the extreme Left and the extreme Right of the two main political Parties, there is bound to be a certain amount of rather violent talk and perhaps something almost culminating in violent action. But, on the whole, there are many fields—foreign affairs and the Health Service, for instance—where there is a large measure of agreement. There are certain aspects where there are major disagreements, including hospital pay beds, how much we spend on defence and where the cuts should come.
These are serious matters of disagreement, but I think, while there is this cynicism, there are reasons for hope. It is essential to recognise that in a democracy such as ours one cannot have political Parties which go back in history over many years which do not have disagreements from time to time. The main problem, on which I think the noble Viscount, Lord Hanworth, is rightly trying to pinpoint his Motion, is to try to narrow the gap of these disagreements in certain matters. Whether this can be done quite as easily as some people may think, and all would like to see done, is another matter. Inevitably, particularly during an Election campaign—and I have

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taken part on behalf of friends and colleagues in another place in about five Election campaigns— heated words are spoken and possibly specious promises are made; rather fewer now than perhaps 10 or 15 years ago, but these are taken up by the media, perhaps quite properly, and they are made to stick. In my view, they are given far more significance and far more importance than the point at which there is genuine agreement between the Parties. This may be an oversimplification and one has to recognise that.
The other matter is one which has not been mentioned in this debate so far; that is, the value of the Inter-Parliamentary Union and the Commonwealth Parliamentary Association, where visits are made to other countries and people from other countries visit us. Views are exchanged by delegates of all political Parties. Of course not all the countries visited by the United Kingdom hold views anything like our own. We accept that and they accept our views for what they are; but I believe that over the years these visits abroad have already done a great deal of good.
Finally, we have in this Motion an idea which it is certainly admirable to propagate. I think the difficulty is rather like trying to plant a seed in the very variable weather we are now having, in that the turbulence of this situation, nationally and internationally, in which we have found ourselves over the years may make the matter harder to bring to fruition. But we must always hope.
6.17 p.m.
Lord PLATT: My Lords, owing to the lateness of the hour and the fact that this is a short debate my thanks to the noble Viscount, Lord Hanworth, and my congratulations to the maiden speaker have to be expressed in these few words. Democracy is vitally important to us, above all as a safeguard against other and worse forms of government and as a means of getting rid of Governments without bloodshed or civil war. Democracy must be preserved at all costs. That being said, the whole of the remainder of my speech will be devoted not to a praise of democracy but to a consideration of its limitations and how it can be kept in check.
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Carried to extremes by some people anything elected by a majority vote is regarded as democratic and therefore good, whereas any appointment made by nomination or selection is an offence against democracy. Those who hold these views arrogantly speak of the elected Chamber as if it had all the virtues. This is a grievous and dangerous mistake and also a nonsense. No recent Government has been elected by a majority of the citizens of Britain. In many decisions and appointments so-called democracy can be quite out of place, or even become a hypocrisy. Trade union card votes are an example and are often much nearer to dictatorship than to democracy. In many situations minorities are far more important than majorities. Minorities or single persons supply most of the ideas and innovations on which progress in thought and technology rest. Fortunately many decisions are daily made which only seem undemocratic to the ignorant and depend in fact on a consensus of opinion among a minority of properly informed persons who are equipped to deliberate upon the decisions required. To my mind, with a wider view of democracy, these are in fact democratic decisions in the sense that they are not dictated ones.
For reasons which r hope will gradually become apparent, the rest of my short speech will be devoted to the phenomenon of the Cross-Bench Peers. I cannot speak for the Cross-Bench Peers, of course, because our very nature is one of independence, but I can speak of the Cross-Bench Peers, and will try to be entirely factual. There are, I think, 200 of us. Needless to say, we cannot all be present together; neither can the whole of the Conservative Peers or Labour Peers be present at one time.
The first point I want to make about the Cross-Benchers is that they make a substantial contribution to the number of Peers sitting in your Lordships' House on any occasion. We frequently number 40 out of a total of perhaps 240 percent. I do not include Bishops or Law Lords in any of my calculations. If we take Peers who made 40 or more attendances during the Session 1976–1977, and are therefore fairly regular attenders, the Independents number 52, the Liberals 24, Conservatives 110 and the Labour Peers 98. So the Cross-Benchers have nearly 20 per cent. Of the total, and if

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you care to add the Liberals, to get a measure of those who do not wish to align themselves with either of the major Parties, the figure is over 26 per cent. The whole point of this exercise is that, given a free society like the House of Lords, where anyone can choose where he sits without reference to Party or constituents, more than a quarter choose not to join either of the major Parties. This is some estimate of—I am not quite sure what the noble Lord, Lord Gore-Booth, called it, but at any rate it is the middle road of politics.
Lord GORE-BOOTH: My Lords, the phrase I coined was "the middle majority".
Lord PLATT: I thank the noble Lord. If this reflects the thinking of people at large there should be about 166 Liberal and Independent Members of the House of Commons. Unfortunately, this is not true, and shows how faulty the present electoral system is. Very large numbers of voters, as your Lordships know, vote Conservative because they want to keep Labour out or vote Labour because the want to keep the Conservatives out; they feel that a Liberal vote would be wasted, and there is no Independent to vote for.
But do we—I still speak of the CrossBenchers—reflect the thinking of the people at large? Possibly not. I claim no special merit for Cross-Benchers in this House, which is so full of experts, but I could modestly mention that all the Presidents of the Royal Society, all the O.M.s (except the military ones) and all the Nobel Prize winners whom I have personally known who have been Members of your Lordships' House have sat on the Cross-Benches, with the possible exception, I think, of the late Lord Blackett, who I think sat on the Socialist Benches. We number among us ex-Governors General, famous diplomats, ex-members of the Civil Service, professors, vice-chancellors, economists, and some very distinguished hereditary Peers. Of course, we are lacking in other respects. We are lacking in politicians, because most of them may have come up from another place and naturally prefer to stay with the Party which they have served for many years. We are deficient in landowners, on whose expertise in farming and forestry this House very much relies.
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This catalogue of the virtues of the Cross-Benchers is not intended to suggest that we have any monopoly of distinction in this House. It is to make my second point, that you could not assemble a company of this calibre by any electoral system whatever. If we reform our electoral system we must be sure that the second Chamber is not abolished and that there is some means whereby in both Chambers there is a substantial body of persons who can speak for themselves without Party allegiance. If we take a broad enough view of the true nature and purpose of democracy—namely, that everyone has a right to be heard—this should lead to a Parliamentary system which has more, not less, hope of survival.
6.25 p.m.
Lord O'NEILL of the MAINE: My Lords, first of all I should like, as so many other noble Lords, have, to congratulate my noble and learned friend Lord Rawlinson on his excellent maiden speech. I do so with particular pleasure as we both served in Her Majesty's Irish Guards during the war. I very much regret that I missed the opening speech of the noble Viscount, for reasons beyond my control; I arrived just as he was sitting down. But it is entirely due to him that I am on my feet at all, because he persuaded me to take part in your Lordships' debate, and I am afraid my remarks will be rather disjointed.
It is not very long ago, my Lords, that there was, or appeared to be, considerable co-operation between the two major Parties, and the names which spring to mind are, on this side of the House, Lord Butler, and on the other side of the other place, the late Hugh Gaitskell. Indeed the Press were in those days rather critical and coined the word "Butskellism", because they felt it was the duty of the Opposition to oppose and that there should not be so much consensus as there was in those days. How wrong they were, and how many of us would welcome the return of the consensus policies which used to exist 15 to 20 years ago. You may well ask how was it that Hugh Gaitskell survived? If we look back to those days we will remember that the union leadership was rather different from what it is today, and whenever Mr. Gaitskell was in trouble with the intellectual Left Wing of

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his Party he was always supported and rescued by the union leadership of those days. So I admit that the situation has changed.
To come back to this side of the House, I think history will show that no one made a greater contribution to the possibility of 13 years of Tory rule than Lord Butler, with the new ideas which he persuaded the Conservative Party to adopt. In my opinion, my Lords, continuity of policy would in many respects breed confidence, not least in the City and among businessmen. I remember well that a few months after I came to your Lordships' House, at the time when the Conservatives were in power, I put down a Question asking why the Prices and Incomes Board was being abolished. It was, of course, not very well received by the Whips Office at that time. Later on, we remember, when the U-turn came along, far more stringent prices and incomes policies were adopted than had existed at the time of the Prices and Incomes Board. This leads me on to make a plea. I hope that the next Tory Government will not automatically banish the NEB. Alter it by all means; have discussions with its excellent chairman. But do not just automatically abolish it. I believe that the IRC should never have been abolished. However, that is another matter. But I hope that we shall not go in for too many U-turns in the future.
In the long run there is, in my opinion, one overriding method of ensuring moderation, and that is by the introduction of proportional representation. I had the great honour of serving on Lord Blake's Committee three years ago, and I remember the first Press Conference we gave. It was held under the auspices of the Hansard Society. I remember the great hostility among Press correspondents who I had known for years and who I thought would welcome this effort. However, the change which has taken place since those days two-and-a-half years ago is astonishing.
If by an overwhelming majority your Lordships thought that that method was suitable for Scotland, it would be hard to argue that it would be unsuitable for Westminster. The noble Viscount, Lord Trenchard, made a passing reference to the fact that he had always been brought up to believe that the reason the Govern-
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ments fell in Paris every three weeks was that the French had proportional representation. I remind the noble Viscount that a better example of proportional representation is modern Western Germany where the system works very well indeed. If we could produce as good results with the additional Member system—which was the proposal in the Hansard Committee Report—as Germany has produced under that system, I do not think that we would be holding this debate today.
I was extremely heartened to read the report in this weekend's Economist and I hope that your Lordships will read it. According to that report, 68 per cent. of the poll said that they were in favour of proportional representation for the United Kingdom. In the long run that kind of thing cannot be totally ignored and pushed under the table. It will have, in time, to be sought out and wrestled with. I believe that nothing would bring about greater continuity of policy, greater moderation in politics and less adversary politics than the introduction of proportional representation.
Finally, like so many noble Lords who have spoken in the debate, I should like to thank the noble Viscount, Lord Hanworth, for putting down this Motion for consideration for the second time. This has been a very worthwhile debate, and I am sure that your Lordships will join with me in congratulating the noble Viscount on his initiative in allowing us to debate this subject.
6.33 p.m.
Viscount YOUNGER of LECKIE: My Lords, I think that the time has come for the acceptance of a voluntary guillotine which I propose to apply. I can do that easily because I am delighted to follow the noble Viscount, Lord Hanworth, in all that he said when introducing this Motion. I am in very strong agreement with him. However, I should like to make a few brief remarks and fortunately that gives me the opportunity to congratulate the noble and learned Lord, Lord Rawlinson of Ewell on his maiden speech. We are very glad to have him here as a distinguished Member of the Conservative Front Bench. He mentioned law and order. The only addition that I should like to make to the introduction

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by the noble Viscount, Lord Hanworth, is to indicate a slight measure of urgency as regards this problem not on the economic side—which I think is being dealt with—but on the social side; the law and order side.
I should hate to think that what we do during the next year or so will leave a legacy of bad feeling among our young people, but I think that that danger is beginning to show now. The effects of inflation are well known to everyone. They upset everyone's arrangements and they upset the arrangements of the young people, too. They have no stability, everything keeps changing—prices, wages and jobs—and on top of it all we add the gloomy predictions about unemployment being not just a temporary thing but something that will be with us for many years. I am not saying that that will happen, but if we are to be faced with that type of situation we must realise that the next generation will be in very grave danger of departing from some of our democratic ideals.
For older people that type of frustration usually leads to apathy which is bad enough. However, in the young, apathy is not a natural attitude. I am afraid that they are much more likely to go to some shady pressure groups and it does not take long for these to become extremist groups in which they could become involved. Therefore, I think that it is urgent for the Parties to see whether there is anything they can do to reach a measure of agreement which would have the effect of improving conditions for our up-and-coming generation.
6.35 p.m.
The Earl of HALSBURY: My Lords, with your Lordships' permission and by agreement through the usual channels I have been allowed to intervene at this stage because I promised my noble friend that I would speak on the Motion. I must say that the initiative which he ascribes to me is something which I certainly do not deserve. We have merely talked to one another about the matter from time to time. I shall select, if I may, one topic to which he referred, after I have thanked him for introducing the subject and also added my name to those who have congratulated the noble and learned Lord, Lord Rawlinson of Ewell, on a most
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marvellous maiden speech. There is no doubt about it that when it comes to its own peculiar combination of charm and style the legal profession has all the other professions licked.
The topic about which I should like to speak is one that was touched on by my noble friend; namely, the relations between Government, Parliament, the public and the unions. In that connection we have a great deal to do. I hope that I can get through a rather delicate subject without putting any noses out of joint. I shall begin with a little bit of recent history. At the end of the war the German trades union movement was in ruins. The residue of its leadership came to this country to seek advice from the TUC as to the best form in which it could set up a brand new trades union movement in Germany taking advantage of all the experience that lay within the TUC. It was given advice and it took it and it has worked extremely well. The advice was as follows: to divide the economy into a limited number of more or less independent sectors—I think that they finally fixed on 16—with one trade union per sector. That is what it has done.
Consider all the problems that it solves. There can be no demarcation dispute because any two people working in the same sector have only one union to which they can belong. Secondly, there can be no competition between unions to attract or recruit members thereby instituting a leapfrog process on claims. So those are two problems which are solved.
If we adopted such a structure in this country, it would leave the unions free to start the big constructive job that they ought to be doing and are not; that is, to solve the vexatious problems of parities between people in different kinds of occupations. Each union would have to solve the problem of its own internal parities. That problem is not insoluble. Many pioneer studies have been carried out which have been most interesting. I took part in some of them in the days when I was associated with the Office of Manpower Economics. The idea was to draw up a number of independent panels with very different characteristics—panels of professional men, of medical men, of personnel managers and of unionists—and give them a number of job specifications and the opportunity to arrange

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those job specifications in rank order; such as which should be the highest paid, which the second highest paid, which the lowest paid and so on.
The peculiar feature of those studies was that there was a remarkably high correlation coefficient between panels with entirely different backgrounds. I was struck by that aspect and at the time when these studies were taking place I was giving a series of annual lectures at the Police Staff Training College on different aspects of social tension. I used the trainee officers to form a couple of panels to find out how policemen would grade the professions. They graded them in exactly the same rank order as all the studies that had been made. But when we turn to the actual pay that those people, arranged in rank order, were getting, we see that there was a strong negative correlation between the money they actually drew and the money these independent expressors of opinion thought they ought to be drawing. Agricultural labourers, who were at the bottom of the list of what was actually drawn in wages, according to the panel's opinions were placed about two-thirds of the way up it. Motorcar assembly operators, who were very high on the list, were placed at the bottom by the various panels. There should be more of these purely objective scientific studies of the distinction between public and private opinions. Of course, I think that I should be the highest paid man in England, but nobody else does, so I am not. Let us think of the liberation of trade union creativity that could be let loose if we could have a structure like that.
There is another way in which the unions could play a creative part, and that is in coping with unemployment. Every Government of every complexion, willy-nilly, find themselves managing a mixed economy. We must assume that wherever there is management there is the potentiality of mismanagement. Of course, we all know that no Government of the day ever mismanages anything; they merely cope with the mess left behind by their predecessors, and they leave the mess they make to their successors. However, it is not necessary to attribute blame; it is not necessary to suppose that their mismanagement is due to negligence. Comes OPEC with a four-fold rise in the price of oil which
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puts a violent strain on the economy, on a scale greater than it can absorb, and four or five years later we are coping with a level of employment that is extremely painful.
We can cope with unemployment in many ways; purely fiscal means is one way. However, we may have to use a double-edged weapon and social means to control unemployment. The most painless way in which to absorb a large sector of employment is by premature retirement at the age of 64 or 65. I cannot remember just what an age group comes to at that age, but in the immediate postwar period age groups came to about half a million per age group; as half of them would be men and most of the women would not be working by that time, one could probably absorb a quarter of a million by one year's premature retirement. That is the most painless way of becoming unemployed.
At the other end of the age spectrum—and this is desperately important—there should not be unemployment among school-leavers or university graduates. Here one could take a leaf out of the young's own enthusiasm to make the world a better place. There are squalid areas of industrial devastation in this country—for example, the South-Eastern approaches to Swansea with old poisonous lead mines; the 10-square miles of country between Birmingham and Wolverhampton, which consists of old opencast and drift mines from 200 years ago—it is a great wilderness of barren brick and dump which would provide plenty of work for enthusiastic students armed with bulldozers. But it is no good having a scheme like that and launching it when unemployment hits you; it must be prepared in advance. The plans for all these schemes can be stage-managed by the trade unions.
There is another matter which can be illustrated by the experience one has in a wages office when one calculates the cost of a strike. The figures that I shall give are so ludicrous that noble Lords will say that this must be the equivalent of the story of a visitor to a lunatic asylum who saw a man hitting himself on the head with a hammer. The visitor said: "Why do you do that?" and the man said: "Because it is so nice when I leave off". When will we leave off doing ruinous

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things? What I shall say—and I have one minute left—applies to light manufacturing engineering industry running one shift. It does not apply to the process industries. It also applies to those who have a full order book. After a strike it actually pays an employer to work overtime at time-and-a-half in order to recover his overheads, which he would lose if he did not. He cannot afford to lose production, which is possible if you are working only one shift.
What is the result? If a man knocks off work to go on strike, he would get his pay back multiplied by one and a half times. Just how crazy can we get? Again, only the trade unions can manage a situation like that for us and say that workers will not be paid at time-and-a-half for knocking off and going on strike. If we could only get the union relationships to Government, Parliament and public on to the right lines, all would be well.
6.45 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, let me begin by making two comments. First, I want to express my gratitude and that of the House to the noble Viscount, Lord Hanworth, for having set down this Motion today. Secondly, I should like to express my warm appreciation to the noble and learned Lord, Lord Rawlinson of Ewell, who has used this occasion to make his maiden speech. It was a notable speech, and one which in one particular respect I shall return to in a moment. Unhappily, I am not in the position of two noble Lords—the noble Lords, Lord Rochester and Lord Gore-Booth—in welcoming the noble and learned Lord, Lord Rawlinson of Ewell, to our House as a member of the MCC. However, I shall do the next best thing and welcome him as a member of the Kent County Cricket Club, who, I would remind him, are the joint county champions.
The debate which we have had today has inevitably ranged over a very wide field. We have gone over the ground of electoral reform to the question of race relations—which was touched on by the noble Viscount, Lord Hanworth, in his opening speech—and from the issue of pensions to that of industrial relations.
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Therefore, the task facing me in attempting to wind up this debate is inevitably rather forbidding. I think that it would be foolish—indeed it would be quite impossible—to attempt to deal with all the many issues which have been raised. Therefore, I propose to deal with what I think was the central theme of the speech of the noble Viscount, Lord Hanworth, taking, as he did, a number of examples to illustrate my argument.
If I may, I should like to begin on a point on which the noble Viscount and I, if not in total agreement, at least share a fairly similar analysis. It is certainly possible to envisage a situation in which the problems facing a democracy become so severe that that democracy disintegrates. Indeed, that has happened to some European nations in the lifetime of many of those present this evening. However, having said that, I think that it is a little fanciful to talk as though such a situation was imminent in this country.
Certainly in this country we suffer from one particular malady; namely, our capacity to move with extraordinary swiftness from dark, doom-laden talk, in which the breakdown of our democratic institutions is predicted with a degree of pleasure which many of our neighbours in Europe find mildly surprising, to a period—sometimes only a matter of a few weeks later—in which the mood swings violently towards euphoria: yesterday's agonising problems are suddenly apparently matters of no importance; all our difficulties are behind us; the headlines become intoxicatingly optimistic. Anyone in a situation of that kind, who is slow to recognise the new mood and is mistaken enough to talk in rather sober terms about our country's continuing problems, finds himself dismissed as a dreary Jeremiah.
I think that we saw some of this last year. When the balance of payments swung round, so did the mood of the media. I say at once that I do not want to suggest that the particular problem which I am now discussing is exclusively the fault of the media; it is not. It is a much more significant problem than that and certainly politicians cannot exclude themselves from being responsible for part of this difficulty. However, undoubtedly, the media must share part of the responsibility.

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Having said that, I hope that in the brief speech which I propose to make this evening I shall succeed in avoiding the temptation to indulge either in gloom or euphoria. Let me begin by dealing with what I believe is this country's central problem—that is, the rate of inflation. Here I think that we can be satisfied that we have, as a country, made significant progress. But we still have a very long way to go. Two years ago our inflation rate was running at 21·2 per cent.— a truly frightening figure. Twelve months ago it was down to 16·7 per cent., and now it is down to 9·1 per cent. I think we should recognise that this is a major national achievement. We have made this remarkable progress thanks to the co-operation we have received both from trade unions and employers.
It has, of course, not been painless. Some people, some occupational groups, consider that they have been treated unfairly. I am afraid that this was to some degree inevitable. It is pure self-delusion to imagine that roaring inflation can be brought under control without sharp and disagreeable measures having to be taken. The considerable progress that we have made in the last year would certainly have been quite impossible without the wholehearted support of the general public.
I believe that we had the overwhelming backing of the British people in the course that we as a nation set ourselves. The successes we have achieved have been solely due to that support. Without it Phase 1 would not have succeeded, nor would Phase 2, and nor would Phase 3. But I repeat that I believe that we still have a significant way to go. An inflation rate of 9·1 per cent. is still far too high. It is well above the rate of inflation being experienced by many of our friends in Europe, so we will require the firm support of the people in the struggle to reduce the rate of inflation still further.
I repeat that I believe that a massive majority of our fellow-citizens are prepared to experience even some personal discomfort if they believe that the problem of inflation can be conquered. I agree with the noble Viscount that this is undoubtedly a bipartisan objective. Indeed, I believe that any politicians who attempt to suggest that the immense difficulties we will face in our struggle to
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cut the rate of inflation can in some miraculous way simply be dealt with by a change of Government will simply not be believed. Were that it was quite as simple as that, but, as we all know, it is not. It is a profound national difficulty that still faces us, which will be experienced by any Government who may be in charge of our affairs.
Undoubtedly—and on this I agree profoundly with a number of points made on both sides of the House this evening—after the period of grave national difficulty we have just passed through the British people are not in the mood for some of the cruder Party stuff that some politicians appear to assume the public expects from them. Having said that, I must explain where I part company from the noble Viscount, Lord Hanworth; that is, on the point which was made by the noble Lord, Lord Auckland, in his speech: there are undoubtedly genuine differences between the Parties. It is profoundly mistaken to believe that they are bogus; that it is all just a question of make-believe. Where I agree with him is that it is silly to exaggerate those differences; to pretend that there are grave differences either where none at all exist or where they are, at best, rather marginal.
Let me take one or two examples of what I mean. This brings me to the speech of the noble and learned Lord, Lord Rawlinson of Ewell. I think there is genuine bipartisan support—indeed, it would be a serious matter if there were not—on what he said about the rule of law. I entirely agree with everything he says. It would be foolish to pretend that there were fundamental differences between our Parties on this matter. The noble and learned Lord, Lord Rawlinson, said that he saw maintaining the rule of law as one of the central objectives both for a Government and for a Party. I agree with him without any qualification of any kind. Indeed, to say anything other than that would negate everything for which Parliament stands.
But the problem is—and we all have to recognise this—that there are some people who are simply unprepared to accept a decision by a court if they do not like it. I deplore such an attitude, from wherever it may come; whether it comes from a rebellious councillor, or some trade unionist, or even the Shadow Secretary of State

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for Scotland, who made an extraordinary speech the other day following a decision by the European Court of Human Rights in the Manx birching case. It is quite interesting just to recall this particular episode, because it demonstrates how deepseated this problem is.
The United Kingdom signed the European Convention of Human Rights in 1950, and it was ratified in 1953. Therefore, both Labour and Conservative Governments were involved. Under Article 52 it was provided that the judgment of the Court would be final. Under Article 53 we undertook to abide by the decision of that Court. I do not want to say much more about what Mr. Taylor chose to say following the judgment of the European Court of Human Rights, except to say that it seemed to me to demonstrate the need for politicians to accept their own responsibility as leaders of public opinion in demonstrating their own support for the rule of law when a court takes a decision which they do not like.
Secondly, the question of race relations was touched on by the noble Viscount, Lord Hanworth. I describe it deliberately in these terms rather than as "immigration", because the issue of race relations is profoundly serious in this country, whereas the endless argument on immigration is almost wholly bogus. The central question on immigration is this: are the 1·8 million immigrants and their second generation going to remain in this country?
The Opposition have made it clear that they, like the Government, totally reject any policy designed to drive these people out of this country. The Opposition also accept—and I welcome this—the obligation to United Kingdom passport holders from East Africa. They also accept the continuing right of dependants to join people already in this country. So on the major issues of immigration there is in fact strong bipartisan agreement. One would not think that to read the newspapers from time to time. One would think there were profound national differences on this question.
Let me mention the matters on which there is a dispute. There is the question of whether it is desirable to have a register of dependants, and whether male fiancés
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should be allowed to enter the country before marriage. But even if these changes were made, the effect on the number of immigrants in this country would be negligible; quite trivial. That is the truth of the matter. That is why this whole argument about immigration is bogus, but there is no doubt that it is damaging and that we should take it seriously, because it creates fear and uncertainty in the minds of many immigrants living in this country. It diverts our attention from the issue of genuine importance which we should be discussing, which is the wider problem of race relations.
I indicated at the outset of my speech that the ground which was covered in this debate had been so wide that it would be quite impossible to deal with the many issues that were raised. I have taken two examples, as I indicated I would, to demonstrate, I hope persuasively, where I agreed with the noble Viscount in terms of the analysis he laid before us at the beginning of our debate. There is wholly justifiable public anxiety in this country about a number of serious problems still facing us, certainly the question of inflation, which I have dealt with already; the problem of unemployment, which is an extremely serious matter in this country as it is in every other advanced industrial country in the West; and, a point touched on by several noble Lords, the productivity record in this country. All these are formidable problems about which there is, I repeat, substantial public disquiet.
Another feature of this debate has been a frank recognition that the Party system that we have in Britain will continue much as it has before, but, secondly, that it is a profound error for any of us to attempt to maximise differences on issues where there is in reality a very substantial amount of genuine bipartisan agreement and, in many cases, an urgent need for a common national approach. That view was expressed by many noble Lords in this debate and it is one with which I profoundly agree.
7.1 p.m.
Viscount HANWORTH: My Lords, I thank noble Lords who have taken part in this debate. My main purpose in initiating it was to provoke thought. It is not my views but the collective views of noble Lords which matter for the

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future. I would not therefore wish to comment on any individual speeches, but only to say that the debate has gone the way I rather optimistically hoped it would, including its timing. It therefore only remains for me to beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

INTERNATIONAL ARBITRATION: LONDON
7.2 p.m
Lord HACKING Lord HACKING rose to ask Her Majesty's Government what assistance and encouragement they are willing to provide for the re-establishment of London as a forum for international arbitration. The noble Lord said: My Lords, this Question focuses on London as a centre for international arbitration when disputes arise on the joint performance on international contracts, that is to say contracts between companies, States or persons of different nationalities.
Let me first set the scene. It so happens that in New York City, of which I have some knowledge, there are, almost week by week, being negotiated vast industrial development contracts concerning new explorations for mineral resources, new plants, new airports, new harbours and even new cities in certain areas of the world which have in more recent times come to greater prominence, in the Middle East and Far East. All of these contracts involve very large sums of money, to the tune of million and multi-million dollar projects. The second characteristic is that they are all very complicated and contain the essential ingredient of financing arrangements, which in their turn add extra complications to these agreements. They are, because of the resources and involvement of the great New York banks, agreements which are likely to come out of New York for some time, and I do not isolate my remarks to New York, although it is a principal area and place for the funding of these massive agreements.
All of these agreements without exception contain an arbitration clause for the settlement of dispute in the performance of the contract. The reasons for this universal practice of including the arbitration clause are that because Governments are often involved in the contract,
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and because in many countries there is a certain closeness, shall I say, between Governments and courts, this makes one or more of the parties uncomfortable to go to the national courts of one or another country. Another reason for this almost universal inclusion of the arbitration clause is that the parties are seeking a method of resolving disputes which is final, swift and private. It is part—this is an ancillary point—of the psychology at the end of these long negotiations to say, "If there must be a dispute, we should resolve it within the private dignity of arbitration proceedings".
It so happens that almost none of these contracts choose English law as the proper law of the contract or England as the forum for arbitration proceedings. It also happens that in many cases the parties wish to choose English law and English arbitrations. I do not want to leave this as just a jingoistic assertion, so I will give the reasons for that. First and foremost, there is wide respect for English law, especially English commercial law, and a general respect for the strong support, principally through the Arbitration Act 1950, which English courts give to arbitration proceedings taking place in England. There is also wide respect—I say this with full immodesty—for English lawyers, judges and arbitrators; criticisms of us are reserved for the home market. It is important to note in this context that since the Administration of Justice Act 1970, High Court judges sitting in the Commercial Court can, with the leave of the noble and learned Lord the Lord Chancellor, act as arbitrators.
Another reason why parties wish to use English law and English arbitration proceedings is because English law and English arbitration proceedings provide a good meeting point between Americans, who form part of these contracts and who feel more comfortable with English proceedings in the English language, and the other parties to the contracts who have misgivings, with reason, about entering into any form of litigation in that highly competitive and highly litigious country —and I hope that comment will not disbar me from the New York Bar!
The question on which I am asking the House to focus is: why do they not come here? Why, if they believe in and

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have a taste for English legal proceedings and English arbitration proceedings, are they all moving away from us? The answer is that in recent years we have been getting a bad reputation, which is not wholly deserved. The main cause of this bad reputation and difficulties—the difficulties are in the realm of delay and expense—is the use and, by our laws, permitted abuse, of a procedure called the case stated procedure. The result is that the parties do not get the swift, private and final adjudication which is the essential ingredient they seek when going to arbitration.
I regret to report to your Lordships that things have now got to a pretty bad pitch. It is now the universal advice of lawyers in America advising clients on the arbitration clause not to use an English arbitration clause. Indeed, on Saturday, just a couple of days ago, in Charleston a lawyer was telling me that that was precisely the advice he regularly gave his clients. Secondly, the arbitration section of the International Chamber of Commerce gives similar advice. Nor, as I have said, is the problem limited to big contracts emanating from New York. Indeed, I am bound to report that the head of the legal department of one of Britain's very biggest companies operating on a world-wide basis has actually ordered no English arbitration clauses.
To set the scene as I believe it should be seen, I will read an extract from a letter which was written to me after I had given an address to a Chamber of Commerce in Boston, Massachusetts, in January. This is what the letter told me in reply to my request for comment on English arbitration:
"While our recent experience is limited to two major cases, I think our complaints may be succinctly stated. The purpose of utilising arbitration in lieu of litigation is generally thought to be that arbitration proceedings will be speedy, inexpensive, and private. Perhaps they are private, but they are certainly neither inexpensive, nor speedy in the United Kingdom".
He goes on to set out certain facts concerning the difficulties in these two arbitrations. He then continues:
"While I recognise that some of the delays might be attributable to the specific arbitrators appointed by the parties, I am told that even when arbitrators with a sense of urgency are handling the case, defendants may delay proceedings by frequent appeals back to the judicial system".
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He then goes on further in the letter to say that until we can make our arbitration proceedings swift and final,
"…I have issued instructions in my department that counsel are never to agree to the United Kingdom as a site for an arbitration".
Many of your Lordships, particularly the very distinguished noble and learned Lords who have kindly agreed to participate in the debate, will know what the case stated procedure is. Perhaps for the benefit of other noble Lords who have been kind enough to come to listen to the debate I should simply explain it in this manner. The case stated procedure is a means by which either the arbitrator, or one of the parties, can seek the guidance of the court on a point of law which arises during the taking of the arbitration proceedings.
The irony is that the case stated procedure played a very important part in the development of English law, and provided a very important bridge (as I have just described) between law courts and arbitration tribunals. Indeed, it is to be noted that there has not been in England a conflicting development of commercial law between the courts of arbitration and the courts of law as there has been, for example, in New Yolk State. The sadness is that this case stated problem has damaged our whole reputation and drawn attention away from the general strength of our arbitration laws, which in the support the courts give to arbitrations are, in my belief, second to none in world jurisprudence. I say again without a blush that our arbitration law is, I believe, in the main very good. One has only to skim through the Arbitration Act 1950 to see the plain authority that is given to the arbitrator in Section 1, or to see in Section 4 (which is now described in the 1975 Act as "non-domestic") that the courts are given, and exercise, the power to stay all legal proceedings when an arbitration clause is placed before them. If one looks at Section 16, one sees the finality, as so drafted, of the arbitrator's awards.
Skimming further through the Act, but without going into more detail, one sees a host of other helpful provisions which make for the efficiency and efficacy in English arbitration proceedings. I have in mind Sections 12, 13, 17 (which covers correction of accidental slips) and there is

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even a means, in Section 19, of resolving disputes when the arbitrator has not been paid.
In this difficulty we have been very lucky. We have had a number of friends from America who have come forward with offers of advice and assistance. A senior partner from a major firm in Washington has given a great deal of time. A senior partner of a major firm in York has also given us the benefit of his advice, and an American lawyer in London has put in an enormous amount of work in assisting us in considering this problem.
We have friends, too, from other quarters. The International Chamber of Commerce is holding a special seminar on Friday of this week to focus upon London as an arbitration centre. At this seminar the noble and learned Lord, Lord Wilberforce, will be chairing one of the programmes. According to the brochure that has been given to me, this is the first time that the ICC has ever held such a seminar outside Paris.
As we are receiving offers of help from outside, Parliament and Government are being offered a great deal of help from a group set up by Mr. Mark Littman, QC, called the London Arbitration Group, or LAG for short. Since once I was president of an organisation called NAG, that title gives me some friendliness. There is also Mr. Justice Donaldson and the Commercial Court Committee. They have given the problem much careful study and have produced very valuable suggestions. Thirdly, there is Mr. Clifford Clark and his joint committee of the London Court of Arbitration, the Institute of Arbitrators, and the London Maritime Arbitration Association. Noble Lords who are kindly participating in the debate have also made contributions. Indeed, the noble and learned Lord, Lord Diplock, in his very recent Alexander Lecture, as the President of the Institute of Arbitrators gave us the benefit of a great deal of his experience and learning.
Inevitably, when so many lawyers and judges consider a problem, differences of opinion arise. I am not anxious in the debate to enumerate these differences; first, because there is now a large measure of agreement on the most substantial points. In particular, there is agreement that parties in international contract
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arbitration clauses can at least have the option (whether contracting in or out) by agreement to exclude the operation of Section 21, which is the case stated provision. Again, it is agreed that disputes which arise out of standard contracts—albeit having international characteristics —are contracts which are used under the auspices of, broadly (if I may put it that way) the London maritime, insurance, and commodity markets. There is agreement that these should be treated separately. Perhaps I should say in reference to these arbitration bodies that they take arbitration with international ingredients, and hence here the need, as I see it, is to fortify their position.
There is also agreement on several useful reforms that can be made to arbitration law concerning, for example, the circumstances in which an arbitrator can be ordered, when necessary, to give his reasons. There are other common grounds on other useful reforms, such as the giving of power to the courts to order the consolidation of arbitration proceedings. There is also agreement on the means by which the abuses to the case stated procedure can be prevented.
My second reason why I am not anxious to run over the points of difference is because it seems that such points which do exist should be debated and decided upon when the necessary legislation comes before the House. The purpose of this Question, therefore, is to ask the Government—and I am very flattered that the noble and learned Lord the Lord Chancellor himself is to answer on behalf of the Government—what support they will give to legislation on Section 21 reform; and secondly, what support the Government will give to legislation which seeks a general and wider reform of arbitration law. Would the Government, for example, even support a simple Bill before the end of this Session?
Looking further ahead, do the Government see themselves as giving help on the provision of a building, and the provision of financial assistance—both very important matters—together with the need for good arbitration reports. I am not suggesting that the Government should spend this money to prop up an ailing project, but as a good Government investment. At all times I am mindful of those arbitration tribunals that are already

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situated in London, and that any of these forms of assistance and encouragement should work through them. Here I especially refer to the London Court of Arbitration and the Institute of Arbitrators.
I hope that the debate will prove to be helpful and will, by whatever means, give further momentum to an important, and, I believe, necessary reform. After all, the bringing to London of these international arbitrations is directly related to the prestige of the City of London and to our national wealth. The greater use, too, of the English Common Law can only bring us benefits. Whatever we do, we should act soon, and, so far as possible, bring into account existing contracts and existing disputes. Above all, we must be clearly seen to be effecting an important change. For that reason, I believe that we should allow parties to international contracts the freedom of being outside Section 21 procedure, unless they contract in. But here I am breaking my own rule and entering into the realm of controversy.
7.20 p.m.
Lord. CULLEN of ASHBOURNE: My Lords, the House will indeed be grateful to the noble Lord, Lord Hacking, not only for having initiated this debate today but for the way in which he has explained to us the reasons for the growing anxiety over the loss of international arbitration business from London to other centres. This afternoon, in his excellent maiden speech, my noble and learned friend Lord Rawlinson said that in your Lordships' House, in the presence of noble and learned Lords of Appeal, he felt like a minnow among trouts. If he felt like that, it will not be difficult to imagine how I am feeling in taking part in this debate amidst such a galaxy of legal experience and talent. I have had several extremely educational days while struggling to achieve some understanding of this subject, and since I suspect that some other noble Lords may be almost as unacquainted with the subject as I am, I shall confine myself to a few comments from the point of view of the consumer in laymen's language. Before doing so, however, I should like warmly to welcome the fact that my noble friend Lord Cockfield will be making his maiden speech from these Benches. With his wide experience in law and in
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many other fields, he will assuredly make up for my deficiencies, and I am greatly looking forward to hearing what he has to say.
From inquiries I have made it would seem that there is little or no argument over the need to make amendments to the Arbitration Act 1950. The nub of the problem is that in countries other than the United Kingdom and the old Commonwealth countries the decision of an arbitrator is final, with no right of appeal to the courts except in very limited circumstances. In the United Kingdom it is open to either of the parties to appeal against the decision of an arbitrator here on a question of law. Not only that, but English law refuses to allow the parties to exclude this right of appeal even if they make such an agreement together. The advantage of our system is that it has ensured that there is no divergence between the decisions of the courts and those of the arbitrators, as the noble Lord, Lord Hacking, said. The law is constantly refreshed and kept up to date. Accordingly, our law has been a popular choice for commercial interests throughout the world. However, one of the main objects of arbitration is to achieve finality in the settling of a dispute, and so some major international development contracts are now being concluded between parties who, though they prefer English law, are not prepared to accept any appeal to the courts on a question of law.
There is, I understand, unanimity of opinion that an entrenched right of appeal should be maintained for ordinary run-of-the-mill disputes of a domestic nature, and for special category disputes over maritime, insurance and commodity contracts. It is over what the noble and learned Lord, Lord Diplock, in his recent, absorbingly interesting Alexander lecture called "one-off contracts" that the problem arises. The noble and learned Lord described these as contracts in the fields of construction and supply across national frontiers, involving enormous sums of money, entered into by multinational companies or consortia, to which Governments or enterprises controlled by Governments are often parties, or in which they are intimately involved.
In the conditions of rapid inflation and high interest rates of recent years,

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the advantage of achieving finality to a dispute as quickly as possible is very great indeed, so arbitration in Paris, The Hague or elsewhere may be preferred. I also understand that where foreign Governments are involved there are at times political objections to submission to the jurisdiction of English courts; and the problem is further exacerbated—and this is a very serious matter—by the fact that the system is capable of being misused by successively appealing to the courts for the sole purpose of postponing the evil day of settlement. Clearly, these one-off contracts are but few in relation to the volume of disputes which are settled by arbitrators in London, but they are huge, and they make an extremely important contribution to our invisible exports.
There is therefore an urgent need, not only to speed up our arbitration procedure in respect of one-off contracts but also to prevent it from being abused. So I have read with attention the recommendations in a report to the noble and learned Lord the Lord Chancellor by Sir John Donaldson, chairman of the Commercial Court Users' Committee. These recommendations are designed: (a) to modernise the procedure for appeals to the court on questions of law; (b) to avoid abuses by preventing appeals which are wholly without merit and are instituted purely for the purposes of delay; (c) to limit successive appeals to cases in which there are special reasons for a review of the law in depth; (d) to take steps to make awards by English arbitrators more readily enforceable abroad and to improve the standards of arbitration; (e) to achieve a new situation in which every arbitration award is immediately enforceable; and, lastly (f) to deal with the extent to which the new right of appeal should be applicable in the absence of special agreement between the parties and the extent to which it should be entrenched.
It would be quite absurd for me to comment on the proposed recommendations, and I shall be eagerly awaiting the views of the noble and learned Lords, and other noble Lords who are to speak, upon them. There may, I suspect, be some difficulty in defining the special category disputes and the one-off contracts, What I think is clear is that urgent
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action is needed to give English arbitration what the report describes as a new look.
The report also puts forward the view that if a choice had to be made between attracting to this country a limited, albeit valuable, number of international development contract disputes or retaining the established arbitration market, there is no doubt that the latter should be retained both on economic grounds and as recognition of the contribution it makes to the long-term development of English law. However, the committee consider that acceptance of its recommendations would achieve both objects. I sincerely hope that this will be the case.
I said earlier that I was going to speak from the viewpoint of the consumer. I have learned that it is generally accepted that the standard of arbitration in London is not only as good as, but many would say better than, that in other countries; and I have understood that it is also cheaper, although the noble Lord, Lord Hacking, seemed to suggest otherwise. It is therefore not surprising that we have long enjoyed the lion's share of international arbitration business. This is, I gather, the only country where there is a special training programme for would-be arbitrators. It is run by the Institute of Arbitrators, of which the noble and learned Lord, Lord Diplock, is president. The programme includes lecture courses, correspondence courses, tutorials, practical training sessions and periods of pupilage which require attachment to very experienced arbitrators. On the successful completion of this training, the pupil gains fellowship of the Institute and is included in the panel of qualified arbitrators which is appropriate to his technical expertise. There are 38 of these panels.
So those who are drawing up a contract have much to influence them in favour of a choice of arbitration in London: the high standard of the arbitrators, the certainty of English law and the relatively reasonable cost involved. It is, therefore, relevant to ask what has gone wrong. I am told that there are two main causes: first, the tremendous increase in major installations of ports, aerodromes, refineries, steel works and so on in Arab and African countries and elsewhere in recent years; secondly, the exceptional

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currency fluctuations which have occurred. It is the one-off contract that I was referring to, and it is estimated that there are approximately 5,000 arbitrations on such contracts held annually in London.
In an attempt to get a perspective on the potential effect on our invisible exports, I inquired about the average cost of each arbitration—and this would include not only the arbitrators' fees but those of solicitors, barristers, expert witnesses and so on. The figure that I was given—and I cannot vouch for it—is £100,000; so that the contribution to our invisible exports could be of the order of £500 million per annum. The noble Lord, Lord Hacking, was kind enough to give me notice of the main questions that he was going to ask and I should like to refer to two of them. Those whom I consulted say that there is an urgent need for an international arbitration centre in London similar to the ICC in Paris and the church halls and the hotel suites are poor substitutes. Huge sums of money are involved and practical help to the service industries responsible for our invisible exports can be just as beneficial to our country as that given to other industries—and in some cases, noble Lords will recall, more so.
The noble Lord also asked what assistance can be given by Her Majesty's Government,
"to provide for the re-establishment of London as a forum for international arbitration".
There was an implication in this Unstarred Question that London has already lost its pre-eminence in this field. That is not my understanding and I hope that this exaggerates the extent to which business has been driven away. In conclusion, I have the impression that the noble Lord is pushing at a door which is ajar. I hope that this is so, since it has been suggested to me that perhaps half of these one-off arbitrations could be diverted to other countries if we do not take appropriate action; so that there is a great deal at stake. If greater speed can be combined with the high standards of our arbitrators and the excellence of English law at reasonable cost we would take a lot of beating. I hope therefore that the recommendation of Sir John Donaldson will be accepted by the noble and learned Lord the Lord Chancellor and that the door will soon be
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opened wide to allow the passage of the necessary amendments to the Arbitration Act.
7.33 p.m.
Lord COCKFIELD: My Lords, I, too, am grateful to the noble Lord, Lord Hacking, for raising this Unstarred Question. It is a matter of importance and one which gives me the opportunity of addressing your Lordships for the first time. I find myself, unexpectedly so far as I am concerned, in the most distinguished legal company and this makes it even more important for me to ask for the customary indulgence which your Lordships show on such an occasion. The establishment or re-establishment or development of London as a centre for international arbitration represents a contribution to the status of London as a financial centre. It is a contribution also to our invisible earnings and to our balance of payments. The United Kingdom economy operates under four major constraints all of which are linked to one another. They are: the level of the public sector borrowing requirement, the growth in the money supply, the rate of inflation and the balance of payments. Quite a lot could be said about the first three of these, but perhaps it would be more appropriate to do so on some other occasion. I shall confine what I have to say, therefore, to the balance of payments which is of direct relevance to the noble Lord's Unstarred Question.
The invisible earnings of the United Kingdom are of immense, and, indeed, crucial, importance to the solvency and stability of our economy. For more years than one cares to remember, we have been in a state of chronic deficit on our visible trade; that is, our imports have greatly exceeded our exports. Indeed, if one goes back to the beginning of the 19th century—that is, for a period of over 150 years—in only about 10 years in that period have we shown a surplus on the visible account. Since the war there has been a surplus on the visible account in three years only—in 1956, 1958 and 1971. These have all been small surpluses. The biggest of them was only £279 million. We have to rely, therefore, on our invisible earnings to bridge the gap.
May I illustrate this by last year, which was a good year so far as the balance of payments was concerned. Last year we

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had a deficit of £1,600 million on the visible account. There was a surplus of almost the same amount on the invisible account, leaving us over-all with only a small deficit. Even these figures understate the importance of our invisible earnings. First, the surplus on the invisible side is struck after deducting Government expenditure overseas of some £2,500 million on defence, our contribution to the EEC, the maintenance of our embassies and representation abroad, the interest on overseas borrowings and so on. The surplus on the private account was no less than £4,000 million. Secondly, total invisible receipts last year exceeded £15 billion—equal to about half of our total visible exports and sufficient to pay for half of our total import bill. Thirdly, we in the United Kingdom have the biggest net invisible surplus after the United States.
In recent years there has been a tendency for people to talk as if North Sea oil would solve all our problems, including that of the balance of payments. Indeed, concern was expressed in some quarters that we would show such a big surplus that the pound would be driven up to unrealistically high levels and thus damage our export trade. The second half of last year did, in fact, show an immense improvement. There was a small surplus on the visible account and a big surplus on the invisible account, meaning that over-all in the second half of last year we showed a considerable surplus. Unfortunately, the current year has not started too well. In the first three months there was a deficit on the visible exceeding £500 million and, despite the very welcome improvement which has occurred in the month of April, when there was a visible surplus of £236 million, in the first four months of this year, we still show a deficit on the visible account which has to be made good, of course, by our invisible earnings.
One very important factor which needs to be taken into account in considering the effect of North Sea oil is that, while North Sea oil makes an important contribution on the visible side of the account, there is an offsetting liability on the invisible side reflecting the earnings of the foreign companies operating in the North Sea. Despite North Sea oil, therefore, the balance of payments remains an important constraint. That this is so
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comes out clearly in the Budget judgment. Even with the present depressed level of output and the high level of unemployment, there is a real fear that on present policies—and I refrain on the present occasion from commenting on those policies—too rapid expansion will suck in imports and precipitate a new balance-of-payments crisis. North Sea oil may have saved us from immediate disaster; but taking the longer term view, the most that can be said is that it has put us back roughly where we were before the oil price explosion in 1973: that is, in a state of precarious balance relying upon a surplus of our invisible account to finance a persistent deficit on the visible account. We remain therefore crucially dependent on our invisible earnings. Nothing has happened to change this; and we need to develop and encourage every possible way of increasing our invisible earnings.
There has been a lot of talk recently about the "regeneration of British industry". However important that may be—and I do not in any way dispute it—it is vital that we should not allow a legitimate concern for the state of British industry to result in the kind of attitude which regards the manufacture of physical objects as "good" and the provision of services as "bad". On the contrary, the development of services is a normal concomitant of economic progress, and the development of services for export is of unqualified benefit to the economy as a whole.
A major contribution to our invisible earnings comes from the earnings of the City of London in banking, insurance, investment and a wide range of other services. Indeed, it is the sheer variety of services offered by the City of London which is one of the major attractions the City has to offer. May I illustrate my point by a simple example. Last year 19 Queen's Awards for Export were given for invisible exports. One of these was given to the management consultancy firm of a leading firm of chartered accountants in the City of London. This is an interesting example of the way that the provision of services in the export field can be expanded in new and valuable directions.
English jurisdiction is often chosen by foreign parties for arbitration even where the proper law of the contract is other than English law. The development of

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London as a centre for international arbitration would add to the prestige of the United Kingdom and would clearly be of benefit to the United Kingdom's invisible earnings not only for itself but also for the use it would attract of complementary services such as insurance, brokerage and foreign exchange.
Some years ago, when I was a member of the original National Economic Development Council, which at that time was under the chairmanship of the noble Lord, Lord Selwyn-Lloyd, we published a study of the British economy under the title: Conditions Favourable to Faster Growth. Before the public relations people took a hand in this, the title had been: Obstacles to Faster Growth. It has always seemed to me that the concepts underlying these two titles; namely, the removal of obstacles and the creation of favourable conditions, are the best and the most apt description of the proper role of Government.
I am only too happy to leave the legal aspects of this matter to the noble and learned Lords who will be speaking later in the debate. But looking at it from the point of view of the general national interest, I suggest that the Government could very happily follow the line that I have just indicated in giving the assistance and encouragement for which the noble Lord asks for the re-establishment and development of London as a centre for international arbitration.
7.45 p.m.
Lord DIPLOCK: My Lords, the habit which I seem recently to have assumed, of bobbing up and down in this Chamber, has the advantage that it has given me the opportunity of listening to a number of maiden speeches and being able to congratulate those who have made them. I can assure the noble Lord, Lord Cock-field, that he required no indulgence from those of us sitting on these Cross-Benches, or indeed from anyone else at all. I listened to his speech with the greatest interest and admiration because it filled out those portions of the debate with which the lawyers speaking in it are not capable of dealing.
The noble Lords, Lord Hacking and Lord Cullen of Ashbourne, have already declared on my behalf the special interest
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which I have in this debate as president of the Institute of Arbitrators. But I also share with the rest of your Lordships the more general interest in preserving and nurturing an important invisible export which, as the noble Lord, Lord Cockfield, mentioned, brings with it not merely fees to the lawyers, the experts and the arbitrators concerned in the arbitration itself, but brings too in its train to the City of London a great deal of other valuable work which helps our balance of payments.
London has traditionally been the world centre of international arbitrations, particularly in the maritime, insurance and commodity fields. Foreigners who are parties to contracts in these fields, though the contracts have no geographical connection with this country, have chosen and still choose to have their contractual obligations governed by English law and settled by London arbitration. There are two interrelated reasons for that: first, that English law provides the most complete and detailed code of commercial law; it gives certainty to the legal rights which arise in a great variety of circumstances and so avoids disputes. The interrelated reason is that in London there has grown up a body of arbitrators whose experience and skill cannot be equalled anywhere else in the world.
It is a characteristic of English arbitration not shared by the arbitration laws of any other country that, although the arbitrator is the sole judge of facts, there is a machinery by which the courts can correct him if he goes wrong about the law applicable to the facts that he has found. As has already been mentioned, any party can ask him to submit to the High Court for opinion any question of law which arises. Although in theory no doubt the arbitrator can refuse, in practice that is a request which, as the law stands at present, it is difficult for him to resist. And if he does, under the present system, state a case for the opinion of the court, this inevitably involves delay in the enforcement of the award because it cannot be enforceable until the court has decided. The potentialities of delay are not limited to the time when the matter comes before the commercial court at first instance—and that, alas! is often long enough—but from the decision of the commercial court there is a right of appeal to the Court of Appeal,

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with another delay getting on for a year, and a possible appeal, but only with leave, to the House of Lords.
Properly used, this system of case stated is invaluable. It has played a major role in the development of English commercial law, and that development is one of the reasons why English law is the preferred law in so many international conflicts. It ensures justice according to law and not according to the individual arbitrator's whim: but it is open to abuse where it is used simply as a means for delaying the date when payment of the amount of the award will become enforceable.
When I was at the Bar and when I was sitting in the commercial court—alas! that is a long time ago now—there were very few complaints about abuses of the case stated system. The answer was that the sanctions of costs and awarded interest upon the sum outstanding were sufficient to make it not worth while, but, as the noble Lord, Lord Cullen, pointed out, in recent years, when inflation is high, interest rates are high and credit squeeze makes liquidity so important, it is often very much in the economic interest of the party against whom the arbitrator is making his award to delay the date of payment for as long as possible. That, think, is why the impression has got about that there is no real finality in English arbitration.
As the noble Lord, Lord Hacking, has pointed out, and as I can corroborate from my own experience, this is preventing the acceptance of London arbitration and the choice of English law as the proper law in the great international long-term multi-million contracts in which Governments or Government agencies are very often parties. I do not take so gloomy a view as the noble Lord, Lord Hacking, but I do think it is urgent that this kind of work—and it is a new kind of work and a new kind of contract which did not exist when I was at the Bar—should not be driven away to other centres which are only too anxious to take the invisible export to their own country rather than leave it to ours.
As the noble Lord, Lord Cullen, pointed out, urgent consideration has been given to this both by those who are customers of arbitration and by the courts who are
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concerned; and that consideration has led to a broad consensus of opinion on the proper cure. May I just give it in a sentence or two, because there are two aspects to it. One is to prevent the abuse of the case stated system in those contracts where the case stated system is accepted by the parties, and the other is the question of the right to contract out of the provisions of the Act, which provide in effect for appeal to the court upon a question of law.
So far as the case stated system itself is concerned, there is, I think, a general consensus of opinion that the power to appeal upon a point of law should he available only upon leave of the court itself. When the application is made to the court it should be granted only sparingly, and the court should be ready to impose the condition, if it thought there was any question of the real purpose of the appeal being to delay payment, that the money be paid into a joint account or brought into court pending the appeal. Secondly, in order to avoid this right of appeal to the Court of Appeal, as of right, there should be no right of appeal from the decision of the High Court to the Court of Appeal unless the High Court—I am speaking of the commercial court—specifies that there is involved there a question of law which is of interest and importance to other persons engaged in the same kind of activity or trade.
May I now refer to the power to contract out. At present there is no such power, but I think there is a consensus of opinion that there should be power to contract out and to say that we will have no appeal to the court on a point of law at any time after the dispute has arisen. Also, I believe that in some circumstances there should he a right to contract out by provision in the contract before the dispute has arisen. Here it is important—and I think we have pretty well reached agreement upon this—to draw a distinction between the standard form in commercial contracts and contracts in the standard form which have been the great source of arbitration in London in commercial matters. Those contracts have been referred to as "one off" contracts, where the arbitration clause had been negotiated between parties negotiating on equal terms, who have

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given their minds to it and who recognise the consequences of it.
A distinction in the kind of contract to which the noble Lord, Lord Hacking, has referred—the "one off" contract which he says (and I agree with him) is being diverted from London now—is undoubtedly something to which the parties will have given their minds. It will have been negotiated on equal terms and there should be no difficulty about allowing them to contract out. In a standard form of contract on the market, say, upon the Baltic Commodity Markets, you have really a "take it or leave it" contract. In those circumstances, some demonstration should be made that the parties have given their minds to it and have really intended to get this finality without the appeal on a question of law. Probably their best way of doing that is to register it in the High Court.
These reforms are not controversial, but they are urgent. The trend away from London of these great international contracts, unless corrected, may become irreversible, because once New York lawyers get into the habit of recommending Stockholm, the Hague, Geneva or wherever it may be, it will be very difficult to reverse that habit and get them to recognise London. Because of that urgency, I hope that the Government will be able to find time for a Bill to be introduced in this Session, and if it contains the kind of provisions which have been discussed and have been produced by the consultation which has been going on between the interested parties up to the last few days, it will be a Bill which ought to go through on the "nod" and not take up much of your Lordships' time.
8.1 p.m.
Lord SCARMAN: My Lords, first I should like to express appreciation and gratitude to the noble Lord, Lord Hacking, for asking this Question and for initiating this short but very important debate. I should also like to add to what my noble and learned friend Lord Diplock has said, in appreciation and admiration of the maiden speech of the noble Lord, Lord Cockfield. He has drawn upon his great experience to emphasise the great importance of the subject matter of this debate to the economy of the country.
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At this late hour, I do not intend to repeat the very formidable case for reform, which I suggest has been made by the noble Lord, Lord Hacking, and by my noble and learned friend Lord Diplock. But there are some wider issues, and some more profound issues, raised in this discussion than servicing our invisible exports by studying the legitimate desires of those concerned in these vast inter national one-off contracts. I have no doubt that it is possible to introduce, and to introduce without much controversy, legislation that would take care of that very limited and very important class of business.
No doubt, it could be done by introducing a distinction between contracts with an international element, and entirely home-based contracts. It is a distinction about which I, as an old-time law reformer, have some apprehension when I consider it. This class of distinction can lead to difficulties in the general law. Nevertheless, if the requirement be as compulsive as the noble Lord, Lord Hacking, suggests that it is—and my noble and learned friend Lord Diplock has said that the requirement is there, though he is not as gloomy as the noble Lord, Lord Hacking—let us see whether something can be done. But there are dangers in piecemeal law reform, and it is because of my awareness of those dangers that I have ventured to say a few words in the course of this debate.
In the course of his eloquent speech, the noble Lord, Lord Hacking, indicated that there was a case not only for reform of Section 21 of the Arbitration Act—that is, the special case procedure section—but for general and wider reform of our arbitration laws. I happen to agree with the noble Lord. I think that there is a case both for reform of the section and for wider reform of our arbitration law. But this is a requirement which arises from sources other than the international one-off contract, which we have been largely discussing in this debate.
As the noble Lord, Lord Cullen, suggested, there are two classes of persons who may find themselves involved in disputes which are amenable to the arbitration process; and I am not now considering the international one-off contract. First, there is the British-based business and trade which for years has, by a system of standard contracts, made use

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of arbitration clauses. As my noble and learned friend Lord Diplock mentioned, much of our highly developed commercial law has developed by the application of the special case or case-stated procedure to arbitrations taking place within trades and within businesses.
It would be wholly wrong for your Lordships' House to think that the only demand for reform of Section 21—that is, the special case procedure—comes from those interested in international contracts. There is a widespread view, among business and among professional arbitrators, that there should be a limit imposed upon the special case procedure, in regard to home-based business which makes use of arbitration clauses. I suspect that the noble Lord, Lord Hacking, had that factor, among others, in mind when he was pressing for reform of Section 21.
As my noble and learned friend Lord Diplock said, our commercial law owes its highly developed and articulated character and certainty to judicial decision, which has been made possible by the case-stated procedure. That is true, and yet today British business would like to see less judicial review and more finality in the awards of arbitrators. For myself, I think that Btitish business has a case, just as I know that those concerned with international arbitration have a case. But it is a difficult case, and there are very difficult questions, advantages and disadvantages to be balanced.
I suggest that this is a reason why the general reform of Section 21 of the Arbitration Act might be considered by the noble and learned Lord the Lord Chancellor as worthy of urgent reference to the Law Commission. The newly appointed Chairman of the Law Commission is one of our most distinguished commercial lawyers and judges, and I suggest that under his leadership there could be no body better placed than the Law Commission to take on board not only the specific reform of Section 21, but that wider reform of our arbitration laws to which the noble Lord, Lord Hacking, referred.
There are advantages in this because the second group of persons affected by our arbitration laws (they were mentioned by the noble Lord, Lord Cullen), the consumers and others who are not traders
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or merchants, are from time to time faced with having to deal with traders and merchants and find arbitration clauses imposed upon them. In recent years we have advanced a long way with reforms to protect the consumer and others in like case against unfair and unreasonable exclusion clauses in the standard contracts under which so many of us have to obtain the services and the goods that we require.
If one is going to help British-based business by a reform of Section 21— as I have suggested we should do and which I have suggested should be referred as a question to the Law Commission—then our reforms have got to be such as to make sure that we are not imposing upon consumers and others the burden of an arbitration clause without recourse to the courts which they do not want and which, if they had the strength and bargaining power, they would resist. And so it is, as in all law reform problems, a two-faced difficulty. One wants to reform Section 21, but one wants to ensure that the ordinary man who is outside the magic circle of the traders and merchants has still got recourse to the ordinary courts and the ordinary law of the country.
Of course, there is a basic question which lies well below the surface of this debate and which affects international contracts just as much as it affects contracts which are wholly domestic in character—that is the preservation of the rule of law as administered by our courts in accordance with the common law and Statutes passed by Parliament. There is a risk, even in making the concession to international trade which is sought in this debate that there is going to be one rule for some and another rule for others. If one extends reform, as I should like to see it extended to give to business something like the same facility of arbitration without recourse to the courts, one has got to do it in a way which will overall preserve the one rule of law for all of us in this Kingdom whether we be consumers, traders or persons concerned in international contracts.
Nothing that I say should be taken to diminish the case for dealing urgently with the international contracts, but I do ask that the wider reforms which the

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noble Lord, Lord Hacking, has suggested, I think rightly, are needed in our arbitration law should, now that we have this opportunity and the matter has been thrown into the crucible, be referred to the Law Commission so that under the guidance of its new chairman, highly qualified in this field, our arbitration laws can very soon he reformed, not on a piecemeal basis but on a wider basis applicable to a greater section of the community than those interested only in these international contracts.
8.15 p.m.
Lord WILBERFORCE: My Lords, we have already had two very learned speeches and I had not determined to speak, but I was slightly stirred to my feet by the remarks of the noble and learned Lord, Lord Scarman, which might perhaps lead one to suppose that there is greater divergence than in fact exists in this House as to what needs to be done. There are three problems: there is the case of the international contract, called, I think slightly misleadingly, the one-off contract, which is a new phenomenon which has come over the horizon recently and which we have suddenly begun to understand as something very important in our economic life. We came across it the other day in relation to State immunity, and it became obvious that this phenomenon called for a recasting of the law on that subject, so it seems quite clearly to call for a recasting of the law on arbitration.
I said "one-off" was misleading, because it is a fact that there are a great number of these contracts of various types which are becoming well known and well accepted by law in all contracts with States and agencies behind the Iron Curtain; they tend to have a certain pattern. All contracts with certain developing countries seem to have a certain pattern. The pattern is gradually shaping itself, and shaping itself to our detriment if we do not adjust ourselves to it. I am entirely at one with the noble and learned Lord, Lord Diplock, and with the noble Lord, Lord Hacking, in urging that this is a problem to be treated very rapidly and very simply—I say simply by allowing those who wish to contract out of the case-stated procedure.
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The second point is also sketched by the noble and learned Lord, Lord Diplock—some reform of the case stated procedure itself. There may perhaps be not quite so much consensus on that as on the other subject, depending on what admiration one has or does not have for the procedure itself. At any rate that is a matter which can be handled quite simply, together with the so-called one-off contract, in the ambit of a short Bill. I would most urgently urge the noble and learned Lord, if he can, to say that there will be legislation on those two subjects which perhaps, it' not going through on the nod as the noble and learned Lord, Lord Diplock, said, ought to be capable of being passed within the limits of perhaps a limited debate and discussion on a few points.
The wider reform of the law of arbitration is no doubt something which ought to he undertaken and requires consideration by perhaps the Law Corn-mission. I would very much hope that these two other matters which are in themselves quite separate, quite concrete and extremely urgent should not be deferred pending the wider examination. I hope that the noble and learned Lord will be able to reassure us that, whatever attractive perspectives there are for longterm law reform, they will not impede concrete steps on the two matters which are now ripe for decision by Parliament.
8.18 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I am sure that your Lordships will be grateful to the noble Lord, Lord Hacking, for having given the House the opportunity of examining, and indeed emphasising, the role of London as a forum for international arbitration. His own commitment to the importance of it may be gauged from the fact that he has indeed flown the Atlantic in order to fly this highly important flag, and we are grateful to him for his enthusiasm and for giving the Government the opportunity tonight of learning from experts in this field the importance of the issues that have been raised and the urgency of dealing with them.
May I join with other noble Lords who have spoken in congratulating the noble Lord, Lord Cockfield, on his admirable maiden speech. There is nothing that this House of experts likes more than someone

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who speaks with authority based on his own experience, practice and learning on the matters in which he takes part in in debate. Although I doubt whether I shall always agree with his views on the economic scene, the whole House will look forward to hearing him frequently in debate and we are already aware that there has been a powerful reinforcement to our ranks.
The arbitration services that are provided in London, through the London Court of Arbitration and other organisations, clearly are of very great importance. That importance has been identified tonight. They already have a high reputation in many fields, and I venture to think that perhaps the Unstarred Question which has been placed on the Order Paper by the noble Lord is a little misleading when it speaks of the "re-establishment" of London as a forum for international arbitration. Not only has it been such a forum for many decades—centuries even; it still is. As the noble and learned Lord, Lord Diplock, said, perhaps we need only to reflect upon its role in settling disputes in the maritime world, in commerce and in the commodity fields.
We have had indications tonight of the contribution that these services make to the commercial community. They play a part in earning foreign currency for the United Kingdom and therefore, as the noble Lord, Lord Cockfield, indicated, help with our balance of payments. The noble Lord mentioned a figure of £500 million. That is a figure certainly to attract the attention of any Government, since the question of the balance of payments is obviously of great importance to our economic life.
Above all, I recognise that the services provided in the field of arbitration represent an important element in the wide range of legal and financial services provided by the City to the international commercial world. The Government are clearly concerned, as they ought to be, that these services should be as efficient as possible. To that end, certainly we shall consider—I think we have already done so—what steps can be taken to improve the services, so far as it is appropriate for a Government to intervene. I call in support of our readiness to help the fact that this Government introduced what is now the Arbitration Act 1975,
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which enabled the United Kingdom to ratify the New York Convention on Arbitral Awards. In addition, the Government participated in the work of UNCITRAL—I am afraid that it is one of these hieroglyphics which we gradually learn to recognise—which stands for the United Nations Commission on International Trade Law, in producing its own arbitration rules which have been widely adopted.
However, arbitration is by its very nature predominantly a private service provided for the private sector. The noble Lord, Lord Hacking, referred to "the private dignity of arbitration proceedings"; so it is a domain with which the Government have little direct contact. It is only where it is clear that there is some inherent legislative defect that I believe the Government or Parliament should intervene. This may sound like a rather conservative point of view, but I believe it to be right in this context. From what has been said in this debate, from what we have been able to read, and in particular from the conclusions of the Commercial Court Committee and the London Arbitration Group, the defects in the case stated procedure may well be such an instance and must clearly be re-examined as a matter of urgency, especially on the two points which the noble and learned Lord, Lord Diplock, and others have emphasised. The points which have been made in this debate with such authority and experience will, of course, be very seriously considered.
As we have heard, the present system has been subject to a number of criticisms, not all of them centred around the workings of the case stated procedure. On this latter point, I should like to express my own gratitude and that of the Government for the valuable work done by the Commercial Court Committee under the highly expert chairmanship of the Honourable Mr. Justice Donaldson. Unfortunately, I have only just seen his report. If I may say so, the noble Lord, Lord Hacking, has rather jumped the gun in bringing forward this subject for debate tonight. As one noble Lord said, the discussions up to the last few days have resulted in certain conclusions being reached after long discussion and questioning. With regard to any help which may be required by the Government from expert consideration, while I am the first to acclaim the value of the work of the

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Law Commission, certainly this is a field where there is no lack of advice that those expert in the field have already given and will later give. I bear in mind that the report of the Commercial Court Committee is still in draft. Whether or not there will be any further elaboration of it remains to be seen.
I am grateful to the committee for considering the issues with which we have to deal with commendable speed and thoroughness, taking into account, as they did, among other things the work of the Joint Committee of the London Court of Arbitration and others, sitting under the chairmanship of Mr. Clifford Clark. I think I am right in saying that a variety of views has been apparent in their deliberations, but they reached an agreed conclusion. I understand that the London Arbitration Group, under the chairmanship of Mr. Mark Littman, went through a similar process of study and difference but that they reached an agreed conclusion. We must all be grateful to them for the work that they have done with such vigour and speed.
It has been clear from this debate that there are two features which run through the consideration of the case stated procedure. On the one hand, there is general agreement that it has served a valuable purpose in the development of English commercial law, in that, as has been said, it has allowed authoritative judgments to be given on points which would normally be the subject of arbitration. This has led to a measure of consistency, of certainty and authority which is of immense value in commercial law—as, indeed, the noble Lord, Lord Cullen of Ashbourne, mentioned in the course of his speech, If he will permit me to say so, in this operation and in this achievement, the noble and learned Lord, Lord Diplock, has played the outstanding part.
On the other hand, the case stated procedure is, as has been indicated tonight, felt not to be appropriate in certain international contracts, some of which are classified as "one-off" contracts. I confess that it was not a description which produced clarity in my mind in a flash. In case the noble Lord, Lord Cullen of Ashbourne, thinks that he is out of step in not fully understanding it, as he modestly confessed, I understand that the London

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Arbitration Group tried to define "one-off" contracts but found it difficult to do so. It may well be that they will fall into the category of the definition of drunkenness being like an elephant—easy to identify but hard to describe.
At any rate, what we have in mind has been illuminated tonight by the noble and learned Lord, Lord Wilberforce, and by the noble and learned Lord, Lord Diplock. Clearly it is a special category which requires urgent consideration. The loss of the advantage of the hearing of proceedings in London of long-term multi-million pound contracts makes me, as one who at one time practised at the Bar, tremble. But, seriously, this is clearly an area of very great importance and, with this background of skills, integrity and competence which has earned the admiration of the world in the legal field, if there are any procedural or legislative bars in the way to limit this work coming to London, then clearly we must seek to do what we can about it.
There is the reconciliation of the two views that I have mentioned of the value of judgments on appeal and the difficulties faced in the kind of circumstances which, as we have heard, have led to important cases not coming to this country. This is apparently a continuing and may be even an increasing process. This is clearly not a simple problem. The report of the Commercial Court Committee, in so far as I have been able to study it in any depth, makes it clear that there is no simple rule applicable to every kind of case. So this must be sorted out and worked upon.
In their view the inescapable application of the case-stated procedure under Section 21 of the Arbitration Act—I mean inescapable so far as the parties are concerned—is only one facet of the problem, and they conclude that amendments to that procedure should form part of a rather wider series of amendments to the Arbitration Act, including the substitution of a limited right of appeal on points of law for the present Section 21. I note that their report ends with the words
"The Committee is strongly of opinion that it is important that English arbitration be given a comprehensive new look as part of a single operation and that this be done at the earliest possible moment".

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Whether or not that is consistent with the view of the noble and learned Lord, Lord Diplock, we can at least, so to speak, deal with it separately—I will not use the term "piecemeal", because whether or not that is appropriate I should like to consider—but whether that is practicable, and in the not too long term is the best way of dealing with it, is one of the factors which the Government will have to consider. As I have said, we cannot afford—and I mean that—to lose this work, especially if it can be won without doing damage, on the other side, to the principles which have operated in the arbitration field and which have maintained for this country the reputation it holds. Those engaged in arbitration are well aware of the fact that we live in a highly competitive world in which anybody providing an international service has to examine continuously the operation of that service. This we must do and we are certainly willing to do.
As I have said, I have only just received the draft report of the Commercial Court Committee. Frankly, I have not been able to consider what steps should be taken with regard to its very important proposals, nor have I yet been able to discuss the matter with my colleagues. I am afraid one does not move quite so fast in so few days in any Government who have to deal with matters of great importance like this. But I can assure the House that, in view of the urgency and importance of what we have been discussing tonight, we will consider the report of the Commercial Court Committee and we will consider the clear and eloquent submissions which have been made tonight as speedily as we can.
However, I am afraid that at this stage I cannot commit the Government further than that. This is a large, important and difficult field, and clearly something must be done. But I certainly should not like to be a party to a long-term reference over a vast area if it is possible, as the noble and learned Lord, Lord Diplock, suggested, to identify what can be, so to speak, "hived off" as a matter that could be dealt with fairly soon. At this stage, I cannot commit the Government further than that. I repeat the importance that we attach to the maintenance of London as a forum for international arbitration and our commitment to maintain it.

EDUCATION (NORTHERN IRELAND) BILL [H.L.]
Returned from the Commons agreed to.