Lords Sitting of 4 December 1979

Preamble
The House met at half-past two of the clock: THE LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter
The Viscount Hardinge—Sat first in Parliament after the death of his father.
The Lord St. John of Bletso—Took the Oath.

HOUSING STANDARDS: INSULATION AND HEATING
Viscount HANWORTH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that the delay in altering the building regulations for housing to take into account better standards of thermal insulation and control of heating is preventing their adoption in new houses, and that it would be extremely costly to make such improvements at a later date.
Lord MOWBRAY and STOURTON: My Lords, my right honourable friend the Secretary of State for the Environment is at present considering the need for higher standards of insulation and control of heating for domestic properties.
Viscount HANWORTH: My Lords, I thank the Minister for that reply. Can he say why there has been such delay in this consideration and when his right honourable friend hopes to come to a conclusion? Can he assure us that there will be higher standards of insulation?
Lord MOWBRAY and STOURTON: My Lords, I was not aware there had been undue delay. Continual consultations on this matter take place within the Department with many advisory bodies. There are some 300 interested bodies which have to be consulted and which are
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giving advice all the time. When the need is seen to be there my right honourable friend will make his intentions known.
Lord STRABOLGI: My Lords, the noble Lord says when the need is there. Are the Government not aware that effective insulation is very important for the conservation programme in an energy crisis, on which all our future prosperity depends?
Lord MOWBRAY and STOURTON: My Lords, I take the noble Lord's point completely. Perhaps when I used the word "need" it was badly phrased. It is when the need is seen to make it compulsory. Any builder can build to a higher standard at the moment. We do not want compulsorily to put more expense on builders. Sometimes having extra insulation can have other side effects. We just want to be sure that we are not going to order something to be done which could have side effects.
Lord ELWYN-JONES: My Lords, is not the necessity to consult 300 bodies rather an excess of consultation? When will it end? Are they all contradicting each other?
Lord MOWBRAY and STOURTON: My Lords, the noble and learned Lord must not tempt me in this way. They are giving us advice all the time, and my right honourable friend is in receipt of all this advice all the time. We have every intention of trying to conserve every bit of energy we can. But we in this country do not have the same climate as the rest of Europe; we have a much greater humidity problem than any other country in Europe and this makes us slightly exceptional.
Lord AVEBURY: My Lords, what possible side effects could there be from improving the standards of new construction as opposed to trying to upgrade levels of insulation in existing buildings, where the sort of problems the noble Viscount has mentioned could arise? Is there not something very incongruous about the way we are quite prepared to spend millions of pounds on developing nuclear energy in order to match supply and demand, but are not prepared to spend a tiny fraction of that amount in

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achieving the same objective and greater comfort to house owners by improving the standards of insulation?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord asked what the side effects are. These are a very technical matter which I should not like to go into here. We obviously want to conserve energy. Builders and authorities are allowed, and are able, to build to a higher standard than the minimum. What noble Lords are asking for is that the Government should make a compulsory minimum standard without being absolutely convinced that everything involved is totally necessary. Let us be quite honest. Anyone can at this moment build to a higher standard if he wishes to.
Viscount HANWORTH: My Lords, may I ask the Minister to say whether my interpretation of what he says is correct: that at the moment there is no immediate intention of doing anything about raising the standards of insulation for new houses? If that is the case, does he realise that a very large number of people—and I think I can say they are represented in this House—think that that is a simply shocking situation?
Lord MOWBRAY and STOURTON: My Lords, I think the noble Viscount has completely misinterpreted what I said. My initial Answer said that my right honourable friend is at present considering the need. Let me remind noble Lords that we have this year, in June, increased the non-domestic building minimum standards. I think it probably quite reasonable to assume that my right honourable friend might come to the same conclusion with regard to domestic dwellings. This is not a promise; it is just a surmise.
Lord BOWDEN: My Lords, are the Government not aware of the fact that there has been neglect not only of the insulation but of what one might call the standards of construction of buildings, which is just as important? I speak, if I may be allowed to, as one who has been much concerned with the building of a university, and we are always under constant pressure to downgrade the standards of original construction, with the result that the cost of the maintenance of the buildings is very dramatically increased. This is true of insulation, and it is just
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as true of general standards of construction, which cannot really be separated from it. May I ask whether it is the Government's intention to continue, as a result of the present shortage of cash, to construct buildings which will cost an enormous amount to keep alive, operating and standing up in the future?
Lord MOWBRAY and STOURTON: My Lords, obviously no Government want to see buildings put up that will immediately need a great deal of money spent on them. We want to have good buildings put up, just as the noble Lord's Government did, but obviously we want to do it at reasonable cost and we want the cost-effectiveness of the insulation to be seen to he there.

HOME-GROWN WHEAT FOR BREAD-MAKING
2.44 p.m.
Viscount MASSEREENE and FERRARD: 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 steps they are taking to encourage the production and use of more homegrown wheat in bread-making in view of the development of United Kingdom cereal growing.
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, the production of bread-making wheat is encouraged by Community support arrangements which offer a premium to bread-making over feed wheats and by Government contributions to research and advisory services.
Viscount MASSEREENE and FERRARD: My Lords, I thank my noble friend for that reply. In view of the improved and harder type of wheat which can now be grown in this country, could he bring pressure to bear on the millers to import less foreign wheat? As my noble friend knows, we import a great deal of Canadian and American wheat, but could he bring pressure on our millers to use more British wheat for bread-making?
Earl FERRERS: My Lords, it is a fact that the type of bread which we require in this country must have in it a certain proportion of North American hard wheat and therefore inevitably, if we are to continue with the type of bread that we have, that is bound to he included. However, over the years the proportion of home-grown hard wheats that has gone into bread has risen from about 30 per cent. to 50 per cent. of a loaf.
Baroness SEEAR: My Lords, would the noble Earl not agree that some of us would be extremely glad if we did not continue to have the type of bread which we customarily have?
Earl FERRERS: My Lords, the noble Baroness is, of course, quite capable of choosing what bread she wants to buy.
Lord BARNBY: My Lords, I should like to ask the noble Earl a question arising out of my noble friend's original Question and the noble Earl's first reply. Would it be wrong to assume that, if the Government were to provide the encouragement requested by my noble friend, it would result, with existing installations of machinery, in a larger proportion of bran of a higher quality being available in this country than that which arises from the imported wheat and the existing machinery employed in producing it?
Earl FERRERS: My Lords, I am not certain whether I have correctly understood the drift of my noble friend's question. However, I would go along with him if he were to say that the type of bread which we have in this country requires some very complicated machinery to produce it.
Lord WALLACE of COSLANY: My Lords, is the noble Earl aware that it is absolutely essential in the present economic climate that more and more food is grown at home, and that the quality of bread would be improved if British wheat were included? I ask the Government to give every possible attention—whether it is a question of growing in larger quantities or smaller quantities—to the fact that more food should be grown at home, because after all Britain needs the dough!
Earl FERRERS: My Lords, I can assure the noble Lord, Lord Wallace of Coslany, that the Government are very concerned to ensure that as much food as possible is grown at home. To emphasise that point, he might like to know that imports of wheat into the United Kingdom have decreased from 3,979,000 tonnes in 1975–76, to 2,621,000 tonnes in 1978–79; and from the EEC the imports during those two dates have decreased from 2,738,000 tonnes to 871,000 tonnes. So, we are not doing so badly.
Baroness SHARPLES: My Lords, would my noble friend not agree that the varieties of brown bread now available are considerably greater than they were a few years ago?
Earl FERRERS: Yes, my Lords, I think that my noble friend is quite right in saying that there are more varieties available and that the types of bread available show a greater range than they used to.
Lord AVEBURY: My Lords, if the Government are so keen on growing as much food as possible at home why are they proposing, under the terms of the Local Government Bill, to allow local authorities to hand over allotment land to developers?
Earl FERRERS: My Lords, I have a fairly wide imagination, but I am bound to say that it is stretched to the limit in trying to see how the noble Lord's question has any relevance to the Question on the Order Paper.
The LORD PRESIDENT of the COUNCIL (Lord Soames]: My Lords, I think that it should be agreed by the House that at this time even we cannot live by bread alone!

THE TERRITORIAL ARMY: CAPABILITY IMPROVEMENT
2.49 p.m.
Lord GLENARTHUR: 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 further steps they are taking to

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improve the capability of the Territorial Army.
The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal): My Lords, the Government have already taken a major step towards improving the capability of the Territorial Army by putting into effect the main recommendations of the Shapland Report. These include the increase in bounties, which we are confident will significantly cut down the losses in trained manpower which the TA has experienced in recent years as well as providing an attractive incentive to potential recruits; and a number of further measures to improve training standards. In addition we have set in hand an examination of all TA equipment scales with a view to establishing the feasibility of making further improvements.
Lord GLENARTHUR: My Lords, I thank the Minister for that reply, but I should like to press him a little further on the Shapland Report, particularly as regards the recommendation made in that report about improving public relations on behalf of the Territorial Army. Coupled with that, can he say whether the Government support the suggestion that they might encourage their own agencies, the nationalised industries and commerce and industry as a whole, to adopt a positive attitude towards recruitment into the Territorial Army?
Lord STRATHCONA and MOUNT ROYAL: My Lords, it is not so much a question of recruitment into the Territorial Army, as one of allowing time for people to take up their training obligations. However, there are some major employers, of whom the Civil Service is one, who give special leave for Territorial Army members, and that is something that we hope will commend itself to more employers. We are looking at what steps we can take to encourage employers to support the Territorial Army in this way, but we agree with the Shapland Report that it would be a mistake to introduce legislation on these lines.
Lord SHINWELL: My Lords, is the Minister aware that I find his reply far from satisfactory? Apart from some increase in the bounty—and that is a mere
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pittance, and is hardly an encouragement for large numbers to join the Territorial Army—is he aware that it is quite impossible to assess the capability of the Territorial Army which, in view of the international situation, is becoming increasingly urgent every day? At present the numbers do not exceed 60,000, which is a mere bagatelle compared to our population and the number of young men and adults available.
Is the noble Lord also aware that we are far from satisfied about the lack of most modern equipment being made available to those who serve in the Territorial Army? Will the Government regard this matter as one of extreme urgency and realise that many of us, who, despite opposition, for many years have been advocating an increase in the Territorial Forces, believe that the time has come to provide something as an alternative, especially in view of the fact that there is conscription in every other European country?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am grateful to the noble Lord, although naturally I am sorry that he does not find my first Answer satisfactory. We have had a comparatively short time in which to do anything about what we have found, but we have acknowledged that there are some shortcomings in the Territorial Army equipment. Last June in this House I announced that we had begun to make enhancements in weapons at a cost of £1·5 million. We have set in hand a review of all Territorial Army equipment to see in what way it might be most cost-effectively enhanced.
Lord CLIFFORD of CHUDLEIGH: My Lords, as an honouary colonel in the Territorial Army unit, I should like to ask whether the noble Lord is aware that over two years ago some units were promised modern wireless sets? The present Government have now been in office for over six months and these shortcomings have still not been remedied. That is one example, but I can give the Minister many others.
Lord STRATHCONA and MOUNT ROYAL: My Lords, the simplest answer that I can give the noble Lord is that wireless equipment is one of the areas

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where we recognise that there are shortcomings.
Lord KILMANY: My Lords, with regard to the original Question, is my noble friend satisfied that sufficient fuel is available to ensure that Territorial Army premises are reasonably heated during the winter months?—because in the coldest periods last year that certainly was not the case, greatly to the detriment of the training of the Territorial Army.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am grateful to my noble friend for that suggestion; I was not aware of that fact. If he has a case about which he would care to let me know, I shall be glad to look into it. I suspect that it is more a question of money than of oil, but I should like to learn.
Lord WIGG: My Lords, will the Minister bear in mind that the fundamental question relating to the Territorial Army concerns its purpose? Earlier he said that his Government had been in office for only six months. The Conservative Government were in office from 1951 to 1964 and from 1970 to 1974, and during neither of those periods did they give the slightest indication of what they wanted to do. Do they want to use the Territorial Army as a source of re-enforcement to the Regular Army, or is it to be preserved in its entirety and used as Territorial Army units? Until they make up their mind about that, they will go on wasting time and money and they will also destroy the patriotism of those young men who give up their time for this purpose.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I hope that the noble Lord is being unduly gloomy. I suggest that he will have an opportunity to address this question in the debate that my noble friend has tabled for next week. We see two roles for the Territorial Army. One is home defence and the other is in support of our forces overseas.
Lord LEATHERLAND: My Lords, can the noble Lord tell us how far below establishment is the present strength of the Territorial Army? I do not think it is many thousand. Secondly, is it
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possible for the Territorial Army to be trained in some of the very modern, scientific weapons which are now available?
Lord STRATHCONA and MOUNT ROYAL: My Lords, the second half of the noble Lord's question is rather easier to answer than the first. I do not think that information on his first question is in my brief and I shall have to write to him on the question of numbers. On training, we are satisfied that it is possible, and we are addressing ourselves to the problem of training the Territorial Army in the use of the equivalent weapons which are issued to the Regular Army. That is the basic policy. It is sometimes suggested that the Territorial Army should use inferior weapons, on a sort of second-class basis. That is not currently the policy which the Ministry of Defence would wish to pursue.
Lord SHINWELL: My Lords, is the noble Lord aware that I personally do not find Government policy guilty or unsatisfactory? I put this simple question to him. Will the Government consider organising a campaign throughout the country in order to encourage existing members of the Territorial Army and to increase the forces in that capability?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I cannot imagine a better protagonist than the noble Lord to do exactly what he is suggesting, and I think it is an excellent idea.

TAX EVASION
2.57 p.m.
Lord UNDERHILL: 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 steps they intend to take to deal with tax evasion and tax avoidance.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, these matters are under constant review.
Lord UNDERHILL: My Lords, in thanking the Minister for that very informative reply, may I ask whether he

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agrees that it would not be surprising for me to express disappointment at it?—particularly in view of the general concern among the great mass of tax payers at what they regard as an unfair and incorrect procedure at present. Has he any comments to make upon the statement attributed to the head of the Inland Revenue Department, that there is tax evasion on some £9 billion of income—7 per cent. of the gross domestic product—and that the tax revenue loss totals some £2 billion?
Lord COCKFIELD: My Lords, I do not know why the noble Lord should be disappointed to hear that matters are under constant review. I should have thought that he would have been disappointed had he been told that the matter was not under constant review. With regard to the figures he quoted, they have been widely quoted without the qualifications which were given at the time they were quoted to the Estimates Committee. In commenting on certain estimates that had been made by other people, Sir William Pile said:
" The conclusion that my colleagues and I came to was that at that level it sounded a hit implausible, but that we thought it was not so implausible at 7½ per cent. of the gross domestic product ".
The words he used were:
" it was not so implausible ".
Of course, one of the problems with tax evasion is that it is necessarily carried out secretly or at best clandestinely. Consequently, it is impossible to produce any reliable estimate of the extent of tax evasion.
Lord ELWYN-JONES: My Lords, would the Minister give an indication, and let us into the secret, of what this constant review has brought forth?
Lord COCKFIELD: My Lords, may I give the noble and learned Lord some information of what the constant efforts have brought forth. Evasion is essentially a question of enforcement by the revenue boards. In the last three years, the total charge raised as a result of detected evasion by the Inland Revenue was as follows: in the year to the 31st October 1976 it was £22 million; in the year to 31st October 1977 it was £37 million; in
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the year to 31st October 1978 the figure was £47 million. I hope, therefore, that the noble and learned Lord would join me in congratulating the Board of Inland Revenue and their staff on their successful efforts in dealing with tax evasion.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, the House is indeed grateful to the noble Lord. Might it not have been more courteous if he had given us those figures at the beginning?
Lord COCKFIELD: My Lords, the answer very simply is that I was not asked for them. Incidentally, the figures are published. May I refer the noble Baroness to the 121st Report. Perhaps I ought to qualify that and say that the figures for the first two years I quoted are published in the 121st Report of the Commissioners of Inland Revenue, which is available in the Printed Paper Office. In order to give the latest figure to your Lordships, I had the figure for the year to 31st October 1978 brought out in order to bring the picture up to date.
Lord BOYD-CARPENTER: My Lords, has my noble friend observed that in his Question the noble Lord opposite has bracketed tax evasion with tax avoidance? Will my noble friend make it clear that there is a great distinction between the one, which is unlawful, and the other which the courts have constantly ruled is wholly lawful? If my noble friend, prompted by the noble Lord opposite, is looking for examples of tax evasion, will he look at some of the practices of the printing unions in Fleet Street?
Lord COCKFIELD: My Lords, there is indeed a clear distinction between tax evasion and tax avoidance; a distinction which is well understood by most people. My reply dealt with both of them when I said that these matters were under constant review. The supplementary questions, of course, related to tax evasion, which is why I confined my reply to those matters.
Lord DOUGLAS of BARLOCH: My Lords, can the noble Lord tell us how much revenue is overpaid and not refunded to taxpayers?
Lord COCKFIELD: That, my Lords, is a totally different matter. Overpayments do not normally arise as a result either of tax evasion or of tax avoidance.
Lord PAGET of NORTHAMPTON: My Lords, the noble Lord said that the distinction between tax evasion and tax avoidance is very well known. Can it be described as this: the one is cleverer than the other?
Lord COCK FIELD: No, my Lords. The one is outside the law; the other is inside the law.
Lord UNDERHILL: My Lords, would the noble Lord accept my assurance that I understand the difference between tax evasion and tax avoidance? Would he not agree that they are both immoral, and both disliked by the average taxpayer?
Lord COCKFIELD: My Lords, when one comes to debate morality one is in a very difficult field indeed. One of the great problems with tax avoidance is that there is no unanimity of opinion as to what constitutes tax avoidance. If I may remind the noble Lord, there has been legislation against the Deed of Covenant in 1936, 1947 and 1964. Nevertheless, the Deed of Covenant is the main instrument used for charities in raising their funds.
Lord PLANT: My Lords, would the Government ask the chairman of the board designate, Sir Lawrence Airey, that one of his prime tasks in the forthcoming months and years should be to reduce the widespread tax avoidance that we all know exists? Further, would the noble Lord agree that, if there is to be an enthusiastic campaign against tax avoidance, or indeed evasion, the Revenue needs more staff and not fewer staff, as the Government seem to be thinking in relation to Whitehall cuts?
Lord COCKFIELD: My Lords, tax avoidance is a matter for legislation. If the noble Lord was referring to tax evasion, the importance of dealing with tax evasion is well known to the chairman and the members of both Revenue boards.
The Earl of ONSLOW: My Lords, would it not make it much easier to stop
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tax evasion if income tax starting points were raised very substantially? Then the temptation to evade tax does not exist, because no tax is evaded. This would, therefore, not only cut down Revenue staff but avoid bringing large numbers of people into the criminal net.
Lord COCKFIELD: My Lords, it is perfectly true that the heavier the burden of taxation the greater is the temptation both to evade and to avoid the burden. I think, however, that it would be too optimistic to think that reductions in taxation would totally solve this problem, which has been with us for a very long time indeed.
Lord BRUCE of DONINGTON: My Lords, will the noble Lord inform the House as to whether the views of the Board of Inland Revenue were sought prior to the Government's total abolition of exchange control? If their advice was sought, what was the advice? If their advice was not sought, why not?
Lord COCKFIELD: My Lords, it is not customary for Ministers to answer questions of that nature. The effect of the abolition of exchange control on avoidance and evasion was considered by Ministers before they took the decisions which they did. The abolition of exchange control was essential from the point of view of the economic health of this country.
Lord MELCHETT: My Lords, concerning tax evasion, could the noble Lord tell us how much public money is recovered per member of staff engaged on this work, and how that compares with the amount of public money recovered by each member of staff engaged on work against social security abuses?
Lord COCKFIELD: My Lords, I doubt whether it is possible to provide figures of that kind. I shall certainly have a look at the matter to see whether figures can be obtained. Of course, a great deal of the work on tax evasion is part and parcel of the daily work of the staff of both Revenue departments, and it is very difficult to separate out one part of their work from another.
Lord LEONARD: My Lords, would the noble Lord kindly be prepared to take some advice on the difference between tax evasion and tax avoidance by going to the right reverend Prelates on this matter?
Lord COCKFIELD: My Lords, I think, with respect to the noble Lord, that I fully understand the difference between tax evasion and tax avoidance.
Lord BOWDEN: My Lords, would not the Government simplify their problems enormously if the legislation in the Finance Act were not so extraordinarily obscure? At the moment, the two most rapidly growing industries in the country seem to be the increase in accountants, who try to discover possibly how to evade or avoid the tax which is imposed by equally clever accountants trying, by more and more sophisticated techniques, to complicate the whole problem. It seems to me that this is a battle in which no one gains, and some of the ablest men in the country devote their time to it. Some of the results have been quite extraordinary. Perhaps 1 can illustrate very quickly.
Several noble Lords: No! Speech!
Lord BOWDEN: My Lords, has the noble Lord heard of a case in which the House of Lords sat in its judicial capacity for four or five days debating the meaning of three words in the Act?
Lord SOAMES: My Lords, I think that that was more in the form of a statement than a question, and I have the feeling that the House would rather like to get on to the Shipbuilding Bill.

SHIPBUILDING BILL
3.10 p.m.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, I beg to move that this Bill be now read a second time. This very short Bill, one of the shortest on record, covers two important shipbuilding items. It provides for an increase in British Shipbuilders' statutory borrowing powers, and it widens the scope of the home credit scheme to include con-
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versions of ships and mobile offshore platforms by United Kingdom owners in United Kingdom yards. Neither provision adds to the aid for the industry announced by the Government on 23rd July and the policy in relation to shipbuilding and British Shipbuilders remains as outlined at that time, and it is to provide a clear and fair framework for British Shipbuilders to perform a very difficult task in difficult conditions and gradually to move to return that industry to profitability.
This is, as I said, a small Bill, but it is useful none the less and I will go through the details and explain what part the provisions play in the Government's plans to help British Shipbuilders. With certain exceptions specified by the Aircraft and Shipbuilding Act, the borrowing limit covers the amount which the corporation and its wholly-owned subsidiaries may borrow and any public dividend capital that may be voted to it. When British Shipbuilders became a fully fledged corporation in July 1977 its borrowing limit was set at £200 million with provision for the Secretary of State to increase it by order to £300 million. An order to this effect was made in July this year. Even then, it was already evident from British Shipbuilders' financial position that the £300 million limit would need to be increased again within a matter of months, and this is still so. Hence the first clause of the Bill. The proposal is to increase the limit to £500 million with powers for it to be raised by an affirmative order in the other place up to a maximum of £600 million. In present circumstances no one can be sure how long the new limits will suffice, but we may certainly hope they will last longer than those they replace.
British Shipbuilders was set up during a recession in the shipping market of unprecedented severity which has resulted in severe losses for British Shipbuilders. Shipbuilding industries all over the world have also made large losses. This year's cash limit of £250 million and loss limits of £100 million, after crediting Intervention Fund assistance, reflects the severity of the industry's difficulties and illustrates the need for the contraction plans of the corporation. Next year we expect improved results; we have set a loss limit of £90 million before crediting intervention fund assistance. It may be helpful if I were to refer back to the

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figure I gave, that this year our loss limit has been £100 million after crediting intervention fund. The amount credited up to October was £35 million, so it is clear that the loss this year on a comparable basis to the £90 million I have just quoted for next year's plan will be in excess of £135 million. That represents a sizeable reduction on the rate of loss and the external financing limit has been set at £120 million.
These figures show that both the Government and British Shipbuilders are determined to reduce the corporation's losses and put it on the road towards viability. We have stated our policy of making public money available over the next two years while it adjusts its capacity and improves productivity. Raising the present borrowing limit as proposed in the Bill will allow the Government to finance British Shipbuilders in accordance with the policy which we announced on 23rd July. I repeat that it does not add any further assistance to that already outlined in that policy.
The second clause is intended to improve British yards' ability to compete with foreign repair yards which already enjoy similar credit facilities. The home credit scheme established by Section 10 of the Industry Act 1972 enables the Secretary of State to guarantee loans raised to finance the construction or completion of ships and mobile offshore installations in the United Kingdom for United Kingdom owners. It does not however at present cover finance for the conversion or alteration of ships or mobile installations by United Kingdom owners. The present proposal will fill that gap.
The guarantees will be limited to the finance for the work of alteration and will not cover finance for the purchase of the ship or installation to be altered. The minimum size of ship which is laid down in the EEC Fourth Directive will be 5,000 gross registered tonnes, although we shall be able to go down to 1,000 gross registered tonnes to match officially supported credit terms in instances outside the EEC where there is evidence that ships of that size are being supported. To qualify under the scheme, the conversion has to involve radical alteration to the hull, the cargo plan or the propulsion system.
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Similar eligibility rules will apply to mobile offshore installations.
Guarantees will normally be up to 80 per cent. of the contract value over a period of five years from delivery. The interest rate in the home credit scheme is currently 7½, per cent. Although these are the normal terms, the possibility of extending credit to 8½ years is the maximum allowed under the EEC and OECD agreements and it is not excluded that for very large contracts of special importance we may feel it desirable to go to the limit. The conversions involved—for example, enlarging and re-engining ships to achieve improved fuel economy—can afford worthwhile opportunities not only for ship repairers but also for shipbuilders, engine builders and other related industries.
The House will recall that when we took office we found that the intervention fund had been allowed to lapse—it had lapsed in March of this year—and that British Shipbuilders had only qualified approval for their corporate plan, and that was over three months after sending it in. The previous Administration recognised that contraction was inevitable, but they could only bring themselves to consider these matters on a step-by-step basis. Our measures have given the corporation a framework of support and a basis for planning over two years.
Since then we have successfully negotiated the proposed new intervention fund of £120 million, which we announced in July, and this is now available to subsidise orders within limitsagreed with our partners in the EEC. We have also agreed wider limits on credit with our partners in OECD, and we have pursued the possibility of a worthwhile Community scrap-andbuild scheme. It has been disappointing to my right hounorable friend that the Council of Ministers were unable to reach a decision on this at their recent meeting, though I understand that further consideration is to be given to the proposals. For their part British Shipbuilders reached agreement at Blackpool with the Confederation of Shipbuilding and Engineering Unions on their strategy to reduce the industry to a little over 400,000 tons of capacity a year. We all recognise—and we congratulate the parties to the agreement—that this was not an easy agreement to reach.

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There are some signs of a rally in the market now, but they have to be viewed in the context that orders for the industry over the past five years have been below the level required to sustain British Shipbuilders' preferred strategy, including the tonnage that I have just mentioned. In our view therefore British Shipbuilders will still find it difficult to sustain their strategy. Moreover, although prices in some areas have firmed up a little, in general they remain much too low.
British Shipbuilders, with the active co-operation of the unions, are making strenuous efforts to improve productivity. Joint monitoring committees have been set up, self-financing productivity schemes have been devised, and the corporation is running a very active publicity campaign in all its yards. As many noble Lords will know, it is never harder to improve industrial productivity than when orders are scarce and, consequently, when men are apprehensive. Yet nothing is more calculated to undermine future employment in the industry than levels of productivity below those achieved elsewhere.
British Shipbuilders still have a long way to go. They recognise the challenge they face, and will continue to face, from their overseas competitiors—both from the old-established industries and from those growing up in the newly-industrialised countries of Asia and South America. The Government have provided the industry with certainty in the framework of support that they can expect. The help which this Bill makes available is part of that framework.
Before concluding my introduction of the Second Reading of the Bill I think I should mention that up until October the tonnage for which orders have been firmly placed is 280,000, against the annual figure for the preferred plan (which I have spoken of) of a little over 400,000 tons. So the size of the task which is still before British Shipbuilders, despite an improvement in the order position, particularly in October, is clearly very formidable indeed. Nevertheless, on the basis of the points that I have outlined I commend the Bill to the House. My Lords, I beg to move.
Moved, That the Bill be now read 2a (Viscount Trenchard.)
3.24 p.m.
Viscount SIMON: My Lords, it falls to me to thank the noble Viscount for explaining so clearly to us this small, but important, Bill. I think that any one of your Lordships who has been following the fortunes—or perhaps I should say the misfortunes—of our shipping industry through recent years would not be surprised that the Government have had to put some more money into the industry. The noble Viscount made the point that the Bill does not add to the aid offered by the Government. I did not completely follow his point; it does not add to the aid that the Government said they were going to give, but it does in fact add to the aid that would be available without the Bill. It is certainly no surprise that this is necessary, but whether it will be enough to carry through British Shipbuilders for two years remains to be seen. I am no financial expert, and clearly we in your Lordships' House cannot examine that matter in detail without having a great deal more information. I will accept it from the Government that they hope that it will do so, and no doubt they have chosen the figure accordingly.
I should like to touch for a moment on Clause 2. I think that this is a great improvement, and I believe that with the aid of this clause there should be very useful work for the shipyards. Your Lordships may remember that when we discussed pollution a great point was made that this would be a good time, while there is shortage of employment for tankers to go ahead with the modifications to tankers which will eventually be required under international agreements—the segregation of ballast tanks, and so on; and one would hope that there will be orders of that kind coming into the shipyards as a result of this clause enabling them to be supported by the Government.
As the noble Viscount said, this is a very short and concise Bill, but I think it is the normal custom in your Lordships' House to look at matters a little more widely than the wording of a Bill, and I was rather hoping that the noble Viscount would be able to say more about the future and how it appears to the Government. I quite recognise that British Shipbuilders are continuously updating their corporate plan, and there may be no exact moment

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when the noble Viscount can tell us what it is; but at any rate he has assured us—and I am very glad to know this—that there is a forward plan and that that forward plan is being developed as we go along.
As the noble Viscount reminded us, there is a target at present of a little over 400,000 tons a year production, and the great problem is: how are we to achieve this? In common with all industries, the answer here is that the industry has to produce what the customer wants, at the right price, and in time. In recent years late delivery has certainly been one of the worst failings of our shipbuilding industry, and it must always be remembered that in this industry, as in most industries, time costs money; the longer it takes to build a ship, the heavier the burden of overheads that have to fall on that particular ship. So the management and the unions are faced with a real challenge today, as I think the noble Viscount outlined. It appears to me that one of the advantages of nationalisation should be the ability to compare the best performers in our shipyards with those that are not so good, to learn the lessons from that, and so encourage the adoption of best methods as widely as possible.
There is another advantage arising from nationalisation—for I do not deny that there may be advantages, though I believe that in most cases the disadvantages outweigh them—in that a single ownership with Government backing is better placed than would be a number of independent shipbuilders to negotiate agreements with other countries. I wonder whether the noble Viscount, when he winds up the debate, can tell us how we are getting on either with international agreements on the reduction in shipbuilding capacity, or with the scrap-and-build scheme which has been discussed in the European Economic Community—which, if it came to fruition, and provided the scheme is well devised, would I think undoubtedly help the shipbuilding industry without in fact damaging the shipping industry.
In conclusion, my Lords, perhaps I may turn to the vast human problems to which contraction of the industry inevitably gives rise. I sometimes wonder whether our present arrangements for dealing with the problems of unemployment can cope adequately with a major industry facing massive redundancies located mainly in a
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few small areas. Rather the same position arises in the case of the steel industry. In fact, we might ask ourselves whether our present arrangements can cope adequately with the problems of unemployment on the scale we see around the country today; but perhaps that is a matter which we should not pursue this afternoon but leave for the debate which is being initiated tomorrow.
In this industry we have fairly substantial redundancy payments, but all that these do is help to bridge a gap; they do not close it. They are temporary palliatives; and the task before the industry—because I think it is a task for the industry rather than for the country—is to redeploy the redundant labour. This, I suggest, should be a major concern of the management and of the unions. It is not good enough for the management to say, "We are paying these men the redundancy payments which have been authorised by Parliament, and they are of no further concern to us". Many of these men have been in the industry for a long time, and I feel that the employer has a responsibility to go beyond that and to try in any way he can to help the redeployment of labour.
I should like to see established in the shipyards special units to give help to those who are made redundant—help as individuals. They should not he treated as a number of people who fall into some machine out of which they may or may not secure what they want, but as individuals with individual problems; and I cannot help feeling that it would be a help to them if those familiar with their own problems were there to advise them. I may very well hear the noble Viscount say, "Who is going to pay for this?". The conception I had in my mind was that these special units should be manned by people in the industry who would otherwise become redundant—people at both management level and at shop floor level, helped, of course, by the trade unions.
My Lords, such an arrangement certainly would not be 100 per cent. effective, but would it not help those who wanted to seek new employment to have their individual problems looked at and discussed by people they know already, people in their own business, rather than for them to have to go merely as numbers into an employment office register? This is not a suggestion that need apply solely

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to the shipbuilding industry, I suppose; but in the situation in which that industry finds itself today, with the very large redundancies in view, I suggest that something of that kind would be a real contribution towards a solution of the problem.
3.34 p.m.
Lord CAMPBELL of CROY: My Lords, I am grateful to my noble friend Lord Trenchard, the Minister of State, for introducing this Bill so clearly. It seems to me to be very urgent. It seems as though it is needed by Christmas, and I hope the House will give it a quick passage. Clause I certainly appears to be needed before Christmas, because British Shipbuilders are likely to exceed the previous limit of £300 million by January. Since the debates on this Bill were held in another place there has been a report in the Press—it appeared at the end of last week—that an estimate had been made of the losses in the current year, and that these were working out at about £4·5 million more than the target loss which had been set by the previous Government. I wonder whether when my noble friend replies he will make any comment on this, and on its effect on the financial part of the Bill, other than that it must make the Bill even more urgent.
I congratulate the Government on obtaining agreement with the EEC on a further intervention fund. I understand that this is to extend for at least two years; and I include in this the separate agreement for Harland and Wolff in Northern Ireland. The United Kingdom shipbuilding industry should now have a clearer picture of where it stands for at least two years. It has been pointed out that the percentage of subsidy under the new arrangements will be somewhat less than that which was available under the previous arrangements, but I understand—and perhaps my noble friend will be able to confirm or correct this—that only about one-fifth of the £85 million which we knew was previously available was in fact taken up and spent. My noble friend mentioned the agreement within OECD on credit terms to be guaranteed by the Government. Provided that all the member nations stick to the rules, this is to be welcomed, too, but I would point out that fierce competition in
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extending credit virtually amounts to the same as increasing subsidy, and as has been proved by experience in the past, this is not to the advantage of this country.
I also welcome the other function of this Bill, in Clause 2. Hitherto, United Kingdom yards have not been able to benefit from the guarantee by the Government, in our case the Export Credit Guarantee Department, with specially favourable terms, for the construction and conversion of vessels where they are owned by United Kingdom owners. The scheme applied to foreign vessels in United Kingdom yards. We were therefore at a disadvantage compared with our EEC competitors. It is right to provide the redress for this in the present Bill, which in my opinion has been overdue. The Bill should therefore provide a breathing space for the British industry, and reduce uncertainty. We are in the middle of a world recession, and there is great over-capacity internationally in this industry. But, as my noble friend mentioned, it is expected that there will be an upturn in about three or four years' time. People are even saying there is a small sign of it now.
My Lords, it has been one of my tasks in recent years to follow the fortunes of the shipbuilding industry. I believe we should remember those long periods when we in this country led the world in shipbuilding. Our industry has set the highest standards, and has enjoyed a very special reputation for skills and workmanship. There was the period when the noble Lord, Lord Shinwell, was on Clydeside, in the years at the beginning of this century—and I am glad that he is to follow me in this debate. We certainly led the world at that time.
I was reminded of this, and of an earlier period, the day before yesterday, because on Sunday I made a visit to Bristol—a city which I know very little and have visited only about three times. I went there to see the progress which has been made on the restoration of the steamship Great Britain ", because I was on the committee which, 127 years after she was built by I. K. Brunel, brought her back from the Falkland islands to the dock in which she was built, where she now lies. I am glad to say that progress is going very well. Let us remember, my Lords, that the "Great Britain" was the largest ship in the world when she was launched in the

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1840s; she was the first screw-driven ocean-going vessel; she was the first vessel with the principle of bulkheads—and I could go on listing the other things on which she was first. She also survived everything. She would not have survived a scrap-and-build programme, of course, but after about 30 years in passenger service, like the Cunard "Queens" of recent times, she turned to freight and finally she was beached and used as a hulk. She has survived 127 years. She is a monument to invention, vigour and enterprise, and I believe that we need those attributes again today.
Some reduction in our shipbuilding capacity is inevitable; it is necessary. The future success of our shipbuilders will depend on productivity and the ability to deliver on time. It is good news that the restructuring programme has been agreed between British Shipbuilders and the unions. I have not seen details of this; I do not know how much has been published of the actual proposals. It may be that they are still confidential. But perhaps my noble friend can give us more news today. But contraction of the shipbuilding industry is especially difficult to arrange. Closures and redundancies on any large scale cannot take place painlessly. There is so much work in the shipbuilding areas which is connected with the industry, for example, the smaller firms supplying components almost entirely to the shipbuilding industry and the ancillary industries which are based in the same areas. Alternative work for those who have to be laid off is not easy to find in those areas.
In the summer of 1978, we had before your Lordships' House the redundancy payments schemes for British Shipbuilders. We gave attention to those schemes and they passed through this House with our blessing. I ask my noble friend: Is it proposed that the redundancies should be carried out entirely by what is called natural wastage—voluntary retirement and absence of recruitment? Are they to be on that basis, or are there also to be compulsory retirements? We saw what looked to be favourable schemes for sums of money to be given to those who were to retire; but I know that the unions were very keen—understandably, for reasons that I have given—that the redundancies, if possible, should be on a voluntary basis.
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I hope that your Lordships will recognise that I, myself, am one who understands the acute problems that there must be in shipbuilding areas if the workforce has to be drastically reduced. The main difficulties are with merchant shipbuilding and I presume that one of the matters to which British Shipbuilders have been turning their attention (necessarily with the assistance of the Government) is how much of the workforce can be moved to the naval shipbuilding programme. I have seen reports that some thousands are being so moved. Provided that the prospects for naval orders, both from the United Kingdom and from countries abroad, are good, that seems to be another way in which the reduction of the merchant shipbuilding workforce can be carried out effectively.
I would ask one question, which is a topical one, about what are known as protection vessels. I regard these as including not only the naval fishery protection vessels but the general protection vessels now that the concept of a 200-mile economic zone as well as a 200-mile fishery limit is one that has the acceptance of most of the world. There was a report in the Press yesterday that there is competition between a design called the "Osprey", of which one has been already commissioned and is in use in Denmark, and the British Shipbuilders' larger vessel designed for the same duties. I believe that we will need vessels of this kind. There have been fishery protection vessels besides those belonging to the Navy. A small fleet belonged to the Secretary of State for Scotland for years and carried out certain duties. There will be a need for more such vessels, I believe, because of the very much wider extent of waters which we will have to patrol for various reasons, including our offshore oil installations.
I now come to the scrap-and-build scheme which was referred to briefly. The EEC Commission's proposals were, I understand, considered by the Council of Ministers two weeks ago on 20th November. It appears that nothing was decided and, although what happens in those meetings is confidential, the impression was given that the scheme was too vague and that the Ministers sent it away asking for more specific proposals. I would support a scheme for scrap-andbuild—and I am glad that the Minister

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of State for Industry in another place made it clear that he supported such a scheme—provided that it is not draconian and that it takes account of the fact that there could be a rather greater upturn in demand for ships in the mid-1980s than that now expected, as the extent of cycles in the past have shown.
I would urge everyone in the shipbuilding industry to espouse productivity. This is exceedingly difficult at a time like the present; but I urge them to shun the temptation to extend time over orders and spread the work, although it is natural to want to do this when there is a world shortage of orders. But it is very shortsighted and will damage the industry in the long run. The United Kingdom shipping industry is one of the largest, although it is getting smaller. Naturally, it has requirements for specialised vessels and it needs to be firm on delivery dates; but I am glad to say that the shipping industry, the ship owners of the United Kingdom, have been ordering a substantial proportion of their requirements from United Kingdom yards. It is in their interests to do so; it is in their interests that there should be a modern, competitive shipbuilding industry in the United Kingdom to be able to continue the supply. It is also, I believe, in the interests of everyone in this country.
My Lords, where shipbuilding is concerned, we, as a country, should still be in the forefront in design, invention and, above all, application without delay. So I give this Bill a blessing and hope that it will go through your Lordships' House with no delay.
3.47 p.m.
Lord SHINWELL: My Lords, one would require to be an incurable optimist to believe that this Bill will save the British shipbuilding industry in the next two years, or even for a longer period, from disaster. When he began his speech the Minister informed us that this was a simple Bill. Undoubtedly, it is simple, excessively simple; but the subject is far from simple. It is complicated and replete with potential queries about whether the financial proposals are capable of bolstering up the industry for even a limited period. I do not regard the subject as in any way simple; it is highly complex. Moreover, it is closely associated with our
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economic situation. Many questions should be asked.
If I am in any way dissatisfied with the Minister's opening speech, it is not because he has not stated the facts contained in the Bill. That did not take much time, in any case. It is because what we should be discussing, debating and investigating, is why the shipbuilding industry of the United Kingdom has declined so rapidly in the last 25 or 30 years. There must be a cause: why do we not discuss it? Are we afraid to discuss it? Will it offend any section of the shipbuilding industry if we venture to ask questions associated with the decline to which I have just referred? So far as I am concerned I have no inhibitions—none whatever—about this or any other matter. If there are problems, let us not run away from them. They are not solved in that way. By no means am I suggesting that problems can be solved by debating them. It depends on attitude. It depends on whether we have the courage to face the facts and whether we refrain from indulging in optimism about what might happen in the future.
I certainly am not very much concerned about the future; I am concerned about the present, and it is to that aspect that I venture to address myself. To begin with, I ask noble Lords to note that we are setting a target of 400,000 tons of British shipbuilding. There is not much difference between the total volume of our shipbuilding set by the target from the kind of tanker the Japanese could produce running to almost 300,000 tons. That is an illustration, a contrast. What are we aiming at? I am far from saying that there is nothing worthwhile in the Bill; Clause 2 is very much worthwhile, except that I am bound to say it is belated. How often under previous Governments has this matter been debated? How often have I personally, when I was chairman of the Labour Party's shipbuilding and shipping committee, raised this issue of why, when we provide credit to foreigners who wish to employ Britishers producing ships for them, we fail to provide British shipowners with similar credits. That has been raised over and over again.
A member of our Front Bench (he is not present and I shall not mention his name) who was responsible during a debate in another place when we were

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discussing precisely this aspect of the problem refused on behalf of the Government of the day—I am sorry to say it was a Labour Government—to provide British shipbuilders with credits similar to those provided for foreigners. I never could understand the reason why they declined. Moreover, it must be taken into account that, as a matter of principle, there is nothing particularly obscene in a Government providing credits, financial grants or assistance of any kind in order to maintain the existence of an industry.
For many long years foreign countries have subsidised shipbuilding with sums far in excess of anything that we have ever attempted to provide or, it would seem, even thought of providing. All Governments have been to blame. I am bound to say—let the truth be told!—that it was a Conservative Government that provided the largest subsidy ever for a ship built in this country. I remember the late Ernest Marples, as Minister of Transport, who was responsible for shipbuilding, urging the Members of another place to agree to a credit of £3 million in order to build a Cunarder. There was a great deal of opposition; I am not so sure I was not one of those who opposed it at the time. I think it was because I thought that the Cunard Line had sufficient financial resources to undertake the task without Government assistance. That is only one illustration. The Japanese have subsidised their ships; the Germans have subsidised their ships; the Americans have always subsidised their ships—there would be no American shipbuilding without subsidies. They are still doing it.
I note that it has been suggested that the EEC have been giving this matter consideration. A scheme was placed before them which would apparently provide for a kind of consortium which would decide not to build too many ships, whether to rely on the capacity of a particular country, and would consider requirements, and so on. We are going to get very little out of the EEC in this respect. We can set it aside; the scheme put before them is dead; it was dead before it started. They are not going to come to our aid on shipbuilding—apparently, they are not going to come to our aid on other matters, but that is another story. We can come to that on some other occasion.
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I am conscious as I speak that this is not a subject that requires oratory, imagery, flowery speeches—and certainly not optimism. I noted what the noble Lord, Lord Campbell of Croy, said. He was inclined to be optimistic. He has been associated with this subject for a long time and I know that his heart is in it. He wants to see the British shipbuilding industry revived; I know that. However, with all the oratory of which he is capable and all the good wishes, it will not succeed.
The other day I happened to read the Daily Telegraph—I am sorry to give them a gratuitous advertisement; they never gave me one. I took note of what was said about British shipbuilding; and surely nobody would refute what the Daily Telegraph says, even if I myself occasionally have some objections. An article was headed: "Jobs warning by British Shipbuilders." The chief executive of the British Shipbuilders had said:
" We must get our costs down and deliver dead on time. No excuses. Guarantees to customers must be kept ".
He said that the alternative could be the loss of practically every job in merchant shipbuilding. He was supported by the managing director of finance, Mr. Hares. The article went on to say, in the context of the financial proposals to which the Minister had referred, that next year the losses must be held to £90 million inclusive of the subsidy fund. That is the target: to hold down the losses. It is not to make gains: gains are not in this matter at all—just losses. Mr. Hares is quoted as saying:
" This will be very difficult to achieve. We are in serious danger of not being able to live within the limits set by Government ".
Obviously there is not enough money. There will be losses and then a further decline. The chief executive went on to say this:
" The Government has given us two years to save this industry. Unless we can demonstrate real progress we will all sink together. My job will go, your job will go ".—
I presume he meant the jobs of the shipyard workers—
" Every merchant ship we build makes a loss. Warships are paid for by the taxpayer ".
He went on to say that an investigation into "fundamental things which damage our efficiency" had been made—I would ask your Lordships to give particular

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attention to this—and had shown that costs could be cut rapidly. Unions had to help management make working practices more flexible. Absenteeism and poor time-keeping had to be reduced.
I hope to be forgiven for my preface. This is what I wanted to come to. This is fundamental, and I ask the question: why did the Minister not refer to this? Are we afraid to talk about it? Who is responsible? What is responsible for this decline?—a general decline throughout the whole world. There is one example I might touch upon—namely, the practice of British shipowners (and I am not indulging in any criticism but simply stating the facts) when a ship is 14, 15, 16 or 20 years old, of not scrapping a ship. They no longer modernise; it is hardly seaworthy but they sell it to the Greeks, sell it to the foreigners, who then carry on for many long years afterwards in competition with us. That is going on all the time. If we had scrapped many of these ships, instead of selling them to foreigners at low prices so that they could engage in competition with us, perhaps paying wages much lower than we give our people, it might have helped, even if we did not build more ships.
I come to the fundamental point: who is responsible? According to what I have just read, we have absenteeism. Who is responsible? Is it the workers? If they are responsible let us have the truth. Do not let us be afraid of it. I would say that to my old colleagues, some of them connected with the trade union movement: let us not be afraid of it. If the trade unions are responsible let us state the facts; let us investigate. If the workers are responsible for absenteeism, let us know all about it. Let us not have mere assertions of this kind, which may be quite justified. Let us have the facts.
Bad timekeeping is also mentioned. Who is responsible for that? Nothing is said about bad management. I do not say a word because I do not know anything about it, but it is just possible—I will put it no higher than that—that the management is not as efficient as it might be. Let us investigate. That is what we ought to be debating. It is not merely a question of dealing with losses likely to be sustained which will he covered by the
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Government in due course. What has that got to do with the subject? We must find out what is the cause of the trouble and when we have diagnosed the complaint and have had a thorough investigation then let us try to find a solution either by co-operation or by some other means. Perhaps it may mean more finance, more imposition on the taxpayer or whatever it may he; but let us get the facts right. Let us find out who is to blame.
Who is to blame? The Minister said nothing about that—nothing at all. He never mentioned it, as though it did not matter. But we understand that it matters and in fact even the Telegraph understands that it matters. Those responsible for running and administering the industry believe that it does matter. They themselves do not suggest a remedy but a remedy has to be found, and I venture to say—and, with this I close—that it is no use having debates of this kind, roaming all over the place, unless we get down to the facts which are associated with our problems, and seek to resolve them. That is essential, and I should like to have an answer from the Minister. Is it the intention of the Government to try to inquire and find out the cause or are they so fully informed that no further investigation is necessary? So are we to see the decline go still further?
It is not only a question of jobs: as the noble Lord, Lord Campbell of Croy, rightly said—and he could easily have emphasised this with justice—it is a matter of prestige. We were a great maritime nation. The noble Lord, Lord Campbell of Croy, referred to what happened at the beginning of the century. I remember so well at that time that every Clyde shipyard was up the eyes in work and often refused to accept further offers from foreigners. They refused to consider tenders and so on. It was in that area in the North-East: Sunderland, Newcastle-on-Tyne and the Wear and all round there. That has all gone. It is slipping, slipping away from us all the time: no prestige, no jobs, no industry. And all we can provide is an assurance that if there are losses they will be met. "If there are losses! "—we know in our hearts there are going to be losses and that what we are proposing to provide in order to cover the losses is a mere bagatelle and will not solve the problem.
4.7 p.m.
Viscount ROCHDALE: My Lords, I am very glad to be able to take part in this Second Reading debate and to thank my noble friend Lord Trenchard for the explicit way in which he introduced the Second Reading of the Bill. As he said, it is a very short Bill and has a very limited application, but it is none the less an extremely important Bill as a link and as a rung in the ladder to get our shipbuilding industry back to viability. I was most interested in what the noble Lord, Lord Shinwell, had to say. In some respects I hope to follow some of his thoughts. Your Lordships will remember that we had a very full debate on shipping in June of this year. We saw the situation of the industry as a dismal and rather aifficult picture, and of course that has its implications on shipbuilding; but I do not think we need to cover much of the ground that came out in the June debate, because that can be read.
There are a few further points to make, and perhaps one or two points from the debate which I should like to re-emphasise, this evening; and I hope not to be very long. At some time world trade will recover, but it seems to me very important to make the point that it would be idle to pretend either that we in the United Kingdom or our fellow shipbuilders in Europe or elsewhere will ever get back to anything like the picture of shipping and shipbuilding that we were accustomed to in the past.
In saying that, I am not being critical of anyone. If I have any reservation about that remark, it would be merely this: that the situation being what it is and having developed as it has—and I want to say a little more about the development of the present situation—I regret that something was not done very much sooner about the way that Europe is now getting down to this difficult problem. I should have thought, with the information which was available a few years ago, that more could have been done to foresee the difficult situation that we have got into now. Be that as it may, we did not foresee it. Therefore steps are actively being taken. We cannot always make the right kind of forecasts, so we have to look at the situation as it is now.
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The noble Lord, Lord Shinwell, asked the very important question: Why have we got into the situation that we are in now? I am going to suggest to your Lordships one or two reasons. They may be self-evident but I think that they need to be repeated if we are to obtain a clear picture of what is behind the Bill. The first and obvious factor which has upset the whole of the shipbuilding world, among other worlds, is the oil and energy situation, with its many facets.
In passing, I want to make this point. The noble Lord, Lord Shinwell, referred to the figure of 430,000 gross registered tonnes as the aim of British Shipbuilders today. He made the valid point that it is not very far off a single VLCC that Japan, may have been able to build. I would merely mention to your Lordships that it is not very much more than some of the very large VLCCs which we were building when I was chairman of Harland and Wolff. Then we were building 330,000-tonne tankers. I make that point because, owing to the oil situation, it is very unlikely that we shall want anything like so big a fleet. We have North Sea oil, and there are all sorts of other reasons why the need for these very large crude carriers is so much smaller and may or may not ever return.
Viscount SIMON: My Lords, I wonder whether the noble Viscount would give way. Are we not getting a little confused over the tonnages which we are speaking about? These large tankers are 300,000 tonne deadweight carriers. The target of 430,000 is the gross registered tonnage, which would be quite different.
Viscount ROCHDALE: My Lords, the noble Viscount is quite right. There is not all that much difference, but it gives the measure of the problem. So much for oil.
The next point I want to make relates to the development of the very fast oceangoing container ships. One of those ships replaces today seven, eight, nine or even, in some cases, 10 of the traditional cargo liners. Then there is the virtual disappearance of ocean-going passenger ships in favour of aircraft and the changing types and demands for naval vessels to be built in our shipyards.
Then there is a point which your Lord-ships may think is a little far-fetched,

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although I do not think that it is; namely, the development by the Russians of their very large freight-carrying Trans-Siberian Railway which will do a great deal to obviate the use of ships between, say, this country and Japan—to say nothing of the developing countries and their determination, which one can very well understand, to have their own shipping and often their own shipbuilding yards. So there exist a large number of facts which are nobody's fault, but those facts are there.
The noble Lord, Lord Shinwell, asked further: Is it the fault of the workers, or is it the fault of management? I would hesitate to answer that question. However, I should like to say that with a declining amount of trade it is very easy to see that morale in the yards is extremely difficult to maintain. This may have an effect. It may affect the enthusiasm either of workers or of management. These are a few considerations which seem to me to answer the question: Why have we reached this stage? I am sure that there are many other reasons which noble Lords can call to mind. However, it leaves us with a picture of considerable over-capacity, a picture which it is difficult to obtain a clear definition of and therefore a picture upon which it is difficult to base any long-term policy for shipbuilding. Having said that, there are certain factors which I regard as definite and to which we can cling.
At some stage there will clearly be a resurgence of world trade. At that stage, and maybe before, the number of laid-up ships—good, modern ships—will be largely absorbed. That will not, of course, help with the building of new ships. The present fleets will in due course call for replacement as they get older and become outdated, though it is important to mention—and I shall refer to this again in another context before I sit down—that the average age of the United Kingdom merchant fleet is only seven to eight years. It is a very modern fleet.
This has certain important repercussions. We in the United Kingdom, I take it for granted, will continue to need a thriving shipbuilding industry, albeit smaller than in the past. As my noble friend Lord Campbell of Croy has said, we are still among the leading shipbuilding nations in
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Western Europe. We can still build as good ships as anybody else so long as—and I think that this is very important—we do not in all these difficult situations allow our skills to be lost to us and go elsewhere.
It is not merely a question of structural change which has to be considered—streamlining to reduce overheads. Nor is it a question of investment to modernise methods. Both of these are very important, but there are other equally important factors to be considered in relation to what has to be done. For instance, manning levels will have to be gone into very carefully. There will be other factors, too, all directed to greater productivity and lower cost. Obviously this must be a major task, but it is an essential task if we are to continue to exist in the world league as we have done in the past. However, I want to emphasise that it will take time.
When my noble friend introduced the Bill he referred to a step-by-step approach, and I agree entirely with him. It is significant to recall that the noble Lord, Lord Shinwell, went back into history. Perhaps I may follow him. It is significant to recall that when Sir Reay Geddes and his committee reported on shipbuilding in 1966—that was Command Paper 2937 of 1966—he referred to average United Kingdom output of over 1 million gross tons a year for the five years 1960–65, and in fact for many years somewhere between 1.1 and 1.2 million gross tons a year has been our level of activity in our shipyards. The level of capacity that the United Kingdom industry is aiming at today is somewhere in excess of 500,000. That includes the 430,000 which relates only to British Shipbuilders. We must take that figure and look at it against our existing order book, and we shall find that our existing order book is a very long way away from even that low capacity at which we are aiming.
That raises two points in my mind. The first is that those figures, from 1 million to about half a million and then right away below that in our order books, are some measure of the difficulty experienced by the United Kingdom industry in competing in the world. The second point is a rather different one. I feel that that low figure is one which we should not be pressed by Europe to try to go below.

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As I have tried to explain, we have already contracted considerably and, after all, if we take Japan, they have increased in the same period by about 35 per cent. There is no doubt in my mind that British shipbuilders, Harland and Wolff and other small private yards, are working hard to improve our competitive ability and I was glad that my noble friend Lord Trenchard was able to give some hope that their efforts to improve productivity are being successful, but it will be a long and continuing struggle. As others have said, there will be some human dislocation, some painful adjustments to be made, and for that reason alone it is essential that we should go on step by step. It is the time factor that makes the provisions of this Bill so important, together with the two year intervention fund arrangements which, as we have heard, were announced early in July.
I mentioned that I imagine, as I think has been said, that the performance in the yards will be very closely watched and monitored. I hope it will continue to show a steadily improving performance. But whether it does or not, or to the extent it does, it will be bound to determine what further measure of support Her Majesty's Government can reasonably then consider. Much will rest in the hands of industry itself, both management and trade unions; but on this, when reading the report of the debate in another place on the Second Reading of this Bill, I was pleased to see that when there was some suggestion that at the end of the two years there will be a deadline the Minister of State was at pains to kill any such idea, and I hope that when my noble friend replies he may be able to endorse that point. The two years does not give a deadline but is merely one step.
On the other hand one must regretfully agree with the Minister of State in the same debate—and I say "regretfully" because I have close and friendly associations with the great shipyard in Belfast, Harland and Wolffe, and one admires so much what all our shipyards are attempting to do. In passing perhaps I may say a rather more pleasant word. Only this morning that yard was able to launch a very important ship for British Rail and I am sure that it gave everyone working in the yard a boost; a ship launch is a great event in a shipyard. But I use the word "regretfully" because I agreed with the
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Minister of State when he made a general point, and perhaps I may just quote from Hansard of another place. He said:
" We firmly believe that if one industry does not in the long run earn a real return on capital employed, support for it will represent a misallocation of resources at the expense of the rest of the economy and employment in other industries ".
That was a very important point but he went on to say that he was certain that both management and the unions were well aware that the future lay in their hands. I certainly hope, and indeed expect, that the more sinister implications of that statement will, so far as shipbuilding is concerned, never need to come into being.
Mention has been made of the extent to which British shipowners place orders with British shipbuilders. They are sometimes criticised for not giving enough support. My impression, however, is that British shipowners have a sense of loyalty to our own yards. They would like to do what they can, and in some cases it is often to their own practical advantage—ease of supervision during building, for instance —but we must remember that shipowners operate in a world market where competition is intense and they must clearly buy in the most competitive and, perhaps above all, the most reliable market.
In this connection, I have been studying a few rather interesting figures. At the 30th September—just two months ago—the order book for United Kingdom registration of new ships consisted as follows: 650,000 deadweight tonnes, which amounted to 39 ships, were to be built in the United Kingdom; 850,000 deadweight tonnes, that is 38 ships, were to be built abroad. That gives a balance in favour of shipyards overseas, but if we look at what has happened during the last two months we see that some six new ships for United Kingdom registration of 400,000 deadweight tonnes have been attracted to United Kingdom yards with —and this is the important point—the help of the invervention fund. While it is apparently true that during that period no overseas orders have yet come in, it seems to me to be an encouraging straw in the wind and it encourages me to feel strongly that the policy that Her Majesty's Government are pursuing as regards borrowing powers and so on is the right one.
With regard to Clause 2, I agree with other noble Lords that it puts right a very

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curious anomaly and I do not think there is anything more I want to say about that. Obviously, when it comes to major conversions in our shipyards, our shipowners should have just the same facilities as regards credit as overseas shipowners.
Before I sit down, I had not intended to say very much about scrap-and-build schemes, but as both my noble friends and other noble Lords have said something about this I feel I must say a word. Superficially, of course, it has great attractions. We in this country are not without some experience of such a scheme. There was a scheme in the 1930s following the great depression when British shipowners had an enormous number of old tramps. They were slow, they were out of date, they could not compete with the new types of ships from overseas, and there was a scrap-and-build scheme. But the circumstances today are quite different. Again in the report to which referred, Sir Reay Geddes's report, he refers to scrap-and-build schemes, and he issues a caution as to the problem of bringing one into being which is fair to all concerned. Today, as I have already mentioned, our fleet is extremely modern, seven to eight years old, and I think before agreeing to any scheme we should be very careful—and I know the Secretary of State is aware of this because I read something he said in another place—to make certain that, whatever the scheme, which will cost money, those who stand to benefit the most should pay most. With a fairly modern fleet it could be that we should benefit least but still be expected to pay most. I think we want to be extremely careful in agreeing to any such scheme. Having said that, I welcome this Bill, and, like my noble friend, hope it will get a very rapid passage.
4.32 p.m.
Lord BRUCE of DONINGTON: My Lords, it may be for the convenience of the House if I respond, somewhat briefly, to the introduction of the Bill by the noble Viscount, Lord Trenchard. It is much easier for me to be short because so very many valuable contributions to the debate have been made, by the noble Viscount, Lord Simon, the noble Lord, Lord Campbell of Croy, my noble friend Lord Shinwell, and the noble Viscount, Lord Rochdale, and it would be presumptuous
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of me, and a waste of time, to repeat to the House many of the informed observations that they have made. We on this side of the House will be happy to facilitate the passage of this Bill with all possible speed. It may be truly termed, as indeed it was termed in the other place in the course of the Second Reading debate on 1st November, a non-controversial Bill, and of course we support it.
That does not mean, however, that we do not require to be informed on certain aspects of the Bill, and it does not mean that we would not like to be reassured on one or two of the matters that have been raised here, notably by the noble Lord, Lord Campbell of Croy, concerning the adequacy of the provision of the Bill, and other points that have been raised so forcefully by my noble friend Lord Shin-well. He referred to the same article in the Daily Telegraph as I believe the noble Lord, Lord Campbell of Croy, had in mind when he referred to the possible inadequacy of the provision. I will not weary the House by reading the same portions of it to which my noble friend Lord Shinwell, referred but it is reported in the Daily Telegraph for Saturday, 1st December:
" A British shipbuilder said yesterday that it is overspending and is likely to run out of cash even though the Government recently raised its borrowing limit from £300 million to £500 million with provision for it to go to £600 million. Mr. Michael Casey, chief executive, said that the average cost of building a ship in Britain was 30 per cent. more than the price charged to the customer ".
This reveals what has been known for a long time, particularly by those expert noble Lords who have spoken this afternoon, not merely a temporary position of the British shipbuilding industry which can be corrected within a finite period of time, but a chronic situation, in regard to which this Bill makes some contribution.
I share the hope voiced by the noble Viscount, Lord Rochdale, that in two years' time the Government will not then hang a threat over the head of the British shipbuilding industry, as might conceivably be implied by a reading of the observations which were then made, and which have already been quoted. We have to face the fact that in this modern age certain industries in the older established manufacturing countries of the world are bound to go into a decline, for

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a number of reasons that have been touched on by noble Lords. The free play of the forces of competition, to which I hope I may refer without offence to noble Lords opposite, which has so long been the basic tenet of the philosophy of the party opposite, means that this is bound to happen.
May I give the House, with your Lordships' permission, just one example. Over the past 10 years there has been a massive export of capital from the United States, from the United Kingdom, from Germany, into the construction of shipyards in Korea and in Brazil, where the labour costs, as indeed was pointed out by the Economist some 18 months ago, are about one-eighth of the labour costs in Europe. Quite clearly, those new shipyards, heavily financed, are bound to produce, bound to be able to produce, craft for the seas of the world at a price with which the older manufacturing countries such as ourselves cannot compete.
There is a question of principle to be resolved here. Are we to leave the whole industry to the free play of forces of competition, which are stacked against us from the beginning, or are we to endeavour to do what, if I may say so, Her Majesty's Government appear to be doing at the moment, although it appears to be half a U-turn, to be able to attack the whole problem rationally? And the fact of the matter is that in many of these industries indefinite governmental support will be required. We seem to have a horror in the United Kingdom about subsidising industries as though in doing so we are committing some mortal sin.
I turn to another topic altogether, but one which is closely aligned with this one. If, for example, because of its losses British Rail is subsidised to the tune of £250 million or £500 million, there is immediately an indignant outcry as though the whole sense of commercial morality, probity and so on has suddenly been violated and we ought to feel terrible about it. Yet, in Germany the railways are subsidised at the rate of £4,500 million a year, and the Germans are quite proud of it. Indeed, they run a very efficient railway system.
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I am well aware that those arguments should not and must not leave either the management or those who work in the industries with any sense of complacency; they must not feel that precisely because there is the social obligation of the Government to keep the industries in proper running order, they can take advantage of that. However, if we we want to encourage those of our citizens who are engaged in the shipbuilding industry to behave with some degree of social morality, it is up to all of us, and the Government in particular, to create a social climate within which that degree of social responsibility can be felt and carried out by the people involved. It is no use on the one hand advocating the policies of the jungle with the weakest to the wall and the devil take the hindmost, and then asking the others to behave with a degree of social responsibility. Therefore, I and my noble friends on this side of the House would envisage the necessity for the continuation of this type of support over a period of years rather than for the limited period envisaged in the Bill.
The Government's stated objective has been to adjust capacity and to restore profitability. I think that that last point had better be held in abeyance for the time being because, due to the factors to which I have already referred, it will not be possible within the modern context to restore profitability to this industry, using any of the normal commercial standards which are used to define normal profitability. That is not on, and we should fool ourselves if we thought that it were possible.
As regards the adjustment to capacity, I sometimes think that we tend to regard the capacity of the industry as being the over-riding factor. We tend to take the view that, apart from the appearance of an upturn to which some noble Lords have referred with a degree of optimism, nothing can be done, or we assume that nothing can be done, to increase demand for the building of ships. That is not so. It may be extremely difficult in the broadest sense to regard—in a world in which the population is increasing at a logarithmic rate—with pessimism the eternal decline of international trade. That simply would not happen because if it were to occur within the modern context

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it would not be possible for the Western world to control the wrath of the developing and poorer countries. It simply will not happen.
But, leaving that consideration aside, it is not generally realised that nearly 30 per cent. of ships at present on the high seas are already obsolete; that if, in fact, those ships were replaced or it were necessary for them to be replaced, the effective demand for shipping, not only in British shipyards but in European yards and other yards throughout the word, would be considerably increased. I would respectfully suggest to Her Majesty's Government that they might give some consideration to that very important aspect of the matter because, as the noble Lord, Lord Shinwell, knows through his long experience, the scandal of sub-standard ships on the seas of the world, largely sailing under flags of convenience, is one of the major evils of all sea traffic at present.
As regards that matter I am happy to say that the United Kingdom has a very good record indeed. Of the seven main conventions that have been agreed over the past 10 years, the United Kingdom has not only ratified the seven, but has enacted in its laws the means of maintaining those conventions and giving them the full application of law. I refer in particular to the Safety of Life at Sea Conventions and the other associated conventions. Our EEC partners, who very often refer to us as the awkward ones of Europe, have not been so good in ratifying those conventions, or indeed in enforcing them by passing the laws through their own Parliaments. France, for example, still has four to ratify and Eire has practically the whole seven—I believe that is is now six out of the seven. The same record goes throughout Europe, with Germany coming a close second to our own record.
The efforts of Her Majesty's Government in Europe to ensure that throughout the EEC the Safety of Life at Sea Conventions and the other appropriate regulations are applied, would immediately mean, if properly enforced, a demand for shipping to replace those ships that, under those laws, would no longer be admitted to any port in Europe. That would increase effective demand. Also, the practices of some insurances companies
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in this respect encourage the retention on the seas of the world—with consequent risk to life, limb, cargo and so on—of ships that ought never to be on the seas at all. They do it because of the extra premium risk they are prepared to take and the owners are prepared to pay in order to sail on the sea ships that ought really to be in the scrapyards. Therefore, one hopes that among the other things that Her Majesty's Government may be considering, they will give their attention to that matter. If, for example, the ships on the seas of the world were required to pass the equivalent of the MOT test which we have for cars, there would probably be an increase in demand of roughly 10 per cent. for new ships in the world. That is not a factor that ought to be left out of account.
There is little for me to say on the contents of the Bill itself. I have touched only on those matters that have been suggested by my noble friend Lord Shinwell and by the contributions that have been made by other noble Lords. The Bill is a simple one. We welcome the improvements contained within it, particularly the extension of the intervention subsidy to conversions as well as to construction.
I am a little bothered about one remaining point which was touched upon not only by the noble Lord, Lord Campbell of Croy, but by the noble Viscount, Lord Rochdale. I refer to the question of guarantees. The guarantee of ship construction—as indeed is the guarantee of ordinary construction projects throughout the world—is, I regret to say, one of the biggest rackets in the world. It is all very well for us to say that we will give the same or equivalent insurance, export credit guarantees and all the rest of it as other countries. In my experience Government departments—particularly the Department of Trade and Industry—are very naïve in this respect. I have one or two instances in mind, with which I shall not weary the House, but in one particular case I wrote to them saying that an insurance was required for some 15 years at X per cent., because, of course, the United States was providing exactly that facility. I received a prompt denial—that it was not the practice of the United States in any way to back anything which was out of the OECD norm. They can think again upon that, because whatever the various Government departments say in some

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countries as to their practice for insurance, what eventuates in practice is a totally different matter.
Therefore, I hope—and I am sure that noble Lords who have had experience of this will agree with me—that the Government will try to be even more vigilant than they are disposed to be at the moment on questions of infringement of agreed rates of export credit guarantees and similar associated guarantees. If merely the word of other Governments is accepted, I do not think that that will be satisfactory. Experience has shown that the words of some overseas Governments cannot be accepted in this regard. We wish this Bill a fair wind and congratulate the noble Viscount, Lord Trenchard, on the very clear, modest and non-controversial way in which he has introduced it. I hope that we may be able to help its passage further.
4.52 p.m.
Viscount TRENCHARD: My Lords, first I should like to thank all noble Lords who have made valuable contributions to this debate. All the points that they have made will be very carefully studied. As I become a little less green, I am gradually learning that one cannot deal with all the points raised in a debate without being too long. I should like to thank the noble Lord, Lord Bruce of Donington, for supporting the Bill on behalf of the party opposite. Indeed, all speakers have wished the Bill the speediest possible passage. My noble friend Lord Campbell of Croy mentioned the urgency of the matter, so I am indeed grateful for the assurance that the Bill will be speeded on its way.
I do not have the time to include in my remarks the points made today on the shipping industry. Noble Lords may care to look back to the debate we had on the shipping industry earlier this year. I think they will find in that debate, for instance, that the Government's attitude was stated on the need for other countries to raise standards of shipping. However, although the connection between shipping and shipbuilding is present and obvious, at this juncture there simply is not time to go into all the points that have been mentioned in passing on shipping.
The noble Viscount, Lord Simon, and my noble friend Lord Campbell of Croy
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raised the very important human problem. First, if the plan for 400,000 tonnes and a bit more is achieved, the work force changes that are necessary to reach efficiency at that level of throughput involve, in very round figures, a reduction of probably just under 10,000 people, which leaves a force at the end of those redundancies of 20,000. The agreement which British Shipbuilders have made with their unions has been on the basis that those redundancies can be accommodated by a combination of naval construction and filling vacancies there, a fairly small contribution from other public sector orders, which have been mentioned by various speakers, and by voluntary, and not compulsory, redundancy. That is the belief of the management, and the union and management have accepted the plan on that basis. They plan to make those reductions over a two-year period.
Viscount SINION: My Lords, I should like to ask the noble Viscount one question. Am I to understand that the target figure of 420,000 tonnes, or whatever it is, is exclusive of Government orders?
Viscount TRENCHARD: My Lords, having read the figures many times, perhaps I could confirm that to the noble Viscount after the debate. At the moment I am of the belief that this does not include the construction of naval vessels. If I am wrong, I may have an opportunity to correct it, but I see that my adviser in the Box is nodding, so that may speed up the process.
We discussed the redundancy payments when we put through the provision for the financial side of redundancy. However, I entirely agree with noble Lords that redundancy and the payment of it is one thing, but the individual attention that those, in this case, volunteering for redundancy will receive is another. I can assure noble Lords, without being lengthy, that British Shipbuilders put a good deal of time into this and pay it much attention. I propose to send those noble Lords who raised this point a short note on the measures that are being taken. These dovetail with the efforts of the Manpower Services Commission and with our regional policy. and with the care and attention that new employers—and they are still too small in number—in these areas are giving to retraining and making welcome shipbuilders in totally different industries.

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My noble friend Lord Campbell of Croy referred to the article which was published in the Daily Telegraph, which I confess I have not read, but nearly all of which has been read to me in the debate. Surprisingly enough, I do not seem able to get hold of a copy on my side of the House. Two facts from the article were mentioned. First, there was the suggestion that there was a £4.5 million greater loss than the target figures for this year. Secondly, some points were raised by the noble Lord, Lord Bruce of Donington, to which I shall return later.
Lord CAMPBELL of CROY: My Lords, perhaps my noble friend will give way because I may be able to help him here.
Viscount TRENCHARD: My Lords, I think that I can clear the matter up.
Lord CAMPBELL of CROY: My Lords, my reference was to an article published in the Business News of The Times of 30th November.
Viscount TRENCHARD: My Lords, I am sorry, I must read the Press much more. The point at issue is that British Shipbuilders have recently assured my honourable friend and colleague the Minister of State, Mr. Butler, that they are on course to stay within their cash and loss limits for 1979–80. The next point raised by my noble friend Lord Campbell was whether it was true that the previous spend before we got the intervention fund going again was only one-fifth of £85 million. Indeed, the sum that was spent was £15 million. To that extent we have already got the intervention fund support for this industry really under control, negotiated, and going at a faster and a slightly higher level than was the case before we came to power.
The scrap-and-build scheme has been raised and welcomed by several of us, but I took note with great interest of the point that the noble Viscount, Lord Rochdale, mentioned in relation to the possible dangers of particular kinds of scrap-and-build schemes, bearing in mind that we have a much newer and more modern fleet than many other countries. That is an important point, coming as it does from someone of his great experience, and I shall pass it on to my right honourable friend.
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May I come to the contribution made by the noble Lord, Lord Shinwell. Let me say straight away that I did not say that the subject was simple. Indeed, I said that British Shipbuilders faced a very difficult task. I hope that we have the courage to face the facts, as he says, but may I deal very quickly with some of the points that he raised. He asked why successive Governments had not given credit to British shipowners similar to that given to foreign shipowners rather than shipbuilders. There are a number of credit and guarantee schemes, as well as the direct subsidy, which we give to British shipbuilders. The British shipping industry is in a different position to the industries of other countries, in that it has been established on a worldwide basis for a very long while. As a result, it has placed its orders over a wider field of shipyards at home and abroad for a considerable number of years. It needs careful thought, as regards credit to shipowners whether a country in the economic condition that we are experiencing should spend any large proportion of its money in that direction, bearing in mind that quite a proportion of it is almost certain, on past trends, to end up working to the benefit of foreign yards.
In the time available, what I have to say is that, taking into account the losses which we are supporting, the intervention fund, the various credits and guarantees (of which some small extensions are the subject of this Bill), and being as vigilant, if I may say so to the noble Lord, Lord Bruce of Donington, as we can, I believe—and I believe that our British shipbuilding industry now believes—that they have a fair position. It is not an easy position, but a fair and a clear position in which they can try to put right the decline that has been going on for too long.
The quotations that the noble Lord, Lord Shinwell, gave from Mr. Casey, the chief executive of British Shipbuilders seem to me to be exactly in line with our statements. He spoke of serious dangers and of difficulties, as I understood it. But there is no doubt that both British Shipbuilders' management and British Shipbuilders' employees are set on the target which is in front of them. They have reached a very creditable agreement. I believe that the diagnosis which the noble Lord, Lord Shinwell, called for has largely been made. I believe that there are limits

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to the degree that it is helpful to go into culpability, or to go into post-mortems. They are inclined not to bring the patient back to life. I believe that we now have a growing degree of realism on the part of both management and employees—of all working in shipbuilding—that we must get our industry competitive, and that the major part of that work needs to be done internally.
The noble Viscount, Lord Rochdale, contributed very helpfully to this debate in raising a whole succession of technical reasons as to why the world shipping fleet will in future not be of the same kind, and will probably be of a smaller tonnage. I am grateful to him for that contribution. Both he and the noble Lord, Lord Bruce, raised the question of time: was the two years a deadline? As my right honourable friend in the other place so clearly said, no, it is not a deadline. A two-year programme in very uncertain circumstances is better than a one-year programme. It is an effort to try to give British Shipbuilding a clear framework in which to continue their improvement, which is planned, and the figures of that improvement I gave in my opening statement.
We shall have to review the situation at the end of that two-year period, and we shall have to see what progress has been made. But we do not accept what the noble Lord, Lord Bruce, said, that the losses of British Shipbuilders cannot, in this world as he describes it and in the sense in which he raised it, be extinguished. We have not said that aid will be extinguished. There are substantial moves for the regressivity—it is a terrible word, but that is the word that is being used—of aid on an international basis. This is why we accepted a reduced limit on the intervention fund from 30 per cent. to 25 per cent. We are being vigilant about the progress of that regression in other countries. But we have never said that in two years, or even any other number of years, aid, credit or guarantees will be eliminated. What we ask for is that on a fair trading opportunity basis which takes account of those things, losses of the company are extinguished after receiving aids, credits, guarantees, et cetera. This must happen because there
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cannot be an indefinite bill for an industry over and above the provision of a fair trading opportunity. As my right honourable friend in the other place said, that can only weaken other sectors of the economy by denying them resources.
In conclusion, I want to strike a note of optimism. If you look at the figures of both world shipping tonnage and of shipbuilding, what you see is what I term an over-shoot. You see that the amount of shipping on the seas of the world has not really declined but the very fast rate of growth that was going on until a decade ago has slowed to a very small amount. What has clearly happened is that the world's shipbuilding industries have totally over-shot demand. This has of course, as my noble friend Lord Rochdale mentioned, been contributed to by new countries coming into shipbuilding for the first time. I do not take the view that the noble Lord, Lord Bruce of Donington, took in relation to it being a matter for criticism that British capital among other capital from many other countries may have gone—I do not have the figures—into helping to construct a shipbuilding capacity in new countries. This will happen and I would much rather we took a share in helping those countries and being able to develop good trading relations with them.
The situation therefore is that we have lost a share of the market, mainly but not entirely because of new countries coming into the game, and because world shipbuilding over-shot demand. The overshoot will rectify itself. Then one sees that this year, and even in very recent months, high wage cost countries have been gaining tonnage. We have started to gain a bit of tonnage ourselves and Germany and Japan are gaining tonnage at the moment at a faster rate than us. I believe that, with the investment that has gone into our yards in recent times and with the will of all working in the industry to become competitive, we can take our share of the increased market which, as Lord Rochdale said, will turn upwards in the mid-eighties.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FISHING VESSELS (ACQUISITION AND IMPROVEMENT) (GRANTS) (VARIATION) SCHEME 1979
5.13 p.m.
Earl FERRERS Earl FERRERS rose to move, That the scheme laid before the House on 22nd November, be approved. The noble Earl said: My Lords, the purpose of this order is to provide for continued financial assistance to the fishing industry. The scheme before us extends for a further year the existing arrangements for grants from Exchequer funds towards the cost of constructing new fishing vessels and improving existing ones. Since March 1975, the rate of grant payable has been 25 per cent. of the approved cost of the projects, and we propose no changes for the coming year.
The shape of any final settlement of the Common Fisheries Policy will have a bearing on the size and structure of our fishing industry in the future. The Government are considering what role Government assistance should then play in the adaptation of the fleet to future fishing opportunities. I am sure the House will agree that during this period, while the Government are developing their future policy on financial aid to the fishing industry, it would be wrong to end this scheme. A sudden cessation of the supply of funds could cause hardship to fishermen, and to the boat-building industry, whose investment plans are inevitably long-term and where consistency in Government policy is important. The scheme is of course of positive value to the industry in encouraging the modernisation of the fleet to reflect the needs of the future and ill allowing a limited amount of construction of new vessels.
At the present time, when the size of the fleet is already more than adequate, any incentive to invest must be subject to strict controls if imprudent investment is to be avoided. The two statutory bodies, the White Fish Authority and the Herring Industry Board, are required as part of this scheme to examine every grant application to ascertain its economic viability in relation to the needs of the United Kingdom industry as a whole. Emphasis is placed on the modernisation of existing vessels rather than the construction of new ones, which is limited in practice to the replacement of vessels lost
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at sea. Expenditure under this scheme during the current financial year is expected to be about £7 million, and Parliamentary approval will be sought to maintain the same level of provision for 1980–81. My Lords, I beg to move.
Moved, That the scheme laid before the House on 22nd November, be approved.—(Earl Ferrers.)
Lord WALLACE of COSLANY: My Lords, having had the honour and pleasure of moving this order last year, it gives me a great deal of satisfaction to learn that the order is being renewed and extended and I thank the noble Earl for the clear way in which he explained it and for the gratifying fact that an additional £1 million is being added, because I believe the figure for the last period was £6 million. As we entirely agree with this, it would be wasting the time of the House to make over-long speeches; I simply say that I heartily approve of the order and wish it well.
On Question, Motion agreed to.

SOCIAL SECURITY (CONTRIBUTIONS, RE-RATING) ORDER 1979
5.16 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE rose to move, That the draft order laid before the House on 22nd November, be approved. The noble Lord said: My Lords, my right honourable friend the Secretary of State for Social Services has completed the review of national insurance contributions which he is required to conduct each year under the Social Security Act 1975. The draft order now before your Lordships contains changes which he considers are necessary from next April. With your Lordships' permission, I will give the details of the changes, commencing with Class 1 contributions—that is, those payable by employed earners and their employers.
The rate of Class 1 contributions is to be increased by a quarter per cent for both employed earners and their employers. The proposed increase in the employer's contribution will however be partially offset by a reduction of 0.05 per cent in the employment protection element of the contribution which is

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proposed in the draft Social Security (Contributions Rerating) (No. 2) Order 1979, which was laid before Parliament by my right honourable friend the Secretary of State for Employment on 28th November 1979.
The lower and upper earnings limits on which employed earners and employers pay contributions are being raised from £19.50 and £135 a week to £23 and £165 a week respectively. Your Lordships will note that these limits are not specified in the draft order. They are in regulations which my right honourable friend has made and these regulations are subject to the negative resolution procedure, but I mention them now for the sake of completeness. The proposed limits follow the requirement of Section 1 of the Social Security Pensions Act which provides that the lower earnings limit is to be approximately equal to the amount of the basic rate of retirement pension and the upper limit is to be between six and a half and seven and a half times that rate. As your Lordships will know, the basic rate of pension is now £23.30 a week; £165 a week is roughly seven times that rate.
For employees earning up to the current upper earnings limit of £135 a week, the effect of the proposals will be limited to the increase arising from the change of contribution rate and will be relatively small—varying from 4p to 36p a week where the employment is not contracted-out and from 13p to 43p a week where it is contracted out. The corresponding increase for employers will differ from that for the employees themselves by only a few pence a week. The increases for those with earnings above £135 a week will be higher because, in addition to the change in the rate, there will be the effect of the proposed upper earnings limit. The maximum increases—at earnings of £165 a week—will be £2.37 for the earner whose employment is not contracted out, and £1.69 for the one whose employment is contracted out. This does not mean that the higher earners are being discriminated against. Most employees pay additional contributions automatically as their earnings rise, but those with earnings at, or above, the upper limit do not. The increase in the upper limit from the start of the new tax year produces the corresponding increase in their liability.
Turning now to the self-employed, the draft order provides for the Class 2 contributions to be increased from £2.10 to £2.50 a week. No change is proposed in the rate of the Class 4 contribution, which remains at 5 per cent, but the range of profits or gains on which the contribution is levied is being raised. The order provides for a range of from £2,650 to £8,300 a year to replace the present range of £2,250 to £7,000 a year. The result of these changes is that for those with profits between £1,250 and £2,650 there will be an extra liability over the year of up to £21.20 because of the rise in the Class 2 flat rate. For those with profits between £2,650 and £7,000 there will be very little overall change because over this range of earnings the combined Class 2 and Class 4 contributions will still amount to about 5 per cent of earnings. For profits above the present upper limit of £7,000 the increase in liability will vary, rising to a maximum of £66.20 a year at the new upper limit of £8,300.
Finally, there are two remaining changes which the draft order makes. It raises the level of earnings below which a self-employed person may be exempted from liability for Class 2 contributions from £1,050 to £1,250 a year. It also raises the amount of the voluntary Class 3 contribution from £2 to £2·40.
Those, my Lords, are the proposed changes. They fall into two broad categories. Those changes to the flat rate contribution rates and to the earnings and profits limits are to enable them to keep pace with rises in the general level of earnings and with increases in benefit rates. Those to the percentage Class 1 contribution rates are necessary, as the Government Actuary's report accompanying the order makes clear, to ensure that income and expenditure of the National Insurance Fund remain broadly in balance in 1980–81. Pensioners and other beneficiaries have just received a substantial increase in their benefits, and this must be paid for. I do not need to emphasise the difficulties facing the economy next year, and this will put a burden on the social security system.
I now come to the conclusion of my remarks. I recognise that the increases in contributions which I have outlined will, like those which have preceded them in earlier years, be unwelcome. They are

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however necessary to enable the National Insurance Scheme to continue to pay its way, while at the same time protecting pensions and other benefits against inflation. My Lords, I beg to move.
Moved, That the draft order laid before the House on 22nd November, be approved.—(Lord Cullen of Ashbourne.)
5.24 p.m.
Lord WELLS-PESTELL: My Lords, I am sure that your Lordships will be as grateful as I am to the noble Lord the Minister for placing the order before us and explaining it. I do not want in any way to argue about the amounts of increase. I recognise that, with increased benefits and so on, it is necessary from time to time to increase contributions all the way round. However, what I am concerned about, and wish to call to the attention of your Lordships, is the report of the Government Actuary. He says that he has been instructed to assume for the benefit of the compilation of these matters that in 1980–81 there will be about 1,600,000 unemployed, and that does not include school-leavers. In fact, he is asked to assume that there will be in addition to that figure about 175,000 unemployed youngsters. It is perhaps the first time that the Government have acknowledged that there is going to be a very serious increase in unemployment; and I believe that we ought to remember what the Government Actuary says:
" A change of 100,000 in the average level of unemployment in 1980–81, with no change in the level for 1979–80, would alter the surplus by £175 million ".
That means that in 1980–81 for every increase in unemployment amounting to 100,000 it will cost about £175 million, so far as the National Insurance Fund is concerned. Of course, if unemployment fell, the position would benefit by that amount, but higher unemployment reduces the surplus, and if the Government Actuary has been instructed to assume that there is to be increased unemployment, this is more than just statistics; it means that there will be considerable misery and deprivation for people who are unable to find work. That is the main point that want to make.
With reference to the income of the National Insurance Fund, the Government Actuary says:
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" The assumption on the total number unemployed shows an increase to a higher level than in recent experience and it is therefore unusually difficult to estimate the proportion of the total which will not be entitled to benefit from the National Insurance Fund …".
The Government Actuary goes on to say:
" Consequently the estimates of unemployment benefit expenditure and contribution income in 1980–81 in this report are subject to a greater degree of uncertainty than is normally the case ".
I believe that it behoves the Government to give a great deal of attention to this monetary policy that they are pursuing, which undoubtedly will lead to far greater unemployment. I say that because I think that sometimes those of us who do not have to face the problems of unemployment do not realise what it means to the individual concerned.
I do not want to say anything about the National Insurance Fund. The noble Lord, Lord Banks, may have something to say about it; he is much more familiar with that field than I am. I thank the noble Lord, Lord Cullen of Ashbourne, for introducing the order.
5.30 p.m.
Lord BANKS: My Lords, I, too, should like to thank the noble Lord, Lord Cullen of Ashbourne, for his careful explanation of this order, and of the effect of the Social Security (Contributions) (Earnings Limits) Amendment Regulations 1979. The raising of the lower and upper limits, to which he referred, is of course the inevitable consequence of inflation, and we are becoming used to it as an annual exercise. I regret that it has been found necessary to increase the Class 1 primary and secondary contributions by 0·25 per cent. each, but I think it is clear from the report of the Government Actuary that this is due to the high level of unemployment which he has been instructed to assume, and that is another indication of the unhappy economic circumstances with which we are faced.
The noble Lord, Lord Cullen of Ashbourne, explained that a Class 1 contributor on £135 per week will pay 36p per week more, but a Class 1 contributor on £165 per week—and the noble Lord explained this, too—will pay £2·37 per week more; so, though he is earning only £30 a week more, he pays £2·37 per more as against 36p more. So for him the increase is not 0.25 per cent. but 1·4

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per cent., which is over four times the figure of 0·25. The actual increase for those earning more than £165 per week remains the same, but it becomes a lower per centage of income the higher the individual's income is; and I have suggested before that it would be better to have contributions paid at an appropriately lower rate on the whole of income, which would remove those anomalies.
My Lords, so far as the self-employed are concerned, those earning between the exemption limit—and, again, the noble Lord explained this—of £1,250 and the old lower limit of £2,250 will pay £21·20 per annum more, but those earning between the new lower limit of £2,650 and the old upper limit of £7,000 will pay that £21·20 more, the increase in the flat rate, but will pay £20 less in levy; so that they will pay only 80p per annum more, whereas the lowest earners will pay £21·20 per annum more. That anomaly arises because of the working of the combination of the flat rate and the levy for the self-employed. The Government feel it necessary to retain the flat rate in order to have a contribution record, but if they could move to a scheme, such as the tax credit scheme which we on these Benches have suggested, which did not require a contribution record, then they would no longer be obliged to have a flat rate contribution, and that anomaly would disappear.
Like the noble Lord, Lord Wells-Pestell, my attention is attracted by the high level of unemployment which is to be assumed, but I wonder whether sufficient allowance has been made for inflation in the assumptions given to the Government Actuary. My Lords, 14 per cent. over the next year might seem a trifle optimistic in view of our current experience. However, provided the rate of inflation does not rise too steeply, earnings-related contributions, coupled with adjustments in the upper and lower limits, ought to take care of inflation. But, as the noble Lord, Lord WellsPestell, pointed out, unemployment is another matter, and 100,000 more unemployed means £175 million off the projected surplus in the Fund. I suppose that whether the Government succeed in holding the contribution rate at its new, slightly increased level will depend on what happens so far as unemployment is
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concerned in the next year; but, bearing in mind the limitations of the present scheme to which I have referred, and in view of the levels of inflation and unemployment we are experiencing, I am content that the House should approve this order.
5.35 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I am grateful to both noble Lords for their acceptance of this order. I should like to say to the noble Lord, Lord Wells-Pestell, that I know he is very well aware that it is necessary for Her Majesty's Government to provide the Government Actuary with working assumptions as to the average number of those expected to be unemployed and the anticipated increase in average earnings during the following year. I join very sincerely with the noble Lord in the concern that he has expressed about the figure given for the number of unemployed assumed for 1980–81, and I feel sure that he and other noble Lords will join me in hoping that this figure will not be reached. I also agree with the noble Lord that the assumed increase of 14 per cent. for both earnings and prices is dangerously high, and assure him that Her Majesty's Government will adhere to policies designed to reduce this rate of increase wherever possible.
I am grateful to the noble Lord, Lord Banks, because he always gives us so much education on this subject, about which he knows such a very great deal.
On Question, Motion agreed to.

PRISON SERVICES: THE MAY REPORT
5.36 p.m.
The Earl of LONGFORD The Earl of LONGFORD rose to ask Her Majesty's Government whether they will define their attitude to the Report of the Committee of Inquiry into the United Kingdom Prison Services (the May Report). The noble Earl said: My Lords, I rise to ask Her Majesty's Government whether they will define their attitude to the May Report on the Prison Services. The May Report has had, on the whole, a thoroughly bad reception from those qualified to judge. I cannot

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speak, of course, for the Home Office. The noble Lord will he speaking for the official world, and, still more importantly, for the Government, later on. The dissapointment and, in many cases, the indignation of the Prison Service, whether governors or uniformed staff, are undoubted. It happens that during the last fortnight I have spent a considerable time in three of our major prisons. The comments about the May Report are not such that I would care to repeat to your Lordships, who have no taste, I believe, for strong language. I am not now referring to the prisoners, who have not yet had time to study the report, but I would not expect to find their remarks any more favourable.
Of course, the proposals on pay are regarded as utterly inadequate—a view I certainly share at a moment when the prison staff is, I believe, something like 25 per cent. under the strength required to eliminate excessive overtime. I have said in this House more than once before now that our Prison Service at all levels is seriously underpaid. The Guardian, in a leading article yesterday, said that the May Report had uncovered how well paid prison officers already are. The May Report also uncovered what the Guardian does not mention, at any rate in this article: that to obtain adequate remuneration prison officers have to work abnormally long hours of overtime, which everyone agrees is most unsatisfactory. I know myself, from prison officers, how damaging this can be to private lives. A crucial meeting is taking place today of the Prison Officers' Association. I shall say nothing more about pay at this moment for fear of making agreement less likely in a delicate situation.
But, my Lords, it is not only a question of pay. The May Committee seem to have failed totally (so it is felt, certainly throughout the Service) to appreciate the vision of a much more constructive and professional Prison Service—a vision which has for some time inspired the governor grades and the prison officers alike. There are certainly some helpful suggestions. Under the May proposals, the chairman of the Prison Board would be in a stronger position than at present in various ways, and that is certainly to be welcomed. But what the governors have been pressing for, for some time, is a professional head of their Service. On
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that point, what do we find in the May Report? The chairman, we read,
" should be either a career civil servant "
as now, or
" an ex-governor, or someone from outside the Civil Service ",
which of course means precisely nothing. Lip service is paid at considerable length in the report to the idea of a more constructive role for prison officers, and of appropriate training, which the prison officers have demanded for quite a while, but one can read the report more than once without being much wiser as to how anything of this kind is likely to happen.
My Lords, it gives me no pleasure to criticise the report in this way. Nothing could have exceeded the courtesy and consideration shown me—and I know others had the same experience—by the chairman and his colleagues when I gave oral evidence for an hour and three quarters. My hopes were, perhaps, unduly raised. I thought that gentlemen so charming and so obviously intelligent would be bound to produce a good report. But I suffered from an illusion. I have already testified elsewhere that in the time available—I repeat, in the time available—the committee worked very hard and very fast. They have collected, arranged and published a mass of information which will for a long time he of great value to students of our penal system. But the time available was totally inadequate for the task assigned to them; their job was always impossible.
The May Committee was set up, as the House will recall, in November of last year in a state of near panic and with the haziest kind of mandate. It seemed to reflect the painful confusion of mind of those who established the committee. The Government were being faced with a dangerous confrontation with the prison staff. It would have been possible to set up a limited inquiry into pay and conditions and to have called for a report in a few months; but, for reasons not altogether clear to me, the terms of reference turned the inquiry into a general examination of most aspects of the whole prison system. Yet the Government went on urging them, having started in November, to produce their report by March. That date soon became ridiculous and it was extended. The committee have managed to complete their task within a year. The result was

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bound to suffer accordingly. It was literally impossible for them, with all their many personal merits, to master their subject in the time or to arrive at a really independent and well-thought set of recommendations.
However, do not let me fail to give credit where credit is due. On the subject of the length of sentences, all that they have to say is valuable although not all of it is novel. They make some telling comparisons with Holland. Per head of population, we send three times as many people to prison as do the Dutch. Between 1964 and 1975, crimes in both countries roughly trebled. That is an awful thought in itself; but there was roughly a similar increase in crime. But the number of custodial sentences increased by only 50 per cent. in the Netherlands and here by 218 per cent.—by more than four times as much. If your Lordships take the view, as I do, that prison is a prima facie evil, which can be justified only if some positive benefit accrues either to the prisoner or to the community, it would seem that we have a lot to learn from Holland. The committee lay much emphasis, I am glad to notice, on a quotation from the interim report entitled The Length of Prison Sentences, published by the advisory council in May 1977. They quote the advisory council as saying:
" We have come unanimously to the conclusion that a large number of sentences are longer than they need be in the interests either of society or of the offencer ".
The May Committee themselves then continued:
" We have neither received nor have our inquiries disclosed any evidence that conflicts with this view. We are unanimous in emphatically endorsing it "—
that is, endorsing the view that a large number of sentences passed in this country today are longer than they need be. It remains the case, say the May Committee, that
" Dutch and Scandinavian experience demonstrates that civilised society can co-exist with significantly lower sentencing tariffs ".
I am sure that all sensible people and all of your Lordships can agree with them there. But I must pause to press one or two questions on the Minister, of which I have given him a little notice; it is less than 24 hours' notice and it may be that he is not yet ready with an answer today.
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I hope, of course, that he will be. Do the Government agree with the May Committee about the need for reducing sentences? If so, what steps are they considering to achieve this purpose? Of course, we all recognise that individual sentences should not normally be tampered with by Government action. But total sentencing policy has frequently been affected by Governmental action, legislative or otherwise. If the Government are convinced that the sentences in this country ought to be substantially reduced, they would not be content, surely, to fold their hands and excuse themselves on the grounds of impotence. So I must ask the Minister whether he can tell us how the Government intend to promote the reduction of prison sentences.
It is when they come to the alternatives to prison—the crucial question of the day discussed so often in our debates here—that the committee show themselves at their weakest. They are well aware, from Home Office research, for example, that there is no reason to conclude that long sentences are any more of a deterrent than short ones. That was the conclusion of a quite careful Home Office study; that is to say, long sentences are now demonstrably no more effective than short ones in dissuading potential criminals from committing crimes. The committee also call attention to what they consider is the decline in the belief in the reformative powers of imprisonment. It is good news that scepticism on this point has now spread to official thinking. It is something that many noble Lords—some of whom are taking part in the debate this afternoon—have been stressing for a number of years. In a quarter of a century, I have never found a belief in the reformative value of imprisonment to be prevalent among people close to the scene, whether prison staff, social workers or prisoners. Very few of us, if we have ever had a friend or relative in trouble, have supposed that prison would be positively good for him. We have been aware for many years that prison, although it does not always do harm, is likely to do more harm than good to the individual in prison; and the longer the sentence, the more moral damage is likely to be done.
I myself have never found any intelligent person who seriously believes that a prisoner was likely to be a better person after 15 years in prison than after 10

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years. We are all aware that suffering can ennoble people in unpredictable ways; or, rather, that the human spirit is capable of drawing from suffering unpredictable benefit. But that is no reason whatever for inflicting suffering on our fellow humans unless there is some overwhelming reason for doing so. In the case of prisons, the overwhelming reason has always been alleged to be the deterrent effect, but, as I mentioned just now, the deterrent effect of long sentences is more and more discredited—which leaves the imposition of the continued suffering with less and less excuse. For these and other reasons, including economic ones—although in my view those are subsidiary—the arguments for finding alternatives to imprisonment become more and more powerful. But here, I am afraid, the committee have more or less "chucked in their hand ".
The feature of the report which has aroused most attention is the demand that the capital expenditure on prison buildings should be doubled. It is true, to be fair, that they will spell out candidly enough the possible alternatives to prison in addition to the shorter sentences already mentioned; but the committee are depressingly pessimistic about what can be achieved by these means in the foreseeable future. For instance, they take a narrow view of the possibilities of liberalising the parole system and expanding the scale of community service orders. In regard to alternatives to imprisonment in general, the May Committee conclude:
" For the purposes of this inquiry, none of these means offer substantial relief ".
Therefore, on their argument, the prison population is going to go up and up; therefore, a much bigger prison programme, on their argument, is ineluctable and, indeed, of the utmost urgency if the present lamentable overcrowding is not going to get worse and worse. As on their gloomy assumptions as to what is feasible in the way of alternatives and as to what is the likely attitude of Governments, their train of reasoning makes sense. But penal reformers and serious people generally see no reason why we should lie down under these far too gloomy assumptions.
The case against the committee's philosophy can be put in various ways. No one has put it to me more simply than
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Mr. Martin Wright, the much esteemed secretary of the Howard League. He writes to me:
" The main thing was that they haven't tackled head on the crucial problem that prisons are overcrowded with a lot of people who ought not to be there, therefore the solution must be to provide the sorts of places they ought to be in rather than prisons ".
Of course, I agree with the committee that much larger resources over a long period and even in a time of restriction ought to be devoted to penal expenditure. But, if indeed we can obtain larger resources from the Governments of the future, our first priority should be the attempts to improve career prospects in the prison service, including the governor grades, to pay them better and give them much more scope. Hand in hand with that, there should be a doubling of the probation service to make possible the supervision of delinquents outside prison. The committee seem to assume that the Probation Service has limits already fixed.
I do not say that we should not spend any more money on prisons if we are not allowed to use it for any other purpose. But the claims of men, not of buildings, should be first met. To quote Martin Wright again:
" Bigger cuts are possible by spending more on probation so that really substantial savings could be made on the planned prison building programme. Prison departments should be left with enough money to do up old prisons, but not to build new ones ".
The Home Office attitude, if one can judge from many debates in this House, is precisely the opposite, and it is the Home Office view which has prevailed with the May Committee. The committee make a gallant but, in my eyes, unsuccessful attempt to redefine the objectives of imprisonment. I am afraid that their formula would come to lay more stress on security, which is already over-done, and still less on trying to improve the character of prisoners. When I said that prison usually does more harm than good, I must not for a moment seem to belittle the devoted efforts of all those who work in prisons: governors, uniformed staff, probation officers, chaplains and others. Prisons may be likely to do harm; but prisons would do far more harm if all these men and women were less dedicated.
There are many sensible suggestions among the 170 conclusions of the report.

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No doubt some of them will be mentioned by other speakers. There are also omissions, and no doubt they also will be touched on. There are some subjects which, however wide the terms of reference of the committee, they might fairly regard as outside their remit. For example, the far-reaching question of prisoner's communications with the outside world, and the still more far-reaching question of prisoners' rights in general must await another occasion.
For my part, I miss most of all a sense of the human tragedy of long-term prisoners under present conditions and with present prospects of parole—or the absence of it. The week before last I visited six life prisoners in Parkhurst Prison and since then I have visited others, male and female. No glimmer of hope was being held out to any of them by high authority. I thought of Christ's message in the parable of the sheep and the goats:
"I was in prison and you came to me; insomuch as you did it to the least of my brethren, you did it to me ".
Christ did not say that he was just a petty thief or political dissident—rather unlucky to be in prison at all. He was representative in that parable of all prisoners, even of those who had committed the most awful crimes. Can anyone seriously suggest that we treat prisoners, especially long-term prisoners, even leaving out the theology, as though they were members of the same human race as ourselves? Those who decide their destiny, whether in passing the original sentence or in the decision to retain them indefinitely in prison, will argue that the interests of the community require the continuance of what can only be called prolonged mental torture. The same arguments for a long time were used in favour of hanging. They have been gradually discredited.
Whether or not I agree with the precise recommendations of the May Report, I feel that they have done a great service in one all-important respect—they have reminded us yet again that there is less and less social excuse for the long-drawn-out suffering that we inflict on many criminals. For much of it there is no intellectual or moral justification. If the May Report helps us understand this more clearly than in the past, it will take an honoured place in history.
5.56 p.m.
Lord FOOT: My Lords, I promise to detain your Lordships for only a few minutes tonight, partly because I am preceded and followed by people who are much more knowledgeable on this matter than I am, and partly because I am interested to know the answer that we are going to get from the Minister. Very often people who ask Unstarred Questions are asking rhetorical questions, and are not really seeking an answer. On this occasion it is very important that we should be told if the Government are able at this stage to give us some indication of the action they propose to take on the basis of the May Committee Report. I do not share the noble Earl's very strong criticism of the work of the committee and indeed the report of the committee. I think that they were—as he acknowledges—circumscribed by their terms of reference in a way which has precluded them from tackling some of the basic questions which arise on the matter of imprisonment.
The Earl of LONGFORD: My Lords, may I interrupt the noble Lord? I was not criticising them so much because they had not dealt with a number of questions. What I said was that it was impossible for them to do this task in the time allotted.
Lord FOOT: I appreciate that. My Lords, I am sure the May Committee themselves and the chairman of the committee realise that they had been given a very difficult task in trying to cope with the problems in the time allowed, even with the extension of the time which was given.
The only matter about which I want to say a few words tonight is this. There are some good things in the May Report and, in particular, one of the things which I welcome is the proposal that we should rewrite Rule No. 1 of the Prison Rules. The old rule was a piece of sanctimonious hyprocrisy and held in general derision by both prison officers and prisoners alike. The Committee suggest that Rule No. 1 (which deals with the purpose of imprisonment) should be rewritten in this way:
"The purpose of the retention of convicted prisoners shall be to keep them in custody which is both secure and positive, and to that end the behaviour of all the responsible authorities and staff towards them shall be such as to:

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(a) create an environment which can assist them to respond and contribute to society as positively as possible,

(b) preserve and promote their self-respect,

(c) minimise, to the degree of security necessary in each particular case, the harmful effects of their removal from normal life,

(d) prepare them for and assist them on discharge ".

I regard that as a sober and modest presentation of the best that imprisonment can do.
I quote also from the report when the Committee speak about the degrading nature of imprisonment for many people today. They write this:
" No prison routine is so sterile, degrading and harmful to the prisoner and exceptionally barren for the staff who have to operate it than one in which an inmate is locked in his cell for a substantial part of the day and only released perhaps for the statutory one hour's exercise ".
It is a sobering and sombre thought, is it not?, that that routine—so sterile, so degrading and harmful, in the committee's view—is the routine which prevails in the majority of prisons today and particularly, of course, in the local prisons. That is the routine; and it is the routine which is so condemned by this report. But while the report does contain, in my view, some valuable and admirable objectives they are all unrealisable, it seems to me, unless we can find an answer to the problem of prison population and the overcrowding in prisons. Everything depends and turns upon that.
This subject was considered at great length by the committee in their chapter 3 and in particular they gave consideration, although not very optimistically, as the noble Earl said, to the alternatives to prison which we have tried already and which we might try in the future. They came to the conclusion—a pretty gloomy one, but I think it was realistic—that the room for manoeuvre in this matter of alternatives to imprisionment is very limited. It is unrealistic to suppose that in some sort of way we are going to be able to cut down the rise in the population in the prisons simply by that means. That is not to say that the alternatives which have been devised and used in past years have not been very profitable. I think the noble Lord, Lord Harris, told us about a year ago that the estimate of the Home Office was that if it were not for the
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alternatives to prison which we have devised we would have a prison population today not of 42,000 but of something like 48,000. So I do not in any way want to underestimate what has been achieved towards keeping the prison population down by those methods. But I think the committee are right in saying there is not much further room to introduce alternatives to imprisonment.
I think the fundamental problem here, when everything has been said about shortening sentences and so on, and the reason why we have been baffled by it for so long, is that there is no correlation between the sentencing policy of the courts and the capacity of the prisons to cope with the people disposed of by the courts. That is the fundamental difficulty; and t will conclude, if I may, by quoting to your Lordships from a representation made to the May Committee by my party. I do not quote this in any partisan spirit, but am fortified in quoting it because in March last the noble and learned Lord, Lord Gardiner, saw fit to quote what the Liberal Party had said, and to commend it. With your Lordships' leave, I will just make two quotations from the representation they made to the committee. They said:
" We therefore reject totally the idea that the prison system can be considered in isolation from the methods by which people reach it and which determine how long they stay, since this merely reflects the illogical divorce between the courts and treatment of offenders ".
They went on in their proposals under the heading of "Structure" to say this—and these were the words which the noble and learned Lord quoted:
" The present illogical system which separates the policies that determine the number of prisoners and the periods of their imprisonment from those concerned with their housing and treatment must be ended. Responsibility for the prison service should be taken away from the Home Office and the prison department should form part of a new organisational structure which—

(i) allows the work of the courts (i.e. the Lord Chancellor's office) and the prison service to be closely integrated.

(ii) Provides a service career with opportunities for those working in prisons to reach the highest levels.

(iii) Is capable of laying down clear objectives for the prison service, whilst permitting maximum flexibility in the treatment of offenders in each prison.

(iv) Encourage full co-operation including interchange of staff, between those concerned with trial, treatment and aftercare of offenders ",

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They went on to say this:
" There are several ways in which these objectives could be achieved including an independent Prison Commission and a new organisation covering prosecution, sentencing policy, the courts, treatment of offenders, the probation service and aftercare. Such reorganisation however raises the question of the future role and structure of the Home Office and ministerial responsibility for trial, treatment and aftercare of offenders. In view of this we recommend an urgent inquiry into this matter ".
Because of their terms of reference, the May Committee were prohibited from making an investigation of that kind, but that urgent inquiry which my party called for when it issued this document earlier this year remains to be done. Until we have tackled the question of getting some co-ordination between the operations of the courts and those of the prison service and prisons, I am afraid we are not going, to see the end of the many very serious problems which the May Committee have shown we now face.
6.7 p.m.
The Lord Bishop of ROCHESTER: My Lords, the May Report is the first report of its kind for over 80 years. None of us, therefore, should be surprised that it was eagerly awaited by everybody concerned with the Prison Service. I do not think it is an exaggeration to say that expectations were very high indeed, even by those who recognise that there could not be a worse time than the present for putting forward creative and far-reaching proposals likely to involve both hard cash here and now and long-term investment later.
While I am sure we must be grateful for a very detailed report produced remarkably quickly, particularly considering all the visits to institutions made by Mr. Justice May and his colleagues, I think it has to be said, however sadly, that the report seriously fails to challenge the attitudes and priorities of our society as a whole about the Prison Service. Let me say at once that the closing paragraph of the opening chapter includes what the committee itself calls the "hackneyed observation" that a great deal of a society's character can be seen in the way in which it runs its prisons. They go on to say that if we turn our back on our prisons we also turn our back on our society and our values; but is it not because we have all too often shown our concern
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only when something has gone wrong, and because for far too long we have failed to invest enough to transform 19th century institutions into prisons that are acceptable in the 20th century. that today we are faced with so many difficulties simultaneously?
Whatever the Minister has to tell us of what the Government cannot do—and we all realise he will be obliged to do that so far as public expenditure is concerned—I hope very much that he will be able to assure us that, as a result of this inquiry, the Government are determined to see that there is a far greater openness about the Prison Service. It seems to me that so many of its problems arise from the separation of the whole of the prison community from the rest of society.
The boards of visitors have a very important role to play and I personally am glad that the committee propose an extension rather than a restriction of their functions. I wonder, however, whether the committee do not underestimate the importance of a board of visitors being seen by prison inmates as an entirely independent body. If boards are given formal responsibilities for the welfare of staff and for staff relationships, there will surely be the danger in disciplinary cases of prisoners asking, "Whose side are they on? The chairman and members of a well run board of visitors engender a good relationship with governors and prison officers by the manner in which they fulfil their regular inspections and by the way in which they conduct their adjudications, as well as by their personal links with them.
I would also most heartily support the committee's recommendation that boards of visitors should consider themselves to be not only independent outsiders for the local community, coming into a prison as overseers of the inmates' interests, but also informed insiders with a duty to increase their local community's knowledge and understanding of what goes on in prison. However, the committee does not make many suggestions as to how this can be done—ways in which the free society outside can be made more aware of and more conscious about what goes on inside.
It occurs to me that the chairman of a board of visitors could be required to

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report regularly to the local magistrates and that there would much to be said for a board's annual report to the Home Secretary being edited for general publication locally. Indeed, a chairman who was well known locally and who had a sympathetic governor might well speak on local radio, or answer questions on the report at a Press conference called as a matter of routine and not because of a crisis. I can imagine some fairly sharp reactions to these suggestions. All I would say is that, if they are unwelcome, then surely it behoves those who find them so to suggest alternative ways in which boards can be encouraged to fulfil the recommendation of the committee that they should do more to involve their prison, its staff and its inmates, in the local community.
There is considerable evidence in the report about the urgent need to reduce the size of the prison population. Reference has already been made in the debate to this question, and we spoke about it at some length in the debate on 27th June, which was introduced by the noble Lord, Lord Soper. There is no doubt whatever that if the various reports which have been published in recent years had been implemented the number of people sentenced to imprisonment would already be very much smaller. I have a strong feeling that we have already passed the point where we are going to achieve this aim by persuasion. Therefore, I hope the Minister will be able to tell us about the attitude of the Government towards extending the parole system. Indeed, I would make so bold as to ask him whether the Government have considered parole being made automatic for all except those classed as dangerous, either because of the crime they have committed or because of their behaviour in prison. We have to face the fact that half of the prison population is not at present eligible for parole. This is one of the factors which keeps overcrowding at its present rate.
I do not see how the committee's very important recommendation with regard to altering Prison Rule I can possibly make sense if the large groups of petty criminals and inadequate but non-violent offenders, about which the report also talks at some length, continue to be held in custody. I am bound to say that, while the committee dismiss as out-of-date rhetoric the phrase
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" the training and treatment of convicted prisoners ", I do not think they go far enough in explaining what they mean by "custody which is secure and yet positive ". I do not regard the word "training" as a sanctimonious word. In every walk of life outside prison I should have thought that there is an increased emphasis upon training, and retraining and in-service training.
I hope that the Minister will tell us what is the Government's attitude towards the proposed rewording of Prison Rule 1 and whether, even if the aim of training for life outside prison is muted, while custody may well be secure they do not think that it is much less likely to be positive. The committee say they do not think that the present poor showing on the industrial work front is unavoidable. I think there are many who would agree with that statement.
The committee go on to press for a development of the facilities for education in establishments and say that subject to certain considerations these should provide a full-time alternative to work. This is a very interesting part of the report. I am glad to see that a brief reference is made to the importance of developing the inmates' social skills and social conscience. This is surely something which should be part of the structured programme of prison education. It should not be left as some kind of extra-mural activity to be run out of hours by education officers and chaplains of all denominations, with the help of voluntary groups. I am confident that governors and staff in many prisons would welcome encouragement from the Home Office to explore this kind of thing in an adventurous way and to do it both at the intellectual and at the emotional learning levels. As Chapter 7 of the report suggests, this is surely another area in which there could be more of a two-way traffic between the prison and the local community as well as between different branches of the Prison Service.
As has already been said, this is an immensely long and full report, of great importance. The noble Earl, Lord Longford, is not asking today for the Government's detailed answers on all the matters which it raises, but he has asked Her Majesty's Government to define their attitude to the report. Speaking from these Benches, I hope so much that the

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Minister's reply will be such as to evoke a response from your Lordships in every part of the House. I would dare to say that what some of us look for is the will and commitment to bring about improvement in a prison service, in a system which creaks and groans at many points.
This must involve political will, but I would hope so much that those of all political parties and of none would be equally committed and equally encouraged by the Government's attitude. However cautious or negative the Government have to be at the present time about adding to public expenditure, I hope they will accept that this is not the only aspect about which many of us are concerned today. We shall be greatly encouraged by a serious commitment to seek fewer and shorter custodial sentences and to improve probation and after-care services. We would he further encouraged if the attitude of the Government to the report makes it clear that they accept its call for a greater openness about the Prison Service, about independent inspections and, above all, about the need to foster a high quality of prison officers and to maintain their pride and their morale by every means possible.
The moral quality of a society is to be judged by the treatment it gives to its outsiders, to strangers within the gates and to those of its citizens who are on the margin. Prisons are on the margin of society, whether we like it or not. Society must act sympathetically and intelligently to bring them in closer—inmates and prison officers, governors and administrators alike—and, once in, they must not form a secret citadel divorced from all the rest of us. The great Bishop Westcott said:
" It is the office of the State to give effect to the will of the people, while it is the office of the Church to inspire the people to true ends ".
I would hope that your Lordships, in all parts of the House, from wherever they may find inspiration, will be united in wanting the Government to give effect to the will of all those people who sincerely and urgently desire that the prison service should be more worthy of our country.
6.23 p.m.
Lord GARDINER: My Lords, my first task must be to thank my noble friend
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Lord Longford for enabling us to consider this Question tonight. This is something of a formality, but I do not intend it to be a formality. Recently I have had occasion in public to suggest that we do not treat those public-spirited citizens who serve on Royal Commissions and committees as well as we should. It is work that takes up an enormous amount of time, and particularly of course if they are working under pressure to a time limit. For the chairman, who is usually expected to produce the first draft of the whole report himself, inevitably it becomes almost a full-time occupation. Of course, Royal Commissions have their own premises and staff, but departmental committees have to make do with whatever the department provides for them.
There was an interesting Question and Answer in the other place on Monday, 26th November, when Mr. Sheerman, who I think is the honourable Member for Huddersfield, East, asked the Question:
" how many reports of Royal Commissions were debated in the House between November 1964 and November in the current year "—
that is a period of 15 years—
" and what percentage this represents of the total number of Royal Commission reports published during that time ".
The Answer was:
" A total of 29 reports were published during this period, of which 11 (37·9 per cent, of the total) were debated ".—[Official Report, Commons col. 423.]
So, if any of your Lordships are asked to be chairman of a Royal Commission, as may well happen, you will be able to bear in mind that, apart from any other difficulties you may suffer, it will be two to one that your report will never be debated in the elected chamber at all.
It is precisely here that I think we have great advantages in this House, and one which I think is of advantage to the whole Parliament is that we can find the time if a Member of the House will take the trouble to put down a Question and insist on its being discussed. My noble friend Lord Longford, who is fleet of foot, as we know, has lost no time at all in enabling us to consider this important report at an early date. Your Lordships may remember that it was on the 31st January that he introduced the question of the crisis in the Prison Service. He introduced it because the prison governors had written

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an open letter to the Home Secretary saying, "The total breakdown of the prison system is imminent "; and they added a reference to a deplorable lack of leadership from the Home Office. That obviously must have cost the prison governors a lot. I remember a time when some prison governors, including the chairman of the Prison Governors Association, signed a memorial in favour of the abolition of capital punishment and were told by the Home Office that if they did it again they would lose their pensions. Of course, all their communications otherwise with the Home Office come under the Official Secrets Act and for governors to write an open letter to the Home Secretary containing those sentiments must indeed have shown how strongly they felt about the appalling conditions which existed in the prisons.
We put forward then many suggestions. My noble friend Lord Longford suggested that there should be a Minister for prisons in the Cabinet although I could not myself see that that would be very effective. The Liberal Party had just published their report on the subject, suggesting taking the prisons away from the Home Office altogether. For that no doubt there was something to be said, but it seemed to me to go a little too far. I had a great deal of sympathy with the observations made by the noble Lord, Lord Hunt, who was emphatic that there should he a great deal more communication and cooperation between prison staff, police, probation officers and the courts. I myself proposed what the Howard League had suggested for a long time; namely, that there ought to he an independent inspectorate of prisons reporting directly to the Home Secretary.
Now we have the report. It is a long report, starting with an introduction and the history of prisons, prison populations, the objectives of imprisonment, resources, and then dealing with what clearly is the primary task because the cause of the threatened breakdown was that because of the high degree of overcrowding in the prisons, prison officers were going slow and as the noble Lord, Lord Foot, said, men were being kept nearly all day, except for exercise, in their cells and there was a resulting increase in tension between prison officers and prisoners. It is, of course, for that reason that the
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May Report—and I seem to be the first Member of your Lordships' House who proposes not to attack the May Report, for reasons that I will explain—dealt at great length, first with the Home Office and a degree of maladministration by the Home Office, and the numerous reforms which they proposed, and then dealt with the governors and prison officers, their recruitment, their training, their pay and allowances; the continuous duty credits, industrial relations and working conditions.
I agree with the sentiment of a great deal of that which my noble friend Lord Longford expressed, but the reason I do not myself feel in a position to criticise the May Committee is simply this. First, so far as pay is concerned, I do not know whether the proposals are to pay them too little or too much—I suspect it is too little but I am in no position myself to form a view. They were appointed on 17th November to report by the end of March. That was obviously hopeless, and the period was then extended to the end of the summer—and here comes about the only question which I shall venture to ask the noble Lord, Lord Belstead, and I am sure he will have no difficulty in answering it. It is this: May we know the date of the May Report? It is very unusual, in my experience of Royal Commission reports and departmental committee reports, that it has not got a date. I know it was published by the Home Office. Usually the date is on the same page as the signatures, but this report has no date. Could we please be told? We do not know at the moment—at any rate I do not know—how long they did take, because we do not know what was the date of their report.
They have arrived at 174 conclusions and recommendations, and disappointment has been expressed by my noble friend Lord Longford that they did not deal, or did not deal adequately, with a number of different matters. Here may I come to what I think are the good things in the report. First, they have recommended that there should be an independent inspectorate reporting directly to the Home Secretary, and in the same part of the report, at page 95, they deal with the excessive secrecy which has gone on for so long, and which has been insisted upon for so long by the Home Office, about

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everything which goes on in a prison and the need to make things public. They said:
" We have no doubt both that the prison service would benefit from and that public sentiment requires that as many aspects of government, which includes the prison service, should be opened up to as wide an audience as possible ".
Therefore, in proposing an independent inspectorate reporting directly to the Home Secretary, they made it clear that his reports were to be published.
Secondly, they drew attention to the interim report of the Advisory Council on the Penal System on the length of prison sentences and thought that that should be acted on. That is now getting old. So fas as I know, the Government have taken no step whatever so far to act on that report. I hope and believe that we shall be told by the noble Lord, Lord Belstead, whether they do intend to do so and, if so, how soon.
They dealt particularly with the training of prison officers, which is something which the Howard League—which includes in its membership a number of prison officers—has been calling for for years. Under that heading alone there are some 15 detailed recommendations. They also call for a greater degree of co-operation between prisons and the local community. On that the right reverend Prelate has already made some observations. At page 158 of their report it says:
"… greater consideration than at present should be given to involving prison officers, on secondment, with a range of activities that take place outside penal establishments themselves, for example, pre-release hostels, bail hostels, day centres and day training centres, and all other types of establishment that are presently or may be in the future used in connection with noncustodial measures … there is scope for increasing the involvement of local volunteers and community groups outside in appropriate activities within establishments ".
They call for another extension of the role of officers:
}"… but it would also be a means of introducing a further degree of openness and public awareness into the running of penal establishments. That, as we have observed elsewhere, is something to which we attach importance ".
Thirdly, my Lords, I would welcome what has been said, so far as it went, on the prison population. At page 50 the report draws attention to those who are mentally disordered—and thanks to the Motion moved by the noble Lord, Lord
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Allen of Abbeydale, we have already, of course, discussed the Butler Report in full—and all those who ought to be moved out of prisons, as we have all been saying for a long time. It is not only the mentally disordered; it is the alcoholics, on which the noble Lord, Lord Soper, will no doubt have observations to make, and the inadequate petty offenders and fine and maintenance defaulters. Here again, on Monday of last week there was an interesting Answer in the other place to a Question as to how many of those imprisoned were without previous convictions, how many had had one previous conviction, or two or three or four or five or more. The answers in each case were about 2,000, except those who had five or more, where the answer was 19,000. These are all the hopeless people, and what good it can possibly do to keep in prison people who are no danger to the community at all is, I must say, something I have never discovered.
My Lords, I had one grave disappointment and this was that the May Committee did not accept the recommendations of the Jellicoe Committee; I still regard as quite incompatible the two functions which boards of guardians and visitors have performed. With regard to buildings, while I appreciate the criticism made by my noble friend Lord Longford, I think to some extent he may have misread the report, because they have made it quite clear that they consider that the first priority must be to deal with existing accommodation rather than with new accommodation. The first task must be to bring the state of our prisons into line with the United Nations minimum rule for prisoners, and in particular to end cell-sharing and to end not having, proper sanitary arrangements.
My Lords, when I said that I did not propose to criticise the committee all I had in mind was this. They were working under great pressure to deal with a crisis which was very largely a crisis of relations as between the Home Office organisation and governors and staff in prisons. They touched on a number of these matters. There were some fields in which they said they would like to have made recommendations but they simply had not had the time; and in other parts of their report, where they do deal, for example, with the classes of people who ought not to be in

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prison at all, they were unable to work out detailed proposals because they simply had not the time. When one regards the time factor I think it is difficult to criticise the committee for not having done more than they did.
Finally, my Lords, may I point out that we are still in a state of crisis. The Prison Officers' Association are said to have given notice to end the overtime agreement, and all day today and all day tomorrow the Prison Officers' Association are meeting. I trust very much that they may feel able to exercise a considerable measure of patience and restraint, because the position is still a crisis position. Everything now really depends on people, including prison officers, keeping their cool, and on the Home Office acting with determination and with a considerable degree of speed to give effect to the most important of the recommendations which the May Committee made. We shall, therefore, all be listening closely to what the noble Lord, Lord Belstead, has to tell us. He will not, I hope, say after all this time that the Government must have time for thought and consultation and so forth. We hope to hear from him that they are now going to act, and act with speed.
6.40 p.m.
Baroness FAITHFULL: My Lords, Mr. Justice May must be very grateful to the noble Earl, Lord Longford, for initiating this debate. The noble and learned Lord, Lord Gardiner, has pointed out the number of reports by Royal Commissions which are not debated, but, while we are all very grateful and acknowledge the work that the commission has done, many of us, as has been said by other noble Lords, are somewhat disappointed. However, we realise that the Commission was set up only on 17th November 1978, and it presented its report to Parliament in October 1979. It was given, as the noble Lord, Lord Foot, pointed out, somewhat narrow terms of reference. So, we pay tribute to it, realising its very great difficulties as regards both time and terms of reference, while at the same time having to admit how very disappointing we are with some areas of the report.
I shall base my speech on one prison as being the prototype of all prisons throughout this country. That one prison
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is, of course, Oxford Prison as Oxford is the area from which I come and Oxford Prison is probably the most overcrowded prison in the United Kingdom. I wish to comment on four aspects and I realise that these points have previously been covered by other noble Lords. I wish to comment first on the recruitment of staff; secondly, on overcrowding; thirdly, on the very worrying numbers of custodial remand cases in prisons due to arrears of work in the criminal courts; and fourthly, on the Butler Committee Report.
I turn first to the question of the recruitment of staff. Like other noble Lords I do not want to prejudice the outcome of the meeting being held today by the Prison Officers' Association. Therefore, I shall say little. But, I wish to draw the attention of your Lordships' House to the fact that the basic pay of a prison officer on first entering the Prison Service is £63 a week. A man out of work and with two children is subject to and receives £55 a week on supplementary benefit and insurance. He often, rightly or wrongly, gets other jobs, such as gardening which bring his pay up. Therefore, unless the prison officer when he first enters the Prison Service is going to work enormous overtime, the poverty trap will rear its ugly head yet again.
Many of the officers in Oxford prison are working between 18 and 30 hours' overtime. That cannot be right for the quality of their work or for their own personal lives or the lives of their families. We seek prison officers who have stability within themselves and within their family life and such men will not enter the Prison Service if they have to work such a large amount of overtime in order to earn a decent wage. I should like to make only one comment on that; namely, that it is the point of entry which is preventing many people from entering the Prison Service. We are losing many good men who would otherwise wish to work in this service.
I then come to the question of buildings and overcrowding. It is said by many that we should do away with and knock down many of our Victorian buildings. Many of the Victorian buildings, if they were not overcrowded, would be good buildings. They have a sense of solidity. In the case of Oxford Prison, it is well placed in the centre of the city, near the

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railway station, near the bus station and easily reached by solicitors, probation officers and, most important of all, the relatives of the men. But Oxford Prison was built to take 137 men. In November 1979 crises proportions were reached when it contained 362 men—that, of course, means three to a cell. In fairness, I should say that the regional headquarters reduced the number by 20, to 342, by 3rd December, but even then most of the cells were occupied by three men.
I would submit that overcrowding leads to recidivism. A warder can get to know the men in the gallery he supervises if there are 30. He relates to the men personally; he accords to the men the dignity of a relationship; he is able to talk to them about their relatives, friends and girl friends and their private lives. Also, there is a dignity preserved with regard to the personal, private lives of the men. If there are 60 in the gallery, the uniformed stair relate, but they do not relate so well—they cannot do so, they have not the time. If there are 90 men in the gallery, as there are today in Oxford Prison and in many other prisons, there is no personal relationship between the uniformed staff and the prisoners whom they really wish to serve. Therefore, the plight of the prisoners is one where a hardening of attitude sets in, a feeling of unwantedness, a feeling of not being cared for simply because the staff cannot possibly give the time.
That overcrowding also affects the education programmes. Those programmes have been spoken of by the right reverend Prelate the Bishop of Rochester and by the noble Lord, Lord Foot. Where there is overcrowding it is impossible to have good educational programmes. Therefore, on discharge from prison the men have not been given the type of help that they might have been given in the areas of under achievement which most of them experience. Thirdly, the noble Lord, Lord Foot, talked about exercise. I know that in the prison in Oxford, in the centre of the city, with three men to a cell, the men have half an hour's exercise in the morning and half an hour's exercise in the evening and they fetch their food—otherwise, they are in the cells all day.
I turn to the question of custodial remand. The noble Lord, Lord Foot, has, to some extent, shown the lack of link
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between the courts and what the prisons have to offer. Of the 342 prisoners in Oxford Prison, 220 are unsentenced or on remand. There is one man who has been in prison on remand for 11 months, as the prosecution is even now not ready to take his case before the court. The number of untried prisoners remanded to Reading Crown Court is surely cause for deep concern. Despite the 1976 Bail Act, I think that I am right in saying that there has been an 80 per cent. increase in the number of prisoners on custodial remand. The arrears of work building up in the criminal courts seem to lead to these delays. I should like to mention—although it has been mentioned before and has been debated in your Lordships' House—the Butler Committee and the situation of mental patients who are not placed in mental hospitals as was recommended by the Butler Committee. There has been very little movement, I would submit, in that direction.
I turn to recommendations. There is no easy solution. There is no quick resolution, but there surely needs to be a sense of direction and boldness laid down by Parliament, instituted by the Home Office and possibly by the outside inspectors recommended in the report. First, I am surprised, sad and sorry that the May Committee did not consider, for instance, weekend detention. In paragraph 218 of' the Fifteenth Report of the Committee on Expenditure, weekend detention was recommended. I suggest that we look at Holland and New Zealand and that we might have a pilot scheme to show whether or not this could work. Speaking as a social worker who has had to work with families of men in prison and bearing in mind what we have heard today about the rate of unemployment, I know that no man wants to lose his job. If he does lose his job, it is an expense to the country because his wife and children must draw supplementary benefit.
Why, then, could we not have weekend detentions, say, for a year, with the man being at home during the week, working, keeping his family and maintaining contact with his family? I imagine that many noble Lords in this House go away for weekends. Therefore, it would not be so strange for those men to go for weekend detention. If they were offered either full-time prison or weekend detention, I know that they would chose the latter.

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Secondly, with great respect to the noble and learned Lord the Lord Chancellor, who sits on the Woolsack, I submit that we might look into the arrears of work in the criminal courts which delay court appearances. I realise that this might mean the appointment of more judges and the setting up of more courts. But could that he any more expensive than keeping 220 people in custodial care on remand?
I wonder whether my noble friend Lord Belstead will comment on the young offenders, many of whom are kept in prison. Were the young offenders to he taken out of the Prison Service and dealt with elsewhere, it would reduce the prison population to two to a cell. I shall not go into the non-custodial sentences, as I know that this will be covered by the noble Lord, Lord Hunt; nor shall I talk about the alcoholics, as I know that that problem will be covered by the noble Lord, Lord Soper.
On the question of maintenance and debt defaulters, in this country 2,564 people are in prison due to maintenance and debt defaulting. I should like to suggest that courts should consider attachment of earnings orders. I point out to my noble friend Lord Belstead that, when I was working as a social worker and people fell into arrears with their rent, it was cause for deep concern that families might he evicted, leaving the children and the mother homeless, and that we might have to accept the children into care. We used volunteers to visit a family every week on pay day in order to persuade them to pay their debts on a regular basis.
I have been asked by my noble friend Lady Vickers to ask my noble friend Lord Belstead whether particular thought has been given to help for the ethnic groups, many of whom cannot follow their religion, obtain the special food that they must eat, or, indeed, speak our language. On entering your Lordships' House today I asked an eminent Member of this House whether she was taking part in this debate. She said: "No, it has all been said before and nothing has been done". Perhaps it is cause for very deep concern that, in fact, more children in this country are in custodial care than in any of the countries of our EEC partners. We also have a high proportion of adult prisoners in custodial care, With my party's promise
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of law and order in mind, like other noble Lords, I ask my noble friend what the Government propose to do.
6.55 p.m.
Lord SOPER: My Lords, the House will be grateful to my noble friend Lord Longford for reintroducing an issue which it seems your Lordships' House has been attracted to debate on a number of occasions recently, and on which I have ventured to speak on matters which are cogent to this particular issue. I must be careful to remember the biblical warning that one is not necessarily heard for one's "much speaking ". Nevertheless, I believe that this is an aspect of a crisis which goes far beyond the merely custodial or prison system or the Prison Service as such. I cannot conceal from myself, and I would not endeavour to conceal from this House, my belief that the prison system as such is irremediable. In as much as this report does not say so, I am consequentially disappointed. But that disappointment is considerably abated by the fact that, although it will take some time to replace the system, the best should be made of what can be done, if anything, to improve it.
What I have to say is largely interrogatory. I should like to know the Government's attitude to matters raised rather than solved, or of the attempt made to solve them, in this report. There is nothing that is more of an abomination than the overcrowding in prisons. Perhaps noble Lords will permit me to reiterate what I have said on previous occasions, that as a prison chaplain I regard the use of one small cell to accommodate two or three people to he an insufferable intrusion upon the privacy of an individual, whatever he has done, and a den of vice in so many aspects of his continuing relationship with others with whom he has no point of necessary contact, and in circumstances in which he happens to be the younger and the less adult he is probably inoculated against any remedial processes and encouraged to the very life of crime which, in the first instance, brought him into that prison. What do the Government have to say about the immediate need—whatever may be the cost of it—to enable a prisoner to serve his sentence in the privacy and decency which is still his right—not because he is

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a good man but just because he is a human being? If there is any therapeutic treatment that can be offered to him, it must come within the framework of that privacy and that sense of human dignity.
What do the Government have to say about long sentences? I have repeatedly said in your Lordships' House that it is my conviction that any protracted sentence over six years in the same conditions is liable to destroy a moral dimension in those who suffer it. It does not mean that after six years a man should be let loose on the streets again, but it does mean that unless there is some kind of light at the end of that tunnel, we are performing an act, in the name of what we might call social justice, which is impermissible on moral and spiritual grounds.
However, I turn, if I may, as has already been indicated, to matters with which I am particularly concerned. The report makes a very strong case—and in this it is to be highly commended—for alternatives to the prison system and the Prison Service. It claims, for example, that therapy of any kind within the Prison Service should not be applied—even if it is attempted—to those who are mentally insufficient or disturbed. This is for the simplest of reasons. As a parson I am always looking for texts, and here is one on page 50 which is particularly apt. Here is a report. Prisons
" contain a lot of people in a small space against their will. There therefore has to be a rigid daily timetable of movement: unlocking, collecting food, exercise, and so on. The mentally disordered cannot cope with this routine or with prison discipline. As prisons are at the moment, a therapeutic environment can be provided for only a tiny minority of inmates ".
I am not sure even of that tiny minority.
If you are prepared to incarcerate, under the Mental Health Act (which makes it more difficult to do anything else about it), those who are mentally afflicted within the general framework of the Prison Service, then how can you expect an overworked and understaffed prison staffing to deal with the peculiarities and idiosyncracies of those who are less normal after they have been in prison than they were even before they entered it.
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Let me turn to the problem of alcohol. I was vastly interested to see that my noble friend Lord Harris of Greenwich—and I wish he was here to correct me if I read wrongly what he said—seemed somewhat surprised at the very large relationship between alcohol consumption and the criminal rate and the penal system in general. This is something to which I have been committed as a proposition for many years. I would invite your Lordships to consider what has been done, and what is now in process of being undone by the Government.
Under Circular 21/73 provision was made whereby the DHSS, through local authorities, could fund social endeavours, hostels, and so forth, to take people who are in danger of alcoholic consumption, who indeed are suffering from alcoholic diseases of one kind or another, out of the prison system altogether, as it is quite right and sensible to say that they should never be there. Now the Government are apparently considering, so far as I can understand—and I hope that the noble Lord, Lord Belstead, can disabuse me of this—within the next few months withdrawing the subventions funding those local authorities. Eleven of those local authorities have already said that they can no longer sustain the voluntary organisations which can keep alcoholics out of prison, and give them a reasonable chance of rehabilitation. They have expressed the opinion that detoxification centres cannot so be funded.
It is no secret that we have made certain presentations to the DHSS. The last time that this question was raised in your Lordships' House the Minister, in reply, indicated the possibility of two years in which to reconsider this matter, and not so to impoverish such voluntary organisations within the next few months as to bring to an end the very process of keeping alcoholics out of prison, because they never should be there in the first place. I very much hope that we can have an affirmative answer on this particular issue. I would only add that I am the more convinced every day that if you could reduce the alcoholic content in the general crime rate, you would reduce the crime rate itself by something like 40 per cent.
I would finish on rather another theme, and you will acquit me of any professional

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zeal in introducing, so to speak, an ecclesiastical commercial. The affairs of this day here were introduced with the prayer:
" Present us O Lord in all our doings with thy most gracious favour; and further us with thy continual help in all our works begun, continued, and ended in Thee ".
This document is a work. It begins with no reference whatsoever to religion. It continues with no single reference to religious matters, and it ends with no propositions that have a religious context. I find that peculiar. Indeed, I personally find it intolerable. I do not want merely to dilate on the fact that there seems to be an element of basic hypocrisy in praying like that and then proceeding as if the prayer does not mean anything. I agree that it would be unsuitable to prescribe certain forms of doctrine as therapeutic in prison services, though I am of the opinion—I hope I am wrong—that the Government are preparing to instil some kind of religious education into the short, sharp practice of sudden and quick sentences, about which we have heard in the last few weeks.
I am well aware, too, that very few of those who will be exposed to any religious education will be, so to speak, already in a kneeling posture at the communion rail and ready to be converted. I am also aware that, if the alliteration is not too apt, they are not in the pew, and therefore are not aware of the general substance of the faith to which we would endeavour to persuade them. But they are in the porch, as it were, and I would suggest to the Government, if I may, that quite apart from the particular religious education which specifies a particular form of doctrine, far more effective than the short, sharp sentence and the application of what is, after all, very much like violence, there is a profound need for a recognition today on the part of many young people, and older people, of the moral issues which are largely obscured and, in many cases, are not even mentioned. I do not think it is beyond the wit of those who can contrive, if you like, or can bring together, a general symposium that does not depend upon certain theological propositions but does depend on the main difference between what is right and what is wrong. That dimension seems to me in many cases to be lost.
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The other day I submitted to a lie test, and was very gratified that I was a very bad liar. I took that to my comfort. Mind you, I am not going to say to your Lordships that I could not tell a lie, but I have an inbuilt tension as soon as I try to tell one. It is not particularly to my credit; it is the fact that I have been brought up in that kind of environment. I noticed that on this particular test actors and criminals had no such tension or, if they had, Mr. Nimmo concealed it with excellent expertise.
I think that this is not an inconsiderable point to make. I believe there is a real place, in the therapeutic treatment of the prison system, with all its inabilities and failures, for trying to represent that kind of moral discussion. I earnestly hope that the Government will be prepared to introduce, as part of the educative process which is indicated in this report, that kind of discussion, because I have a sneaking feeling that quite a number of those who are now in prison will be much more likely to respond to a free and fair discussion of moral issues than they are prepared to think that they will be the better for a short, sharp treatment on something like a barrack square.
Let me conclude in this way. I hope that the Government will answer the questions, or seek to answer the questions, which have been posed this evening. If the attempt is made to answer them, they will attract the admiration and the support of many who feel that, at the moment, nothing very much is being done, but so much ought to be done.
7.10 p.m.
Lord HUNT: My Lords, this is the second time in a matter of weeks that I have had the pleasure of following closely the noble Lord, Lord Soper, delivering an ecclesiastical commercial. The last time I recollect having appeared to disagree with him in your Lordships' Chamber, but I hope I made my peace with him outside the Chamber and I take this public opportunity of assuring him and your Lordships that I do not really dissent from the proposition he has put to the Government this evening.
I join with everyone in thanking the noble Earl, Lord Longford, for giving us this early opportunity to debate the May

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Committee's report. The fact that he has done so so soon after its publication should serve to impress on the Government the urgency of acting, at least on its more important recommendations. The noble and learned Lord, Lord Gardiner, spoke about the institution of Royal Commissions and committees of inquiry. I too had that point to make, and I will make it briefly because he is right in saying that the institution of such commissions and committees has come in for a good deal of criticism, on the grounds of the amount of time they take, the cost to the taxpayer and the fact that after many months, perhaps years, of patient and thorough investigation, nothing or very little happens as a result of all their labours.
I speak, as no doubt other noble Lords could, with some feeling about this, having served on a Royal Commission recently and on a number of such committees. My point this evening is not to complain about this situation but to make the point that, despite the lack of public interest in the prisons, to which Mr. Justice May himself alludes, here is a report produced with the necessary speed to cope with what was well described by Lord Longford as a crisis, some of the observations of which and, I would say, the main tenor of which would be ignored only to the discredit of the Government—although they did not themselves set up this committee—and certainly against the public interest.
I propose to strike a more positive note than the noble Earl and some other speakers, and I am glad to join with the noble Lord, Lord Foot, in doing so, and I shall, I assure your Lordships, touch on only a few of the main areas in the report. I would say about those who criticise it that there are dangers in striking a general note of condemnation about a report of this importance in perhaps encouraging the Government to take little or no action on it; it is necessary to be positive. It is logical to start with administration and management. In mild disagreement with the noble Earl, I was personally glad to note the proposal that the chairman of the Prisons Board, as head of the service, should not necessarily be a civil servant; and equally, if not more importantly, that he should serve for at least five years, and preferably for seven years.
The Earl of LONGFORD: My Lords, I was not complaining of anything except the way in which they made their proposal, which renders it completely meaningless. He should either be a civil servant or not, or an ex-governor. I was not criticising anything except the absurdity.
Lord HUNT: I shall be coming to that in a moment, my Lords. I intend no disrespect whatever to the very able deputy secretaries who have held this post for a number of years in the past, but I say that the lack of identity within the service and in the mind of the public at large of the head of the service and the limited term it has been held have, I think, been one of its main structural weaknesses. I was glad to note the prospect which is held out to prison governors to aspire to this summit, this peak of their profession, and I hope that future service chiefs will, as May has recommended, serve for a full seven years. Taking the noble Earl's point, surely the essential point is that the best person should be selected for the job regardless of where he comes from, and that he should serve for an adequate time.
At the level of the prisons, I like the references to a new management style and to leadership from the centre. A uniformed service is of course necessarily traditionally hierarchical, but I am convinced that under able management—and let there be no doubting the wealth of management skills among the governor grades in the Prison Service—the service could be democratised without detriment to essential discipline, and I take a side glance at the noble and gallant Field Marshal in the hope that he will support me in that thought.
I turn to the welfare and social problems of people serving sentences in prison. The probation and after care service has traditionally been charged with the social problems and the welfare needs of men and women in our prisons. It is not a popular role among probation officers, but it is accepted by those officers who serve inside that their training and skills cannot be dispensed with and that they form a bridge for supervision and care of prisoners after release. The involvement of prison officers in the welfare of prisoners which the report alludes to as a recognised secondary role of the prison officer has a lot to commend it. In fact it has

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been going on informally for a very long time. But by making if official it can serve to generate collaboration—I was glad that the noble and learned Lord, Lord Gardiner, referred to this—and postulate an equal status between prison officers and probation officers. Even more to the point is that it enables a human relationship to be established and maintained between prison officers and inmates, that "humane containment" which is referred to in the report on which the very viability of life for everyone inside our prisons really depends. I hope that when the Minister replies he will be able to confirm that there will be no delay in developing the practice which has been proven by experiment in the five prisons.
I speak for myself, knowing that it is a contentious point and is not agreed by many social workers and probation officers, when I give my view that the report is right in making a further recommendation that prison officers should have the opportunity to serve on secondment outside prison. It has long been my belief that suitable officers could provide a continuum of fairly close supervision from prison into the community of certain difficult offenders who might otherwise place the community unfairly at risk.
I am quite purposely repeating what has been said by everyone in this debate in saying that the most important general point in the report is the weight it has given to the policy of reducing the prison population. So much has been said about this, not only this evening and not only in your Lordships' House but outside it and for so long—by the Advisory Council for Penal Reform in 1974, the House of Commons Select Committee on Expenditure in 1978, the National Association of Probation Officers, prison governors, criminologists, and every respectable independent body such as NAPO, working positively and responsibly for penal reform—that I will limit myself to enjoining on the Government once again the importance of heeding the words in this report. What is needed, what is overdue, is not more words, but action. Will the Minister forecast some steps within their power to bring progress in this critical matter of reducing the prison population?
The corollary of that main point in the report is of course the need to press ahead
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with methods of alternative treatment in the community, for which the noble Baroness has billed me to say something, but I will say very little because of time. One has to mention only community service orders (referred to in the report), intermediate treatment (which, so far as I know, received no mention), detoxification centres (which the noble Lord, Lord Soper, mentioned), day centres for ex-offenders, day training centres, and probation orders. I was very disappointed in the rather pessimistic note struck by Mr. Justice May about the prospects of increasing probation orders. My own view is that they can usefully be combined with some of the other types of treatment that I have mentioned.
Quite recently I visited three of the four existing day training centres. Only last week I was down at Pontypridd, and I mention this only because I came back more convinced than ever that, expensive through they are, and selective though they have to be at the moment because there are only four of them in the country, I believe them to be potentially the most productive of all alternatives to imprisonment for difficult offenders, hardened to crime and inured to prison. in enabling them to come to terms with themselves and with the community.
I have spoken of alternatives to prison, but of course they are not alternatives in terms of this report and its recommendations. There has to be action both in the provision for the prisons and for non-custodial methods. As Mr. Justice May has pointed out, the main areas of his recommendations are a package and must be taken as a whole. Again, I hope that the Minister will assure the House not only that there will be further expenditure on the prisons, but that there will be no cut-back: indeed, on the contrary, that there will be the means for extension of non-custodial alternatives to prison.
There is a great deal else in the report. I think that most of the points have already been touched upon and I shall restrain myself from saying more. However, I should like to add a tailpiece. No one who is familiar with our more decrepit and disgraceful prisons would dispute the need to renovate and to replace at least some of them. But I had a touch of sadness about the committee's reference

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to Dartmoor. I am well aware that my feelings will not be shared by the staff and inmates at Princetown Prison, Dartmoor, though when I was last there there was still something of a cachet about doing time on the "Moor ". I once made an interesting route up the wall of Dartmoor Prison. It was from the outside, and it will not be a popular route. The only point I want to make is that I venture to hope that when the time comes to dispose of this historic place, the Home Office will consider placing a plaque to mark that spot.
7.23 p.m.
Lord MISHCON: My Lords, in adding to other tributes that have been paid to my noble friend Lord Longford for enabling us to debate this important matter, may I assure the House that at this late hour I have no intention, even if I were capable of doing so, of entering into the theological or philosophical concepts which arise from a discussion of prison reform and the prison crisis. I want to concentrate upon a few points that have already been dealt with by your Lordships in the course of the debate, and I want to try to make them short, interim points on short, interim measures to deal with the current crisis, as it has been so aptly described by my noble friend Lord Longford.
All of us will share in hopes and dreams that there will be found more alternative remedies than we have already thought of, be they the extension of community service orders, be they the extension of other alternatives to imprisonment. The fact is that at the moment the prison system is there, and therefore I want to direct my speech towards some short questions to the Minister arising from the present critical position and the measures that could he adopted fairly quickly in order to relieve an impossible situation which now exists.
First, may I deal with the question of the prison officer, and may I at once disclose an interest, in that I happen to be the senior partner of a firm of solicitors who have been legal advisers to the Prison Officers' Association for very many years. Quite apart from that, it has been mentioned that it would be a most undiplomatic moment—I think the noble and
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learned Lord, Lord Gardiner, said that—at which to discuss the question of prison officers' pay. I do not want to do that. What I want to refer to, and ask the Minister about, is a reference in the report to something which can he done and which arises from the present conditions for prison officers. I refer to paragraph 10.15 on page 239 of the May report. I regard the matter as most important in view of the vital role that prison officers must play in our Prison Service—as one noble Lord after another has said tonight—in connection with both educational and welfare matters; and in the hope that they will take more than a custodial and a security role in the service.
I quote the report as follows:
" The increase in inmate numbers has also exacerbated already cramped conditions for staff, and we have seen for ourselves the difficult and unsuitable circumstances in which many work, often without the standard of recreational and canteen facilities enjoyed in other occupations. However soundly-based the civil service rules governing the provision of such facilities (and the department's interpretation of those rules), these factors have further convinced prison officers that management lacks any real interest in them as people and is unconcerned with the betterment of their working environment ".
There is then a reference to the Scottish Home and Health Department, which is a flattering one to it in regard to the way in which it has improved staff conditions. I shall omit that, and quote as follows:
" It is clear that an essential feature of good industrial relations in the prison service is that not only should management be as concerned for staff as inmates, but that it should be seen to be so ".
I ask the Minister if in his reply he can indicate whether improvements are being considered; what steps are being taken to deal with this very important matter regarding prison officers which has been raised by the report?
Reference has been made to the increase in the prison population. I should like to indicate the seriousness of it—not that anybody has any doubts about the position—and I shall quote from only one set of figures contained in the report, at page 31. Since 1947
" the average daily population has increased by nearly 24· times. The number of remand prisoners "—
a matter that was emphasised by the noble Baroness, Lady Faithfull, in her most interesting contribution—
" has increased more than fourfold: this is partly the result of increases in reception but also partly

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due to the increased average time these prisoners are held on remand ".
I therefore emphasise the point that the noble Baroness made in reference to the one prison that she knows so well—though I am sure that there are other prisons that have also had the benefit of her interest—but I should like, apart from the statistics that she quoted in regard to that one prison, to give your Lordships the overall picture as revealed by this report; namely, that the 1978 population of prisons of 41,796 included 5,631 remand prisoners—a proportion of one-eighth of the total population. While realising that it is not the reponsibility of the Minister who will graciously be replying to this debate to see that trials are speeded up and that remands are very considerably shortened—it is certainly not part of his responsibility, as I understand it, outside the magistrates' courts—may I plead with him that he, together with the noble and learned Lord the Lord Chancellor, should, as was said earlier in this debate, consider it as a matter of prime importance that at least that part of the population of our prisons is decreased very considerably?
My Lords, I do not want to repeat things that have been said by other people, but I should like if I may to refer for a moment to that other element within our prison population which, if I may say so, is an absolute scandal—that is, the presence within the population in the prisons of the mentally disordered, to which reference has already been made. It has been said, and absolutely correctly, that this House dealt with the interim report, and indeed the final report, of the Butler Committee on Abnormal Offenders when there was a Motion before this House by the noble Lord, Lord Allen of Abbeydale. My Lords, a firm recommendation was made in that interim report, as long ago as July 1974, that there should be set up regional secure units in the 14 health authorities that would be capable of accommodating, among others, disordered offenders in prison. It was interesting that, following upon our other debate, the Department of Health and Social Security, in giving evidence to this inquiry, said that there were at present plans to provide 1,000 places in what are now termed (in the usual way that we do these things) RSUs in programmes which were expected to be completed in 1985.
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My Lords, the report also comments on the fact that there were very few regional health authorities which had set up interim units. May I ask the Minister how many such units have been set up? And, realising the problems that there are, both with planning permissions and with procuring the right staff, what is the policy of the Government in regard to carrying out the recommendations of the Butler interim report in 1974? How far are we going to get with those recommendations over the next year? Is there anything in the Government's plans over the next year to deal with what is a scandalous situation quite apart from its effect on the prison population and the disturbances caused in prisons as a result of these poor people being where obviously they ought not to be?
My Lords, there is plainly a part for the National Health Service to play in this. It has been said—it is quoted in the report—that the National Health Service has failed in its obligations in this regard. Has the Minister, from his or his right honourable friend's discussions with those responsible for the National Health Service, any constructive plans to offer in this connection?
7.35 p.m.
Baroness MACLEOD of BORVE: My Lords, I am very pleased indeed to be able to follow the most eloquent speech of the noble Lord, Lord Mishcon. He speaks so eloquently on so many subjects that it is indeed a privilege to follow him this evening. I am also grateful to the noble Earl, Lord Longford, for introducing the May Report to us, even at this late hour at which I am on my feet. I should also like to pay a very great tribute to the chairman of the committee, Mr. Justice May. I have the privilege of knowing him fairly well, as one of the reasons I am able to speak tonight—and I shall be only a very short time—is that I am, and have been for the last two years, a member of the Parole Board, apart from the fact that I have also been, for 25 years, a magistrate. I am inhibited tonight in speaking at all after the noble Lord, Lord Hunt, who was the first and very worthy chairman of the Parole Board, but it is in the context of my membership of the Parole Board and of the dossiers that I am able to read more or less fortnightly that I have gained some knowledge of the prisoners' views of problems

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within the prisons, and can perhaps make a very short contribution to the debate on this very important report.
My Lords, as everybody will know, there are 117 prisons, including borstals and detention centres; but I think that what is important to our deliberations tonight is the fact that 40 per cent. of prisoners are sent to prison for terms of under six months. Perhaps it is that population that we should be turning our minds to this evening, because in Chapter Three it says:
"Every effort should be made to reduce the population in prisons".
I am sure we would all agree with that. The noble Lord, Lord Soper, has suggested that alcoholism is a very big contributing factor to people being in prison. I should like to add the mentally disordered, to whom other people have alluded, and I would also add a third group, which has come through the dossiers I have read, and that is those who suffer from epilepsy. It is perhaps not quite so widely realised that epilepsy can lead to spasmodic violence, and violence is one of the causes of people being imprisoned almost (shall I say?) forthwith.
Bearing in mind these three conditions—mental disorder, epilepsy and alcoholism—I should like to suggest that it might be possible, before the magistrates send a prisoner to the Crown Court for sentence (or even, indeed, before they themselves send a prisoner to prison) they should be asked by the Home Office to have a medical report on the prisoner concerned. Of course, alcoholism and the treatment of it are not by any means as easy to deal with as the other two conditions, because as far as I know alcoholics are not always amenable to treatment. One reads in the dossiers of those who will join Alcoholics Anonymous with every good will in the world and with every good wish for their survival outside, but who, directly they get outside, even if it is part of their parole licence that they should not drink, are likely to go overboard and celebrate their coming out of prison with a drink, and it starts again.
Voluntary effort has been alluded to in the report, and I feel that this would he enormously helpful within the local confine of a prison. As I happen to know from my work in another sphere, there are so
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many people of goodwill who, I am sure, would he prepared to help certainly the alcoholics in the problems that they have.
Although I am told on reliable authority that 40 per cent. are sentences of six months and less, that leaves 60 per cent. who are in prisons of all kinds—prisons which are run on very good lines and prisons (as we have heard tonight) which are antiquated, early Victorian and have nothing at all to commend them. These hardened prisoners, the hardened criminals, the recidivists, are sent to some of these prisons. As I have said so often in this House, as a magistrate I have always felt the public must be protected from people like armed robbers, arsonists and murderers; but I should like to allay the fear of anyone who thinks that people are not educated in prison. Of course, education cannot be undertaken in every prison; but it is possible. What is not possible is to persuade some of the prisoners that they need to be educated. It is not always possible even to persuade prisoners that they should be able to read and write.
I was interested to read, at least a year ago, of a probation officer who wrote:
" Snooks was glad to have been imprisoned, the reason being that it has afforded him educational opportunities and the encouragement to improve his knowledge which, sadly, he had never had outside. He has gained two City and Guilds certificates on the vocational training course in engineering; he is doing a correspondence course in navigation and is also studying photography ".
I know that prisoners also can study bricklaying, radio and television, painting and decorating, GCE courses (and can take examinations in that) and can also study at the Open University.
But we have a long way to go; and the people who are primarily responsible within our prison walls are, of course, the prison staff. Other noble Lords have warned us that we should not discuss the prison staff tonight; but I should like to say that I think that it was perhaps unfortunate that the May Report came out with a recommendation of a 6 per cent. increase. That does not give the true picture whereby, being civil servants, the prison staff start this year with a 22 per cent. increase, added to which there might be possibly a 6 per cent. one or perhaps even more.
I should like to pay my tribute to the prison staff for their dedication to the

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people in their care. The staff themselves have almost doubled in the last 15 years and from my experience of them I have come to feel that prison staff are certainly born and not made. They have a sense of duty and loyalty. Their working conditions have been alluded to in the May Report. I am sure that the Government will do everything in their power to make their quarters up to date and their working conditions as good as it is possible for them to be. It was very interesting to me to read of the prison officers' desire to extend their roles with a wider range of duties. This seems to me to mean that they want to help their prisoners even more than they have done before. It cannot be easy to have strict discipline while at the same time being almost a friend, and perhaps even a welfare officer, to the prisoners within their wing. I should like to say how much those of us who have to deal with the various reports rely on the wing officer's report. The May Report is vitally important for the future of prisons, the staff and the inmates. Much needs to be done in the light of the report. Like other noble Lords, I await to hear from my noble friend Lord Belstead of what the Government have in mind.
7.44 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I should like to follow the noble Baroness in a number of things that she has said. I am particularly interested in epilepsy and crime. I think we do have a number of successes through education and I entirely agree with her about the dedication of many people within the prison officer service. But if I am going to get through the three points that I particularly want to make in reasonable time, I do not think I can follow the noble Baroness on those matters. I begin by saying that Sir John May said that he hoped that the report would stimulate the kind of public debate that we think desirable. Closed institutions, above all, require open, well-informed discussion. I had the honour to chair just such a discussion last Friday. It was organised by NACRO. of which I am proud to be president, and Sir John May, Mr. Dennis Trevelyan, head of the Prison Department, and Dr. Roy King, from University College North Wales, were the speakers. Mr. Trevelyan praised the report; while
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Dr. King attacked it root and branch. On balance, I think that Dr. King had the better of the argument, but not by any means easily.
The report is constructive and sound in its condemnation of prison conditions, both of prisoners and of staff, and in its amazed recognition of the appalling treatment or remand prisoners are who caged up for a month and then, in many cases, found not guilty or fined; so they are more severely punished before the verdict than most short-term prisoners after the verdict. Nearly every noble Lord who has spoken referred to this point. It is probably the worst thing in our system. The report slips a bit in its attitude to what I think important: visits, letter censorship and the use of the telephone. But it is sound on work, on education, on the length of sentences, and, above all, on independent inspection which I think extremely important. It was not swayed by Home Office arguments to give up its point there.
Its description of the building needs of the Prison Service, I find convincing; although disputed by Dr. King. I am clear in my mind that, even if we are able to do what I believe we ought and could do—which is to reduce the prison population by 10,000 and the number of prisons to, say, 100—we should still need to spend large sums to bring the remaining buildings up to standard. Dr. King, I thought, was unfair in his accusation that the Home Office is only interested in pouring money into the estate; but I think the report failed to do justice to Dr. King's argument for the redistribution of population among existing prisons. This is my first and most important point. If I may follow his criticism in my own words, the first and most important problem in penal affairs is to stop sending people to prison who need not be sent there. This is something to which most noble Lords referred. Out of the latest figures from the Home Office research unit in the South of England, we learn that 30 per cent. of the offenders are petty offenders, 21 per cent. are mentally disturbed, and one-third of the 42,000 they believed to be divertible from prison. Obviously, there are enormous difficulties in doing this. My complaint about the May Report is that it was very weak on this side of it. The prerequisite for any prison planning must be the reduction of the

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population in this way down to, say, 10,000 and 100 prisons, if and when necessary. I will say something later on about how this can be done—the clue to which, curiously enough, is at the bottom of one paragraph in this report.
The second point is to give more weight to maintaining family ties than to training. Imprisonment is a disaster in anyone's life but family visiting is its main mitigation. It is more important to confine men near their homes than to try to rehabilitate them, because you will not rehabilitate them if you take away the one link they have which really means something. This means reviewing the whole layout of prisons throughout the country. At the moment, training prisons are not overcrowded, some indeed are under-used, and conditions are good. Yet, local prisons are grossly overcrowded and the conditions are appalling, as the noble Baroness, Lady Faithfull, made only too clear.
As training meets with a minimum visible success, there seems no reason to punish one lot of people by viciously bad conditions, while looking after another lot by good conditions which produce no important results. Without adopting the full King-Morgan plan of abolishing 21 training prisons in favour of better local ones, it must be right to effect some changes in this direction. I confess that I think that the report missed a major chance in not accepting some part of this recommendation.
I will not go into the argument about humane containment versus positive custody. Both conceptions are undefined and one cannot discuss them without clear and precise definitions. No doubt the average citizen in Thailand would consider humane containment to be given to the 50 or so men condemned to death whom I saw seven years ago contentedly playing cards in their fetters. But I do not think that we should quarrel about this. Clearly, every prison should meet a minimum standard of humane containment which the overcrowding, the lack of occupation, the long periods locked up and the sanitary arrangements in most local prisons do not meet. The report is strong on all these points.
Over and above this, surely there can he no doubt that facilities for individual
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development of all kinds, of the kinds the noble Baroness has been speaking about—educational and recreational—should be freely available, and the admitted desire of staff to do more than just enforce custody should be encouraged. This does not justify the present distribution of good and bad conditions, if I may so put it, whereby the longer-term prisons are well treated and the shorter-term are badly treated. I most earnestly ask the Minister to study the King-Morgan evidence to the May Committee on this point. Some change of attitude, and hence some change of planning, is overdue here. The May Report took far too little notice of the new and original suggestions in that evidence.
May I turn now to the crucial point. No report on prisons can be anything but tinkering which does not at least attempt to deal with the main problem, on which we all agree, that there are far too many people in prison who should not be there. This is not the point that overcrowding is bad; it is the point that, if you do not need it, prison is bad. Home Secretary after Home Secretary has agreed with this. I and my colleagues, as the noble and learned Lord, Lord Gardiner, said, have been saying so for well over 20 years. Yet nothing happens. There are of course real difficulties: the public desire for crime to be punished cannot be ignored, nor can the judiciary's determination to maintain its freedom of action.
This brings me to the one really encouraging paragraph in the May Report, isolated among some particularly weak and hesitant paragraphs concerning action on parole, alternatives to prison and executive action generally. Paragraph 3.58, on page 56 of the report, has the following two sentences on flexible remission:
" In addition, of all the possibilities, it is schemes of flexible remission which are the most nakedly linked to prison population levels and, accordingly, the least reflective of what it was the court on individual merits thought appropriate. Such objections might be reduced, however, by devices like putting to Parliament in annual debate the decision on the appropriate remission rate for a 12 month period ".
The suggestion is put baldly—and it is not put baldly in the report—that Parliament should decide each year what size of the prison population was tolerable, and should reduce all sentences by the proportion necessary to produce that figure. Thus if the prison population is 42,000 and

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it was thought desirable to reduce it by 10 per cent., an overall reduction in all the sentences of the necessary percentage would be enforced from a certain date. This could be done year by year, each time bringing the population down as required. The precise figure would not be difficult to calculate. The judiciary would behave as usual and would not know what reduction in their sentences would be imposed and so should have no temptation to increase their sentences to allow for it. The public would hardly notice it as sentences would remain stern and the speed at which Parliament decided to reduce the population should not of course be too fast. Meanwhile, the other things which we all think ought to be done like the alternatives, like the amnesties, like the parole, like the week-ends, could be worked out; and, in due course, they would be effective. There is not time to discuss this fully. But at last a serious suggestion has been made—however pipingly—in a major report which contains the seeds of a solution to our age-long prison problems. We could thus really approach our first target of reducing the population by 10,000 and closing anything over the hundred prisons, leaving a hundred to be properly reconditioned and maintained over a period.
My Lords, I am going to stop after I have made two small points. I cannot agree with the right reverend Prelate; I do agree with the noble and learned Lord about boards of visitors. I was chairman of a board of visitors for over 10 years and I think that it is totally wrong to try and combine getting the confidence of the inmate and the staff with adjudications. I do not think it is a starter. May I say one last thing: this report is not really very well written. I think it is a great pity that a report as important as this should violate so often the rules which we laid down the other night in our debate on the English language. My Lords, I should like to speak for hours but I will stop now.
7.57 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, this is the first time that either House of Parliament has had the opportunity to debate the report of the May Committee
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since its publication. This debate is of great value in assessing the recommendations of the report of Sir John May's committee because all your Lordships who have come to the House to speak today have a personal commitment and knowledge of the subject about which we have been talking. In addition to that, I am grateful to the noble Earl, Lord Longford, who has once again done a service to your Lordships' House by quickly raising the subject of the Prison Service. The reason I say this is because this debate reminds us of the vital importance of the prison system, an importance which is constantly stressed throughout the report. In some ways—and this has come clearly through this debate—the report paints a sombre picture of the prison system, pointing to overcrowding, problems of control and the physical decay of some prisons with the associated poor working conditions for staff. Yet, as the committee has forcefully pointed out, everything is by no means black. The Prison Service has in the past 10 years had to cope with all these problems and many more. But it has coped and, not only that, it has done a great deal to maintain civilised and humane régimes in the prisons.
I mean by that that the Prison Service has in the past 10 to 15 years carried through a really extraordinary modernisation and expansion of prison industries, positive developments in education—although I know that may of your Lordships would like to see further progress in this direction and the introduction of parole, and of course the service has meanwhile maintained control of an increasing number of dangerous prisoners.
The May Committee recognised these things and paid a justified tribute to the staffs of the Prison Service. It cannot be said too often—and I repeat it now—that the service has much of which it can be proud; but no one can read the report and no one could have listened to this debate without being able to understand the magnitude of the difficulties which undoubtedly face us. Nonetheless, I think one of the great advantages of the report is that it gives us a chance to do something about these difficulties.
Of course the committee has not provided us, and it did not claim to have done so, with a magic formula to solve all our

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problems. I would suggest to the House that there is no such formula. It is going to take a great deal of hard work and goodwill on the part of all concerned. But May has given us an opportunity to work for a better future and I think it was very important that the committee should have reported as it did, after an enormous amount of hard work, in under a year. The report was made, I can say to the noble and learned Lord, Lord Gardiner, on 28th September.
The noble Earl said in his speech that it should have been possible last year for the previous Government to set up a limited inquiry into pay and conditions. I must say that I do not accept that assertion. The May Committee argues convincingly that the deterioration of industrial relations in the Prison Service has been a symptom of more fundamental problems, and for that reason alone I think it was terribly important that the previous Government should have taken the view that the terms of reference should be wide.
The committee saw one of the first priorities as being to restore confidence and to improve morale and, to this end, proposed a major reorganisation of the Prison Department within the Home Office, designed to raise the standing of the Department and to enhance the unity and identity of the service. The Home Secretary has welcomed these objectives, and work is now proceeding on those recommendations as a matter of urgency. I realise that the noble Earl has taken a deep interest in this particular aspect of the Prison Service, and I should like to assure him, together with the noble Lord, Lord Hunt, that changes in management and organisation will result from our consideration of the report.
In this context, there is one decision which the Home Secretary is convinced it is now right to take. The noble Earl, I know, has previously argued that a weakness of the present structure of the Home Office is that the Director General of the Prison Service is not responsible or accountable for the conditions of service of his own staff. May takes the same view. Therefore it is clear to my right honourable friend that the functions now performed by the division in the Home Office Establishment Department
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concerned with prison service grades should in future he exercised within the reorganised Prison Department.
As I have said, the other organisational proposals made by the committee on the structure of the Prisons Board, the regions and the inspectorate—a matter which I very much take to heart—about which noble Lords have spoken this evening, are under consideration. We are not committed to the May scheme; we are committed, after discussions with those involved, to trying to get matters right. I do assure your Lordships that it is not just a form of words when I say that we shall announce decisions on these matters, as soon as possible, having taken seriously into account what has been said by your Lordships in this House.
I would particularly draw attention to the report's conclusion: that the Prison Service cannot, any more than any other part of government, be insulated from the need to be accountable to Parliament and public. Thus it is that the report recommends the continuation of the Home Secretary's final responsibility for the service to Parliament. I must say I personally think that this is essential. I find it hard to be persuaded by the noble Lord, Lord Foot, to whom I must say I listened with the very greatest interest, that in some way an independent commission would be able to adjust penal policy to prison capacity, attractive though that sounds. It occurs to me that such a policy would encroach upon the independence of the judiciary— an independence which after all is vital to our freedom—and I doubt whether a policy of that kind would he acceptable to Parliament and public.
Nonetheless, having said that, we were then brought back to this subject head-on by the speech of the noble Lord, Lord Donaldson, who, by referring to the report, drew the attention of your Lordships to the practical importance, as he saw it, of the proposals for reduced or remitted sentences. If the noble Lord will forgive me, I would rather not try to answer him across the Floor of the House this evening but, if I feel I can add anything, I should prefer to write to him after the debate.
Also in connection with this area, may I say that I do understand that those

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involved in the day-to-day problems of running so diverse and complex a service as the Prison Service may sometimes feel that their problems and their objectives are not sufficiently understood. The noble and learned Lord, Lord Gardiner, has gone further and laid the very great difficulties which have been faced by the service at the door of the Home Office. If he will forgive me, I believe this criticism is not fair, but I accept that what is needed on the part of all involved in the Prison Service is a greater understanding of each other's problems.
The May Committee has emphasised that ultimately the problems of the Prison Service are the responsibility of the service. I believe that means that leadership is needed by giving not just directions, but direction, to the tasks of the service—something which I understood the noble Lord, Lord Hunt, to be saying to the House—and that a response is called for from members of staff at all levels, because together all members of the Prisons Service are facing very great problems indeed.
The May Committee were quite clear that the prison population is too large. My noble friend Lady Macleod reminded us in her speech that there are violent offenders who really can only be sent to prison. So, in the words of the committee,
" we shall have to support for the foreseeable future a substantial penal population ".
I agree with the tenor of what many speakers have said, that that does not absolve us from the obligation to continue to seek ways of reducing it. We accept unreservedly what the committee say in this respect. We do so with realism because, at a time when the proportionate use of imprisonment has declined over the last 25 years, the scope for creating further non-custodial alternatives may become the more limited. But there is, surely, hope. The committee endorsed the view that shorter sentences would be appropriate in many cases, and so added weight to what I believe, and what I have certainly taken away as being the feeling of this debate, is a growing body of opinion. Their recommendations on this matter were welcomed by my right honourable friend in another place and I know he is determined to try to make progress on this issue.
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Similarly, the Government have welcomed the committee's firm recommendation that mentally disturbed offenders falling under the terms of the Mental Health Act should be transferred to hospital, where they belong. I agree that is where they belong. Although my right honourable friend the Secretary of State for Social Services is continuing to press the health authorities to make proper provision for these offenders, we should recognise—and I would just inject this into the discussion—that the transfer of mentally disordered offenders would take only some 200 or 300 people out of the prison system. None the less, I agree with the noble Lord, Lord Mishcon, the noble Baroness, Lady Faithfull, and other speakers that it would bring a great deal of relief to the staff of prisons for whom such prisoners pose problems of control out of all proportion to their numbers, and that above all to do something in this respect would be right. The noble Lord, Lord Mishcon, asked me the direct question: What is actually being done? The information I can give him this evening—and I should have to write to him to give him more—is that 11 out of the 14 regional health authorities have now submitted plans for the setting up of regional secure units.
Lord MISHCON: My Lords, the noble Lord has been so gracious in dealing with the comments which I and others have made that I hesitate to interrupt him. However, I am wondering about the accuracy of his figures, only because I took the trouble—this is also referred to in the report—to see what were the figures given by the prison medical services on 31st December 1978 as to the content in the prison population of those who were mentally disturbed. I believe that this is reported in the Official Report of the Commons on 12th June 1979 at cols. 162 to 168. The figures are 519 such persons on that date, of whom 389 were sentenced.
Lord BELSTEAD: My Lords, I must admit that I have a feeling that the noble Lord is right. Having to reply to him immediately across the Floor of the House, certainly I am not going to contradict him and say that my figures are right and his are wrong. I wonder Whether the House would accept it from

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me that in this matter I believe I may be mistaken and that in order to put it right, if I am wrong, I shall most certainly write to the noble Lord so that the figures are on record in that way.
Speaking of reducing the prison population, emphasis has also been placed by the May Committee as well as by your Lordships on the need to redirect more offenders away from prison and towards non-custodial penalties. All I would say on that this evening, because of the confines of time, is that the Government are committed to the development of non-custodial penalties, so far as possible, and that we are trying to show the honesty of our intentions by the support which we are giving to the work of the Probation Service.
Reducing numbers would go some way towards alleviating our immediate problems. As the committee have said, and said forcefully, one of our greatest problems is the condition of the prison estate. To quote the report, the worst prisons are very bad indeed. The right referend prelate the Bishop of Rochester and my noble friend Lady Faithfull provided the answer to this: that in the past, Governments have given too low a priority to the prison system in the allocation of resources. This is not a political point. In its way, this reflects society's view of prisons. The committee noted without much surprise that public interest in the penal system has been fitful. In these circumstances, it is understandable—although I know it is not excusable—that the prison system has been undercapitalised. But we now have a worthwhile capital programme designed to bring into operation one prison in each of the next five years.
I say openly to the noble Lord, Lord Soper, that if we are to achieve the targets set by the May Committee—the elimination of enforced cell-sharing and the introduction of integral sanitation—we shall need more resources. In the present economic and financial climate, with many competing claims, this is not going to be easy, but the Government are committed to supporting and improving the prison system. We shall seek to ensure that prisons receive that share of our resources which fairly reflects their importance to our national life.
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I reply, if I may, to the noble Lord, Lord Mishcon, who quoted paragraph 10.15 of the report: that what I am saying about the capital spending on prisons applies not only to the building programme recommended by the May Committee but also to their proposals for improvements in facilities and amenities for staff. It is sometimes forgotten—although the noble Lord very much reminded us this evening—by those with a legitimate interest in the welfare of prisoners that staff, too, have to spend much of their lives in and close to prisons. The May Committee quite rightly laid stress on the importance of providing properly for staff, and we shall be giving this issue the priority that it deserves.
Tackling these problems, if we can—the size of the prison population and the physical condition of the prison estate—will make it easier for us to ensure that we can maintain and improve the kind of constructive regime towards which we are always aiming. We no longer entertain the kind of exaggerated expectations relating to the rehabilitative value of imprisonment which were current even a short time ago. To that extent I meet the case which was put so powerfully by the noble Earl. However, as the committee said, that does not mean that we should be tempted to abandon all attempts to be positive and just fall back on what is sometimes called "humane containment".
To do everything that we should like would require fewer prisoners, better buildings and more staff. In this context, I am pleased to report that recruitment is improving. Moreover, the diversity of the prison system militates against general prescriptions. Positive custody will mean different things in overcrowded local prisons, or borstals, or dispersal prisons, or open prisons. Nevertheless—and this is my answer to the right reverend Prelate the Bishop of Rochester about our attitude to the committee's rewording of Rule 1—the Government will heed the committee's injunction to redouble our efforts to ensure that every prisoner has at least the chance to use his or her time constructively, and that the staff have the opportunity to extend their role in a positive manner.
If your Lordships would forgive me for just a second, I should like to say this, because many of your Lordships have spoken personally. In the short time

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that I have been working at the Home Office, I remember very well one evening reading the umpteenth parole case. In it, I suddenly realised that there was a report by one of those whom my noble friend Lady Macleod of Borve called "wing prison officers" on a particular offender who was seeking parole. As I read that report I realised that, although the report was analytical and accurate, the officer could not conceal from the reader his genuine concern about the future of the prisoner about whom he was writing. I am bound to say to your Lordships that there is a lot of scope for increased welfare work, if I may put it broadly, by members of the Prison Service.
Before I come to the end of my remarks, may I turn to two points about which I was asked. In her speech, my noble friend Lady Faithfull gave details of the overcrowding at Oxford Prison. My noble friend may like to know that Reading Prison is about to take up the function of a local prison. This has been planned for some months. I had the opportunity to visit that prison some months ago and the staff at Reading were training at the time so that they would be ready to take up this new function. I very much hope that this move will be a real help towards alleviating the overcrowding at Oxford.
The other point I should like to take up is the one which was put to me by many of your Lordships, about the desirability of what the committee called "openness in the Prison Service". I think it is sometimes underestimated how much in recent years the prison system has been opened in some ways. For example, agreement was reached recently with the BBC on a major study of life in a prison—not dissimilar to that which was carried out for the Royal Navy some time ago. In addition to this, the new Select Committee on Home Affairs in another place will doubtless be interesting itself in the Prison Service. All that falls into this category, and I think it is desirable.
I am convinced that there is a great deal to gain from increasing public understanding of prisons. That is why we shall pay heed to the May Committee's suggestion for greater openness. The committee made a number of proposals as to how we might meet that objective: for example more positive public relations, a more open
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management style, greater involvement of local communities—about which the right reverend Prelate the Bishop of Rochester made many interesting suggestions—non-executive directors, if I may put it that way, on the Prisons Board and a more independent inspectorate. We shall genuinely be looking at these points in the immediate future.
Lord SOPER: My Lords, may I presume to interrupt the Minister before he sits down because I asked a specific question about the funding under 21.73 of hostels dealing with alcoholics. The arrangement has been that such funding will end in March of next year. May I ask whether the Government will be prepared to reconsider that in the light of the very serious position it will raise in the next two years before we have opportunities, if the Government continue to press that point, of making alternative arrangements?
Lord BELSTEAD: My Lords, since the noble Lord spoke I have been in touch with the Department of Health and Social Security, and the answer that I should like to give to the noble Lord is that this was indeed an option which the Department felt had to be considered. No decision has been taken and the terms of what the noble Lord has said are being drawn immediately to the attention of my right honourable friend the Secretary of State for Health and Social Security.
May I finally just turn to the question of industrial relations. The Committee argued, as I said when I began to speak, that the deterioration in industrial relations in the Prison Service was symptomatic of more fundamental problems of the kind which we have been discussing today. It also reflected changes in attitudes to industrial relations in society generally. If that analysis is correct—and I am sure it is—a lasting improvement in industrial relations can only be achieved by tackling those problems and by changes in the attitudes of all concerned. I like to think that the Government have shown an absolutely straightforward attitude on their part to the importance of pay, by my right honourable friend's immediate acceptance of all the committee's recommendations on pay and allowances. I accept that some in the service are disappointed by the size of the increment recommended

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by the committee on the third stage of the general Civil Service pay settlement, but it would be a tragedy if concentration on questions of pay were allowed to blind us to the real chance we now have to create a better deal for the Prison Service.
I think perhaps there has grown up a certain cynicism about reports of this kind, to which the noble and learned Lord, Lord Gardiner, drew attention in his speech. Committees are established (so the story goes) to buy time until a difficult but possibly temporary problem blows over. Reports which are unwelcome or uncomfortable are simply shelved or pigeonholed. I really do not think that either of those things applies in this case. In Opposition we welcomed the establishment of the May Committee, and in Government we have no intention of shelving the report. The Home Secretary is determined that we shall make progress on the basis of the report. The May Report is typical of the age in which we live: it is realistic, it eschews rhetoric, because rhetoric solves nothing; but if, as the right reverend Prelate says, this is not a Gladstone Report for the present day, what is it? In my view it has indicated the directions in which the Prison Service should go in two main ways: the recommendations on positive custody, Home Office organisation, the building programme, the prison population and many others are significant contributions to our thinking on future strategy.
But secondly, and potentially even more valuable, the report challenges all of us involved in the Prison Service to take the initiative in solving our problems. It challenges us to improve the quality of management at all levels; to increase public understanding of the prison system; to end the scandal of the physical conditions to which many of our prisons have sunk. In this sense, too, I do not think the committee would be unduly worried if we did not accept to the letter everything that they recommended. They did not claim a monopoly of wisdom, any more than do the Government. If I have read the report correctly it is more important to the committee that we get on with the job in hand—and that, my Lords, the Government intend to do.

CITY OF LONDON (VARIOUS POWERS) BILL
Reported from the Select Committee without amendment, and recommitted to an Unopposed Bill Committee.
FELIXSTOWE DOCK AND RAILWAY BILL
Returned from the Commons with the amendments agreed to.