Lords Sitting of 12 July 1979

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Exeter.)
THE LORD CHANCELLOR On the Woolsack.
The Lord Sackville—Took the Oath.
The Lord James of Rusholme—Took the Oath.

CONTINENTAL SHELF: EXPLORATION AREAS
The Earl of LAUDERDALE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they propose to make more of the United Kingdom Continental Shelf available for licensed exploration.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the House will know, from an Answer I gave the noble Earl on 10th July, that Her Majesty's Government are presently reviewing licensing policy. It is the Government's objective to restore the momentum of exploration activity on the United Kingdom Continental Shelf, and to this end they aim to complete their review and prepare for further licensing as soon as possible.
The Earl of LAUDERDALE: My Lords, I thank my noble friend for that encouraging and informative reply. May I ask him whether he is aware that, from the first round to the fourth round inclusive, blocks were offered at the rate of more than 200 a year; in Round 5 it was 70-odd and in Round 6 I think it was only 46. Therefore, will he ask his right honourable friend to bear in mind the desirability of raising the number of blocks issued and also the frequency of the offerings?
The Earl of GOWRIE: My Lords, the Government are aware of this problem, and if my noble friend will do me the kindness of consulting my speech in the energy debate of the noble Lord, Lord Strabolgi, he will see that we are anxious to keep up the momentum.
Lord BALOGH: My Lords, is the Minister aware of the fact that there are ample opportunities after the retrocession of licences from the big fourth round? Is he further aware that one ought to pay some attention to conservation? Finally, is he aware that the year 1977, to which some noble Lords are referring, was an exceptional year, because of the retrocession and the culmination of obligatory wells?
The Earl of GOWRIE: My Lords, the Government are certainly aware that oil is an asset which is increasing in value year by year.
Lord DAVIES of LEEK: My Lords, will the noble Earl please bear in mind that these assets of oil, if they become assets, should not be handed out willy-nilly like cockle-finders on Cardigan Bay, but should be distributed with care for the benefit of the nation as a whole?
The Earl of GOWRIE: My Lords, I hope that the cockle-finders on Cardigan Bay are aware of the immense amount of consultations and procedures that go on over the sixth round.
Lord AVEBURY: My Lords, have the Government considered that, if we make an exploration and hence discovery is speeded up, instead of being self-sufficient for the whole of the 1980s we shall have a large surplus of oil which will need to be exported? This will hasten the day when we have to return to the world market to purchase supplies of oil, at a time when the supplies available from the rest of the world will already have decreased to a very low level, and hence we shall be at the mercy of the producers in the late 1980s and early 1990s.
The Earl of GOWRIE: My Lords, it is to this end that we are looking at energy questions as a whole, not neglecting, as I pointed out to the House yesterday, issues connected with gas and, of course, the importance of the coal industry.
The Earl of LAUDERDALE: My Lords, would my noble friend ask his right honourable friend to bear in mind that, inasmuch as oil discovered is an appreciating asset, there is no necessary contradiction between the need for conservation policies on the one hand, and the widest possible exploration on the other?
The Earl of GOWRIE: My Lords, I certainly agree that one needs incentives in order to explore the seabed, so as to find out what assets one has.
Lord CLIFFORD of CHUDLEIGH: My Lords, has the noble Earl any more up to date information about the oil in the Western Approaches, and about what exploration is going on there?
The Earl of GOWRIE: My Lords, if the noble Lord will give me notice, I will try to answer that question.

CONTINENTAL SHELF: EXPLORATION LICENCES
3.5 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many conditional awards of licences to explore the United Kingdom Continental Shelf were granted in Round 6 and how many still remain unconfirmed.
The Earl of GOWRIE: My Lords, the conditional award of 42 blocks was announced by the previous Administration on 26th March. None of these awards has yet been confirmed, but good progress is being made in the negotiations to settle the joint operating agreement and work programmes.
The Earl of LAUDERDALE: My Lords, while thanking my noble friend for that reply, may I ask him whether he is aware that up to about a month ago some oil companies were complaining that in their negotiations to settle the exploration terms, the BNOC was still insisting
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on provisions in the agreements made out of date by this Government's own policy changes, and that that was itself hindering some of the agreements?
The Earl of GOWRIE: My Lords, the joint operating agreements are being negotiated on the basis of guidelines published by the previous Administration, but with one significant exception—and I think that this answers my noble friend's point. The stipulation that the BNOC should have the first option on any proposed assignment of interest is now to be omitted from the agreements, in accordance with the change in assignment policy announced by my right honourable friend on 14th June.
Lord STRABOLGI: My Lords, will the noble Earl confirm that the present arrangements will include the 51 per cent. participation agreement?
The Earl of GOWRIE: My Lords, I can neither confirm nor deny that.
Several noble Lords: Why not?
The Earl of LAUDERDALE: My Lords, is my noble friend aware that his last reply gives great solace and comfort?

LOCAL RADIO FRANCHISES
3.7 p.m.
Lord LOVELL-DAVIS: 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 will ensure that, in awarding franchises for the new local commercial radio stations, the Independent Broadcasting Authority will consider favourably only such applicant groups as consist wholly of local or regional representatives.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the award of independent local radio franchises is, under Section 2 of the Independent Broadcasting Authority Act 1973, the responsibility of the Independent Broadcasting Authority. I understand that the Authority already expects to see

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significant elements of local ownership and knowledge in the composition of applicant groups and companies.
Lord LOVELL-DAVIS: My Lords, while appreciating the position in so far as the Government and the IBA are concerned, may I ask the Minister whether he is satisfied with the present situation, whereby large non-local companies, among them some major Canadian broadcasting organisations owning radio stations in Canada and the United States, hold equity in a number of British independent local radio stations; and does he not consider that this represents something of a threat to the independence and local nature of the stations? Secondly—and here I should declare some interest, in that I would not have been aware of the position had I not been associated with a company intending to be involved in this field—may I ask the Minister whether he would tell the House if he and his right honourable friend the Secretary of State approve of the practice whereby some of these outside companies not only hold equity in the local radio stations, but also act as agents selling national advertising time for the stations, generally on a sole agent basis, from which they earn substantial commissions—that is to say, they are both agents and operators? Should they not be told to be either radio station owners or agents of advertising, but not both?
Lord BELSTEAD: My Lords, I think the noble Lord will know that it is the practice of the Independent Broadcasting Authority to seek substantial information from prospective groups about the local nature of the programmes to be provided, and elements of local ownership and knowledge in the composition of the applicant groups and companies. After that, it is a matter for the Independent Broadcasting Authority to decide to which companies to award the franchises. So far as the noble Lord's second question is concerned, it really is not a matter of my right honourable friend approving or disapproving of the practices which the noble Lord outlined. Giving the franchises is a matter for the Independent Broadcasting Authority.
Lord MURRAY of GRAVESEND: My Lords, was it not intended that on the setting up of independent local stations,
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newspapers would be restricted to 12½ per cent. of the shareholding? It has now reached the stage where some newspaper groups are holding up to 45 per cent. of the voting stock. This is obviously wrong and takes away much of the independence. Is the Minister prepared to do something, either now or in the near future, about the new franchise?
Lord BELSTEAD: My Lords, when the noble Lord says, "Is my right honourable friend going to do something?", he is really asking me whether my right honourable friend will put something into legislation. I must put it to the noble Lord that there may be circumstances either in which no application from a locally owned company is forthcoming or in which an application from a locally owned company may, in the Authority's view, be less satisfactory than another. In those circumstances, and subject to those considerations, my right honourable friend the Home Secretary would see no reason to introduce provisions in his forthcoming Bill to require the Authority to depart from their policy of awarding the franchise to the applicant group which they consider would provide the best service for the locality.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that some of us who are concerned about the quality of life would urge that, before these concessions are made, the local idiosyncracies and the natural environment of an area should be taken into account as a qualifying factor rather than that there should be a foreign importation into areas which we should keep particularly local, since they have their own dialects and their own character?
Lord BELSTEAD: My Lords, I could not agree more with the noble Lord, and I assure him that this is precisely the policy of the Independent Broadcasting Authority.
Lord LOVELL-DAVIS: My Lords, while appreciating what the Minister has said, could I ask him whether he and his right honourable friend the Secretary of State might at least review the situation so far as the state of participation in independent local radio companies is concerned? It was, after all, the noble Lord's Government who established inde-

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pendent local radio, and I wonder whether the present situation is quite in accordance with the spirit in which they intended local radio to be set up.
Lord BELSTEAD: My Lords, I give the noble Lord an undertaking that I shall look with the greatest care at what he has said and that I shall draw the attention of my right honourable friend to what he and other noble Lords have said this afternoon.
Lord AYLESTONE: My Lords, having had some experience in the early days of independent local radio, may I ask the noble Lord whether he is aware that, but for the difficult but nevertheless achievable amount of Canadian money which was put into one of the two London stations, it would never have got on to the air?
Lord BELSTEAD: My Lords, I think that the House will wish to take into account what the noble Lord, with all his experience in this field of the media, has just said in the form of a question to your Lordships' House.

OIL PRODUCTION: EXPORTS
3.13 p.m.
Lord BALOGH: 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 was the tonnage and the percentage of the total crude oil production exported in the month of May 1979 and the dollar value.
The Earl of GOWRIE: My Lords, our preliminary estimate is that about 3·1 million tonnes of North Sea oil was exported in May, amounting to about 49 per cent. of our disposal; that is, oil sent to refineries as against total production. The exact value of these exports is not yet available, but the Department of Energy estimates they were worth about 420 million dollars.
Lord BALOGH: My Lords, I appreciate the noble Earl's Answer, but does not the situation show that insufficient
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flexibility was built into our refineries? Will the present Government follow the previous Government's policy of encouraging this higher flexibility to be achieved by investment?
The Earl of GOWRIE: My Lords, I am all for flexibility, but, as I always have to say at the moment, these things are a matter for review.

BUSINESS OF THE HOUSE
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 43 (No two stages of a Bill to be taken on one day) be dispended with for the purpose of taking the Pensioners' Payments and Social Security Bill through all its remaining stages this day.—(Lord Soames.)
Lord HOUGHTON of SOWERBY: My Lords, I have objected on a previous occasion to a Motion to take all stages of a Bill on the same day without explanation and without justification. If I may say so, in moving this Motion the noble Lord did it just as casually as if he was saying that it is a nice, warm day—which it is! The noble Lord said not a word about the need for suspending our normal procedure for dealing with Bills. He said nothing about the urgency of the matter. Christmas is still a little way away. The noble Lord offered no explanation. I think that we have to watch very carefully casual attempts to override the normal procedure of this House, unless there is a very strong justification for it.
This is not an Irish terrorist Bill which, for the security of the realm, has to come into operation in the next 24 hours. This is an important social security measure which raises questions of expenditure relating to the National Insurance Fund and which also raises a question of principle, in my judgment, because I have commented on a previous occasion on this method of paying out social security benefits. May I ask the noble Lord to be courteous enough to give to the House an explanation of why we have this Motion before us?
Lord SOAMES: My Lords, I am extremely sorry if the noble Lord, Lord Houghton of Sowerby, thinks that I have in any way maltreated the House. Certainly it was not my intention so to do. I was informed—and my experience is limited in this respect, I must say—that this is what has happened regularly year after year after year, and that this is how the matter has been handled. The fact that I dealt with it in this way was because I was advised that this is how it should be dealt with. I assure the noble Lord that I did not intend to treat the House with any over-degree of levity.
The main principle which lies behind this Bill is that there should be a £10 Christmas bonus for old-age pensioners. I am told that, in order for it to go through all the processes which inevitably it has to go through, the matter has to be decided before the House rises for the Summer Recess and that hitherto this has always been done. I think that this is a moderately, at least, non-controversial issue. If, of course, anybody wishes me to do so I can elaborate further upon the point.
I think that the House will be fairly well aware of what the Bill sets out to do, and the reasons for it, although I must add that an extra provision is contained in this year's Bill. This provision removes from the Secretary of State the duty to review the amount of the earnings limit for dependent wives. Apart from that, this is the Bill which, I am led to believe, the House has passed year after year in the same way as I have suggested that the House should pass it today.
On Question, Motion agreed to.

PENSIONERS' PAYMENTS AND SOCIAL SECURITY BILL
3.18 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I beg to move that this Bill be now read a second time. This is a very short Bill which has two quite distinct purposes. The first is to provide a Christmas bonus of £10 for pensioners this year and to provide for bonuses to be paid in subsequent years. The second purpose of the Bill is to freeze for the time being the maximum amount of earnings which a dependent wife of a pensioner can receive before her husband's increase of
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pension for her is affected. I will explain the purpose of this rather more complicated provision in a moment, but let me first deal with the Christmas bonus.
Clause 1 of the Bill provides for this year's payment and Clause 4 enables provision to be made by order for the bonus in each subsequent year. This carries out the commitment in our election Manifesto, where we said:
"the Christmas bonus which the last Conservative Government started in 1972, will continue".
This year, the Christmas bonus will go to over 10 million people, and the Bill sets out the categories of people who will be entitled. They are exactly the same categories of people who received bonuses in the last two years. As before, the Bill extends to Northern Ireland by agreement with the Secretary of State for Northern Ireland. The relevant week for determining entitlement will be the week beginning 3rd December. To qualify for the bonus a person must be present or ordinarily resident in the United Kingdom, or any other Member State of the EEC, at any time during the week beginning 3rd December and also be entitled to payment of a qualifying benefit for at least one day in that week.
Let me remind your Lordships of the people who will qualify. They are those in receipt of a retirement pension; supplementary pension; widow's pension under the national insurance, war pension or industrial injuries scheme; invalidity pension (including non-contributory invalidity pension); attendance allowance or unemployability supplement under the industrial injuries or war pensions schemes. The bonus will also be paid to war disablement pensioners over pension age who are retired or are treated as retired but who are not receiving any of these benefits. A man who is receiving a qualifying benefit with an increase for his wife will, where they are both over pension age, be entitled to a bonus for his wife, as well as for himself. The bonus will be tax free, and will not affect entitlement to other benefits or allowances. As I said before, all this is the same as in recent years. The bonus payments will cost about £108 million.
Your Lordships will no doubt recall that my noble friend Lord Boyd-Carpenter has, during debates on two

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previous Christmas bonus Bills and more recently in the form of a Question for Written Answer, inquired whether all war pensioners will be entitled to the bonus. I think your Lordships will find it helpful if I explain very briefly at this stage that between a third and a half of all war disabled pensioners will in fact be eligible for the bonus and that these include, as well as war disabled retirement pensioners, those whose disablement prevents them from working and a few war disablement pensioners over pension age who are not receiving a retirement pension. Those war disablement pensioners whom the Bill does not cover are, broadly speaking, men and women under pension age whose disablement does not prevent them from working. It is the Government's view that these people fall outside the broad categories of people for whom the bonus was intended.
Clause 4, which gives the Government power to pay the bonus by order in subsequent years, enables the Government to pay a bonus of more than £10 if that is considered appropriate at the time. Your Lordships will see that the Secretary of State is required to have regard to the economic situation in the United Kingdom, the standard of living in the United Kingdom and such other matters as he considers relevant in determining whether a larger sum should be paid. I must make it clear to your Lordships however that the existence of this power in the Bill carries no guarantee of any kind as to when or by how much future Christmas bonuses may be increased. The important thing is that the power will be there, and that we shall not have to have a new Bill each year.
Baroness WOOTTON of ABINGER: My Lords, if the noble Lord will forgive me for interrupting him, I wonder whether he will be good enough to clear up one point on what he has just said? When both members of a married couple are pensioners, a man receives the bonus for his wife as well as the bonus for himself. Why is the bonus not paid to the wife?
Lord LEATHERLAND: My Lords, the wife will get hold of it!
Lord CULLEN of ASHBOURNE: My Lords, I am afraid I cannot answer that
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question, but I will certainly write to the noble Baroness, Lady Wootton, and tell her the answer.
I now turn to Clause 5, which contains the other substantive provision in the Bill. This removes the requirement for automatic annual increases in the level of the dependency earnings test for the wives of invalidity and retirement pensioners, and of disablement pensioners with an unemployability supplement. Some of your Lordships will probably remember that this dependency test is of fairly recent introduction so far as dependent wives are concerned. In 1971, when a previous Conservative Government introduced a number of new benefits for the long-term sick and the disabled, it was decided that a relaxation in the then dependency test would be useful to help the non-working wife of a chronically sick man to take up employment if her domestic circumstances and her husband's condition allowed. The basis chosen for the new test was the retirement pension earnings rule, which at that time was at a quite modest level.
It was convenient to use the existing earnings rule, and so avoid multiplication of tests. But because the rules are the same, there is a risk of confusion here. It may help if I make a point of explanation. First of all, the earnings rule which affects a retirement pensioner as regards his or her own pension has a quite different purpose from the dependency test which determines what benefit a man may receive for his wife. The one is a test of retirement; the other is a test of dependency. Our present proposal affects only the second case—that of dependency. It does not affect the retirement pension earnings rule, which we are committed to phase out in the lifetime of this Parliament.
In 1971, when the dependency increase was £3.70, the earnings rule started to bite at £9.50. That amount was rather less than the earnings a woman could expect from full-time employment. It was also less than the joint pension rate for a man and his wife, which was £9.70 a week. Today, a man can get the full £11.70 increase for his wife if her earnings (net of working expenses) are £45 and a reduced rate of increase if she is earning up to £58.70. It is not really very sensible to treat a woman as dependent on her

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husband, when she is earning substantially more than his total benefit as a married pensioner—which is at present £31.20. The previous Government were unhappy about this, and said so in Parliament. These matters are dealt with in the report on the earnings rule, presented to another place by the former Secretary of State on 24th October 1978.
There is little doubt that the retirement rule, which has been raised dramatically in recent years, has carried up with it the other limit, and that the latter is already substantially higher than could be justified by any test of dependency. Clause 5 allows the Secretary of State to deal with the dependency test outside the automatic uprating provisions, and so to let it find its own level. There is no question of actually decreasing it; but the Bill allows it to be left at its present level, probably until it bears a more rational relationship to the married couple's pension rate.
This change in the law will save some money on benefits. However, we are under an obligation to implement by December 1984 the EEC Directive on equal treatment for men and women in social security. Equal treatment will mean paying married women increases of benefit for their non-earning husbands and for their children. So when it became necessary to have a critical look at the financial implications of implementing the EEC Directive, it seemed right to look equally critically at the payment being made for dependent wives. My Lords, I hope that you would consider this just, and that I have given a sufficiently full explanation of the provisions of the Bill, which I commend to your Lordships. I beg to move that the Bill be now read a second time.
Lord DERWENT: My Lords, before my noble friend sits down, and before the Question is put, may I ask him whether he is aware that what the noble Baroness, Lady Wootton, said is not exact? The sum of £10 for the wife is not paid to the husband; I have been trying for years to get hold of my wife's £10!
Moved, That the Bill be now read 2a.—(Lord Cullen of Ashbourne.)
3.30 p.m.
Lord BANKS: My Lords, I should like to thank the noble Lord, Lord
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Cullen of Ashbourne, for his explanation of this Bill, and to welcome what I believe is his first appearance in debate in his new capacity. We on these Benches welcome the fact that the Bill before us will ensure that the Christmas bonus is put on a permanent basis, that it will not be necessary to have legislation every year; the bonus will be paid every year. I have pressed in this House on previous occasions that that should be done. But I think it is important to state once again that the Christmas bonus, however welcome, is no substitute for an adequate basic pension. It is a little extra at Christmas and as that it is welcome.
We are bound to be concerned that the basic pension in future is to be related to increases in prices only and not to prices or earnings, whichever is the higher. I believe it is true to say that, if that new rule had been in force since 1973, the pension today would be £5 a week less than it is, or £260 per annum. Beside that figure—and a similar situation could occur again—the £10 bonus looks rather puny.
Provision is made in the Bill for an increase in the bonus, as the noble Lord said, but, as he also pointed out, there is no automatic increase each year. I believe that the bonus should be indexed, because if it were to be at its original value when it was first introduced it should now be £24. I think there should not be any further erosion of its value. I hope it is not going to meet with the same fate as the death grant, which should be £130 or more now to retain the original value of the grant established in 1949, yet is only £30. There has been a very considerable fall in value by default over the years. I hope that is not going to apply to the Christmas bonus.
In another place, expense was put forward by Government spokesmen as a reason for not providing for an automatic increase, for not indexing. But the bulk of the £108 million that this provision costs will fall in the National Insurance Fund. That Fund is paying out some £10,000 million a year, and the contributions to that Fund are earnings related; so the Fund should automatically be able to provide for earnings related benefits, including the Christmas bonus.
Turning to the other aspect of the Bill, to Clause 5, the earnings limit for depen-

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dent wives of pensioners, the noble Lord has explained very clearly what is going to happen. The earnings limit for dependent wives is to be held at £45 and not increased to £52 a week along with the earnings limit for pensioners themselves. As the noble Lord pointed out, the earnings rule for pensioners is to be phased out over the lifetime of this Parliament. That is because the Government and their predecessor came round to the view that a test of retirement was not necessary. But it is proposed to keep the earnings rule for wives of pensioners because it is a test of dependency, and to hold it at £45.
I can see that there is a case for keeping a test of dependency for wives under retirement age, but I should like to ask the noble Lord—and I hope he will be in a position to reply to this question when he replies to the debate—what will be the position of wives over retirement age who earn but whose pension depends on their husbands' contributions? Will they be covered in the future by the earnings limit for dependent wives? If so, we on these Benches would be critical of that.
In fact, we question whether a wife's pension should be dependent on her husband's contributions at all. A wife's pension, in our view, should not be related to dependency on the husband. We have been anxious for years to get away from the qualification by contribution record. We all know that contributions do not pay for benefits. The scheme is a pay-as-you-go scheme; the money that comes in is the money that goes out to pay for benefits immediately, not the money that was contributed in the past. We think it would be more sensible to regard the contribution as a social security tax and divorce it from qualification.
In the tax credits scheme which we prepared in April of this year in some detail we provided that all over pension age should get the same pension and that a married couple should get twice the single person's rate. That would remove the anomaly of a married couple getting less than two single persons living under the same roof. That is the direction in which we on these Benches would like to go. It follows from that
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that we are inclined to be hostile to the concept of dependency as a qualification for pension where wives over retirement age are concerned. So we would be critical if, following this Bill, the earnings rule were retained for wives over retirement age. That is why I ask for clarification. That is one of our two reservations about the Bill. As I said earlier, we are critical of the failure to index the Christmas bonus. But, apart from those two reservations, we welcome the Bill.
3.37 p.m.
Baroness LOCKWOOD: My Lords, I should like to thank the noble Lord, Lord Cullen, for the way in which he introduced this Bill. I hope that I will not delay the business of the House too long. As the noble Lord, Lord Soames, said in moving the Motion, this Bill is moderately uncontroversial. Lord Cullen referred to the fact that there were two aspects to the Bill. One is the bonus for pensioners, which I think all of us in the House welcome; we welcome the fact that it will now come to pensioners in their own right without an annual Bill coming before the House, although many noble Lords would hope that in terms of value it can keep up with rising costs. However, the noble Lord then went on to indicate that there was a second aspect to the Bill, and it is to that that I should like to direct my remarks. I am referring, of course, to Clause 5 of the Bill, which has the purpose of freezing the earnings limit for dependents.
I should like to record my welcome to the fact that, as the noble Lord indicated, there is a long-term implication; as I understand it, the savings which will be derived from the freezing of the earnings limit for dependents will be used to finance what we hope will be a further Bill. I understood from the statement of the Secretary of State in another place that we could expect a Bill on this matter in this Session of Parliament. I would say how much I welcome that statement. I welcome the fact that the Government are taking such an early initiative to implement the EEC Directive on equality of treatment for men and women in social security. I underline my welcome to that.
I should like to follow the noble Lord, Lord Banks, in the comments that he has

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made. I accept that there has to be some dependency test, and I think it is to be welcomed that we are moving away from the automatic assumption that a wife is dependent on her husband to the assumption that dependency as such is something that we have to cater for and a dependant could be either a husband or a wife. Although the Bill before us talks about a dependent wife, the Bill which we anticipate later this Session will, I hope, deal with a dependent spouse. However, I welcome the change in definition, but there are problems in moving towards a quick change in that respect.
If we were to look at the situation of women today we would find, for example, that 57 per cent. of all working women would qualify under the present earnings limit. In other words, 57 per cent. of all working women—that is over 5 million working women—earn less than £45 per week. Therefore, the earnings rule would not affect them. However, as we move forward and as wages advance—as everyone expects that they will—the number of women who would be able to earn and in respect of whom their husbands would be able to claim an allowance, would decrease. In that respect we must face the problem that the majority of those 5 million women will be married women who have not contributed in full to the National Insurance scheme. Therefore, when they come to retirement they will not have a pension in their own right. Because of present practices and because of the operation of past legislation those women will be dependent on their husbands.
Therefore, I join with the noble Lord, Lord Banks, in asking the noble Lord to look at the distinction in the dependency test between women who are young enough to go out to work and to earn in their own capacity—and who will perhaps be covered by the new provisions in the social security legislation and will therefore earn a pension in their own right—and the majority of women who will come in the older age group and who therefore will have had no opportunity to earn a pension in their own right. So, although I welcome the concept of dependency as being one who is dependent on a spouse, I should like to ask the noble Lord whether he would look carefully at the details of the implementation of this clause in the Bill.
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There are two points that I should like to draw to the attention of the noble Lord and perhaps I may put them in the form of a question. Again, I am anticipating what may come before the House later this Session. I am referring to statements which were made in another place when the Bill was introduced. We were told by the Secretary of State in another place that provisions would be introduced which would provide for dependency in the role-reversal situation—that is, where a husband and wife, no doubt together, decide that she should be the principal breadwinner. In the proposals which will come before us at a later date I hope that there will be provision for the free choice of the couple concerned to determine who will be the principal breadwinner and the principal provider, and therefore who will be the dependant. In other words, I hope that it will not be left to the Government or to Government agencies to determine who will be the principal breadwinner within the family.
Lord DRUMALBYN: My Lords, would the noble Baroness support the idea that the situation might change from time to time, and that the choice should not be once and for all?
Baroness LOCKWOOD: My Lords, yes, I would accept that, but I think that we would then be moving into a situation where both husband and wife—or both spouses—would be building up, over a period, their own entitlement to social security in retirement, and that is a situation which we do not have at present.
Finally, may I point out to the noble Lord that I hope that, in preparing the legislation that we have been promised—legislation which will be dealing with very important principles in social security and taking account of the concept of equality between the sexes—he will consult with the wide range of organisations, both statutory and voluntary, who are interested in this subject, before bringing detailed proposals before the House.
3.46 p.m.
Lord LEATHERLAND: My Lords, at this stage in the list of speakers, a gap has been deliberately left in case the spirit should move any other noble Lord to rise and say a few words. I seem to fall into that category. I welcome the Bill, as I

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am sure do all Members of the House. The special bonus of £10 at Christmas for old-age pensioners is most welcome.
However, as regards what I am about to say I must declare an interest. I am 81 years of age and I want to speak specifically about the situation of the over-80s. I am suggesting that the over-80s are in a special category and should receive something in the nature of a special bonus over and above the £10 which is being paid to pensioners generally. The over-80s are not so robust as their younger brothers and sisters. Their state of health needs greater care and they need more careful feeding. They cannot, as a rule, go out and get a part-time job. Their living costs are dearer than for the ordinary couple because they have to buy their food and other requirements in small quantities.
The over-80s are really special people. They have had a very hard life. They have been through two world wars and they have lived through the hungry 1930s. They retired—and this is a most important point—before inflation came into full flood and therefore wages were low. Thus the amount which they could save for their old age was correspondingly limited. Therefore, I suggest that the over-80s require some special treatment. Although on this occasion, this afternoon, it is too late for anything special to be done for them this year, I trust that the Government will bear their special needs specifically in mind when they come to introduce a similar Motion next year—if they still happen to be in office.
3.48 p.m.
Lord HOUGHTON of SOWERBY: My Lords, 1 apologise for rising to make a few comments on the Bill without having given notice, but I am sure that your Lordships will understand what a great inconvenience it is not to have the normal facility of seeing a printed Order Paper. We have our annual printing difficulties, but when will they be overcome? The Order Paper is not delivered any more. Therefore, when a Motion to take all stages of the Bill is sprung upon us, as it was today, it makes it difficult to be fully equipped to deal with the situation.
The Bill will deprive me of the annual occasion of criticising it—of swimming against the tide of the Bill. Therefore,
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I think that I had better make my comments and say farewell to the opportunity, though, having had more to do with the origination of the Christmas bonus than anyone in the House, it probably ill becomes me to criticise it. However, I do not believe that this is the way to deal with social benefits.
In the beginning, the bonus was paid because we could not get an operation completed before Christmas and a great cry went up that making improvements to the statutory benefits was taking too long and that the beneficiaries who were badly in need of the money could not get it before Christmas. So, the first instalment of this was to give a bonus—of £10, incidentally—to all those who at the time were on national assistance or were receiving chronic sickness benefit. That was given in Christmas 1964 in order to overcome any hardship that might occur to those who were most in need, on account of the inability of the Administration to get the operation completed in time.
But, of course, doing it that way led to loud protests from all those on normal statutory benefits about the fact that those on national assistance only were recipients of extra money. Moreover, of course, the bonus then was chargeable to the Exchequer and not to the National Insurance Fund. To overcome that kind of criticism and to avoid discontinuance of this gratuity altogether, the next attempt to deal with it was to embrace all those who were on national insurance retirement pensions. Here I say to my noble friend Lord Leatherland that we ought to call all those beneficiaries what they really are: they are retirement pensioners and not old age pensioners. Neither are they necessarily old—not these days; many of them are comparatively young. They are retirement pensioners. We must regard them in the light of their position in the social security system.
If we are to make the benefit permanent by law, could we not remark on the fact that £10 is already out of date? It may be fulfilling a mandate from on high or be equivalent to a direction from Brussels, it being an item in the Conservative Party Manifesto, but £10 was not enough when they made the promise and it is not enough now, if one is to look at it in relation to the purchasing power of this gratuity

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in the past. Many anomalies are bound to arise from a distribution of a benefit of this kind out of the contributions of the people who are members of the National Insurance Scheme.
I shall not delay the House for longer than a minute, but another point is that we are moving towards a multiracial society. Christmas is a Christian festival, or it was; it is now becoming the season of the commercial exploitation of a religious festival. It has never been a more pagan festival than it is today. We are merely going along with the commercial idea that Christmas requires lavish spending by all concerned. Other religious communities celebrate other festivals, and we cannot expect for ever to have a Christian festival as a State occasion for the purpose of the distribution of national insurance benefits.
That is all I have to say. I regret that we are not doing this in a different way. I regret that we have not looked at the whole scheme of national insurance as a provision for those in retirement after a lifetime of work. I had hoped that we had got away from this kind of benevolent attitude towards retirement pensioners. They are citizens; they have completed their task in life; they have years before them. They have a right to a reasonable standard of living; they wish to share in the activities and in the benefits of the community generally. On the whole, I believe that concessions to retirement pensioners are undesirable. There should be statutory benefits and pensioners should have a claim on the resources of the community as of right, having regard to their contribution to the wealth of the nation, rather than encouraging the lather patronising feeling that arises on these occasions that it is nice to give the old age pensioners something for Christmas. I do not like that attitude and never have. It is a pity that we are to give it statutory blessing. However, that is what I have to say and I shall be unable to say it again.
3.55 p.m.
Lord WELLS-PESTELL: My Lords, I do not think this is the first time that I have been down this particular road, but the tradition of your Lordships' House makes me declare an interest in what we have been discussing this afternoon, because if I live until 3rd December I
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shall benefit by this Bill. When the noble Lord, Lord Cullen of Ashbourne, made his first speech at the Dispatch Box on 22nd November 1977—which was on this very matter—he was at some pains to remind me that the value of the £10 at 1972 prices was £5. May I remind him that it is worth less than £4 at present; in fact, it is worth only £3·97. But what will it be worth at Christmas? With the rocketing prices and the increased rate of inflation, inflation which we understand from his right honourable friend the Secretary of State is likely to be in the region of 17½ per cent. by November, there will be an increase of between 5 per cent. and 6 per cent. between now and November.
Today we have heard that the cost of paraffin is to increase by between 65 per cent. and 70 per cent. I notice that in the Budget there was no reference at all to an increase of the price of paraffin. I do not know whether it is due to the Secretary of State of Energy not knowing who uses paraffin. It is used mainly by people who can be described very adequately and accurately as poor people, but in the main by old-age pensioners. Did he not know that because he was not properly advised? If he did know it, and still took this action, then it is an act of callousness, and I question his wisdom in doing so and his right to hold the position he at present holds.
One of the noble Lord's honourable friends in another place suggested at one time that there should be a fifty-third-week payment for pensioners. This would mean that a married couple would receive in the region of £36·10 a week instead of the £20. I suppose that one can say most charitably that this was a kite which was flown and which has been shot down in flames by the new Government. I am sure that the noble Lord, Lord Cullen, will want to remind me that the retirement pension for a married couple will be increased by £6·10 in November as against—and I accept this—the £4 proposed by the Labour Government when they were in office. But, in view of the very serious increase in inflation and in the cost of living generally, will the pensioners be better off? Pensioners will require every penny of the increase to meet this increase in the cost of living. I am sure that the noble Lord will tell

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me—and I should do this if I were in his position—that the £10 was not raised under a Labour Government. That is true. However, not only did we substantially reduce inflation, but—as the noble Lord, Lord Banks, made abundantly clear—we linked increases in pensions with wages, which resulted in pensioners today getting an extra £5 a week—£260 a year. In future it will be linked with prices.
If the Government are to plead that the money is not available to do this, I would remind noble Lords opposite that they appeared to have no difficulty in finding the £660 million which they gave in tax cuts to those earning £250 a week. Less than one-sixth of the £660 million would have enabled the Government to double the Christmas bonus; to give every pensioner £20 instead of £10; and they would still have had somewhere in the region of £550 million to give away in tax reductions. In case the noble Lord should come at me on the next point, I acknowledge that a large number of people—I believe, 1 million—were taken out of taxation by the Budget proposals. But how many of that million could you count among the 10.8 million pensioners? Only an infinitesimal number of them pay tax.
It was my intention to raise a number of matters during the Committee stage on clause stand part, but there is a lot of business before your Lordships' House, and if I were to raise matters under clause stand part I do not think at this stage I would achieve very much, and one always has to be realistic. In particular, I do not like Clause 4, which only requires the Secretary of State to lay a draft order for the payment of £10, or a larger sum if he deems so. I would ask the Minister—I shall content myself with this—whether he would make representations to his right honourable friend the Secretary of State that the Christmas bonus should be raised at least to keep pace with inflation. As the noble Lord, Lord Banks, said, it should be indexed. I was almost going to say that I am quite prepared to start with the £10, but I really feel, in common with the noble Lord, Lord Banks, that this should be done.
I wanted to raise another matter under Clause 4 stand part and again on Clause 5, but both those matters have been dealt
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with reasonably adequately in the time permitted by both the noble Lord, Lord Banks, and my noble friend Lady Lockwood. But I would ask the noble Lord to read what the noble Lord, Lord Banks, and my noble friend Lady Lockwood have said because their observations are very cogent. I would ask him to point out to his right honourable friend that if there are to be in the future any more tax reductions for that section of the community who, in my opinion, can well do without them, then they should take into account any extra money that may well be needed for the old age pensioners.
4.3 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I should like to thank all noble Lords who have taken part in this debate, and for the general welcome they have given to this Bill. That perhaps does not quite apply to the noble Lord, Lord Houghton, who was really making his goodbye swansong to this Bill, of which he does not approve. Having only just started to get involved in this field, apart from once or twice talking about the Christmas bonus before, I find that one does find oneself in rather a minefield. You start off on what seems to be a simple £10 for the pensioners, and you then get involved in all sorts of things which I know only a certain amount about. I am in the middle of a sort of crash course, trying to catch up with the extreme complications of the subject. I will, as the noble Lord, Lord WellsPestell, suggested, read extremely carefully what the noble Lord, Lord Banks, and the noble Baroness, Lady Lockwood, had to say.
Strangely, I have got replies—not out of my own head. To Lord Banks I should like to say that if a woman has her own retirement pension she is subject to the pensioner earnings rule, not the dependancy rule, no matter whose contribution record was used. I hope that that is a satisfactory reply to the noble Lord. So far as indexation of the bonus is concerned, obviously I cannot do otherwise than agree that this would be an excellent thing, and in many ways I suppose we would all like to have it made more realistic on the basis of what it was worth when we started it in 1972. However, I do not have to go into the question of lack of funds at the moment.

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As your Lordships know, this is simply just a continuation of what we have done. The same people are getting it, and the same amount, and regrettably in these inflationary times it becomes worth less and less.
The noble Baroness, Lady Lockwood, clearly has studied this subject in great detail and is well aware that savings are being made in this Bill which will be useful when it comes to carrying out our EEC requirements, where men and women will be equally treated. I shall also read with great interest what she has to say, and make sure that my right honourable friend the Secretary of State is fully acquainted with what has been said on these matters.
I was also interested in what the noble Baroness had to say, and what my noble friend Lord Drumalbyn interposed, about the role reversal of the breadwinner. It is a little early to go into this at this stage, but certainly it will be of great interest to those who are preparing legislation in the future. The noble Lord, Lord Leatherland, made a plea for the over-80s, to which I am sure everybody is very sympathetic. I would hope that the over-80s are particularly well looked after so far as ordinary pensions are concerned, and in that case I would, I think, feel rather like the noble Lord, Lord Houghton, does, rather than that they should get a slightly larger Christmas bonus. But that is just a personal opinion.
I hope that the noble Lord, Lord Houghton, will think—now that we are getting this on to a definite basis as opposed to being a handout which comes one year and not another, depending on the state of the economy—that it will not be so much of a patronising matter and that it will become a regular feature which, one hopes, as time goes by will be able to be raised when the economy can stand it. The noble Lord, Lord Wells-Pestell, of course know as much about these matters as anybody in your Lordships' House—he always sounded as though he did, which I am sure I do not—but I am not sure I really agree that £3·97 is the right figure. It is not far out. I think it is a little over £4, but I do not think we can really split hairs on that point. Certainly, as he said, in inflationary times it will become less in 12 months' time. He
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mentioned the rise in paraffin and I think he said it was going up by 60 per cent. I do not think that is right.
Lord WELLS-PESTELL: My Lords, I said it was going up to between 65p and 70p. If I did not, that is what I meant.
Lord CULLEN of ASHBOURNE: Obviously the noble Lord said 60 pence, which sounded like 60 per cent.; I thought we had better get it right. I quite appreciate that one of my honourable friends in another place suggested that a 53rd week might be another way of doing it, but, as the noble Lord pointed out, that died a very quick death and there is no question of that being brought up again. It is fair to say—Lord Wells-Pestell mentioned this—that, although the Christmas bonus is only a very small amount nowadays, the increase in pensions generally which has taken place since we came to power is the largest which has ever been made.
On the subject of taxation, I would suggest to him that the people he particularly mentioned as having had these concessions on taxation were people who needed them very badly indeed. He more or less picked out those in junior and middle management, and one hopes—and it is certainly the belief of the Government—that this incentive which has been given to them should be helpful to the economy in future and may help pensions later as well. I think I have dealt with all the questions I am able to deal with, and I therefore beg to move.
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 43 having been dispensed with, pursuant to the Resolution, Bill read 3a and passed.

SOCIAL SECURITY REVALUATION OF EARNINGS FACTORS ORDERS 1979
4.14 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE rose to move, That the draft order laid before the House on 12th June, be approved. The noble Lord said: My Lords, I readily accept that the term "earnings factors" is likely to mean little to the majority of

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your Lordships, so I must start by explaining what earnings factors are, and I may add that I have only just learned it myself. Earnings factors are derived from earnings-related national insurance contributions and, among other things, they determine (under the new pensions scheme) the amounts of earnings-related additional component payable with national insurance retirement pensions and other long-term benefits, and the amount of the guaranteed minimum pensions to be provided by contracted-out occupational pension schemes. Earnings factors have to be reviewed and revalued annually to ensure that they keep in line with the increase in national average earnings.
The purpose of this is to ensure that, broadly speaking, when the additional components and guaranteed minimum pensions are being calculated by reference to earnings factors—for example, when a person retires—those earnings factors bear the same relationship to national average earnings as they did when the contributions were paid, perhaps several years previously. This is what is called the "pre-award dynamism" of the new pension scheme. The necessary provisions are contained in Section 21 of the Social Security Pensions Act 1975, as amended by Section 10 of the Social Security Act 1979, and this is the first order made under those provisions.
Your Lordships may recall that the purpose of the amendment in Section 10 of the 1979 Act was to enable the order under Section 21 of the Pensions Act to be made as close as possible to the beginning of the tax year to enable contracted-out occupational pension schemes to calculate their liabilities for early leavers without delay. The amendment achieved this by providing that, for the first review, the period over which earnings movements were to be calculated was to be the latest 12-month period for which figures were available at the time the review was carried out.
Although it was the intention to make the order in April or May this year, following a review carried out in April when the latest available 12-monthly index figures were those for December 1977 to December 1978, the dissolution of Parliament and the election prevented the making of the order at that time. Neverthe-
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less, the former Secretary of State did in fact carry out the review on 17th April this year and, in view of the unusual circumstances which applied, very kindly informed the present Secretary of State of his action at that time; this is therefore the earliest opportunity which this House has had in the current tax year of considering the order.
I must also explain that the original draft order which was laid before Parliament had to be withdrawn and replaced by the order we are now considering solely because the original draft contained a coming into operation date of 18th June 1979 which, because of the time it took to formulate a Joint Committee on Statutory Instruments, unfortunately proved too optimistic. Next year's order will, I hope, be made much closer to the beginning of the tax year, as was intended.
Turning to the order itself, this provides quite simply that earnings factors for the 1978–79 tax year shall be increased by 13·3 per cent.; 13·3 per cent. is the percentage by which the Department of Employment's Index of Average Earnings of all Employees increased between December 1977 and December 1978. That period was the latest 12-month period for which earnings figures were available when the former Secretary of State carried out the review on 17th April 1979. For next year's review, the period will start from the end of the period taken into account for this year's review; that is, December 1978. This will enable that review, and, consequently, subsequent reviews, to be carried out at the beginning of the tax year and the order to be made as soon as possible thereafter.
The increased earnings factors will not be of relevance for the purpose of calculating the additional component in State pensions until 6th April 1980. This will be in respect of people who attain pensionable age, or where other relevant events occur, on or after that date. However, as your Lordships will be aware, contracted-out occupational pension schemes need to know increased earnings factors now for the purpose of calculating their guaranteed minimum pension liabilities in respect of early leavers. It is of course for the occupational pension scheme concerned to notify the member of his preserved pension rights, including the guaranteed minimum pension.
The order does not contain any reference to revaluation for the purposes of the calculation of these guaranteed minimum pensions. This is provided for by another part of the Pensions Act. I hope your Lordships will agree that the order is basically technical and strictly in accordance with the provisions of Section 21 of the Pensions Act, as amended. I trust your lordships will approve the order. I beg to move.
Moved, That the draft order laid before the House on 12th June, be approved.—(Lord Cullen of Ashbourne.)
4.20 p.m.
Lord WELLS-PESTELL: My Lords, as the noble Lord the Minister has said, the order is technical and is mainly, if not entirely, an administrative convenience. I do not think that any useful purpose would be served by my attempting to cross the noble Lord's t's and dot his i's. I am grateful to him for drawing our attention to this crucial matter.
Lord BANKS: My Lords, I should like to join in thanking the noble Lord for his very clear explanation of the purpose of the order and of how it fits into the working of the new pensions scheme. I suppose that the only argument that could arise would be over the actual figure given for the increase in earnings, but the noble Lord has explained, and the Explanatory Memorandum has set out, how the Government arrived at this figure, and I do not think there can be any quarrel with that. However, I wonder whether there is any way in which the Government might take steps to make the whole procedure better known and better understood by potential beneficiaries. Of course 13·3 per cent. is a high figure, and in passing I would draw attention to the burden which such a rate of increase must be imposing on the funding of final salary occupational schemes. The figure reflects inflation, whether it runs behind or ahead of prices, and one is bound to speculate gloomily about the figure which will appear in a similar order next year. However, so far as the present order is concerned, we on these Benches are content that it should receive the approval of the House.
Lord CULLEN of ASHBOURNE: My Lords, I am grateful to both noble Lords for their approval of the order.
On Question, Motion agreed to.

ARMY, AIR FORCE AND NAVAL DISCIPLINE ACTS (CONTINUATION) ORDER 1979
4.22 p.m.
The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal)The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal) rose to move, That the draft order laid before the House on the 25th June be approved. The noble Lord said: My Lords, when we had our debate on 26th June I explained to the House that it had been the Government's original intention to combine that debate with the renewal of the Army, Air Force and Naval Discipline Acts (Continuation) Order. However, for technical reasons the Joint Committee on Statutory Instruments had not then reported to the House, so that was not possible. Nevertheless, on that occasion the House had what I hope noble Lords will agree was a full and an interesting debate on a substantive Government Motion, and therefore on this occasion I hope that it will be satisfactory to the House if I move formally that the Army, Air Force and Naval Discipline Acts (Continuation) Order be approved. My Lords, I beg to move.
Moved, That the draft order laid before the House on the 25th June be approved.—(Lord Strathcona and Mount Royal.)
On Question, Motion agreed to.

ECC 16th REPORT: TEXTILES AND CLOTHING INDUSTRY
4.23 p.m.
Lord RHODES Lord RHODES rose to move, That this House takes note of the 16th Report of last Session of the European Communities Committee on the textiles and clothing industry. The noble Lord said: My Lords, may I first thank the powers-that-be for allowing us to debate this afternoon the 16th Report on the EEC. May I also offer my thanks to the noble Viscount, Lord Trenchard, who was to have replied to the debate but who, because he has been called elsewhere, cannot now do so.
I wish to make a reference to the question of the publication of the report. Some local authority representatives who

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expressed a desire to come to listen to the debate about textiles attempted to obtain a copy of the report from the Manchester branch of Her Majesty's Stationery Office, but that branch did not have any copies. We in this House are giving our time and expertise—in many cases we are putting in long hours, particularly on matters of this kind—and I consider that a report such as this should be in the hands of every textile manufacturing company in this country. I should like a reply from the Government on this matter, perhaps by letter.
I feel honoured to initiate the debate, because it is concerned not only with a prosaic collection of pieces of evidence; it is not just a matter of whining on the part of an industry that is vital to the well-being of our country; it is about people. It is about folk with whom I have been bred, born and brought up, and whom I am proud to know. They are the kind of people who will put the kettle on when you go into their houses, not as you are going out. That describes the type of people on whose behalf I have the honour to speak this afternoon.
The purpose of the report is to draw attention to the serious difficulties besetting the textiles and clothing industry in Europe and to discuss the Commission's proposals for it, which are contained in the report in the form of guidelines. We are encouraged in our deliberations by the fact that we have at the Department of Trade a Minister who, on 9th April this year, said:
"Following the expiry of the present regime in 1981, it will he necessary to continue with a regime for the orderly marketing of textiles within the Community. As a new Government we will exert our full influence within the EEC to ensure that a vigorous and effective policy for textiles is continued"
That was stated by Mr. John Nott, who is now Secretary of State for Trade; and I hope that the noble Viscount, Lord Long, who is to reply to the debate, has come with the right answers.
The guidelines make proposals for a European textiles and clothing industry policy. It was successful in provoking a good debate in the industry here and in Europe. The guidelines do not set out detailed proposals for the textiles and clothing industry, but propose general objectives. The more specific suggestions have to do with research, innovation, EEC
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financial aids, what to do with EEC social funds, exhibitions, and the like. The main issues for discussion have been multifibre arrangements, outward processing, enlargement of Community State aids. and the role of the Commission. It would take too long to deal in detail with all these items, but my noble friends who are so loyally supporting me this afternoon in the debate will deal with some of them.
The Industry has had some hard knocks through world recession and fierce competition from countries developing their own textile industries—a matter which I do not propose to enlarge upon. So, production has declined in Europe, but imports have risen dramatically. Twenty five per cent. of textiles and clothing sales in the Community are imported. In this country the penetration is much higher—in some areas by as much as 40 per cent.—and so we have low profitability and mounting unemployment. But it is still an industry vital to the economy of Europe and the United Kingdom, especially as our industry is the largest in Europe. It employs nearly 800,000 people, many in high unemployment areas such as Northern Ireland where 50,000 men and women are dependent upon this industry for a livelihood. It affects other industries, too, particularly the chemical industry. Between 1969 and 1976 imports into this country doubled, and as a result 245,000 jobs were lost.
This is a serious matter; but, to be fair, not all the decline was due to imports. There was a little bit due to productivity—and do not forget that the textile industry has as good a productivity record as any in the land—and there was a little bit due to economic recession; but, mainly, it was through cheap imports. Here I would draw attention to Question 16 in the evidence given by a witness from the Department of Industry—and this is a fact that we should bear in mind during our discussion. In reply to a question by the noble Baroness, Lady Hornsby-Smith, that witness said:
"England of course has the best distribution system of any in the world. A foreign buyer can come here and go and see the buyers of our largest stores and do his business in one day and he knows that he has a market here. If he tries to do the same thing in certain other places in the Community he will he lucky if he gets round in three months of the season that he is trying to cover".
That was evidence by a witness from the Ministry of Industry, not from the trade. Here may I say that the tariffs in the

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Common Market are the lowest in the industrialised world.
My Lords, the main response by the Community to our textile problems has been the negotiation of protective trade agreements to counter the worst effects of imports from low-cost countries; and, secondly, to provide a better balance in world trade in textiles and clothing. It is known as the multi-fibre arrangement, and so that Members can understand it perhaps I should elucidate on it. This is the topic which has aroused the most interest in the trade because, by and large, since 1977 it has been reasonably successful and, naturally, the industries concerned want to keep it so. The multifibre arrangement stemmed from the long-term arrangement for cotton textiles in 1962. In 1974 this was replaced by the multifibre arrangement to incorporate wool and man-made fibres, as well as cotton. It was hatched during a period of good trade, and was a product of the general euphoria prevalent before the world recession and the oil crises. It was generous. It gave importers a growth rate of a minimum 6 per cent. This could have been borne if there had been a corresponding growth in the European economy, but there was not, and by the time it came round for renewal in 1978 times were bad.
To its credit, the Commission jibbed at this renewal on the original basis and demanded that the 6 per cent. growth of imports should go out and that bilateral agreements with low-producing countries should come in. The Community won the day, in our view in GATT, and arrangements were made with 25 textile-producing countries in consequence. This arrangement is due to expire in 1982, but the textile and clothing industries in this country and in Europe are adamant in their opinion that the present arrangement must continue indefinitely. The Commission has said that advantage must be taken of adaptation and restructuring in the years between now and 1982, but anybody listening to the debate yesterday had ample evidence that you cannot perform miracles in the alteration of our industrial set-up in this country. Lord Soames, Lord Campbell and Lord Watkinson were all eloquent on the same point. It is a slow process that we have to go through to get back to efficiency, and it is no use the Commission saying
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arbitrarily that this will not continue after 1982. It must.
There are no signs that a dramatic change for the better is coming. Indeed, the guidelines say that there are too many textiles for sale in Europe now—a position likely to be even worse when Greece, Spain and Portugal add their production to that of the Common Market. This will be dealt with by other speakers who are to follow me. So the first question is—and I have given the Minister plenty of notice of it: Will the Government give a clear statement on the future of the multi-fibre agreement and its effective application after 1981?
My Lords, my next point is about outward processing. This may sound a very difficult term to understand, and I shall attempt to describe it briefly. Outward processing is the practice of exporting semi-manufactured goods, such as yarn or cloth, produced within the Community, to be further processed in third countries with lower labour costs than the EEC, for subsequent re-importation into the Community. This does not apply only to the textile industry. If anybody is interested enough and goes into Grundig's premises in George Street, they will there see ample evidence from the tags on the machines how the thing works. It is a way of cheapening the product, but in many ways it is also reducing the labour requirements in this country. Outward processing is a normal commercial practice which we do not want to block, properly managed. But outward processing trade must be counted against normal trade quotas. An imported shirt is an imported shirt whether outward processed or wholly produced in the supplying country. Early in 1979 the EEC introduced outward processing allocations for Portugal and Greece in addition to normal trade limits. These were offered to member States and were taken up wholly or in part, notably by Germany.
Out of this comes the question of free circulation, and the committee are of the opinion that we should be very careful indeed in the continued absence of satisfactory regulation concerning outward processing. I understand that this is still in draft form, and is deficient in one major respect; namely, that the definition of firms entitled to engage in

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outward processing is far too wide. We believe, too, that any significant extension of outward processing would represent an export of jobs if carried too far; and a significant extension of outward processing can represent an export of know-how. The more experience outward processing countries get in clothing manufacture, the greater the attraction of expanding upstream into textile manufacture; and, ultimately, it could destroy, or at least weaken, the Community textile régime as we know it.
It is interesting to observe, on page 33 of the report, in paragraph 6:
"It should be noted … that under the provisions of the Treaty of Rome, goods which are returned to the Community after being subject to outward processing in Mediterranean countries with whom the Community has preferential agreements (including Greece. Spain and Portugal) are in 'free circulation' and can move without restriction between Member States".
The same applies to Comecon. We must be very careful about this. I hope that the House will unanimously support what we have to say about it. I now want to come to something which will probably amaze most Members of this House—the rapidity with which a situation can develop. What I have to say is to do with man-made fibres. The situation in the United Kingdom in the man-made fibres industry arises out of the American policy regarding the price of oil and gas. Is it generally known, or instance, that American producers of man-made fibres can buy oil and gas feed-stocks at prices in some cases only 60 per cent. to 70 per cent. of the corresponding prices in this country? How can you maintain a viable industry with that sort of manipulation going on? No wonder President Carter has departed to Camp David. Cheap oil and gas is not only available for the feedstock but is also available to textile producers downstream; so that they get the advantage of it, too.
Time was when the dollar was strong and the United States had a buoyant home market. In those days the impact on this market was small. Now the dollar is weak and an artifically-held price for oil means that every increase in world oil prices makes things worse. So the US producers are able to move into the profitable European man-made fibre market—which means, in effect, the United Kingdom; because we are the
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easiest country by far to sell to in Europe. We do not want to forget that. I am going to quote one or two figures which will shock your Lordships. Take the case of polyester staple fibre! In the year 1977, our imports of polyester staple fibre amounted to 220 tons. Do your Lordships know what it is running at now, in 1979?—it is at an annual rate of 2,160 tons per annum. This is shocking. One cannot expect any industry to stand up to this artifically-manipulated situation. Take tufted carpets. In 1977, a couple of years ago, for the year the total was 122 tons. And today?—it is running at the rate of 6,712 tons. Take polyester textured filament yarn. In the year 1977, 159 tons; now, 3,132 tons, with a price differential of anywhere from 15 per cent. to 30 per cent. to 40 per cent. It really is time that we got down to serious consideration about these problems. It is not just a matter of whining about the fact that we are having a serious situation imposed upon us; it is a matter of survival.
Coming to the end of my speech, I reiterate the questions that I have addressed to the Minister. We need a clear Government statement on their future attitude to multi-fibre arrangements; and we need to get down to a policy with regard to the growth of imports from Mediterranean suppliers being subject to the same constraints as other low-cost suppliers. That will be dealt with by others. I have dealt with man-made fibres. Others will deal with the China situation. What I urge upon the Government—and we are not pleading we are just stating the facts this afternoon; and it is up to intelligent people to interpret the facts—is action which will help ordinary folk, who were looking to this Government to give them a lead, as to what is going to happen to the textile industry of this country in the context of Europe.
Moved, That this House takes note of the 16th Report of last Session of the European Communities Committee on the textiles and clothing industry.—(Lord Rhodes.)
4.45 p.m.
Baroness HORNSBY-SMITH: My Lords, I am sure that your Lordships will join with me in congratulating the noble Lord, Lord Rhodes, on having the initiative

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to put down this Motion and to extol it in his usual forceful and very knowledgeable manner, particularly in view of the vital importance of this question to so many people in this country. I should also like to pay tribute to him for his robust and skilled chairmanship of the committee which produced this report. Thirdly, I should be remiss if I did not thank him personally in particular for having invited me to join this investigation by the committee. I felt very privileged that he allowed me to do so.
The textile and clothing industry, as the noble Lord has said, employs 800,000 people—no mean number, although far less than in years gone by. It is our sixth largest exporter. Its future is therefore of profound importance to the economy of this country and I regret that it receives so little attention in both Houses of this Parliament. This report focuses attention on the industry. It provides an invaluable record and an evaluation of the record—what the industry has achieved, its problems and its requirements—as seen by management and unions alike.
Unlike the motor industry or the shipbuilding industry, which is confined to a few giants, the textile industry by its very nature and the immense variety of goods that it produces is, and inevitably will be, a fragmented industry. There are a few giants, mainly in the fibre lines; but the industry must inevitably be made up also of thousands of small, specialised companies. When one considers the variety of its products, that is the only practical solution. I hope your Lordships will bear with me if I give a little graphic description of what I mean. Consider what is produced by the industry, from bed linen to boiler suits, from table cloths to tee-shirts, from soft furnishings of all shapes and kinds to swimsuits, also of all shapes and kinds, from the mass market to haute couture, all backed by widely different yarn and fabric manufacturers. It is then divided by fashion and by the seasons. It is again then divided by sex: male and female garments. It is then divided by age groups: babywear; children's wear; teenagers; young, and the older. It is then divided into outer garments; top garments; under garments; nightwear and sportswear. Thus it is no good people philosophising and saying: "Why cannot it all amalgamate into half a dozen great companies?". It will remain a highly
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specialist and fragmented industry. Thus, thousands of small companies specialise in one or two of these groupings, and over generations they make their name by that specialised knowledge in many industries.
One of the great strengths of the textile industry is its very fine record of industrial relations. Families succeed families working in it, and it is proud to show a quite unusual proportion of members who remain within the same firm for the whole of their working lives. Because of the multiplicity and specialisation of small companies, their job losses—because the companies are small—do not hit the headlines. But as was repeatedly stressed in the economic debate a fortnight ago, and as the noble Baroness, Lady Seear, emphasised, it is in these small companies employing 50, 100 or 200 people that, given stability and confidence, there is the chance of increasing employment, 10 here, 20 there and 50 somewhere else. But these undertakings, in an intensive labour-using industry, and exporting, must have that confidence, and I am sure that they can make an enormous contribution to mopping up our tragic unemployment situation.
But, to return to the report, may I make it clear—and I think it needs to be made clear—that the textile industry in its representations to us on the committee is not seeking "protection" in its accepted sense; it is not seeking high tariffs such as those imposed by Latin America—up to 200 per cent. in Brazil—nor indeed the 15 to 28 per cent. higher tariffs which goods from the EEC going into the United States have to jump above anything that their goods coming into the EEC have to pay.
The industry is not seeking to eliminate fair competition; it is not seeking to avoid its commitments to the developing countries and all those undertakings that it has entered into under GATT, MFA and other agreements. In fact, in relation to the developing countries, the extent to which we have absorbed goods from those countries, puts us extraordinarily high in the league table. We have more than honoured our commitments.
Nor is the textile industry seeking excessive millions of taxpayers' money for investment, as does the steel, shipbuilding, motor car and other industries. I acknowledge that the Government produced

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£15 million of Government aid for the clothing industry; but the clothing industry itself matched that with £75 million of their own investment. Given fair competition, given stability and confidence, they will in the main find their own investment for the future.
What the industry represented so forcefully to us on the committee, and what they sought to rectify, is, first, the uncertainty created by the then pressures not to continue the MFA and other agreements beyond 1981, which would virtually remove all limitations on imports and encourage wholesale dumping—I know that it is called other fancy names nowadays, but to me dumping is dumping. At the same time, in many areas countries are increasingly putting up tariffs against us. The greatest fear in the industry arose from the proposals in the EEC textile policy guidelines, which were the main purpose of investigation by this committee, that the agreement should be phased out. Therefore, with the noble Lord, Lord Rhodes, I warmly welcome the recent firm statement by Vicomte Davignan, the EEC Commissioner for Industry, who has undoubtedly listened to representations and changed his former views since our report was published:
"The position of the Commission is therefore clear: it sees the continuation of the MFA as an essential element of the Community's strategy for textiles".
This is a very great step forward from the woolly conjectures of the guidelines paper and is warmly welcomed by all sides of industry.
The industry has a good textile export record. In the 10 years 1968 to 1978, textile and garment exports from this country rose from £453 million to £2,074 million, four and half times. In the same period, imports coming into this country went up seven times. I shall not weary your Lordships with the figures. Many firms—large, small and specialist—contribute, as I have said, to that export trade; but they can only do so from a firm basis of a reasonable home market. The industry is not backtracking on any of its former agreements, but it protests at the flagrant abuse of agreed quotas and the very devious methods of subsidy practised by many of our competitors abroad. As one textile leader put it to me last week:
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"We play the game and they play their own damned game".
Let us consider these dubious "games". First, there are the hidden subsidies and tax relief covertly paid, in particular to the Greek textile industry and firms, and in many Far Eastern countries. Then there is blatant over-riding of agreed quotas under MFA or other Mediterranean agreements by State and by State-operated industries. Portugal went over; Turkey went over; and Greece went over. One must be fair. Portugal, having exceeded its quota, has agreed to abide by the limits; but Turkey and Greece in particular have completely ignored the EEC complaints and are, in the first six months of this year, disastrously over their quotas to an even greater extent than last year.
The noble Lord referred to the United States, and he has already mentioned their advantageous fuel pricing. Not only is their fuel cheaper than ours anyway, but a heavy energy consuming industry like the textile industry has a special dual pricing which provides fuel at an even cheaper price than the standard rate. Also, incredibly, their wage rates, particularly in the South, where they have large numbers of Mexican, Puerto Rican, negro and Chinese labour, are lower than we pay in this country. Then we are aware that massive professional analysis has been made for the United States industry into the EEC markets which is to be followed by a full-scale attack of exporting to Europe. In relation to carpets, I would have liked to add to the figure that the noble Lord gave to remind people what a magnet our market is. Of the 2,750 extra tons, 1978 above 1977, of carpets from the United States which came into the EEC, 2,600 tons came to the United Kingdom alone.
We should consider very seriously the very firm pledge made by President Carter on 11th November 1978. This is what he has agreed to do for the American industry:
"1. Import surges will be aggressively controlled whether they occur from one source, or many, under agreements or otherwise; 2. Prompt enforcement of United States international rights including the use of MFA articles 3 and 8".
The United States can impose an embargo in a fortnight: it does not take three years, as our new procedures do.

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"3. Import growth will be regulated on the basis of the growth of our home market".
Would that that had happened to us! We would have been sitting high and pretty!
"4. In the event that the MFA is not renewed or a suitable arrangement is not put into place, legislative remedies will be proposed to allow the President authority unilaterally to control imports of textiles and apparel consistent with this enunciated policy.
"5. Speedy and stronger customs controls and monitoring.
"6. A vigorous programme to tear down foreign trade barriers against United States exports."
Those proposals from the enormous complex of the textile industry in the United States are far more precise and stringent than anything so far implemented in favout of the European textile industry and, in particular, that of the United Kingdom. To our exporters I would say: it is hardly going to be fun exporting to the United States under those terms.
Now I turn to the Eastern bloc, where the markets are among the most difficult in the world to break into. They "dump" by the method of "political pricing". As the State controls all manufactures, distribution and sales, so they fix all the prices. Thus the mark-up on the home market is often 300 per cent., which enables them to export a percentage of their overall production way below cost, and still trade overall in that item at a profit. Suits landed in the United Kingdom at £12·50 and sold for £30 are £90 to £100 in the Eastern complex itself. Every complaint made to the Board of Trade—and I put questions to the former Government—that the Eastern bloc were exporting at prices which were a denial of the agreed procedures, being far lower than those which they charged their own people in their own market met with the answer—the truth of which I do not deny—that the Eastern bloc will supply no figures on which the evidence can be confirmed and so a case cannot be lodged. My Lords, that is not good enough.
Next, through agreements with West Germany, goods from the Eastern bloc—and this was raised with the committee—enter West Germany via East Germany with the greatest of ease and are then rerouted to the EEC nations under the Community's trade arrangements. They avoid tariff barriers, they avoid quotas and they come in at "political prices".
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In theory, the MFA and other agreements are subject to controls to curb these infringements but in practice protest after protest, accompanied by overwhelmingly-documented evidence, makes a slow progress through the Department of Industry and even slower progress through the EEC—so slow that the British Textile Manufacturers' Association have been informed that three flagrant cases submitted to them are unlikely to be considered by the appropriate EEC Committee for three years, during which time surplus goods continue to pour in, far exceeding the agreed quotas. Korea, Greece, Brazil, Turkey, the Eastern bloc and others must be laughing their heads off. I should like to ask the Minister how many cases of infringement have been lodged by the industry with the Department of Industry and how long it is estimated it will be before we see any action.
Further, there is another source of evasion—what are known as the "basket extractor arrangements", which were intended to cope with sudden eruptions in the production and export of textiles by newly-developing countries not previously covered by quota agreements. The arrangements have been totally ineffective and, as one of my robust colleagues in another place remarked: "The chap who thought up the name 'basket' had foresight and a sense of humour".
The suggestion is put forward by those who understandably want to purchase goods at the cheapest possible price—and we had representations from the retailers' consortium and from the Consumers' Association—that the Multi-fibre Agreement was intended to give a breathing space so that the industry could become more efficient and the agreement could ultimately be phased out. That is true; but the suggestion that the agreement should be swept away in order to allow competition just honestly cannot hold water. When one appreciates the enormous increase in imported textile goods in the last ten years, who on earth can say that the MFA has prevented competition?
I know others of your Lordships want to speak so I really must curtail what I was going to say; but I do want to endorse what the noble Lord said about the magnet of our market. We think of

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America with its vast chains, but their position is very different. There is far more local autonomy for the local chain stores there because of the enormous distances, the differing climates and, of necessity, the different demands in different types of clothing. If one wants to sell, for example, to Macey's stores throughout the States, one has to go to Chicago and cope with Illinois, go down to Texas and cope with Texas—because you will find they want an entirely different range of goods—go to California, and so on. Meanwhile, the boss says: "Your swindle-sheet is £9,000. How on earth did you spend that?" You will have been flying around in jet aircraft all over the States, whereas you can come to London and see four of the great chains in two days. That is why we are such a magnet.
Also, I think it is fair to point out that the manufacturing industry faces competition that the High Street never sees. If a Korean syndicate set up a chain of stores in the High Street opposite our great chains, they would not be allowed to employ people at £5 for a longer working week. But if they could do so, then the multiples and USDAW would appreciate the sort of competition we are facing against producers abroad. I will give your Lordships one last set of figures which I think are extremely telling. From various international sources I have obtained the following quite staggering figures. I have tried to simplify them by taking the United Kingdom base as 100—it could be 100 pence or £100. The United Kingdom worker gets 100; in comparison, Hong Kong gets 30; Tunisia, 28; Taiwan, 15 to 20. South Korea, 11 to 25, according to skills; the Philippines 6; China 5; and Sri Lanka—at the bottom of the league table—4. That is one twenty-fifth of the rate we pay.
I have seen many TV programmes, all with different groups pleading for more employment for some of the different ethnic immigrant groups in this country. In the textile industry, we employ many thousands of Asian immigrants with their natural and undoubted skills, and very fine workers they are. Of course, they get our union rates of pay, as is absolutely correct. Other fellow-immigrants—hard-working and astute shopkeepers—start small clothing shops. I regret to say my Lords—I
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will put it no more strongly—that many of these immigrant shops sell exclusively garments imported from the very countries which refused to take them in when African countries encouraged them to leave. They could do a great deal to help their own ethnic unemployed by stocking a few more British goods from the country of which they are now citizens.
Years ago, when the noble Lord, Lord Hale, used to thunder forth for Lancashire and the noble Lord, Lord Rhodes, did the same for Yorkshire woollens—it is only 12 or 15 years ago—then the issues in the House were Indian cotton against Lancashire cotton and the manufacturers from Hong Kong. Who, then, even thought of Korea? After 10 years, she has increased her exports to us from 2 million dollars to 31 million dollars? She has increased her exports to us over 15 times in 10 years. Who, then, ever considered Turkey, Greece and Portugal as significant exporters? Who would ever have thought in a thousand years that the EEC would have to make special agreements in relation to the great export surge of textiles from Tunisia, Cyprus, Tahiti, Peru, Uruguay and Guatemala? They are only a few of the 36 countries who, 10 years ago, we would never have dreamed of as textile exporters.
In this connection, I should like to express some sympathy with Hong Kong—a country bearing an intolerable burden of excessive numbers of refugees, postwar and present, greater than any country of similar size in the world. Under very severe pressure from both Governments, the present one and the last one, they limited exports and were pressed to sacrifice part of their quotas in order to find breathing space for Taiwan and Korea. When they see them ride roughshod over their quotas, is there any reason why they should not ask "Why limit us and not them?"
Every developing country has been encouraged to launch into textiles to the extent that they could well glut the market and ruin us, and themselves, in the process. Korea aims by 1986 to more than treble her exports and to produce as much as the whole of the EEC countries put together. Then we have the threat of China, which is preparing for the biggest explosion in textiles that has ever been known in the world, with a target of 1985. By then

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China, too, will be producing more textiles than the entire production of the EEC countries put together. At the moment, their current home consumption per head is a mere three kilos of textiles per annum, and even if this is trebled they will still be using only a fraction of their production.
There is a very serious feeling in the industry that, with the possible exception of certain valuable concessions gained in wool textiles, the industry as a whole was sold down the river in the Tokyo Round; and I cannot over-stress the concern that the Chinese, who are unable to pay cash, will use their vast surplus of textiles for barter against the engineering goods that they want to buy from the West. Without some effective measures of control, and notably the continuation of multifibre rings, how can you reasonably expect United Kingdom industry to commit itself to vast investment expenditure? A brand-new factory, which is the last word in modern equipment and methods, was opened a few months ago in Northern Ireland. It has £28,000 worth of investment in equipment for every man and woman employed in that works. With the political troubles of Northern Ireland and the problems of the industry, that is indeed an act of faith. But if they are not given some guarantee that in the future there will be stability, that there will be reason and balance in the world textile trade, how can we encourage or expect investment on this scale?
The industry is not asking for rigid protection. It is seeking to impress upon your Lordships that there must be some order in the world textile explosion, and that arrangements voluntarily entered into must be honoured. That is why the committee felt it necessary—and the noble Lord, Lord Rhodes, so ably moved this Motion today—to ask your Lordships to endorse the continuance of MFA, and to ask the Minister, in particular, for effective application of its provisions, for an ordered textile industry with fair competition, and prompt and effective action against those who dishonour their agreements.
5.15 p.m.
Lord HALE: My Lords, I apologise for what may seem an unwarranted intrusion into a debate which already has comman-
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ded so many experts, so many people of greater knowledge and, as the last two speakers have shown, so many people who can speak with outstanding ability upon this subject. But I feel that this might be a time when it would be not inappropriate for me to visit an old battlefield, on which I regularly and constantly suffered defeat for 25 years. The noble Baroness will know that one of the difficulties in another place, in regard to the textile industry, is that it does not command more than five constituency votes—or did not some years ago; with the present organisation it might be a dozen or more—and the party leaders were never able to generate a great deal of passion
I regard the Commission's paper, in as much as it contains no concrete proposals of any kind, as being a tentative paper calling for discussion mainly on the multifibre arrangement, and upon the point, that is emphasised from time to time, that it was originally due to expire at the end of 1981. It is coming very near. Some of the papers are writing about four or five years' time, but it is near enough for us to take the matter seriously. I have no doubt that the members of the Commission are people of earnest ability. I have no doubt that they want to see the EEC a success. We now know that the textile industry, as now classified and constituted with the clothing industry, too, is one of the largest industries in the EEC, and that the United Kingdom is the largest of the EEC countries so far as the combined textile industry is concerned.
When I first read this document, I had a new feeling of hope about many things We know the history of the textile industry. It is rather strange that the Commission's document for consideration does not seem to display any knowledge of the fact that we have gone all through this before. Not once, not twice, not three times, but year after year the workers have been diverted for a special purpose. Year after year, old-fashioned economics have dominated the Government. I was asked to go out earlier on, and appeal to the workers to work harder and bring their wives back into the industry, after they had been driven out, and so on. I asked "What happens when they do the same thing in every other European country? Who buys the stuff that they produce? There is no one to do it."

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The Commission document talks about the nature of the problem. It might be of interest to the noble Lord, Lord Trevelyan, that the nature of the problem is set out in his relative's most distinguished chapter "The State of England in 1685". There he draws attention to the fact that the loom worker, who in those days was generally thought to be worth a shilling a day, if he could get it, was unable to get it because of competition from the Far East. That is going back a bit. Those were semi-prosperous days; those were the days when the cotton industry in Oldham was one of the greatest of our industries. Nobody would care to recall in detail the events of the years between the end of one world war and the start of another. Those were years when the mills were empty; they were not even filled by people sending postal packages or carrying on the sort of temporary occupations which followed later disasters.
One thing which we can always obtain from Governments is advice, but they have the curious habit of always being wrong. People are now advised to restructure their factories and to buy new machinery. Although quite a number of enterprising mills did so in the years before the next crisis came, those mills were the first to go into liquidation. They could not keep up the payments on their machinery, since the money they had borrowed for that new machinery bore very high interset rates.
Who is going to say today, whether in the Common Market or elsewhere, that one can finance these enterprises at 13½ per cent. and be sure that something will not happen in America which will put up that interest rate to 15½ per cent.? Since the end of the First World War we have not been in charge of our own currency. We finance ourselves on the basis of the dollar. I used to say—and therefore I was sometimes called proCommunist—that it was strange that, after all the help which America had generously given to us during the war and after all our friendship and association during the years which followed the war, the economic development of our country was incompatible with America in full competition. I do not wholly blame them. However, most of the employment which we have been able to generate faces competition from the massive power
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of America. The noble Lord, Lord Rhodes, has told us today about the oil. There have been other statements about American policy. The Americans have managed to get themselves into something of a financial crisis, because of their failure to use their external surpluses to benefit their own poorer people.
When I first read these documents, I was greatly encouraged by what they contained. First, there is a superbly drawn document from a committee made up of people with very great ability, knowledge and business judgment. However, Comitextil is now in existence—I myself am in touch with the British Textile Federation which is closely concerned with those matters with which my political life has been concerned—and Comitextil represents the industry with great ability. They have submitted their views on behalf of the whole of the EEC textile industry. It is a very strong document. Instead of the rather too many small trade unions which existed—and which still exist, I am very happy to see, because I get more friendship from them than from anybody else in Oldham—the TUC has submitted to this committee a paper which contains advice from their very experienced advisers, with their great knowledge.
So far as the multi-fibre arrangement is concerned, they all say the same. Herbert Morrison used to say—it was a favourite quotation of his—that we always watch the signs until they are all pointing in the same direction, but they never are. Everything is pointing in the direction of the absolute necessity to continue, for a considerable time at any rate, the multi-fibre arrangement. This is overwhelmingly in the interests of the Community. It is a little late for them to say that they think that a matter of principle is involved. However, I do not think that this is likely to happen.
Our committee made one suggestion which was accepted with pleasure by the Lords' Committee; namely, that they should publish a regular, three-monthly report and that they should establish a new machinery for providing figures. There—dare I say it?—was Daniel come to judgment. The figures which were presented to us when I was a member of this committee were hopeless. They had never been co-ordinated. We were given

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books of statistics. They contained about 25 pages of statistics which were translated into nine different languages, or thereabouts. It was rather a silly and futile way of wasting paper, because most countries do not want all that information every time there is a briefing. Columns intended for British figures were blank. I know this information had been published in this country through our own organisation—which is pretty good at this—two years before. There is no machinery for collecting them, and something at least was said about this in the course of the discussions. We are told at least twice in the evidence in the report that the matter was received with agreement but that they had not enough staff to perform all the duties that were imposed upon them.
If one glances for a single moment at the complexity and the immensity of the organisation one realises that it certainly needs a lot of work. In our evening papers we see articles about the bureaucrats of Brussels. I have not been to Brussels for a long time, but everyone who mentions it seems to think that they have never been able to perform many of their duties. The noble Baroness, Lady Hornsby-Smith, speaks very forcefully, and with her own great charm and ability, of the possible leakage through Eastern Germany. They cannot check it. Indeed it is one of the troubles that Western Germany may check it. I do not know. We are told that they are doing their best but that no great leak has been detected. We used to be told that in another connection about the Northern Ireland border. So, my Lords, I hope that at least in that one extremely important connection we can look forward with certain confidence.
We are now in a position in which there is a European Parliament sitting. However one talks about its limited powers, Parliament will find methods and Parliament can find means. We have a majority of members from this country in favour of the Common Market and anxious to see it succeed, and who can bring help. We are now talking about taking part in the common money policy of the Common Market, which is essential and which our own financial position at the time made it quite impossible for us to establish and participate in on reasonable terms; but the indications at this moment are that we are approaching a position which offers the
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possibility of entering into negotiations. Indeed the Prime Minister has intimated that to be her desire.
We can avoid industrial trouble, whether it comes from the Left or whether it comes from the Government. Nobody can say that I am speaking in a Party sense; I am speaking in the opposite sense. There may be a chance. We should not worry too much about allegations that we are betraying some vague principles in favour of countries which have more. My Lords, I have taken much longer than I intended to take and I have said less than I intended to say. I wanted to commend to the House the proposals of the British Textile Federation, which are presented so cogently. Most of them, of course, are already endorsed in the committee's report, and those who are to speak later know much more about these things than I do. I would accept, as indeed almost everyone accepts, the point on caution about processing. We used to have a problem of grey cloth and its importation and exportation, which caused us trouble; but, given goodwill, given unity, given a determination to work together, I still hope, more than I have hoped for a long time, that the British textile industry, as part of the EEC textile industry, will be able to continue as one of the most powerful industries in the Community and face the difficulties, which I think are quite serious, from the accession of the three new countries.
5.37 p.m.
Lord CAMPBELL of CROY: My Lords, the noble Lord, Lord Hale, has complimented the Select Committee on this report and I hope it will not be immodest of me in following him to say that I am speaking as a member of Sub-Committee B which carried out the studies and prepared the draft of this report for the Select Committee. In that context I should like to mention the chairman of that sub-committee, the noble Lord, Lord Trevelyan, because his sub-committee has been very active and its fruits have been coming to this House to be debated while he has been away in hospital. He is now recovering from an operation. Three weeks ago we debated the report on shipping, introduced by my noble friend Lord Rochdale, who I am very glad to see is to speak today. I am

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sure we all wish to express again our hope that the noble Lord, Lord Trevelyan, will soon make a complete recovery. One thing which he did, and upon which I should like to congratulate him, was to enlist the noble Lord, Lord Rhodes, and my noble friend Lady Hornsby-Smith. This afternoon they have shown their immense knowledge of this industry and the contributions they were able to make. The noble Lord, Lord Rhodes, took the chair on this subject.
I was able to hear all the oral evidence which is appended to the Committee's report. The subject is not new to me because over the years I have followed events concerning the Scottish woollen industry, which today employs about 10,000 persons in about 60 firms. I do not possess—nor pretend to possess—anything like the knowledge of the noble Lord, Lord Rhodes, who so ably introduced this debate, and I congratulate him upon the way he did it. I should like to emphasise the point he made about the multi-fibre arrangement. It cannot be allowed simply to run out after 1981; something on the same lines must be negotiated to take its place. It is understood by all the countries which have been affected by it, and accepted.
If my noble friend Lord Long is not in a position to make a statement about this today I ask him to take to his colleagues in the Departments of Industry and Trade the fact that we expect a statement by the Government on this subject as soon as they are in a position to make one. If a reassuring statement cannot be made today—and, if it is all still being worked out and consultations are taking place, I can understand that—we do ask that one should be made before long.
The two matters to which I should like to draw attention are two of those which the noble Lord, Lord Rhodes, said would be expanded upon by speakers later in the debate. The first is the effect of enlargement—that is, the membership of the three countries who are expected to join the EEC. Secondly, the negotiations now proceeding with China. As regards the first, the new members, I was a member of the Sub-Committee which produced the report about a year ago on enlargement of the Community, and in our report, which was debated in your Lordships' House, we
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pointed out that the textiles and clothing industry was likely to come under new pressure when those three countries joined. The United Kingdom textile industry is the largest in the EEC. Consequently, Britain has a greater interest than any other member in the possible effects of the proposed additional membership of Greece, Spain and Portugal. They all have substantial textile industries, and Portugal's industry, with lower labour costs, is a very significant competitor to our industry.
Since the Select Committee's report which we are now considering was completed, Greece has signed the membership agreement; on 28th May the Treaty of Accession was signed, meaning that Greece will become a member from 1st January 1981. As expected, there are transitional arrangements over periods of years before the EEC regimes are fully adopted. The British Government, I suggest, must ensure that in this case of Greece, and later in the other two cases, these rival textile industries are not given special treatment at our expense. As regards the Treaty of Accession concerning Greece, there is the normal safeguard clause. It provides for restraining action should imports during the transitional period threaten disruption to the Community's industry. But that safeguard clause is worthless unless there is a will on the part of the British Government to invoke it if circumstances justify it. I hope that it will be possible for my noble friend to state this evening that the Government will press for the clause to be invoked should it appear that the textile and clothing imports coming into this country from Greece threaten the industries of existing members, particularly Britain.
Then I turn to State aids and regional policy. There is a protocol concerning Greece on the same lines as that granted to Ireland when Ireland acceded, with us and Denmark, in 1973. The regions of Greece under that protocol, will be eligible for national State aid and for aid from the European Regional Fund after their accession in 1981, and the regions will be designated after that date. Let us compare what happened in the case of Ireland in 1973. Special arrangements were made whereby industries in Ireland have benefited during the transitional period, particularly from 1973 to 1976, but the textile and clothing industries in Ireland benefited particularly.

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For example, American enterprises set up in Ireland during that period with remissions of tax on a very great scale, and in that way they obtained access through Ireland to the Common Market. Similar developments could occur with all three of the new members. If aid on this scale were authorised for Greece, and later for the other two applicants, the present members of the EEC would face subsidised competition not from just one country, Ireland. Ireland always seems to be an exception in so many cases and we in Britain always make exceptions where we can for Ireland, but to have three more countries enjoying these special advantages would be a very serious situation.
I would draw attention, where Greece is concerned, to the EEC Commission's own estimate of the position of Greece in 1981, which will be its first year, vis-à-vis the EEC Budget. A special financial mechanism, as your Lordships will know, has been arranged for Greece, as indeed it was for the United Kingdom when we joined. As a result of that, and taking it into account, the Commission estimate that in 1981 Greece will receive from the Community Budget a net benefit of about £54 million. There is great goodwill in this country towards Greece and also towards Spain and Portugal. But our altruism will be put to a very severe test if, besides accepting our share of this extra budgetary burden where Greece is concerned, we have at the same time to withstand increased competition in textiles from a new member enjoying special industrial advantages. I fear the Greeks, not because of the gifts they are bringing but because of the gifts that may be bestowed upon them. And this will apply to Spain and Protugal, too, no doubt, as the accession negotiations proceed with them.
I turn to my other point, the negotiations with China. These are almost completed, as I understand it, so that the preservation of the essential United Kingdom interests in the textile and clothing industry is a very urgent matter. China controls the main supply of raw materials for high quality knitwear and certain woollen garments; namely, cashmere and other fine animal hair. It is a curious arrangement that providence has made—that these materials, like pig bristles, are to be found almost only within the confines of the country of
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China. But China knows that it is in her best interests to ensure that her good customers continue to have access to those sources.
In this context there is, however, one part of the United Kingdom industry to which the Government must now give special attention. That is the manufacture of cashmere knitwear, which is almost all concentrated in the Scottish borders. The principal competitor in those garments is China. The present arrangements allow the Chinese to export 44,000 garments to this country a year, but not more than 4,000 of those may be cashmere or its equivalent. These arrangements are now being renegotiated through the EEC Commission, no longer direct with the United Kingdom Government. It is essential, therefore, that this inner limit of about 4,000 garments now governing trade between the United Kingdom and China be accepted as a principle in these future arrangements. Since most of the threatened knitwear industry is situated in one town, Hawick, in the Borders, it could be disastrous for that area if this inner limit principle is not continued for the EEC as a whole in relation to State trading countries and in particular, China. I would emphasise, that failure by the negotiators to continue an arrangement well understood by the Chinese could lead to specialist firms closing down. This would be a calamity for the area of the Borders concerned, an area of high skills and where a very large proportion of the manufactures are exported.
I am in full agreement with the conclusions of the Select Committee's report, having participated myself in reaching them. We want to help the developing countries. We want to help raise their standards of living. They are very low in some cases, and that is the reason for the low costs of labour and the low costs of the goods which they produce and which can therefore compete—as we think, unfairly—with some of our own. But, in helping the developing countries, we are determined not to allow the standards of living of our own employees in these industries to be depressed, because they are industries where there is high efficiency; a great degree of skill; and the industries themselves are adapting to new situations and continuously keeping up to date with technology.

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Only the continuation of orderly arrangements in the coming years, which are of interest to all the parties concerned—including the developing countries—can solve the problem. It will be a few years—certainly well beyond 1981—before those arrangements can be abandoned. Therefore, having drawn attention to two of the points which the noble Lord, Lord Rhodes, raised at the beginning of this debate, I hope that the Government will take all these matters into account.
5.52 p.m.
Lord DRUMALBYN: My Lords, it was a great privilege for me to serve on the sub-committee over which the noble Lord, Lord Trevelyan, asked the noble Lord, Lord Rhodes, to preside. No one in the House has more experience of the textile industry than he has, having started his own firm and seen it grow to success, and having spent most of his life in the textile industry when he was not the Lord Lieutenant. He is in a very good position to judge the effect of the guidelines that we are considering today. My noble friend Lady Hornsby-Smith dazzled us with an absolutely brilliant speech, as usual. I share with the noble Lord, Lord Rhodes, and my noble friend, the privilege of having held the same job in the Board of Trade, into which of course came textiles. That, I am afraid, is the limit of my particular experience with textiles, except that when I was a Member of Parliament I had textiles firms in my constituency with which I became extremely familiar. However, I do not have the practical production knowledge of the noble Lord, Lord Rhodes, or the marketing skills of my noble friend. I should like to associate myself with every word that has been said by my noble friend Lord Campbell of Croy. He never fails to be a wonderful champion for Scotland, and he has been so today.
I shall begin my remarks with the origins of the consultative paper—which is also called a Communication from the Commission—as explained in the introduction to the communication itself. It says that the paper
"is a reply to the following statement of the European Council meeting held in December 1977, with the aim of adapting the European
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production machine to the new conditions in the Community and world markets. Solutions to the structural problems which are common to all member-States must increasingly be sought at Community level, particularly for the iron and steel, textile and shipbuilding industries".
In this instance we are considering the textile industry. I am bound to point out—and this was implied by what my noble friend Lady Hornsby-Smith said—that the conditions in those three industries are very different (and in particular in the textile industry very different in structure) from the iron, steel and shipbuilding industries.
The Commissioner himself said:
"The aim of this communication, which is based on the declaration made by the European Council in December 1977, is to outline general guidelines for adapting the textiles and clothing industry to the conditions of international competition after 1982".
It seems to me that the two main questions that arise are first, how far is the Commission apt to control the restructuring of the textiles and clothing industry? Secondly, what situation will the industry confront in 1982? Those are the two questions which seem to me to stand out. At present the industry is working within the framework of the Multi-Fibre Arrangement of 1974, as modified in the last two years, and that is to last until 1981. In the sub-committee we found that the first question that arose in the minds of the witnesses concerned was what was to happen after 1981. We were told that the Commission regards the 1978–81 arrangements as a "breathing space" for adaptation and restructuring Paragraph 11 of the report says:
"The Commission states"—
and it does—
"that it is essential for Europe to have an efficient and competitive textiles and clothing industry which can provide"—
and these are the important words—
"a high level of long-term employment".
So, whatever arrangements are made, they must be aimed at providing a high level of long-term employment because that, said the Commission, is essential.
The principal Department of Industry witness said:
"Her Majesty's Government is committed to maintaining a strong and viable textile and clothing industry in the United Kingdom".
Therefore, I am bound to ask my noble friend who is to reply whether the Government accept that commitment. We must

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know the answer to that question, and I hope that he will confirm that they do. I should also like to remind my noble friend of the Conservative Manifesto which said:
"We fully support the renegotiated Multi-Fibre Arrangement for textiles and will insist that it is monitored effectively and speedily. We also believe in a revised safeguard clause under GATT to give us a better defence against sudden and massive surges that destroy jobs".
I am sorry to say that it now seems unlikely that the Tokyo Agreement will provide that better defence and the revised safeguards. All the same, the existing safeguards are not negligible and we want to be assured that they will be used when necessary. Needless to say, the low-cost developing countries do not like the 1977 revisions. It was disappointing for them that the annual rate of growth of 6 per cent. had to be cut back. It was disappointing for us, too, that growth in demand for textiles and footwear within the Community was well below 6 per cent, as it turned out in later years, and for the United Kingdom itself it was virtually negligible.
What are the lessons to be drawn? I suggest that the first one is that, whatever may be the future form of the Multi-fibre Arrangement, it should not commit developed countries to accept a rigid annual rate of growth in imports. Secondly, whatever rate of growth may be agreed from time to time, it should be the rate of growth of total imports of each of the various categories of textiles and clothing under the agreement, and should not be the rate of growth of exports from each country. In other words, it should not be the rate of growth of exports from each country, but a global amount for that year of imports into the Community, which is not the same thing at all. When we come to consider—and this has already been mentioned so frequently in the debate—that there is very rapid development of investment in textiles and the clothing industry in a number of other countries, countries that are not already included in the Multi-Fibre Arrangement, they are all likely to press for higher facilities.
Without some such arrangements, the Community's objective of an efficient and competitive industry providing stable long-term employment simply cannot be achieved. Surely it must be accepted that every major developed country considers itself both entitled and bound to have a
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substantial textile and clothing industry as a social and strategic necessity. Furthermore, however efficient textile and clothing enterprises are or may become, they cannot compete with low-wage countries or State-trading methods, as my noble friend Lady Hornsby-Smith has made so clear.
It is not only the lower end of the trade that is affected, because some of these State-trading countries have very long traditions of fine workmanship. This is likely to spread from the bottom up. There is no dispute about this; there certainly was no dispute from our witnesses or within the committee. There was no dispute about allowing the volume of imports from low-cost countries to grow, provided that growth is orderly and in keeping with a share of the market. There is no dispute about not propping up inefficiency, but there is a dispute about the length of the breathing space. Four years is not enough for adaptation, re-equipping and restructuring. Nor does it make sense to expect undertakings—large, medium or small—to invest in modernisation without knowing what will be the framework within which they will be trading at the end of the breathing space. Industry would like renegotiated arrangements to continue for longer than four years; every speaker has said that they should. At the very least there should be another renegotiation of the Multi-Fibre Arrangement in good time before the present modifications end. I submit that such renegotiations should cover "outward processing". I need not add to what has been said about this, but it occurs to me that some way should be found of including the value added by a developing country within the allocation of exports to each developed country. If that were done, it would largely meet the difficulties. Whatever arrangements are made, they must cover those Far Eastern countries which are planning a vast expansion in manufacturing capacity and, as has been made plain already, have already expanded so greatly.
I wonder whether my noble friend Lord Long would also consider the following. Should there not be a reallocation of the shares of the Community's total of imports between member-States in the course of any renegotiation? At present, as I understand it, they are divided up in proportion to the level of imports in 1976.

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Will my noble friend tell us, in broad terms, what these proportions are? If he cannot, perhaps we could table a Question and receive the Written Answer. Can he also say what is the degree of penetration, first, of non-EEC supplies as a whole and, secondly, of supplies from low-cost countries, in particular into the United Kingdom as compared with those into other member-States? Is it not true that more than our allotted share might come into the United Kingdom—and although it is not subject to quotas, the noble Lord, Lord Rhodes, made a very strong point indeed about what is coming in from the United States in the form of carpets—as, once goods have been imported into a member-State, they can be transferred to any other member-State? As the noble Lord made clear, ours is the easiest State to enter. Is there any way of monitoring that? I do not believe that there is. However, I submit that there should be.
I turn from that to the policing of the arrangements. The sub-committee received evidence of delay in taking steps to ensure that quotas are not exceeded. One must ensure that once a supplying country has exhausted its annual quota for any one importing country, no more supplies should be admitted into that country in that year. We are talking about the industry becoming more efficient. Would it be impertinent—it would certainly be pertinent—to ask what the Commission is doing to make itself more efficient in this respect? Because they are the people who control this. I hope that my noble friend will endorse what the principal Department of Industry witness said last November. He said:
"We are giving a tremendous amount of access to developing countries, hut we must insist that access is orderly and in keeping with the market conditions appertaining at the particular point in time".
This is the flexibility of which I have been talking.
I turn now to financial assistance. What is to be done to help the industry to restructure; that is, to re-equip, to regroup and to improve productivity and so competitiveness? Some undertakings in the United Kingdom are flourishing, but the industry as a whole is not exactly flush. The Knitting Industry Federation, which gave evidence to the Committee, drew our attention to the fact that:
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"Every study in the EEC has shown that the lowest and least productive return on capital employed is in the textile industry".
When we are talking about restructuring and modernisation, this is not a particularly good prospect or good omen for the future. Help will be needed. Who is to give it and who is to control giving it? Is it to be the Commission, the national Government or the banks and the other financial institutions?
The guidelines mention help to assist restructuring from the European Social Fund, but is not that simply directed towards providing alternative employment where a firm closes down? What about assistance to firms which can become competitive? The Department of Industry thought—and again this was last November—that this would be better handled by national authorities than by the Commission, for the national authorities are much closer to the industry in their own territory than the Commission could ever be, and much better placed to make judgments about individual firms or sectors of the industry.
Of course, there is no reason why the Commission should not share the cost. It might not be whimsical to suggest that the highest national share should go to the country saddled with the highest share of low-cost imports. But what is Her Majesty's Government's attitude to financial assistance?—whether in the form of sectional schemes or of selective assistance. We know that there is in existence a Wool Textile Scheme, a Clothing Scheme, and a Footwear Scheme. Do Her Majesty's Government intend to carry on with these sectional schemes and with selective assistance under Section 8 of the Conservative Industry Act 1972?
I hope that my noble friend will be able to tell us and the industry the attitude of Her Majesty's Government to these problems, and, I should like to add, what they judge to be the attitude of other member States. Do they share the view of our witnesses that the welfare of the textile and clothing industry—the fourth largest industry in the Community, accounting for 8 per cent. of industrial value and 10 per cent. or 8·6 per cent. of employment (two separate figures are given) in the Community—really is important, especially at a time of high unemployment in member-States? Do they share the view that the Commission should not attempt to control

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this great industry? Even though it can certainly assist and co-ordinate—it can negotiate agreements; it can see that they are observed; and, above all, to borrow the telling phrase in the Committee's report, it can create the right environment in which firms can take the necessary decisions, especially by providing a truly common market, free from internal barriers, and providing an external trading regime that will give the industry stability and confidence.
6.11 p.m.
Lord ARDWICK: My Lords, we are playing in the northern union this evening. If you look at this impressive list of names you see the names of the noble Lords, Lord Rhodes, Lord Hale, Lord Barnby, the noble Viscount, Lord Rochdale, and my own name, Ardwick. It is a formidable, hard sounding northern thing. Then of course there are the two Scottish Peers who have taken part, and the noble Baroness who comes, I think, from London, but who came to the debate today clothed in the garments of righteousness and made a most notable and interesting speech.
I felt that I shared to a certain extent the kind of dèjà vu feeling that the noble Lord, Lord Hale, had at the beginning of his speech. I too was brought up in Lancashire, and since my earliest days people have been saying, "Lancashire must reduce her costs and recover her export trade". My mind goes back to the days of the Japanese competition in the 1930s; of the "more looms per weaver" controversy, and of the automatic looms. Then of course my knowledge ends. Thirty years ago I was the editor of a paper in Manchester, but since then everything has changed, and my knowledge is out of date. My feeling for the people of Lancashire—and not only for the operatives but for the managers, the mill owners, and the merchants too—remains very strong. Whenever I hear British management criticised for being amateur I think back to those people who knew the world, and the technicalities of their product. In my day some of them were even equipped with oriental languages, but that too may he a thing of the past.
Once again we have to acknowledge a report from the Select Committee which is a model of clarity, and which is both
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comprehensive in its scope and wise in its judgment. This is the kind of exercise that ought to raise the deplorably low level of public debate in Britain on the affairs of the Community. Indeed, the recent European election campaign—if it can be called a campaign—seemed to concentrate on an important but very narrow range of subjects: the CAP and the British contribution to the budget, et cetera, and the unanswerable questions of whether the European Parliament's powers could, or should, be increased.
In this industrial country one would have thought that the achievements and deficiencies of the Community's industrial policy would have been a major topic, but I think it had barely a mention. During the campaign I myself visited several textile constituencies, and nobody raised the question of the Multi-Fibre Arrangement or the GATT, and nobody responded when I tried to speak to people on the doorstep about them. I got no response. They had not heard of them. Yet the GATT negotiations represent a most important aspect of the Community's work.
This country would have come far worse out of the GATT negotiations if its interests had not been represented by the Commission with all the muscle power of the biggest trading community in the world at its disposal. This indeed was one of the benefits of membership which was almost unacknowledged, and indeed almost totally unknown in this country. During the election campaign the BBC put out a beautiful and sensitive but intellectually rather lightweight documentary on Bradford. One would have thought that the work of the Commission described in this report would have had an important part to play in that programme. After all, Bradford is a major textile city. But not a bit. There was simply a complaint about unfair competition from German textiles as a result of the processing abroad and the textiles then being sold in Europe as goods of wholly European origin. Of course the complaint, as people have made clear this afternoon, has some justification, and the report itself makes that clear. But the beneficent work of the Community for the British, as for other European textile and clothing industries needs to be known and acknowledged.

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So I wonder, my Lords, whether we should be content merely to publish these excellent reports of the committees. Is it within our power not only to publish but to publicise them too? To see, for example, in this particular case that the correspondents of the newspapers in the textile areas, or the specialised textile journals and trade union journals, are alerted to the findings of the committee, and encouraged to print them and comment upon them. I make this suggestion not to publicise some of the best work of this threatened House, but to get European affairs dicussed with reason against a background of fact instead of irrationally against a background of ignorance and prejudice, which is so often the case.
Your Lordships must forgive me if most of you have been looking at Europe through British eyes this afternoon. I am still disorientated; I am still looking at Britain from Europe. I have spent four years there dealing with these particular problems. Those of us who have served in the European Parliament have been impressed in the past year or two at the efforts of the Commission to evolve an industrial policy. This is a fairly new aspect of the Community. In the golden years up to 1973 there was no need for such policies at European level. Against a background of full employment, of easy economic growth and increasing prosperity, any problems of restructuring or of the creation of new industries were easily soluble within the nation States.
But even after the collapse of the Bretton Woods system, even after the world recession caused by the oil crisis, even after the emergence of the new industrial competitors from the third world, the need for a community industrial policy was not immediately recognised. It is gradually coming to be recognised. However, even now the Community has not yet worked out a coherent philosophy, largely because it means moving away from the virtuous but rather simple idea that all good flows from competition and from free trade.
Although this might be a basis on which to start, it cannot end there. We have today massive unemployment throughout the Community; indeed throughout the whole of the industrialised Western World. We have to face a further heavy increase in the price of oil, and a long-term energy
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crisis whose implications we have not even yet fully grasped. Our current expectation is of another recession and another unwanted bout of inflation. Indeed, at Tokyo there was no talk of a co-ordinated expansion; none of that optimistic mood which had prevailed at the Bonn Conference of major industrial nations only a year before.
The great old industries in the Community—not only textiles, but shipbuilding, steel, and so forth—are facing a period in which they must restructure, re-equip, and, alas, shed labour. So we are going to face difficult social problems, and problems of finding and starting new industries and training workers for them. All this has to be undertaken in a most discouraging climate of recession. I think that it is absolutely essential that the Community should lead, inspire, and coordinate the efforts to solve these problems, although of course they have to be carried out at national level, and carried out by industries rather than by Governments. During this period, and perhaps beyond it, these threatened industries must be safeguarded.
We are all of course against protection if that means sheltering incurably uneconomic industries against fair and legitimate competition from abroad. We are against subsidies, if that means simply providing a wheelchair for every lame-duck industry and firm. But regulations which enable industries to restructure and subsidies which enable them to re-equip and become more competitive are a different matter entirely and, to change the metaphor, I think the general feeling in Europe is that the Community itself and the Governments of the member-States may supply springboards but not feather beds.
The moral problems have been looked at in the Community although they have not yet been resolved. Some inroads have had to be made into the concept of perfectly free trade and the needs of producers, of both firms and employees, have had to be set off against the needs of distributors and consumers. We cannot disregard the needs of the developing countries, nor can we regard them as paramount. The best expression of the new mood of the Community was given last year in a report to the European Parliament by Mr. Vandewiele, a Belgian

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Christian Democrat. A return to protectionism, he said, would be catastrophic for a Community which made the opening of frontiers one of the reasons for its existence, a Community which had become the largest importer and exporter in the world. Indeed, the Community itself could not survive in a world which had reverted to protection. To quote him:
"It is not acceptable for the Community authorities to stand by powerless as imports flood in from third countries in more and more sectors of economic activity. The new redistribution of labour which is coming into being between industrialised countries and developing countries will inevitably give rise to a painful effort to restructure, which will mainly affect the declining sectors and depressed regions".
So Europe is, I think, proceeding from free trade towards managed trade, and although free trade may again be the eventual goal, it will lie at the end of a longer road than it is perhaps possible to envisage.
The report of the Select Committee contains a letter from Mr. Ridley, of the Department of Industry, to Viscount Davignan, the Commissioner for Industry. Mr. Ridley mentions the Commissioner's address to a world textile conference in London. Most of the people at the conference, said Mr. Ridley, accepted the need for the Community's textile and clothing industries to use the next five years to adapt to intensified competiton. But some of the people at the conference gathered that after five years the Multi-Fibre Arrangement would lapse and all measures to stabilise the world textile trade would disappear. There was a danger that that belief might take root and damage the confidence of the industries and their will to make the necessary adjustments. I thought Viscount Davignan's answer was not very satisfactory. He said:
"I agree with you. There will probably be a third Multi-Fibre Arrangement. What I wanted to say was that a future agreement could in no way be as restrictive as the present one".
Of course the Commissioner at that time—I have the greatest respect and warmest regard for him; I sat with him for many months in committee on this subject—dared not say anything at that moment which would encourage firms to lie back in the expectation of long-term protection, and he could not commit his successor. He had to accept what at that time was the Commission's collegial view, that such arrangements as the MFA
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could not be permanent, or even long-term, and so on. However, I was delighted to hear from the noble Baroness what I did not know; namely, that he had been able to make a firmer commitment about the future of the MFA. As the report of the Select Committee hints, without some degree of stability, the industry dare not make the investment that is so essential.
What is to be done about it? I hope that not only the Commission but also President Jenkins will read our committee's report. I hope too that they will take a further glance at the comprehensive report on textiles which Mr. Tom Normanton, another Manchester man, presented to the European Parliament last year. I thought Mr. Normanton got the balance right between freedom and regulation and the needs of the newly industrialising countries. I welcomed his proof to the general public that this is not an old-fashioned, out of date industry. On the contrary. It has developed into a multi-fibre, multi-sector industry with a higher rate of productivity than manufacturing industries as a whole enjoy. Mr. Normanton said:
"Unless the Community is prepared to accept the gradual disappearance of its textile industry and the consequent social problems, it is essential that a consistent textile policy should be elaborated and applied".
I believe that message comes not only from him but has come very strongly from noble Lords on both sides of the House in this debate. He went on:
"We must not preach protectionism, but we must regulate the world trade in textiles until balance has gradually been restored".
Our committee, I am glad to say, consider that the Multi-Fibre Arrangement and associated agreements are not only desirable but should not be abandoned precipitately after 1981 and 1982 if that would nullify the efforts of the industry to adapt itself, as undoubtedly it would.
President Jenkins is going to leave the Community with one important legacy—the return to a system of fixed and adjustable currencies, the European Monetary System, which may or may not be a precursor of monetary union. I wonder whether he could leave us an additional one: an industrial policy balancing the needs of industry with those of consumers and distributors in the Community and with the obligation to extend world trade

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and help developing countries to subdue their own poverty by industrialisation. It is not easy. It requires the reconciliation of competing and contradictory interests, but it is essential if we are to achieve clarity and consistency and save great industries from distruption and decay.
6.28 p.m.
Viscount ROCHDALE: My Lords, I am very pleased indeed to be speaking following the noble Lord, Lord Ardwick, being, as he is, another Lancashire Peer. I congratulate the noble Lord, Lord Rhodes, both on the way in which he introduced the Motion and for the excellent report that he in particular and his colleagues have presented to us for discussion today. It is a most valuable report, not least because it contains, as well as the report itself, the full minutes of evidence, various memoranda from different expert organisations and a valuable appendix of statistics. It is certainly a report that needs very careful study if one is to get all the various points included in it in fair perspective. It is difficult to do that for anyone, although—if I may say with an appropriate degree of humility—it is perhaps a little easier for those of us who have spent many years of practical working in the textile industry, but I feel sure that even we find it not too easy.
I have no practical experience in the clothing industry, though I appreciate that their problems are obviously very similar to those of the textile industry. I shall confine my remarks to the textile industry, and if I roam a little wide in time I hope I may be forgiven; I shall do so not merely because I wish to reminisce but because I think I can make the point of the continuation of the Multi-Fibre Arrangement better by drawing on the experience some of us have of the past.
Like the noble Lord, Lord Rhodes, when I started work in industry after I left university I began in the woollen industry, at a place only a few miles away from the noble Lord, though I think that he would have been a few years in advance of me. In passing, I should like to emphasise a point that the noble Baroness made when she referred to the excellent support that the industry receives from its trade unions. I can recall no occasion when I was working with the trade unions
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in both the woollen industry and later the cotton industry (which I want to say something about shortly) when they were not most helpful and co-operative companions with whom to work; and I believe that this is typical of the textile industry.
At the time of which I speak, all sections of the wool industry, for a number of reasons which I will not attempt to elaborate here, did not suffer anything like the same destructive penetration of cheap imports from underdeveloped countries such as the cotton industry did. Today, of course, the situation is different. The wool industries are not in such a favourable position, and, as I see it, their position is just as much at risk in this way as is that of any other industry. That was a point that my noble friend Lord Campbell of Croy made when he was discussing the industry in Scotland.
When in the late 1960s I became independent chairman of the Cotton Board—a board established under the Industrial Organisation and Development Act 1947, but which has since ceased to exist—I found a very different situation, and I was most rudely made aware of the very deep penetration into the cotton industry. Incidentally, as I understand it, that board is almost an ancestor of the British Textile Confederation (though there are many differences) which gave evidence to the sub-committee during its consultations.
In an address that I gave in 1961 to the Manchester Statistical Society I made the following statement, which I think is worth mentioning because it shows how little many of the problems have changed. I said:
"By far the most serious problem facing the United Kingdom cotton industry is that of imports from low-wage countries. This development is one that embarrasses not only our own, but all the more developed Western economies, and it is not incidentally confined to cotton goods".
I said that in 1961, and really it is exactly what we are discussing today. In fact that issue probably took up more of our time than anything else, even then. There were many low-cost exporting countries involved (as there are today) but at that time, as other noble Lords

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have said, our main problem was the duty-free imports from Commonwealth countries—India, Pakistan, and Hong Kong.
In the event our efforts resulted in an "understanding" (and I use that word carefully, because that is what it was called) which in effect evidenced a willingness—rather a reluctantly given willingness—by those countries for reciprocity, and provided some modest limitation of imports which justified substantial Government aid for massive closures and reorganisation. When I say "massive" I should like to quote just two figures: 49 per cent. of our spinning spindles and 40 per cent. of our looms were scrapped. This provided the climate for a really healthy investment and reorganisation of the industry, with a considerable degree of diversification, as well as the introduction of new industries which over the years has paid off very well, and the results can be seen in the North West of this country today.
All this may seem old history and out-of-date but I believe that unless we understand the arguments and issues of the past, and that the problem we are considering is one that has been with us, with varying degrees of intensity, ever since the end of World War I (over 60 years ago), we shall not arrive today at the right diagnosis of the problem, and therefore we shall be in danger of drawing up the wrong prescription.
Textiles have always been the ideal industry for the underdeveloped countries to start off with on the industrial ladder. They can start in a small way without using too much capital and can provide useful employment for their people, as well as a positive way of earning the currency that they need. Therefore the problem in those early days was whether the competition from countries with an abundant supply of low wage operatives, working with fairly simple machinery (often second-hand, from the West) could be countered with more sophisticated modern machinery, higher skills, and of course much higher wage levels and a higher standard of living at home. But as we have heard from other noble Lords, the situation today is quite different. Today many of the developing countries of the Third World and the Mediterranean are perfectly capable of operating the most modern and
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sophisticated machinery despite their low wages and living standards, even if at first their efficiency may not be quite so high as it is in the West. It follows that re-equipment and modernisation, important, indeed essential, as it is, is not necessarily, and in some cases not at all, the answer to the problem at home.
I may have been oversimplifying the issue; it is very easy to oversimplify this sort of issue. The problem is obviously different in different countries, and as has been stated, it is different in different sections of the industry, whether it is the domestic section, the furnishing trade, the fashion trade, or in the very wide range of industrial requirements, many of which no doubt are outside what may be called the sensitive areas because of their specialist nature. But looking at the picture as a broad whole I cannot see how the present situation can be regarded—as I get the impression from the Communication that was considered by the sub-committee—as one of mere crisis of limited duration, calling just for an urgent and once-for-all transitional arrangement, so that everything can be put right, and then we can carry on without any arrangement at all.
In my view, so long as there continue to be such wide variations of living standards around the world, the problem will continue with us. I would agree, in theory, with the high-sounding aim of the Communication that the Community should attempt to reduce barriers to international trade in textiles. That is all right; but in practical, working terms today—and, I suggest, into the next century—if we want to retain viable textile industries in Europe at all, which I regard as absolutely essential (and every other noble Lord who has spoken today has agreed) then a renegotiation of the Multi-Fibre Arrangement and the many bilateral agreements is of the greatest importance—and that on a continuing basis; not merely for a further period of four or five years.
I entirely agree with the view—and this, too, has been referred to—expressed by Comitextil at the bottom of page 35, where it says—and I quote:
"…those who speak with authority within the Community should leave no doubt of their intention to see the MFA renewed in 1981, preserving the basic principle of regulating world trade in textiles".
I was delighted to gather that, as recently as 9th April this year, Vicomte Davignan,

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the Commissioner for Industry, has virtually confirmed that view. There seemed to be some doubt in the minds of one or two noble Lords whether or not that was so, but I very much hope it is. There will, of course, by many difficulties, and they will not always be the same. The question of enforcement of the bilateral agreements has been mentioned; and there is the need to limit new capacities which would otherwise aggravate the world situation—notably, of course, in South Korea, but in other countries as well. Then there is the problem of the Mediterranean countries; the particular problem, of course, arising from the enlargement of the Community, with Greece, Spain and Portugal; and other problems so well summarised in the report in the submission by Comitextil, again, at the foot of page 34.
I am certainly not advocating a degree of protection which would blunt determined, essential enterprise. Sometimes, that enterprise may have to be ruthless. We must maintain that competitive enterprise, whatever happens. But these and similar problems will be with us for a very long time, just as they have been with us in the past; and we in Europe must be constantly on the lookout and prepared to play them with the utmost and continuing tenacity, but again with a considerable degree of flexibility. Having said that, I realise that there is obviously another side to this coin, and that is the view clearly and cogently put forward by the Retail Consortium. There clearly must be a right balance between the two requirements: as between the needs of the buying public, on the one hand, who want cheap goods, and the preservation and encouragement to greater efficiency of the industry, on the other. I feel there is a parallel here with the impact of cheap food, but what was its effect on the farming community? There is a parallel there.
Do not let us forget that the European textile industry and the United Kingdom industry, I think, in particular—and, as has been mentioned, it is by far the biggest textile industry in the Community—have already over the years had to contract enormously. I do not think this has come out quite as much as I should like to picture to your Lordships today. The statistics in the report are useful, but they do not go anything like a sufficient number of years back to give the picture of the contraction
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one has known. I am now going right back, and for the moment I am referring only to the cotton industry, because these are the figures I happen to have.
In 1913, when our cotton industry was at the height of its fame, it used to be said that the industry produced all that was necessary to fill the home market before breakfast, and that all the production for the rest of the day was exported. The peak figure in that year was 7,000 million yards a year. By 1961, that 7,000 million yards had dropped to 400 million yards; and those of your Lordships who read yesterday's Financial Times—and I am now talking about all textiles—will have seen that the latest figures show that we are net importers of textiles. That terrific change emphasises the position. However, I must in fairness say that, as I understand it, those latest figures include some imports from Western countries, and in particular from the United States—a point that the noble Lord, Lord Rhodes, made when he was discussing the effect of the unfair pricing of energy in that country. Nevertheless, to me those figures are aboslute evidence that we have gone far enough in the decline in our textile industries. Whatever we do, we must see that we maintain the present position and not allow it to be penetrated and go lower down, because if we go further down the scale it will be difficult to maintain viable industries in Europe, whether or not we have outward processing.
My Lords, I am therefore convinced that we must press ahead with the renegotiation of the Multi-Fibre Arrangement and with the appropriate bilateral agreements, and maybe with other bilateral agreements as they come along. Like my noble friends and other noble Lords on all sides of the House, I very much hope that my noble friend the Minister, when he comes to reply, will be able to give us some encouragement about the Government's view on that matter.
6.48 p.m.
Lord BARNBY: My Lords, I am so happy to find myself following my noble friend Lord Rochdale, because I have such a great admiration for him. It is certainly proper that in a textile debate like this he should participate, because he

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is singular in this position, that, having been brought up in the textile trade, which is now under such pressure, he should then have devoted his talents to the shipbuilding industry, which is perhaps in a worse state than the textile industries. Anyhow, I would emphasise that his knowledge of textiles must be great because, as a wool controller in World War I, I remember the great contribution his firm made to the essential requirements of textiles in World War I; and his firm was then probably the largest producer of that particular product in the world.
My Lords, speaking at this time in the debate one can do little more than underline the many points that have been made, in the hope that my noble friend who is about to reply will have been so impressed by the number of repetitions that he will tell us there is every prospect that there will be what every speaker who has taken part in this debate has urged—that is, a renewal of the Multi-Fibre Arrangement.
I want to thank the noble Lord, Lord Rhodes, for introducing this debate. There is nobody more fitted to have done so. He has been in the textile industry all his life, he speaks with practical knowledge, and also has a been Minister in the Department of Trade. All other speakers have hammered home a particular point, but in the course of doing so they have introduced a wealth of details, figures and statistics in support of that main point. The noble Lord, Lord Rhodes, of course emphasised the importance of the industry. The industry is an important one. It is among the large employers not only in Britain but in the EEC. However, I am sure that all those kinds of details have been paraded today.
The industry is composed of so many large federations; and it has so many appropriate bodies not only among the employers but also among the workers. I should like to explain to the House that I, myself, have been in the textile industry all my life—in the earlier part of my life in the States and then in this country—so that, naturally, I could not resist the desire to say a few words in support of the Motion of the noble Lord, Lord Rhodes. Repetition of the points already made is unnecessary; and I shall try to do my best to support the Motion by a few personal points. I should like, first of all, to say
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that I have always absolutely disagreed with the philosophy that we, together with some others of the developed countries, owe it to the developing countries to be indulgent and generous in sacrificing our own market, by giving them generous opportunities to import in competition with us.
The noble Viscount, Lord Rochdale, referred to the question of efficiency, as did my noble friend Lord Drumalbyn. First, I want to disagree with any allegation that there can be inefficiency in the industry. One of the testimonies reported among the wealth of information in this most informative report is that of the British Importers' Confederation, who were of the opinion that a protective tariff is only going to produce inefficiency. Well, my noble friend Lord Rochdale of course referred to that. There is a point which I should like particularly to raise because it rather caused me disquiet—a disquiet which has been intensified by the quotation that he gave: that we are now in deficit in balance. We, the greatest textile exporting country in the world, are now in deficit. Surely that is something to be frightened of.
The British Importers' Confederation, in their submission to the Committee, said:
"Continued protection at the expense of developing countries will only stave off defeat for the inefficient firms, and at considerable cost to the economy, and leave a legacy of resentment at the crushing of the legitimate aspirations of the developing world".
What absolute nonsense that is! But, perhaps it is wrong to select one small quotation like that one out of the wealth of information contained in this impressive report, with which I am sure every speaker has familiarised himself.
My Lords, I have been connected with tariff-making and protection all my life. During that experience I have had ample opportunities to see what can be the effect upon industry and upon a country's employment as a whole if there is not reasonable confidence of a continuing possibility of success. That is one of the things that is so important at the present moment. But I go back a long time. I can remember Taft's election in 1908 in the States. A year or ten months before that, the textile industry was paralysed because of the uncertainty as to whether such protection as there was would be removed

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or continued. I, personally, was a member of President Taft's Tariff Committee which made all the recommendations which were subsequently adopted. But the absence of that assurance paralysed the trade. There was also the Underwood Bill in 1913 which put the US practically on to a free-trade basis. There was almost a collapse of the textile business in the few months which followed it. Then came the war; and the industry was again saved.
There was then the period in this country of the safeguarding of industries, of the McKenna duties—all the different variations of protection and recommendations as to what the Government should do. So it is that I venture to indicate to your Lordships how much the industry must depend upon the reasonable assurance of a continuation of work and profit; and during the economic debate yesterday my noble friend Lord Boyd-Carpenter made a brilliant extemporary speech bearing upon this aspect of industrial success.
But, my Lords, I must pass on. I have referred to my previous experiences of uncertainties about tariffs causing distress to the trade. That is the situation even today with the uncertainty as to whether the MFA will be efficiently and energetically applied. The textile industry in Yorkshire is suffering heavy unemployment because of the imports which, as my noble friend Lord Rochdale has emphasised, are coming in in such increasing volume. How can it be expected, under those conditions of uncertainty, that there will be a readiness among employers for generous expenditure on capital for new equipment? It is uncertainty of that kind which can contribute, inevitably, to inefficiency in the industry.
But, apart from that, there is the tremendous unemployment problem. It has been reported that a few years ago there were 5 million workers in the textile industry. Of those, some 400,000 already have lost their jobs. Think of the scale involved in this country if there is not adequate protection from the developing countries. Again I stress: why should we in this country sacrifice our workers as well as our capital to the other countries—to whom we are giving such generous aid—and throw our markets open to them? It just does not make sense.
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I remember how the textiles industry in the United States showed how employment can be increased by their prosperity and how the opposite is dangerous. The defence angle is something which should be remembered. People forget that in World War I the British wool textile industry supplied the total uniforms for the fighting forces not only of the United Kingdom, but of France, Belgium, Holland, Yugoslavia, Portugal, Brazil and the United States. The first battalions that came over from the United States in 1915 had no spare clothing with them. They came over just with what they stood in. They had two typewriters per battalion. For defence it is important to consider: how could we put the troops in the field? It is true that one can have synthetics, but they do not have the value of wool.
The point of this debate is to bring home to all the authorities concerned that there is going to be encouragement in the belief that the Multi-Fibre Arrangement will be continued and, in the interval, there will be an effective Government attitude which will prevent our industry being swamped by low labour cost goods.
7.2 p.m.
Viscount LONG: My Lords, may I begin by congratulating and thanking the noble Lord, Lord Rhodes, for so kindly instigating this debate on this vital subject of textiles and the 16th Report of the EEC on textiles. In his usual way, the noble Lord, Lord Rhodes, stared straight at me, pointed a finger and said: "I want every answer by tonight or do not go home!" I shall try my best to enlighten him from these Benches and hope that he will be happy at the end of the day.
I should also like to congratulate the noble Lord, Lord Ardwick, on his new appointment to the Opposition Front Bench. I can assure him it is a very comfortable Bench; I was there for a number of years and I hope that he will enjoy the many hours of authority there, because it is very interesting being in Opposition. I congratulate him on his new position. I should like to mention briefly that the noble Lord, Lord Trevelyan, has, I understand, been ill; I am sorry that he is not here to enjoy the debate which the noble Lord, Lord Rhodes, has instigated, and I hope that he too will soon be well recovered.

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I have an apology on behalf of my Minister, my noble friend Lord Trenchard, who was unable to be here to join in this debate. He very much wanted to do so, but unfortunately he was called away. He will read all that has been said tonight in Hansard. Having said that, I should like to go on with the debate and try to unveil sonic of the difficult problems that have been raised in your Lordships' speeches.
There can be no doubt of the significance of the textile and clothing industry for our economy. With a labour force of some 800,000, it is our third largest manufacturing industry, and had a turnover of £93 billion in 1978. The industry is of vital importance to some parts of the country. Much of the industry is capital intensive and highly modernised, although the old image of a labour intensive and out of date Lancashire or Yorkshire industry dies hard. There are very large sophisticated firms in the industry, and also, at the clothing end, thousands of small manufacturers often with only a handful of employees. My noble friend Lord Barnby mentioned that just now.
Easy generalisations about such an industry should, given its great variety of processes, products and companies, be avoided. But the textile and clothing industry is perhaps above all an industry which must be acutely sensitive to customer requirements. I know that the United Kingdom industry possesses the wit and flair to respond and adapt readily to inevitable change. Despite the difficulties the industry has faced in recent decades—the impact of the growth of the use of manmade fibres, changing techniques, capital re-equipment with increasingly sophisticated machinery, the loss of export markets, the rapid expansion of competing industries abroad, inevitable restructuring, the general economic climate within which it has had to operate—despite all these, the industry remains a major contributor to our net United Kingdom output. It is worth noting here that last year our exports of textiles and clothing accounted for over £2,000 million. I break into my speech here to say that there was pride running through all the speeches on this great industry, and it was very pleasant to hear your Lordships who know so much about this great industry of textiles.
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What of the future? Subject to world trading conditions and the general economic climate, the future of the industry is in the hands of its own management and workers. It is not for the Government to dictate how the industry should run its own affairs, or how it can best organise itself to compete successfully in the modern world. But the Government are determined to create a climate in which industry generally in this country can operate effectively, a climate in which initiative and entrepreneurial spirit can be exercised without the level of State activity which has had such an inhibiting effect in the past. Only in this way can the country make the best of all its resources—including the workforce—and create the basis for a prosperous society.
We have made a start along this road in the Budget, and shall continue to move in this direction. But it will not be easy. The economic prospects at home and abroad are not good, and the need to get inflation under control with a sound monetary and fiscal policy must remain a priority. We just cannot afford to price our products out of the market with an inflation rate higher than that of our competitors. And we cannot insulate ourselves from world economic pressures.
It is against this background that the Commission's proposals for guidelines for a textile and clothing industry policy, and the Select Committee's report have to be seen. We do not believe that it is possible or desirable for the Community to lay down a detailed and comprehensive policy for this large and diverse industry. The most that the Government and Community institutions can do—and this is generally recognised by the Commission—is to set a framework within which the industry can take full advantage of its opportunities.
We can accept many of the points made in the Commission's guidelines paper, and shall play a constructive part in Community discussions on any detailed proposals which the Commission puts forward to the Council. I would particularly commend the Commission's view that it is the industrial drive of individual companies which should be the prime mover of progress and adaptation in the industry and that competitiveness is the only guarantee for maintaining jobs in the long-term. We agree, too, with many of

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the conclusions reached in the Select Committee's report.
The noble Lord, Lord Rhodes, put a number of questions and I will try to answer them to the best of my ability and to give him from tonight onwards confidence that the Government are going to press on with endeavours in the Council to make sure that this report is fully understood. I should like to have been able to answer all these questions, but I cannot. However, I will write to the noble Lord. He also mentioned the need for a clear Government statement on the future of the MFA and its effective application after 1981. The noble Lord and others were worried about that dateline. The noble Lord also referred to the need for growth in imports from Mediterranean suppliers to be subject to the same constraints as those from the other low-cost suppliers. The third point raised by the noble Lord concerned concessions which could be made to China in the current negotiations.
So far as international trade in textiles and clothing is concerned, this has long been recognised as posing special problems. The Government fully support the Multi-Fibre Arrangement and I recognise the need for a continuation of orderly marketing arrangements when the current MFA expires. The precise arrangements will be a matter for decision by the member-States of the Community and the Council of Ministers closer to the time. As noble Lords will know, the Council has already made it clear, when approving the outcome of multilateral trade negotiations, that the Community's concessions on textile tariffs were effectively subject to a mutually acceptable arrangement for international trade in textiles being secured after 1981. The Government fully appreciate the significance of the global ceilings. However, as your Lordships will know, these were originally agreed in December 1977, and since then things have moved on. Development in international trade, for instance, in relation to Mediterranean suppliers, made some breaches inevitable, but I can assure the House that the Government are doing their utmost to keep such breaches to a minimum, and will continue to do so. Also, in the Government's Manifesto we pointed out that we shall vigorously oppose any kind
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of "dumping". My noble friend Lady Hornsby-Smith mentioned this point and, if I may, I should like to return to her question later, when I should be able to give more details.
Reference was made to difficulties over the imports of textile and clothing from the Mediterranean associates of the Community. The Government cannot take unilateral action in the case of over-shipment by Mediterranean suppliers, but through the necessary channels in Brussels we shall be doing everything in our power to see that they abide by the agreements. The Commission has negotiated comprehensive agreements with the majority of Mediterranean suppliers, and the Government support the Commission's efforts to reach an accommodation with those countries which have not yet signed an agreement: Turkey and Cyprus. It will have been noted that an acceptable agreement has been reached between the Community and Malta.
During the debate reference was also made to the position of China. I recognise the industry's concern about the great potential of China in the long term as a major force in the international trade in textiles and clothing, and I note the Select Committee's view that an agreement with China is urgently required. In the current negotiations we and the Community will be seeking an agreement on quotas at a level which is realistic and consistent with the Community's overall policy on textiles. My noble friend Lord Campbell of Croy referred to the problem of cashmere and the quotas, and so perhaps I can refer to that while on the subject of China. It is the Community's intention to seek an inner limit for cashmere products and quotas for knitted jerseys, and so on—the products covered by MFA Category 5 in the current negotiations. It is also intended to obtain an inner limit on those products for the United Kingdom. I can assure your Lordships that the Community intends to seek a guarantee of access to raw cashmere supplies from China. My noble friend Lord Campbell mentioned that the meetings had already agreed in Peking—I believe I heard him say—but a further meeting is taking place within the next few days to tie up some loose ends regarding Scotland. I agree it is vital that we get some agreement on this.
Lord CAMPBELL of CROY: Hear, hear!
Viscount LONG: During the debate many questions were raised and some very fine speeches were made, if I may say so, and I felt that I should take into my brief a little more—just to keep Members opposite waiting a little longer for their next debate! I certainly endorse the Select Committee's concluion that the existing MFA agreements should be implemented effectively and speedily. It has been suggested that this is not happening, in that imports from some low-cost sources are running higher than the agreed quota levels. It is, however, misleading to compare the level of a quota with import statistics for any particular year. The latter figure includes certain elements such as the previous year's shipments, imports, re-exports and imports allowed under free circulation, which do not count against quotas. In the case of formal quotas, the United Kingdom authorities will not issue import licences in excess of agreed levels, and there have been no breaches of United Kingdom quotas.
I would not agree that the Community's "basket extractor procedures" are ineffective. Several new quotas were secured by the use of a "basket extractor" last year. Admittedly, delays resulted in imports being higher than might otherwise have been the case, but the Commission and member-States were treading new ground and we hope that the position will improve following the discussions which took place in Brussels earlier this year. During 1979 the lack of import statistics, as a result of industrial action in the Civil Service earlier this year, has so far prevented the United Kingdom from initiating "basket extractor" cases; but it is expected that the statistics will shortly be up to date. The difficulties in relation to import statisics have caused no problems in connection with formal quotas which are already established. These are kept under tight control by the import licensing procedures. That was a point mentioned by several speakers.
Regarding enlargement, we are conscious of the problems for our textile and clothing industry which are likely to arise from the enlargement of the Community. As regards Greece, which was mentioned by one or two of your Lord-
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ships, a general safeguard clause has been negotiated in the Treaty of Accession under which, for a transitional period of five years, a member-State can seek authority from the Commission to take protective measures in the event of a serious difficulty arising. We shall expect to negotiate similar safeguard clauses with Spain and Portugal, but it has to be recognised that there would be greater difficulty in obtaining authority from the Commission to control imports from another, poorer, member-State than in acting against a non-member of the Community. Too much reliance, therefore, cannot be placed on the safeguard clause mechanism.
I can understand the Select Committee's concern that discussion should begin as soon as possible on ways to assimilate the industries of the African countries with least damage both to them and to the Nine. But in the last resort, and subject to the safeguard clauses that I have mentioned and to the Community policy on, for example, State aids, it will be for individual firms in the existing member-States, as well as in the new member countries, to adjust to the new dimension afforded by the enlargement. My noble friend asked me to say that he fully understands this, and will be reading tomorrow what I have said.
On outward processing, noble Lords have drawn attention to the disquiet in the United Kingdom industry about the development of outward processing in the Community. As the Select Committee points out in its report, this has potential dangers for the textile and clothing industry and for employment in the United Kingdom. Nevertheless, outward processing exists, and the Council of Ministers has agreed Community level outward processing restraints for certain products from certain Mediterranean suppliers. We need to consider the position very carefully, and are playing a constructive role in Community discussions on a regulation to control outward processing restraints where these have been established. We shall take full account of the views expressed by noble Lords, by the United Kingdom industry and by unions.
I was asked a further question regarding the dangers to sectors of the textile industry. These are now a reality in the case of carpets, stemming from the United

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States energy policy. Although imports from low cost sources are part of the major problems facing the United Kingdom textile and clothing industry, this should not be regarded as the whole of the import story. Imports from developed countries have also been rising rather rapidly.
I take first the United States. With the weakness of the dollar against the pound in the last six months the exchange rate against the dollar has risen 10 per cent—and continuing inflation here has seriously affected the competitive position of the two countries' textile industries. In addition, the increasing divergence—flowing from wider world energy developments, with which noble Lords are familiar—between the controlled, and thus lower American oil and gas prices and those in Europe means that for synthetic fibre textiles the competitive position of the United Kingdom and Community industry has further worsened. The picture is complex, due to the varying mixes of the oil and gas feedstock components in different products. But for a number of major fibres, the US advantage in this respect is significant and could lie between 14 and 29 per cent.
Industry is, reasonably, worried about this state of affairs: some imports are rising, as the noble Lord has pointed out. The problem, however, is not yet universal. What can be done about it? The Commission should be discussing it today and tomorrow in its twice yearly high-level discussions with the US. The industry, through its Community level trade federation, is pressing the Commission for Community action to control these imports The Government are closely following developments and will do their utmost to ensure that quick and serious consideration is given to these representations. But actual or threatened disruption, and detailed information about the extent of the advantage enjoyed by the US producers, will have to be displayed to the satisfaction of the Commission and other member-States, if there is to be some Community action. The ideal, of course, would be for the Americans to remove the source of the disruption of competition, by bringing up its oil and gas prices to levels comparable to those facing the Community. That would also be good sense for energy policy.
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The noble Lord also mentioned the American Government's textile programme, and that Government's expressed commitment to assist the American textile and clothing industry. I am aware of the American programme, but I am not sure that it is so very different from what we are doing. But we are looking at this point. As I have explained, we, too, fully support the MFA, and its effective monitoring and implementation. In the Community's arrangements, there is provision for introducing new quotas against low-cost imports which rise to unacceptable levels, and, like the Americans, we, too, are paying special attention to the most sensitive textile and clothing products.
I know that the American programme envisages a more tight control on imports from low-cost sources during the remainder of the MFA, but I am not sure how this is working out in practice, or whether the outcome will be significantly different from the Community's arrangements. But we shall not hesitate to learn from the Americans, if that is consistent with our overall objectives. Again like the Americans, we are keeping in close touch with the industry and the unions about the operation of the MFA arrangements. And the textiles EDCs and sector working parties, together with the NEDC's Joint Textile Committee could be regarded as our equivalent of the American high-level Industry-Labour-Government Policy Group, which has been established.
As noble Lords will know, the EEC Council of Ministers has declared that it will have recourse without delay to the appropriate safeguard provisions of GATT, if foreign producers of synthetic textiles try to take advantage of artificially cheap supplies of energy and feedstock materials to threaten disruption of the Community market.
Secondly, there is the question of United Kingdom competition with the rest of the EEC. Imports from that quarter increased, often substantially, in 1978. There may well have been some temporary bottlenecks—for example, in United Kingdom capacity—which contributed to the scale of the import increase in 1978. But the opportunities are undoubtedly there within the United Kingdom and Community markets, and our industry is no doubt taking the necessary steps—on design, marketing, quality; all important

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factors, as well as price—to improve its market share. There should be good scope here, particularly in view of our relatively favourable labour costs, for our firms to perform well in competition with other developed countries. I accept that it will not be easy, even so, but the chances should be there.
I was asked about the advisability of discouraging additional investment in textiles and clothing in developing countries, particularly those, such as Korea, with excessive ambitions. It would certainly be unwise and contrary to their own interests for developing countries to continue to invest in areas of excess capacity in textiles and clothing, and I very much hope that the Commission has made this clear to developing countries. In the final analysis, investment decisions are for developing countries themselves to take, although I should hope that by now the dangers for the Third World of over-dependence on particular industries are well recognised.
Noble Lords referred to the need for a greater reciprocity in international textiles trade, as did the Select Committee in its report. Different countries do, of course, adopt varying methods of protection for their domestic industries. Our policy will be to try to secure the fairest trading opportunities that are possible for our own industry. I recognise that nearly all low-cost producers at present maintain high tariffs on textiles and clothing products. Naturally, we would welcome liberalisation, although this could affect our own interests in maintaining EEC restraints on imports from low-cost sources. No doubt this issue will, as the Select Committee suggests, be looked at when the MFA conies up for renegotiation in 1981.
Time is getting on, and we have covered a great deal of ground. Perhaps noble Lords will forgive me if I cut out one or two of the less important items in the middle of my brief. My noble friend Lady Hornsby-Smith also raised the question of dumping. The Government are committed to opposing all kinds of dumping. Specific cases are investigated thoroughly by the EEC Commission, and the Department of Trade is always ready to give guidance to sectors of United Kingdom industry wishing to present a case to the Commission. There is, of course, no
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concept of dumping in trade between member-States of the Community, although there is provision in the Treaty of Rome for action to be taken against firms abusing a dominant market position in the Community. If my noble friend has any reason to suspect anybody, perhaps she would let me know after the debate.
In discussing the MFA, there is a temptation to consider the position of the United Kingdom textiles industry in isolation. But we do not operate in a vacuum. Within the EEC we have to press the United Kingdom's case and seek to persuade other member-States of the merits of our views. We cannot expect always to succeed. The EEC has to do the same within the international trading community. Essentially, international trade policy is a question of negotiation. We and the Community are in a position to impose our will unilaterally on the rest of the world without consideration for the interests of our trading partners. This said, we shall continue to pursue United Kingdom interests on textiles matters vigorously, but we cannot ignore our wider interests and the realities of our position in the EEC and in the world trading community.
And at the domestic level, as the Chancellor of the Exchequer made clear in his Budget speech, we should do well to acknowledge the limit to our capacity as politicians to influence the course of economic events for the better. At the risk of repeating myself, I think it is worth emphasising that in many fundamental respects the future of our textiles and clothing industry is in its own hands. We shall play our part on international trade matters, within the constraints I have mentioned, and at home the Government will concentrate on creating conditions in which enterprise can flourish and provide more secure and better-paid jobs. It will be for the efficient and responsive textiles and clothing firms to take full advantage of their opportunities. I thank noble Lords for their patience.
7.32 p.m.
Lord RHODES: My Lords, I do not intend to make a speech. I shall ask the Minister only one question. Which department provided the noble Lord's brief? Was it the Department of Industry, or was it the Department of Trade?
Viscount LONG: My Lords, it was the Department of Industry.
Lord RHODES: My Lords, I thank the noble Lord. Then I have an answer to my first request about the distribution of this report. Newspapers which are competent and which comment on the textile trade, such as the Oldham Chronicle—which knows this industry inside out—have referred to this report as the best which has been produced in years. What has happened to the damned thing? Copies of the report were printed. The House of Commons Vote Office received 40; the House of Lords, 100; the Holborn Stationery Office, 175; the House of Commons European Committee, six; witnesses, 25; and Manchester, six.
I ask noble Lords: what are we playing at? What on earth are we supposed to be doing upstairs in this committee? We spent hours on this subject. We occupied the time of clerks, and this report was printed at great expense. Do noble Lords want us to carry on with this sort of thing, or do they not? We can easily sell our know-how, believe me, to the people we have been having discussions with overseas. It is about time that we took hold of the question of distributing information outside this place, where there is so much expertise; but we are not taking advantage of it. This is an example of not taking advantage of that expertise. For goodness sake! can we not do something about it, so that there is a real distribution of information? Every textile company, with more than 50 employees, should have a copy of this report.
To give noble Lords an example, I had something to do with the House of Commons Blue Book on the question of the textile trade, and immediately afterwards I went to Japan where I visited the Toyo Spinning Company—a gigantic organisation—where I found that they had a copy of the Blue Book in their safe. They said, "This will be our bible for the next few years". It is about time that this report was distributed to the textile trade as their bible for the next few years.
I shall not comment on what the Minister had to say in the gabbled version of his reply, but I shall return to it.
On Question, Motion agreed to.

JUVENILE DELINQUENCY: CO-OPERATION IN PREVENTION
7.36 p.m.
Baroness PHILLIPS Baroness PHILLIPS rose to ask Her Majesty's Government what action has been reported on the Home Office Circular 211/1978, Juveniles Co-operation between Police and other Agencies. The noble Baroness said: My Lords, I beg to ask the Unstarred Question standing in my name on the Order Paper. If one says that one is for crime prevention it means that one is against sin. This is what a Home Office research bulletin writer has underlined. To take positive action in an attempt to achieve crime prevention must surely receive universal approval. Whether one adopts the moral or the social angle—which I prefer to do—or the economic angle, it is always cheaper to prevent crime than to spend energy, time and money upon trying to pick up the pieces after the event.
Juvenile crime has risen dramatically in the last few years. I will give just a few examples. A group of shopkeepers, police and security officers in Croydon set up a special project to deal with theft from shops and from people during a particularly busy period—in other words, at Christmas. Out of 672 apprehensions, 50 per cent., or well over 350, were under 17 years of age. The chief superintendent of the community relations branch of the Metropolitan Police said recently that one-quarter of all suspected criminals arrested in London were children. He also mentioned that even 10-year-olds were now being arrested.
A Hampshire study of theft carried out between January and November 1978 showed that 3,300 offenders were between the ages of 12 and 21, compared with 600 between the ages of 22 and 31 and 70 over the age of 62 years. That, incidentally, disposes of the suggestion put forward by a member of another place that these crimes are committed by confused old ladies.
Bearing in mind these statistics, of which I have given noble Lords only a sample, it was good to read in a reply to a Question asked by a Member of another place that an interdepartmental circular had been sent out in December 1978 on the subject of juveniles and co-operation

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between the police and other agencies. The kernel of the circular is to be found in the first sentence:
"The prevention of juvenile delinquency is not the prerogative of any single agency. A concerted approach can avoid misunderstanding, apparent clashes of interest and a wasteful duplication of effort".
This circular, from four Government departments—which I felt must surely be unusual—was sent to all chief officers of police, to chief officers of education, to chief officers of social services, to chief probation officers and to all county councils, local authorities and clerks to the justices—indeed, to any group which was likely to be concerned with schemes to prevent juvenile delinquency.
Since the chief constables were asked to write to the Home Office within six months—and I have given them six months—about the joint activities, I wrote as a member of the Standing Committee on Crime Prevention, to inquire what had happened so far and I offered assistance if they needed it. So far I have had replies from Greater Manchester, Humberside, North Wales, where they have some very imaginative truancy schemes; Norfolk, West Yorkshire, Kent, Thames Valley, Leicestershire, Devon and Cornwall, Hertfordshire, North Yorkshire and Cheshire. That, my Lords, leaves quite a number of chief constables who have not had the courtesy to reply to me. Perhaps I am not important enough. So I am hoping tonight that the Minister will be able to tell me that all the chief constables have replied to him within the prescribed six months, and I know that we are going to hear about some exciting and inspiring schemes.
I should now like to refer to another document, which presents some idea of why we have this problem. This is called Day Care for School Children; it was prepared by the Equal Opportunities Commission and published in September 1978. Here we have a picture of 1 million children with working mothers in 1971, and the figure must be considerably higher now because that is eight years ago. Obviously these are not all unsupervised but with the increasing number of one-parent families the report suggests that, on the basis of available evidence, approximately one-quarter of the 11–15 year olds will be left alone during the school holidays and before school and after
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school. In other words, if we estimate a conservative figure it is something like 375,000 children who are at risk.
What are the consequences of children being left alone? Obviously there is boredom, there is lack of adult company; some children will be in actual physical danger and some will get into serious trouble. We do not have very up-to-date figures. One of the curious things that one finds when doing research is that it is rarely possible to find figures that are up to date. In 1975, 24,000 children between the ages of 5 and 14 were involved in road accidents and 8,000 were seriously injured or killed. In 1974 over 36,000 children were admitted to hospital because of accidents in the home and in 1975 24,000 children under 14 were found guilty of indictable offences.
Only yesterday in the Daily Telegraph I read:
"British Rail is preparing for a surge in child vandalism. It costs £4 million annually".
That is only British Rail.
"Special trains patrolling hundreds of miles on 'at risk' tracks are to be used in the fight against attacks on the trains and British Rail property. One official explained that bored children easily get into mischief on the long summer evenings and as a result British Rail has stepped up efforts to warn children on the dangers of trespassing and asking parents 'Do you know where your child is playing?'".
Today I have given the prizes at a little school in Poplar where the teachers are doing a magnificent job with physically handicapped children. They fight a constant battle against broken windows, broken equipment and vandalism of the most appalling kind, committed in the main by the young. Now we have to look at the fact that the long summer holidays are approaching, so what sort of provision exists? The noble Lord who is to reply may not have the answer to this, but I think it is so much part of the endeavour to prevent juvenile delinquency. First I think we have to recall the powers and the obligations. The 1944 Education Act states:
"It shall he the duty of every local authority to secure that facilities for primary, secondary and further education are provided for their area, including adequate facilities for recreation, social and physical training, and for that purpose a local education authority may establish, maintain and manage, camps, holiday classes, playing fields, play centres and so on".
Then again Section 1 of the Children and Young Persons Act 1963 is concerned

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with preventing children from going into care, and the powers are there.
What actually is provided? The Commission wrote to a number of authorities—and of course, again, a number did not reply. One wonders whether it is discourtesy, inefficiency or whether we actually pay some of our officials more than they deserve to receive. Out of 47 county councils that replied, 37 had schemes. What about the other 10? Out of 52 metropolitan boroughs in London, 49 had schemes. What about the other three? Of 12 Scottish authorities, nine had schemes. The National Playing Fields Association have 3,000 play schemes in England and Wales and about 100 of those are in London alone. That suggests to me that there are many towns with no schemes of any kind at all.
The report of the Equal Opportunities Commission shows that the provision was very patchy, with no regular returns and no real overall concern. What can be provided? Play centres, adventure playgrounds, camps, children's houses, support for the many voluntary schemes, whether the formal ones like the scouts or the cadets, or the informal ones. The Silver Jubilee Trust Fund, the president of which is His Royal Highness the Prince of Wales, is set up for youth to provide service for others, and a large sum of money is available for this purpose. This can be fun as well as taking up energy.
I thought it interesting that the head of the crime prevention department of the Netherlands Department of Justice gave two reasons why he considered that action against crimes committed by juveniles was particularly important, and they are worth our taking note of. First, in the short term preventive measures are likely to have a greater impact on youngsters than on older criminals. Secondly, there is a long-term gain to be made by adjusting incipient criminal careers to responsible citizenship.
So by now the Minister will have realised that I am not just asking what action has been taken already, but also what further action can be spurred on by this debate. This is the Year of the Child and it is not unreasonable to ask that all authorities provide proper care
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for the children in their area. This is not to pass any judgment, whether moral or otherwise, on whether or not the mothers have to work. This is to state the facts as we know them. Full publicity must be given to where the facilities are. Just try to find out where all the facilities are—and if there are not sufficient, then we must have the playgrounds open and all the other great public buildings open.
It is curious that the facilities for recreation are actually closed for more hours in the year than they are open. The parents must make certain that they know where their children will be and what they are doing before and after school and during the holidays. Why not encourage these children to join voluntary groups? Let us have some advertising on television and radio about the dangers of this behaviour, but also about the opportunities for fun and adventure that exist as a sensible alternative. As usual, we fall lamentably behind France, Holland, Belgium and Germany, to say nothing of the Scandinavian countries, where provision of all kinds is made for children and youths. If I am going to be told that it costs too much —and I hate to talk of money—then I would remind the House that in 1976 there were 82,000 children of school age in care at an average cost of £3,500 per child. In his speech to the Police Federation conference the Minister, whom we shall have the pleasure of hearing tonight, said, in relation to juveniles:
"Care and control are two sides of the coin. Unless young people can be shown that their own happiness and the future of our society rests in large part upon their consideration for the feelings of others as well as themselves, we cannot be said to be truly caring or concerned with their welfare".
My Lords, I applaud and I endorse his words. I ask tonight what action Her Majesty's Government will take in the matter of preventing juvenile delinquency?
7.50 p.m.
Lord HUNT: My Lords, I was delighted to note the intention of my noble friend, if I may so refer to her, to ask the Government about the developments since that most important inter-departmental circular of 19th December last year. In a debate in your Lordships' House on 31st January this year on Home Office penal administration I suggested that some effective authoritative link was needed at central Government level in order to

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ensure effective action at that level to prevent crime and delinquency, and to stimulate and encourage the initiation of that kind of co-operation at local level also. I must admit that it was disappointing to me when the then Minister—I am glad to see that he is going to speak this evening—made no reference in his concluding speech to my question and made no mention of that inter-departmental circular, that circular having been issued only six weeks before that debate. It appeared not to be in his Home Office brief.
Since today's debate is in the nature of a Question, I will now ask the present Minister to say in his reply whether he does not think that something more is called for than an inter-departmental circular, signed though it was by three Permanent Under-Secretaries, wearing the robes, the pinstripes, of power, if we are to follow the Guardian; whether it also represents the present Government's policy in this vital area of the nation's problems, and whether indeed, as I suggested on 31st January, there is merit in having some standing inter-departmental machinery, or, perhaps better, some independent body at government level, national level, despite their dislike of Quangos, to keep crime prevention under review and to stimulate more constructive and concerted measures at local level.
I have been greatly impressed by the pioneering work in Devon and Cornwall inspired by the chief constable, Mr. John Alderson. Recently he came to address the annual conference of the National Association of Probation Officers. I had previously been down to Exeter to hear at first hand from members of his crime prevention consultative group and from members of his crime prevention support unit, and I was very impressed indeed. I understand that a juvenile bureau has since been established which is operated jointly by the police and the social services and that it is working well. There are other clear and encouraging signs that all this initiative is beginning to pay off in such cities as Exeter and Plymouth.
There are, of course—the noble Baroness mentioned some who replied to her—other initiatives elsewhere; and in fact no single blueprint would be appropriate to every place and to every circumstance. With 2½ million reported
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criminal offences annually, and we understand that that is only one-tenth of reported crime overall, it is the tip of an iceberg. It is quite essential that there should be such initiatives, not only in exceptional places where there are outstanding chief constables such as Mr. Alderson, but in every city in the land. This is very far from the case at present. I am sure most of your Lordships would agree that there are still many places where the tasks of the police and the other agencies addressed in that circular are formal and cool and the contacts occasional, where indeed one party tends to see the other as the opposition, and where, most regrettably, relations between police and groups of the general public are downright deplorable. Here is an area in which, notwithstanding the new Government's intention to minimise governmental intervention, it seems to me to be very important indeed that they should act firmly to improve relationships and to cultivate collaboration in the prevention of crime.
The noble Baroness's Question relates to the prevention of juvenile delinquency, and as a general proposition the best hope of tackling this alarmingly growing phenomenon is not by such measures as appear to be implicit in the Queen's Speech and in the Conservative Party Manifesto which preceded it, with their threat of sterner and more punitive action. The Minister has recently repeated and made more explicit that intention.
From some considerable experience of working in the youth service myself, and from my continuing contacts with the Probation Service, I can say, both on the evidence and from personal conviction, that, with certain exceptions for whom secure accommodation is clearly inevitable and necessary, commital to penal institutions will not work. For over 75 per cent. of juvenile offenders it is a recipe for costly failure. It is a prospect which is rightly viewed with apprehension, and I would go so far as to say with hostility, by the Probation Service and by directors of social services. There is no more appalling aspect of this present situation than the increasing numbers of juvenile offenders, more than one-third above the figure as reported in 1977, who are even now being sent to penal institutions without having previously had the benefit of care and supervision in the community.

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The best hope is to involve delinquent youngsters, under professional supervision and with volunteer support, in the problems and needs which abound in their own neighbourhoods, and, as the noble Baroness pointed out, was the intention of the 1944 Education Act, to challenge them through leisure activities which make demands on their energies and which give them a sense of satisfaction. Most of these activities are capable of being included in what is termed "intermediate treatment". It would, in my view, be better still to step up the provision of programmes of neighbourhood service and leisure activities, perhaps under the auspices of the special temporary employment programme and day release schemes, which involve youngsters before—and without the need for—the intervention of the courts. We need more measures of this kind, not more prisons, more detention centres and more borstals.
The intermediate treatment fund which is administered by the Rainer Foundation, of which I am privileged to be president, has just published its first annual report. In that report its chairman, Michael King, has written the following words:
"The serious lack of community-based treatment resources specially designed to divert youth in the 14 to 17 age group from slipping into further and more serious crime is an important contributory factor in the startling increase in the number of 15 to 16-year-old boys committed to detention centres and borstals since the 1969 Children and Young Persons Act".
My Lords, this, in my firm belief, places a premium on more citizen support both for the provision of schemes involving young people generally and in the treatment of young offenders. I should, for instance, like to see a faster evolution in deprofessionalising the Probation Service. I should like to see a pattern evolving which has long since emerged in Holland, for example, and in Sweden, by a wholehearted recruitment of voluntary assistants in the service working under professional guidance; ordinary citizens sharing the responsibility with the Probation Service and with the social services in the task of keeping their young, junior citizens lawfully occupied and in order. That is what law and order means to me.
So in the sense and spirit of my noble friend's Question, I will conclude by asking two further questions of the Minister who is to reply. If I might
1104
remind him, I have asked one question already, so this is the second question. Can the Minister reassure those of us in this House, and many more outside who are concerned about the interpretation placed on the Government's policy about law and order, that his Government intend to put a constructive emphasis on this slogan, both by encouraging and enabling community action to pre-empt crime and by giving more support to intermediate treatment schemes?
Thirdly, will the Government consider in a future inter-departmental initiative, the need to call for public co-operation with the Police, the Probation Service, the Education Service, the social services and any other appropriate agencies, not by "having a go" at dangerous criminals and thugs, but by tackling the grave question of juvenile delinquency in local constructive programmes? It is only by community action—indeed, where it is lacking, by the re-creation of a sense of community through tackling crime before it occurs—that we can hope to get the measure of hooliganism, vandalism and juvenile violence, and turn the misspent energies and perverted ideas of many of our deprived young people into constructive and useful channels. There is no other way.
8.2 p.m.
Lord MISHCON: My Lords, may I first apologise for the fact that my name does not appear on the list of speakers. I gave notice to the Table at a late stage and I promise to be brief by way of some sort of defence for rising at this time. I hope that I may be forgiven for making what may seem to be a political point in what should be a non-political subject. I do so because of the urgency of the problem of juvenile delinquency and its relevance to the whole question of law and order, to which the noble Lord, Lord Hunt, referred. It was also a matter which featured very prominently in the Conservative Party Manifesto, which dealt with the question of law and order in a manner which could be debatable. However, it emphasised to the electorate how important it was, from the Conservative Party's point of view, that the matter of law and order should receive primary consideration by any Government.
I look at this moment from these Benches, at a time when we are consider-

1105
ing an Unstarred Question on juvenile delinquency, and see not one Government Back-Bencher present. I see the Minister, who it is always a delight to see, and his noble friend Lord Long, who equally it is always a privilege to see and hear. However, I see them in their lonely isolation on the Government Front Bench dealing with an issue of law and order—almost the first one that we have dealt with in this House—and the whole problem of juvenile delinquency. I say, with a feeling of regret—and I do not wish to make a political point—that it seems a great shame that more importance has not been attached by the Government Benches to the Unstarred Question that my noble friend Lady Phillips so properly put down.
The next point that I should like to make is, I hope, a more constructive one. There is not the slightest doubt that the question of juvenile delinquency is one of the most tremendous social problems facing this country today. It has many aspects. It has the aspect of poverty, of broken homes and of very difficult social considerations which appertain to a certain section of our population with its own individual problems. I am talking about the immigrants to this country who have great problems. I am talking of the difference between parent and child, some of the disabilities that unfortunately they undergo and some of the stresses and strains which are put upon their respect for law and order when some of them feel they do not attain social justice and tolerance within our society. So it is necessary to have the amalgamation of all the thought and all the experience of the social services, youth services and so on.
When I read the circular which was addressed by the authorities—the Ministries that have already been mentioned—I, too, noted the time limit of six months or so. I saw in that circular mention of the need for reports to be made centrally so that the various Ministries could consider concerted action and experience could be gained centrally and nationally from what had been done by way of experimentation and otherwise in various areas throughout the country.
We all know that the police do a tremendous amount in individual areas and that various youth agencies also do
1106
a tremendous amount. There is a terrific amount of goodwill. There are many volunteers who do this type of work with great sacrifice, and to great social purpose. To be able to wed all those efforts and to learn centrally from their experience was what I thought to be the purpose of this circular, which made chief constables the medium through which the arrangements were organised in the various areas so that reports could be made. I wait to hear from the Minister—as does my noble friend Lady Phillips—what has been the response. If the response has been good, what action will now be taken? Moreover, paragraph 8 of the circular says:
"Depending on the response to this circular, consideration would then be given to the production of a summary of relevant schemes for general circulation to all interested parties".
May I ask how it has proceeded? If it has not proceeded, because there has not been a proper response, what steps will the Minister take in order to ensure that responses are obtained as a result of the initiative that was taken last December? I feel this House can do nothing more useful in its deliberations than to try and push forward something which may be along the lines of social work—encouragement in education and in youth work—to ensure that this tide of juvenile delinquency does not swamp us. I do not use those words in any dramatic sense.
I hope that the Minister will not regard my final point as irrelevant to this debate. I promise that I shall return to it again. Indeed, I believe I am right in saying that he has already had notice of it from the Lord Chancellor's Department, and, if he has not, will he accept my apology because I understood that that notice had been given. One of the great difficulties in dealing with children who start off by being unfortunate in their home background, or who show some measure of misconduct which may well lead to juvenile delinquency, is that they find themselves the subject of care and control applications. If those children are not to be turned into juvenile delinquents it is vitally necessary that those care and control applications are dealt with with some amount of promptitude.
In the meantime, the children are sent all over the place. The parents do not know where they are and local authorities

1107
do not know where they are. The delays which are occurring, about which I gave the Lord Chancellor's Department specific notice—which I was promised would be passed on to the Home Office, which has responsibility in these matters—are scandalous. The courts are now taking months, during which all these applications are adjourned, before making a decision. To those who have responsibility for these matters in local authorities, in social work and elsewhere, this is causing the utmost concern. I hope that I have not wearied your Lordships for too long, and again I apologise because my name does not appear on the list of speakers.
8.10 p.m.
Lord DAVIES of LEEK: My Lords, I apologise for rising to speak, but I also affirm to the House that I shall not be longer than three minutes. First, I am grateful to my noble friend for asking this Question. Some of the statistics which she has mentioned should almost have been blazoned throughout the land. I do not know how we can impress the urgency of this matter upon people. Ruskin uttered the phrase:
"There is no wealth but life"
and that is the axiom of economics. Our welfare depends on our children. I was brought up in the wilds of Wales. I had the mountains, the woods and the rivers. They do not exist so much in modern society. We are becoming an insect society. Nothing is more horrible for child-life than living in a high-rise flat. I remember quoting in this House the famous poem which I learned as a five year-old in a little Welsh mountain school:
"Over the waters and across the lea,
That's the way for Billy and me,
Where the pools are bright and deepest".
Some of these fellows never tread on real grass. We have an insect society; a massive population moving to perdition. Nobody seems to care, because the economic fact is that the shadow of prosperity is with us—not the substance—because the motor car, the colour television, the flat and the bathroom are dominated by the fact that the mother and the father must work like hell to earn the income to keep everything going.
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Behind all juvenile delinquency the great old background of Britain, the homeliness of life and the neighbourliness are shut out. Half of Londoners living in flats do not know the names of their neighbours, and when they do know them they cock their noses up with silly pomposity, for some reason that God only knows. This kind of thing is growing. Therefore, although I criticise television for the terrible violence it shows—everthing opens with a shot, a bang or a scream—it should co-operate much more in this area of trying to solve the problem of juvenile delinquency.
I promise not to delay the House. I also want to pay tribute to some programmes shown on television, which have brought children together. In Wales I well knew of the marvellous contribution which the noble Lord, Lord Hunt, made as a mountaineer to child health and child strength. When I was a kid I liked to wrestle and fight; we liked to push each other in the rivers; but we did not want to smash up old women, or tear windows and houses to pieces. My three minutes is nearly up. Lastly, I do not understand local authorities which are supposed to be carrying out slum clearance, but which leave the skeleton of ugly houses, torn and shattered, looking like the East End of London after the bombing. They are dens of iniquity for children. Those children commit all sorts of petty crimes in them: smashing windows, lighting fires and terrorising old people. When local authorities start on slum clearance as a project, they should not clear too much at once, but should rebuild as quickly as possible.
I see that three minutes is now on the clock. I appeal to the Minister to ask the Government to give us a day or two in this House when—without making party points—after the Recess, we can discuss in depth this vital problem which affects the destiny of Britain and our future.
8.14 p.m.
Lord BOSTON of FAVERSHAM: My Lords, my noble friend Lady Phillips could hardly have chosen a better moment to raise this subject. Not only should I like to thank her for initiating this debate, but I should also like to congratulate her on her timing. She has taken a keen interest in this whole subject for some time

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and her knowledge is admired here and elsewhere. Of course, she has considerable experience as a magistrate and in other ways on which to draw. Therefore, she speaks with great authority.
The timing is right for several reasons. There is, first, the point that my noble friend mentioned about the timing of the response to the circular. I very much hope that even if the Minister is unable to give a complete report on the response to the circular tonight, he may undertake to do so as soon as possible. However, there is also a good reason for debating this subject at this moment, because the past three days have seen the first national conference on Juvenile Delinquency and Children at Risk, to consider the intermediate treatment of juvenile offenders and young people at risk. I am pleased to see that that conference, held in Sheffield—which had, of course, been planned some time ago—has had the full backing of the present Government with, if I may say so, just the sort of turnout of a galaxy of most of the relevant Ministers we should have intended had we remained in office.
That conference dealt with only one of the matters touched on by the circular which we are considering tonight, but it is an important matter. Other aspects of juvenile delinquency were also referred to there. Those attending the conference were mainly the sort of people to whom the circular was addressed. If, on examination, the conference is found to have been worth while and productive, it might be useful to press on with others on specific aspects of the problem.
I very much agree with what the noble Lord, Lord Hunt, said tonight about intermediate treatment. In saying that, I must also apologise to him for obviously not having done full justice to his speech in our debate on 31st January. I remember the occasion very well indeed because it was my first ministerial speech in your Lordships' House and I was rather conscious that time was getting on. I believe that I spoke for 31 minutes, which I do not think the Whips on my side thought very kindly about. However, I remember the noble Lord's speech. Whether or not that particular point was in my brief, I remember regarding his contribution on that point in particular as most significant, and certainly call it to
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mind, though at the time I did not reply to it directly.
My noble friend's Question is timely for at least one other reason. Last December—the same month as this circular was issued—the then Government published a Green Paper entitled Youth, Custody and Supervision: a New Sentence, and embarked on a consultation process on it. The Government asked for comments by June this year. Although that Green Paper was on a rather different aspect from those covered by the circular, nevertheless it is relevant to the whole subject of juvenile crime, punishment, treatment and sentencing policy. I shall return to that in a moment.
The circular itself stemmed in part from a conference organised by the Home Office in March last year at Ditchley on the Police and Juveniles, which was presided over by my predecessor as Minister of State at the Home Office, my noble friend Lord Harris of Greenwich. One matter which attracted particular attention there was the system developed in Cheshire for community liaison, involving the police and other relevant agencies. The process for consulting on what to do about particular cases seems to have had some success. A useful and illuminating account of one aspect of the Cheshire scheme is given in an article in the Journal of Social Welfare Law for March 1979 by Neville Shone and Ruth Christie of the University of Liverpool, who have been involved in a research project in Cheshire. The account shows how an effective working relationship between the police and other agencies has, as the authors put it:
"developed and led to the creation of a comprehensive diagnostic, preventive and treatment service for delinquents".
The scheme and the project give weight to some of the very proposals put forward in this circular, for, as the authors go on to say:
"The benefits of sharing in this consultation procedure have gone further than merely creating a mutually supportive atmosphere in which to work. This was all that was hoped for when the project began. In reviewing the results of the work undertaken, it can be seen that the consultation procedure has formed the foundation for a comprehensive flexible service for children in trouble. Before any decision about court appearance, every child is offered systematic diagnosis and assessment. New resources have been created or linked in a new way to provide opportunities for care and treatment within the community before or after court appearances".

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So that is somewhat encouraging.
Of course, it is important always to bear in mind that the decision on whether to prosecute or not, and whether to caution or not, must remain the responsibility of police forces. There is some encouragement, too, to be gained from the report of the Commissioner of Police for the Metropolis for 1978, because in Chapter 6 on community relations there is quite a meaty section headed, "The Police and Young People". I use the word "meaty" because so often when one sees these matters discussed in articles and elsewhere there is very little meat and rather a large quantity of airy-fairy talk; and it is good to see something meaty in a report of this kind, too.
That section refers to co-operative ventures of the sort we have been discussing. It is commendable and heartening that the Metropolitan Police have been pursuing these policies vigorously and that the Commissioner, Sir David McNee, is able to report that progress has been made. It is also worth noting that, as the report points out, this year, which as we know is the 150th anniversary of the Metropolitan Police, also sees the 10th anniversary of the Metropolitan Police juvenile bureau system.
This has proved of great value, and is another example of the usefulness of consultation and co-operation with other agencies. The bureaux—there are 23 of them in the force area—deal among other things with cautioning as an alternative to prosecution. It is disturbing that so many youngsters, as my noble friend has already said tonight, are still having to be referred to the bureaux—37,656 last year. Admittedly, this is a drop of over 2,000 on 1977, though, as the report goes on to observe, previous falls have not been maintained.
But the proportion of juveniles cautioned has remained for some time at about one-third of all those coming to police notice. It is heartening that the report is able to state:
"There are indications that police are largely making the correct decisions. In 1976, 9,000 first-time offenders were cautioned. By April 1978 only 20 per cent. had come to police notice again".
The report also mentions that since 1975 bureaux have been diverting some young
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offenders into intermediate treatment, which is a good thing, and allied schemes, and that all bureaux are encouraged to co-operate with local intermediate schemes, although, as it adds, the level of participation is determined by the facilities provided by the various local authorities.
I hope that the Government's public expenditure cuts are not going to affect adversely the work being done and planned here. Indeed, many local authorities need to be encouraged to do much more. I hope that the Minister—as I believe my noble friend herself mentioned in the course of her speech—may be able to say something reassuring about that. It is hard enough to get schemes of this kind off the ground in the first place. It is so often hard to persuade bodies to embark on them for many people have been sceptical about them, let us face it, although the results show that they should not be. It would be all the harder to start them up again after they had been dismantled through lack of funds.
Other police forces too have been working on similar schemes. Although time does not permit me to mention them in detail, they do deserve praise. I referred just now to the last Government's Green Paper, A New Sentence for Young Offenders; a consultative document to see whether a new form of custodial sentence might replace the present rather unsatisfactory set of alternatives. There have been some ominous signs over the past few days that the Government may be in the process of abandoning the consideration—and I stress that word "consideration"—of the suggested new so-called generic sentence as a possible alternative. There was, for example, a report in the Daily Telegraph on Monday of this week, 9th July.
I note that at the Sheffield Conference, the Minister of State, Mr. Leon Brittan, is quoted as saying yesterday that there had been some misunderstanding of the Government's policy on juvenile offenders. I have not seen the text of that statement and only heard him on BBC Radio 4 last night, and reported in the Press today. I do not know how reassuring his statement might have been. But I hope that the Government are not going to cast aside all the efforts put by so many bodies and individuals into the consultations before

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they have had a chance to consider those representations. I hope that the noble Lord, Lord Belstead, might feel able to reassure your Lordships on that point tonight as well.
This whole problem is an enormous one, as a number of my noble friends have said, including my noble friends Lord Mishcon and Lord Davies of Leek. It is profoundly disturbing that we have reached the stage where, in 1977, 8 per cent. of males aged 14 to 16 were found guilty of, or cautioned for, serious offences. My noble friend Lady Phillips has given us some other figures tonight which are also disturbing. As Sir David McNee told the Sheffield Conference on Tuesday of this week, in 1978 the Metropolitan Police arrested 110,000 people for indictable crime, nearly 30,000 of them juveniles. He also mentioned that under-21s account for half of all arrests.
It is partly because it is so disturbing that the last Government had been putting in a great deal of work and thought to encourage a concerted onslaught on this problem, not least through the means referred to tonight by my noble friend. It is immensely important that we tackle ever more vigorously the problem of juvenile offenders. So many of these youngsters in trouble, or at risk, are either, after all, the adult criminals of the future or, if we can act effectively in time, future adults who were deflected from an otherwise almost inevitable career of crime.
I believe that not only must we encourage schemes of the kind we have discussed to deal with youngsters already at risk, or who have got themselves into trouble, we must also encourage, perhaps even more than those, other schemes which some police forces, for example, have been trying with some marked success. For instance, to get schoolchildren and other young people involved in helping to combat crime. Projects like the one brought in by the Surrey Constabulary to get the help of young people and others to fight vandalism is one example. It has been getting results, which is splendid, because it helps the youngsters, it helps the community, it helps the police. Other forces have done something similar, also with encouraging signs. That sort of venture which, in a sense, is more positive even than dealing with those who have
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already offended because it helps directly to prevent crime, could perhaps be extended to other areas and other aspects of the battle against crime.
There is, too, the problem of truancy, which has been referred to by my noble friend Lady Phillips tonight. That needs more attention, because much crime is committed by truants. Sir David McNee, in his speech on Tuesday, regretted the fact that the Metropolitan Police felt that it had to abandon its so-called truancy patrols because of objections in some quarters. He is reported as stating that when they were operating there had been a notable drop in offences of theft from vehicles during school hours. One district reported a 26 per cent. drop in motor vehicle crime; a 36 per cent. fall in petty crime; and a 10 per cent. drop in burglaries.
Without having all the facts about these particular operations before us at the moment, I will not discuss their merits in detail tonight; but this I would say: we are blinding ourselves if we ignore those figures; and perhaps we should all think again about the value of that sort of plainly effective operation, with a view to encouraging its reintroduction. We cannot, after all, expect a police officer to fight crime if we insist on handcuffing one of his arms behind his back—always assuming that such a feat is physically possible.
Then, somewhat allied to the truancy problem, is the problem of the pupil who is suspended from school because of some misdemeanour there, and who is then free to roam the streets, perhaps bent on venting on others his resentment at being suspended—like the truant, another potential offender. Perhaps some other way of dealing with those pupils to prevent them from causing trouble for other people, and worse trouble for themselves, should be considered.
I believe, with my noble friends—and the noble Lord, Lord Hunt, clearly takes this view—that quite high priority should be given to combating crime among the young, for any success here would be an investment in the future. It is for this reason that I am sure we are all grateful to my noble friend Lady Phillips for the chance to discuss this important topic tonight.
8.31 p.m.
Lord BELSTEAD: My Lords, it is unusual for a government circular to be the subject of a Question in your Lordships' House, but this, it it is clear from the speeches made by noble Lords tonight, was an unusual circular, and I am grateful to the noble Baroness, Lady Phillips, for providing this opportunity to discuss it and for explaining so clearly the formidable problem which we are debating. The circular was conceived at one of a series of conferences of selected chief constables held at Ditchley in March 1978. The conference took as its subject juveniles and the police. The programme involved two presentations, one on the links between the police and the social services, and the other on the links between the police and the Education Service. This brought out very sharply, I understand, the extent to which co-operation between the police and local authority services and the Probation Service could make a substantial contribution to the treatment of children in trouble.
The noble Lord, Lord Boston of Faversham, gave an interesting example of children who are themselves combating vandalism in Surrey, and I will give another example of co-operation which might be of interest to your Lordships. Noble Lords may be familiar with a juvenile volunteer scheme which was established in 1976 by the Cheshire Constabulary in the Crewe area under which members of the public volunteer to act as honorary aunts and uncles—that was the expression used—to children who had been cautioned by the police. These civilian volunteers required no special qualifications other than a wealth of common sense, good character and a committed interest in young people; but they received some initial advice on dealing with young offenders before being given absolute discretion on how to help youngsters committed to their charge, and the social services department was closely associated with the police in the scheme.
Incidentally, I was glad, as I am sure your Lordships were, that Lord Boston mentioned the increase in the use of cautioning and the success it has met. To amplify the noble Lord's remarks on this, in recent years there has been a marked increase in the use of cautioning by the police. In 1977, of those aged 10 and
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under 14 found guilty of or cautioned for indictable offences, just over 70 per cent. were cautioned. For those aged 14 and under 17, the corresponding figure was 38 per cent. Those are, particularly the first, quite high percentages and I was glad that Lord Boston gave the House, which I was not prepared to be able to do, the success rate in the sense of non-return to crime of young people who have been cautioned. I am grateful to him for doing that.
It was agreed at the conference that it would be helpful if central Government could take some action to bring to the attention of all concerned schemes which, through improved co-ordination between the services involved, would help to reduce juvenile delinquency, and that the previous Government did. I am glad to be able to pay tribute to the fact they they did so. The importance of the need for cooperation was emphasised by the fact that the circular was issued by four Government departments, and I am bound to say that whenever people criticise the distribution of responsibility between different Government departments, this circular shows that on that occasion anyway the criticism was taken to heart.
The noble Lord, Lord Hunt, put to me the question: Should there not be some standing inter-departmental machinery or some independent body to keep juvenile crime under review? I will take away his remarks and think about them, and will draw the attention of my right honourable friend to them. But I would tell the noble Lord that there is close and continuous co-operation in all aspects of the prevention and treatment of juvenile offenders by the four Government departments most closely concerned; namely, the Home Office, the DHSS, the Department of Education and Science, and the Welsh Office. The main administrative machinery for this is an inter-departmental working group at a high official level which meets monthly—I am sure the noble Lord is aware of it—to monitor the working of the 1969 Act and to keep all aspects of the subject under review. The working group has statistical and research sub-groups to co-ordinate action and initiatives on the provision of statistical advice and on the formulation and funding of research projects of joint interest. I am not suggesting that that should necessarily be

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an alternative to what Lord Hunt suggested, but I thought it right to deliver that information to the House.
Coming to the Question, chief constables were asked, it is true, to write to the Home Office in the following six months or so, and since the circular was not issued until the end of last year, perhaps I may gently say it is a little premature to consider the responses to it to be totally closed and the conclusions of the Government to be quite finished. I am nevertheless glad to be able to tell your Lordships that the response we have received so far has been extremely encouraging. We have received replies from a number of chief constables, all of whom report that there is effective machinery for liaison in their areas or, if there is not, that efforts have been made to establish such machinery since receipt of the circular. Meetings have been held, steering committees set up and there have been consultations at senior level between local services and the police.
But it is not general statements of that kind that the House wants to hear tonight, I know; it is the descriptions of what is being done, the specific practical results of working together, that noble Lords want to hear of, and I will give a few examples of those. The response to the circular indicates that co-operation is continuing in the area where its need was first most readily apparent, in dealing with cases of non-accidental injury to children. The noble Baroness, understandably and rightly with her experience of schools, first dealt with children who are at risk because of being out of school when they should be in, but I am, first of all, turning to what we would call battered children.
Here, it is clear that a close working relationship is continuing to develop between the police and the other agencies concerned in order to minimise risks of children being unnecessarily hurt. And here—I speak with so much less experience than most of your Lordships—I think one learns the first lesson of co-operation within the community. If I remember rightly, some years ago Mr. Alec Dickson, the head of Community Service Volunteers, gave a talk in which he said, "We are all volunteers now"; and I remember well that Mr. Dickson went on to point out that some of the most effective community workers were those who, through the jobs they were
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doing, constantly called on people—postmen, milkmen, people who delivered newspapers and so on—and that we could all help people in need provided of course we were ready to open both our eyes and our hearts.
It is for that reason that I agree strongly with the noble Lord, Lord Hunt, about the police work being done in Devon and Cornwall. But in varying ways I think I am right in claiming that chief constables all over the country are encouraging their forces to work increasingly closely with the communities they serve.
The noble Baroness asked what is to be done to keep an eye on children during long summer evenings, and during the summer holidays which are just beginning. One answer—to use a homely expression—is to keep the police on the beat. Of course that is tremendously demanding of time and therefore of manpower, but I am sure that your Lordships will agree that the improved terms and conditions of employment for the police, following the Edmund-Davies Report, and the steady recovery in recruitment, will help in this respect.
With regard to truancy from school, where the need for inter-agency co-operation has long been recognised, the replies that we have been receiving are more encouraging. In most areas there is close co-operation. In some places special projects have been established to reduce the incidence of truancy. A booklet produced by the North Wales police, called Missing Out, which describes the police liaison officers' scheme, is mainly concerned with truancy. In Cheshire first to third year truants in certain schools are seen at home and warned by police officers, and in Nottingham the police operate truancy patrols.
I believe that one of the great sources of strength of our police in this country is that each police force is rooted within its local community. May I for a few moments put this point personally. Whenever I visit a police force I find that, whether it is operating in a town or in the countryside, the chief constable is invariably genuinely planning how best to improve relations with the general public and thus try to recruit more effective public support for the maintenance of law and order.

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Six days ago a young woman police constable was telling me of the work that she is doing in the schools of a large town where she is stationed. She is a member of a community relations team placed under a police inspector, and her job as a schools liaison officer is to foster good relations with children in schools, to make the police in uniform familiar figures, and to give talks in schools on such subjects as road safety, cycle proficiency and first aid.
In Lancashire there are special school weeks schemes in which display stands showing all aspects of police work are installed at schools for a few days or for a week. Pupils take part in different competitors with police themes, and visits are paid to schools by members of the mounted, dog, underwater search, and other police departments. For what, some people might ask? I believe that it is for this: one day in the future, as with the young woman police constable with whom I was speaking, these projects and this general approach may lead a boy or girl to decide that he or she wants to join the police or the probation service, or generally to help, or become involved in helping, less fortunate young people, perhaps with intermediate treatment schemes.
The noble Lord, Lord Hunt, questioned what he believed to be the implications of the gracious Speech for strengthening the powers of the courts in relation to young offenders and juveniles. I always take very much to heart everything that the noble Lord says to the Government, but in reply I should like to say that surely care and control are two sides of the same coin. There are some young people who will mindlessly cause cruel damage and deep distress. Is it not the case that many of them need the care which only a period of control can bring? The Government believe that it is in their interests, as well as in the interests of the community, at least to develop our proposals for shorter and sharper sentences in some cases. If these proposals can prevent young people from serving longer terms of imprisonment later, who would deny then that the experiment was worth trying?
But of course we are as anxious as the noble Lord to keep young people out of
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penal establishments, and within the available resources the Government are supporting the scheme of intermediate treatment. I am not at this hour going to give your Lordships a list of what my right honourable friend's department does in this respect, except to say that some 225 hostels for homeless offenders, many in the younger age ranges, are being grant-aided, and more are in the pipeline. Your Lordships might be interested to hear of the grant which the Department of Health and Social Security has made to NACRO for a team to promote intermediate treatment for those young people who are most at risk of receiving custodial sentences. The Home Office, as well as the DHSS, is represented on the steering committee of this project, which by showing what can be done and what is being done with such young people, will, we hope, be able to increase the trust of the courts in the making of supervision orders in cases in which otherwise the courts might hesitate to do so.
I need hardly say that in work of this kind the participation of volunteers and of the Probation Service is absolutely essential; but as the noble Baroness's Question relates specifically to the police, may I finally commend to your Lordships the reports which come from several police forces about inter-service training which exists and which is being encouraged. In some areas there are schemes for the interchange of officers for short periods of time between, for instance, the police force and the social services department, or the police and the Probation Service. In other areas joint seminars, lectures and conferences are held, and all these initiatives enable the different agencies to understand better the problems and objectives of each other for the good of young people whom they are trying to help.
The noble Lord, Lord Hunt, asked me whether the circular represented the present Government's policy, and whether we believe in a constructive policy of crime prevention. Although we may disagree on some points, I hope that all of my reply has made clear the attitude of the Government. We really are committed to as much co-operation as possible between agencies, and indeed to encouragement from Government.
In reply to the noble Lord, Lord Boston of Faversham, may I also make it

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clear that, while it is true that within our own Government departments we have adopted severe manpower restraint, and that we are asking local authorities for a policy of manpower restraint, we have also asked local authorities in choosing their priorities to exempt from this particular policy law and order services, which means not only the police but also the courts and the Probation Service.
The noble Lord, Lord Mishcon, asked me two questions. One was in essence about young people on remand, and I have to admit to the noble Lord that I am afraid that the message that he gave to the department of the noble and learned Lord the Lord Chancellor did not reach me. It occurs to me that this particular point falls a little outside the terms of this debate, and I wonder whether he will allow me to write to him on that issue. The noble Lord also asked me whether the summary, which the circular stated would be considered when the replies to the circular were received, would be proceeded with by the present Government. I assure the noble Lord that we will certainly be considering this matter exactly as seriously as the circular forecast that that previous Government would do—
Lord MISHCON: My Lords, the Minister is most kind in allowing me to intervene. Of course I should be very grateful for any communication from him, and indeed I will send him a copy of my communication to the noble and learned Lord the Lord Chancellor. I was referring not only to remand cases, but to care and control cases, too. With regard to the other point, I hope that the Minister will also give me some satisfaction. Is he as disappointed as I was by the attendance of his own Back-Benchers?
Lord BELSTEAD: My Lords, in this House your Lordships come and go as you feel best and it would not be for me, sitting on either the Front Bench or the Back Bench, in any way to criticise the comings and goings of my noble friends.
I should like to end by thanking the noble Baroness, Lady Phillips, for asking the Question which we have been considering this evening. In the final analysis it is, as I am sure your Lordships will agree, for the different agencies locally to organise the necessary action in order to
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help young people. But I accept that in order to encourage this, and to give a lead, the Government must play their part. I welcome the opportunity which the debate has given to explain something of what is being done and to make clear the Government's support for it.