Lords Sitting of 23 July 1979

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.

LORD BROOKS OF TREMORFA
John Edward Brooks, Esquire, having been created Baron Brooks of Tremorfa, of Tremorfa in the County of South Glamorgan, for Life—Was, in his robes, introduced between the Lord Parry and the Lord Leonard.
The Viscount Scarsdale—Sat first in Parliament after the death of his kinsman.
The Lord Hirshfield—Took the Oath.

OILFIELD DEVELOPMENT: STAGED APPROVAL
2.48 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they propose to modify the staged approvals procedure in regard to oilfield development plans on the United Kingdom Continental Shelf so that consent to develop is given for the lifetime of a field instead of a period equal to about a third of its life as under the last Administration.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the Government have reviewed the system of staged approval of offshore oilfield developments, and while the particular circumstances of individual fields will be taken into account, we take the view that it strikes an appropriate balance between the licensees' need for a secure period of production to recover and to make a reasonable return on high levels of investment, and the inevitable pre-development and production uncertainties.
The Earl of LAUDERDALE: My Lords, in thanking the noble Earl for that reply, which appears to confirm the previous Government's policy, would he not agree that the effect of the staged approvals procedure is to raise uncertainty about the future of the field which, in turn, raises the cost of finance, and in turn amounts ultimately to a production disincentive?
The Earl of GOWRIE: My Lords, I am not sure if I really agree with that. Obviously the staged approval system has been of great interest and concern to those who helped to finance the developments, but discussions between my right honourable friend's Department and licensees, and the licensees' bankers, suggest that there is no impact on the availability of funds for offshore developments. Noble Lords familiar with these matters will, I think, have appreciated that staged approvals extend well beyond the points in time at which the lenders expect to have been repaid.
Lord HARMAR-NICHOLLS: My Lords, will my noble friend keep in mind that, while he may not be able to accede to what my noble friend has just asked for in this case, competition in the world for the skills required for both exploring and developing is very keen? Unless we have terms which make it reasonably attractive, we may be too far back in the queue to get the benefits at a time when we want them.
The Earl of GOWRIE: My Lords, I agree with my noble friend, but I think in fact we have terms that make it attractive where the staged approvals are concerned. Certainly I have no evidence—and I would welcome any from noble Lords if they care to write to me—that any proposals to develop oilfields have foundered on this account.
Lord STRABOLGI: My Lords, may I ask the Government if they agree that their present Answer is rather more encouraging than ones given so far during this Parliament? Will the Government confirm that they intend to maintain national control over the depletion rate, as happened before?
The Earl of GOWRIE: My Lords, I cannot confirm to the noble Lord, Lord

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Strabolgi, that all my Answers will be as satisfactory to him as my Answer has been today.
Lord STRABOLGI: My Lords, will the noble Earl answer the second question, which is to confirm that they will continue to maintain national control over the depletion rate of our oil, or will they let it rip?
The Earl of GOWRIE: My Lords, I think there is no evidence that the Government are relinquishing any control of this kind whatsoever.
The Earl of LAUDERDALE: My Lords, will the noble Earl agree that, while he has said there is no shortage of availability of funds, the point in my Question was the cost of funds, which rises with the degree of uncertainty? On the question of depletion, will he not also accept that the companies themselves have a strong incentive not to let the oilfields rip, in view of the continually rising price of oil in real terms, so that depletion, as raised by the noble Lord opposite, is not really quite as urgent a question as he thinks?
The Earl of GOWRIE: My Lords, the latter part of my noble friend's supplementary is certainly of great interest. It has not of course passed the Government by because the Government, too, may have an interest in the accumulation of reserves at a time of rapidly rising prices.
The Earl of LAUDERDALE: My Lords, may I ask my noble friend to pick up the point about the cost, which rises with the rise of uncertainty in the individual field?
The Earl of GOWRIE: I think it is balanced by what I said, my Lords; of course the costs of profit and return rise also, at the same time.

VIETNAM: PROVISION OF AID
2.53 p.m.
Lord BOYD-CARPENTER: 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 any aid is now being provided by this country for Vietnam.
Lord TREFGARNE: My Lords, there can be no question of our giving any new aid to Vietnam while the Vietnamese Government continue their callous and inhuman policy which is the root cause of the present Indo-Chinese refugee problem. Current British aid commitments, carried over from the previous Government, are to meet by agreed instalments the remaining £2·3 million of the total grant to support the sale of four British-built cargo vessels to Vietnam and to complete the courses of English language training in Britain for the few Vietnamese teachers who are due to remain here until June 1980.
Lord BOYD-CARPENTER: My Lords, while thanking my noble friend for that Answer and for the courteous and helpful letter which he sent me, may I ask him whether, none the less, he would accept that there are many people who feel it is quite wrong, despite the difficulty caused by the commitment of the previous Government, to continue putting the money of the British taxpayer into the hands of this gang of genocidal murderers? Would it not be better to stop the flow to that Government and use what resources are available to help their victims, the refugees?
Lord TREFGARNE: My Lords, I am not sure I would use the language my noble friend used in referring to the people of Vietnam, but certainly the situation there is highly unsatisfactory. My noble friend will have read however of the fairly satisfactory outcome of the conference at Geneva at the end of last week. On the question of ships aid, as the House knows, in Opposition we were highly critical of the ships aid. On taking office we looked promptly to see whether we could stop it, but, as my right honourable friend the Prime Minister said in another place, unfortunately it would cost us more to cancel those contracts than to complete them. Furthermore, the commitment was a firm one and cancellation would have had damaging effects on British Shipbuilders and its employees.
Lord GORONWY-ROBERTS: My Lords, are the Government intending to make a full Statement on the outcome of the Geneva talks to either or both Houses of Parliament?
Lord TREFGARNE: My Lords, I understand that is in my noble friend's mind.
Lord BROCKWAY: My Lords, in view of the decision of the Geneva conference regarding the treatment of exiles from Vietnam, may I ask whether Her Majesty's Government would reconsider their decision if that agreement was implemented?
Lord TREFGARNE: Yes, my Lords: we will do that, I think, but we shall want to see the outcome and the effect of the undertakings given by the Vietnamese before we move further.
Lord HARRIS of GREENWICH: May I press the Minister on that last reply, my Lords, which I am not totally sure I understood? Would he not accept that the Governments who have experienced this huge wave of refugees must take first priority so far as any additional aid is concerned? Is he not aware that many people in this country, understanding as they do the situation explained by the Minister today about existing contracts, nevertheless feel deep unease about British money going to support a régime which has murdered tens of thousands of its own citizens?
Lord TREFGARNE: Yes, my Lords, and we felt deep unease about it as well, and that is why we reviewed the whole matter when we came to office.
Lord ROBBINS: My Lords, would the Minister not agree, in respect of the vessels to which he made allusion, that in technical language they would be classified as " unrequited exports "?
Lord SHINWELL: My Lords, I understood the Minister to say the Government proposed to make a fuller Statement about what happened at the conference in Geneva. When is that Statement to be made? Is he aware that all the information We have had, apart from Answers to Questions—and they have not gone into detail—has been gained from the Press?
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In view of all the complications that are likely to emerge from what happened at Geneva, are we not to have a Statement before we depart from this House for the Recess?
Lord TREFGARNE: My Lords, I am not able to bind my noble friend the Foreign Secretary to make a Statement today, tomorrow or any other day, but I know that is very much in his mind.
Lord BOYD-CARPENTER: My Lords, would the Minister be prepared to answer my last supplementary question, as to whether the Government have considered diverting the remaining payments from the Government of Vietnam, notwithstanding the latter's undertaking not to murder its fellow subjects for a few weeks, to the refugees? Could not, for example, these ships be sold and the funds made available for that humanitarian purpose?
Lord TREFGARNE: My Lords, that was certainly one of the things we considered at the outset, when we came to office, but it proved to be impracticable, however desirable it might seem.
Lord WIGG: My Lords, may I ask the Minister to realise that, so far as I am concerned, I do not dissent for a moment from his condemnation of the conduct of the Vietnamese Government? But, in the interests of the long-term policy of this country, to secure the stabilisation of the Far East, would he also bear in mind that that country has had 30 years of war, first with the French and then with the Americans, during which time it was bombed to an even greater extent than the allied bombing of Germany? Is he aware that, if we do not bear that in mind, we shall be creating a situation which will continue and worsen for many years?
Lord TREFGARNE: My Lords, I find it impossible to justify the action of the Vietnamese Government, even bearing in mind the factors mentioned by the noble Lord.
Lord MISHCON: My Lords, on that line, too, may I ask the Minister to convey to his noble friend the admiration for his noble friend's speech in Geneva which commended itself to many sections of this House?
Lord TREFGARNE: I will do that, my Lords.
Lord SHEPHERD: My Lords, in the light of what my noble friend said and the fact that we have a Foreign and Commonwealth Secretary in your Lordships' House, something we must all be conscious of, may I ask the Leader of the House whether he will approach the Foreign and Commonwealth Secretary to see whether he would be willing to make a Statement in the House in regard to the conference in Geneva, something which the House would very much welcome?
The LORD PRESIDENT of the COUNCIL (Lord Soatnes): My Lord, as my noble friend Lord Trefgarne said, I know that my noble friend the Foreign Secretary has it very much in mind that he would like so to do and would hope to fit it in.

LIBEL LAW
3 p.m.
Lord WADE: 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 proposals they have, in the light of the speech made by Lord Diplock in the case of Gleaves v. Deakin, to amend the law on criminal libel to bring it into line with the European Convention of Human Rights (All England Law Reports 19th June 1979, p. 499).
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the law on criminal libel is currently under review by the Law Commission. Although the speech of the noble and learned Lord, Lord Diplock, in the case of Gleaves v. Deakin has been Given careful study, I think it is preferable to await the conclusion of the Law Commission's study before contemplating legislation in this area.
Lord WADE: My Lords, will the noble Lord, first, be good enough to accept that
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the asking of this Question does not diminish the significance of a vote in this House in the last Parliament on the subject of a Bill of Rights designed to incorporate the European Convention into our domestic law? But on this particular point, will he agree that the law with regard to private prosecutions for criminal libel is very archaic, and if, as it appears, it is inconsistent with Article 10 of the European Convention, is it not appropriate that the law should be reformed?
Lord BELSTEAD: My Lords, I am advised that it is not certain that private prosecutions for criminal libel would necessarily be inconsistent with the European Convention; this may or may not be the case. This is one of the many reasons why the Government think it appropriate to await the report of the Law Commission on the whole subject of criminal libel.
Lord ELWYN-JONES: My Lords, would it not be prudent to follow the advice of several of the noble and learned Lords who made the speeches in the case of Gleaves v. Deakin—that this difficulty could be remedied by requiring the consent of the Attorney-General to be given before proceedings for criminal libel could be instituted? That would get rid of any difficulty that we may have under the European Convention, which I know would cause grave concern and anxiety to the noble Lord, Lord Wade.
Lord BELSTEAD: My Lords, I know that my right honourable friend and others who read this exchange will be interested that it is the noble and learned Lord's view that the requiring of consent would get rid of the difficulty so far as the European Convention is concerned. However, I am not entirely persuaded that that would totally clear up all the problems with regard to the law on criminal libel. This is the reason why the Government feel it is right to await the recommendations of the Law Commission.
Lord WADE: My Lords, I appreciate that this matter is being considered, but would the noble Lord agree that one of the relevant points here is the public interest, and that that should be taken into account before there is a private prosecution for criminal libel?
Lord BELSTEAD: Yes, my Lords; I certainly agree with what the noble Lord has said.

TANZANIA: ECONOMIC ASSISTANCE
3.3 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a special grant to the Government of Tanzania in view of its economic difficulties following its conflict with General Amin in Uganda.
Lord TREFGARNE: My Lords, a request has been received from the Tanzanian Government for special economic assistance, and will require co-ordinated consideration by the international community. Our own response must to some extent depend upon the outcome of the public expenditure review.
Lord BROCKWAY: My Lords, in thanking the Minister for that reply, may I ask him whether it is not now clear that the first invasion of Tanzania was by Uganda? Would that not be confirmed by our High Commissioner in Nairobi? Is it not the case that it had cost Tanzania £500 million and that it is asking for only £170 million from nine different Western Governments? In view of the act of liberation which has been carried out in Uganda, should we not make a response to this invitation?
Lord TREFGARNE: My Lords, what the noble Lord says may well be true, but development aid cannot be used directly or indirectly for military purposes. We can help Tanzania with general economic aid, and this we are doing, and shall continue to do so.
Lord HATCH of LUSBY: My Lords, would the Minister not agree that the greatest disaster in Tanzania as a result of its removal of the dictator Amin (who, incidentally, was sustained by Western and other Governments) has been the blow that it has suffered not
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just in military expenditure, but also in its economic development? Would the Government please consider, when they are talking about reducing public expenditure here, that this is a case of a very poor people who have removed from the world a gross dictator, and who deserve every assistance that we can give towards their economic development which has been stymied by the military expenditure?
Lord TREFGARNE: My Lords, I must repeat that we do not provide development aid for military purposes, either directly or indirectly. But having said that, the application that has been made by the Tanzanian Government both to ourselves and—as the noble Lord mentioned—a group of other Governments has not fallen on stony ground, and we shall certainly seek to help as best we can within the limits of our resources.

GOVERNMENT STATEMENTS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 this afternoon my noble friend Lord Trenchard will repeat a Statement being made in another place on British Aerospace and British Shipbuilders' future financial structure.
He will then repeat a Statement on the future of the shipbuilding industry.

BILL OF RIGHTS BILL [H.L.]
Lord WADE: My Lords, I beg to introduce a Bill to render the provisions of the European Convention for the Protection of Human Rights enforceable in the courts of the United Kingdom. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a —(Lord Wade.)
On Question, Bill read 1a; and to be printed.

BUSINESS OF THE HOUSE
Lord DENHAM: My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in his

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name on the Order Paper. This is the Motion which is usually moved to enable Business to be completed before the long Recess. The Bills concerned on this occasion are: the Education Bill—remaining stages on Tuesday, 24th July; the Finance Bill—all stages on Tuesday, 24th July; and the Consolidated Fund (Appropriation) Bill—all stages on Friday, 27th July.
Moved, That Standing Order No. 43 (No two stages of a Bill to be taken on one day) be suspended until the Summer Recess.—(Lord Denham.)
On Question, Motion agreed to.

CHILD CARE BILL [H.L.]
3.7 p.m.
THE LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that this Bill be now read a second time. This is the first of three Consolidation Bills which come before the House this afternoon for Second Reading. This Bill consolidates the enactments relating to children in the care of local authorities and voluntary organisations in England and Wales. The main provisions are at present contained in the Children Act 1948, as amended by the Children and Young Persons Act 1963, the Children and Young Persons Act 1969, and the Children Act 1975. The Bill contains only the provisions which operate after a care order has been made. The provisions of the 1969 Act relating to the making of a care order will be consolidated in a separate Bill relating to the powers of juvenile courts. If this Bill is given a Second Reading, it will be referred in the usual way to the Joint Committee on Consolidation Bills. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

FOSTER CHILDREN BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now
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read a second time. It is closely related to the Child Care Bill, to which your Lordships have just given a Second Reading. It consolidates provisions relating to the fostering of children by private individuals. Its provisions are at present to be found in the Children Act 1958, as subsequently amended by the Children and Young Persons Act 1969, the Children Act 1965, and the Adoption Act 1976. It makes no changes in the existing law, except that it brings into force some of the provisions of the Children Act 1975 which are not yet in force. The Bill will be referred to the Joint Committee on Consolidation Bills, if it receives a Second Reading. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

RESIDENTIAL HOMES BILL [H.L.]
3.10 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. It consolidates enactments relating to residential homes for old, disabled and mentally disordered people. Its provisions are derived from the National Assistance Act 1948 and the Mental Health Act 1959. It makes no changes in the existing law. Again, this Bill will be referred to the Joint Committee if read a second time.
Moved, That the Bill be now read 2a —(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

LIMITATION AMENDMENT BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Report be now received. I think that perhaps I ought to say this. At Committee stage I gave certain pledges both to the noble and learned Lord, Lord Elwyn-Jones, and, I think, to the noble Lord, Lord Mishcon, who was very largely reflecting the views of the Law Society. The

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position is this. I have not neglected to keep those pledges, but there has been a certain amount of correspondence, which is still going on, between my office and the Law Society; and I believe the correct course would be to put down any necessary amendments which may be agreed upon when the Bill reaches another place at the beginning of the next sitting, rather than to try to record an amendment here. I hope that that course will be agreeable to both the noble and learned Lord and to the noble Lord, Lord Mishcon. Of course, I make no promises except that the matter is still being considered in the context of my pledges.
Moved, That the Report be now received. —(The Lord Chancellor.)
Lord MISHCON: My Lords, it is quite correct that certain private but by no means insidious correspondence and talks have taken place, and what the noble and learned Lord the Lord Chancellor has said is quite correct. I would have thought that the course that he suggests was a reasonable one, and so far as I am concerned I have no objection to it. I know his pledges will be honoured in another place.
Lord ELWYN-JONES: My Lords, I agree with the views expressed by my noble friend. I note his use of the word " insidious ". I do not think anyone has suggested that the correspondence between him and the Law Society could even be capable of being suspected of being insidious. However, his assurance will clear the air, and I entirely agree with the course that the noble and learned Lord the Lord Chancellor suggests.
The LORD CHANCELLOR: I am much obliged to the noble and learned Lord and to the noble Lord.
On Question, Motion agreed to.

CHARGING ORDERS BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Report he now received. I think there is nothing I wish to say about this because at Committee stage there were no amendments except Government amendments.
Moved, That the Report be now received.—(The Lord Chancellor.)
Lord ELWYN-JONES: My Lords, I, too, have nothing to add. I merely wish the Bill, which is of a highly technical but valuably reformist character, a fair wind on the rest of its course.
The LORD CHANCELLOR: My Lords, I am much obliged to the noble and learned Lord for what he has said. We will try to do what we can to blow.
On Question, Motion agreed to.

COMPANIES BILL [H.L.]
Bill read 3a; an Amendment (privilege) made.
Lord CULLEN of ASHBOURNE: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Cullen of Ashbourne.)
Lord ELWYN-JONES: My Lords, while this is not the moment, perhaps, to seek the division of the House on this matter, nevertheless I must repeat the complaint that was made from this side of the House about the total inadequacy of this Bill, which purports to be a Bill to deal with the reform of the company law. At Committee stage we on this side sought in vain to use this opportunity for Parliament to deal with some of the outstanding defects in the present state of the company law—defects which are notorious, like insider dealing, like loans to company directors, like the failure to accept that a duty should be placed upon directors to protect and look after the interests of employees. All those suggestions were rejected. I think Her Majesty's Government are going to pay a high price for the failure to act at this stage, bearing in mind some legislation which will not be regarded by employees as being favourable to them; on the contrary. So, while I am not proposing to seek the division of the House on this matter, I think I would be neglecting my duty to my colleagues on this side if we did not continue to register our protest about the inadequacy of the Bill, grateful as we were for the three small morsels that were given to us during the Committee stage.
Lord LLOYD of KILGERRAN: My Lords, this Bill deserves the support of the House, but I should like to support what the noble and learned Lord, Lord Elwyn-Jones, said at Second Reading, that this Bill was merely a morsel, and also to echo his other use of the word " morsel " in his speech today. I also join with the noble and learned Lord in saying how disappointed we on these Benches are that so many of the urgent matters which he has adumbrated have not been included in this Bill. However, to some extent I share the views of the Government that many of the clauses which were included in the Bill which was passed by this House before the election contained provisions, particularly those relating to insider dealings, which were rather difficult to comprehend; but at an early moment the Government will no doubt be introducing a new Bill which will cover these very important matters which require urgent attention in the reform of company law.
Lord CULLEN of ASHBOURNE: My Lords, the noble and learned Lord has said again in his usual charming way things he said earlier. I can only say that both the matters that he would have liked to have attended to this time and the appetite of the noble Lord, Lord Lloyd of Kilgerran, will be satisfied in due course, in 1980, by a second Bill.
On Question, Bill passed, and sent to the Commons.

EUROPEAN ASSEMBLY (PAY AND PENSIONS) BILL
3.18 p.m.
Lord BELSTEAD: My Lords, I beg to move that the European Assembly (Pay and Pensions) Bill be read a second time. This Bill provides for the payment of salaries and pensions to our representatives to the European Parliament, for the payment of severance grants to those who lose their seats at future general elections of representatives and for an order-making power so that the Secretary of State may authorise the payment of allowances and facilities to assist representatives in the execution of their duties within the United Kingdom. It is therefore a short Bill for which it is necessary to seek your Lordships' approval now, so that the first payment of salary to our representatives may be made at the end of this month.
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Last week this House expressed its thanks to noble Lords who had served in the nominated European Parliament, and there were expressions of goodwill from my noble friend the Leader of the House and the noble Lord, Lord Greenwood, to those noble Lords who had secured election. The Parliament has now met for the first time—last week—and on behalf of Her Majesty's Government I should like to repeat, if I may, those expressions of congratulation to the noble Lords who were elected, and goodwill to them on starting their work in Europe.
All the Members who attended the nominated European Parliament were sent by their national Parliaments and were in receipt of their usual rates of salary. The only provision necessary on a Community scale was the reimbursement of the travelling and subsistence expenses of Members attending European Parliament sessions in Strasbourg or Luxembourg, or Community sessions there in Brussels. But the remuneration for elected representatives has not been so easy to decide, particularly because Parliamentarians from the different Member States receive such widely differing salaries. For instance, the basic salary of a Member of the German Bundestag is about £22,000; that of the Danish Member of the Folketing £12,000; and of Luxembourg Parliament, some £4,500.
The European Council concluded, in the light of this, that it was not possible to determine a common European salary system for the first set of elections. The United Kingdom Government were therefore a party to an agreement at the European Council on 4th and 5th December last year, and confirmed by the Council of Ministers a fortnight later, that the salaries of representatives should be paid from national funds at national rates and should be subject to national taxation. The previous Prime Minister reported this agreement to the House on his return from the European Council, and the Member States set about implementing it. By the time of their leaving office, however, the previous Government had not introduced the necessary legislation for the United Kingdom and that is why this Bill is before your Lordships' House today.
My Lords, I should now like to explain briefly the main provisions of the Bill.

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First, Clause 1 provides that our representatives in the European Parliament will be paid at the same annual rate as Members of the House of Commons. The rate of salary will take account of any change in the rate of MPs salaries, so that the arrangements are exactly on a par. However, the Government do not believe that it would be right to pay two full salaries from public funds to representatives who are already Members of Parliament and who therefore hold what I might call a dual mandate. In taking this view, we have noted the proposals which had been made in the other Member States of the Community for dealing with similar groups of Members. In Germany, legislation has already been enacted, providing for a single salary only. In France, Belgium and Italy, that is also proposed. In only two countries of the Community does it seem likely that an additional full salary will be paid; namely, in the Republic of Ireland and possibly, but not definitely, in Luxembourg, where legislation has yet to be introduced. In Denmark, legislation has been enacted for the additional salary to be abated and this is the proposal for the Netherlands. Strong representations were received during the proceedings on this Bill in the other place that a similar scheme should be adopted for the United Kingdom representatives.
In the light of those representations, the Government moved an amendment to the Bill on Committee stage in the other place to provide that representatives who are also Members of the House of Commons should receive two salaries; one, the ordinary salary as a Member of the House of Commons; and a second salary as representative equivalent to one-third of the House of Commons ordinary salary. That is what I meant by an " abated salary ". This the Government believe to be a fair compromise between the different positions which have been advanced.
In addition to basic salary and pensions, it is not unusual, of course, for elected representatives to receive allowances and facilities to enable them to carry out their duties. Members of the House of Commons do so. It was originally the understanding, from the European Council agreement in December, that the reimbursement of such matters as travelling and
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subsistence costs would be a matter for the European Parliament, as was the case for the nominated members. Therefore, the Bill as introduced made no provision for the payment of sums other than for salaries and pensions. It became clear, however, during the passage of the Bill in another place that some other Member States had either made provision in their legislation for the direct payment from national funds of some allowances, or had at least ensured that they had the facility for enabling them to do so. It was again represented that the United Kingdom representatives would have special problems in relation to their constituencies, some of which are of enormous size, if the European Parliament did not make adequate recompense for the extra travelling and subsistence expenses which our representatives would necessarily incur.
I should like to make the Government's position on this matter absolutely clear. We do not accept that there are any insuperable practical difficulties for the European Parliament in paying for all the necessary expenses of representatives. We believe that that is their responsibility and that the understanding created by the European Council in December 1978 should be enforced. It is certainly our wish that if necessary the United Kingdom representatives should be prepared to press this point. The European Parliament is, in fact, paying travel allowances to places of work within the Community, and some other allowances. However, if the European Parliament is not prepared to meet all legitimate claims for expenses within the United Kingdom, then the Government accept that there could have to be a role for the national authorities.
Within Clause 2, therefore, it will be possible for Parliament to determine, on orders presented by the Secretary of State to both Houses for Affirmative Resolution, whether representatives should receive such facilities for travel within constituencies, and for travel to and from London, either freely or on some restricted basis, and for administrative expenses. But I must emphasise that it is the Government's feeling that such facilities and allowances ought to be provided by the European Parliament.
So, my Lords, what I have referred to as the contents of the Bill refer only—for

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this is only a short Bill—to salaries and allowances. Finally, there are just two quick points. Clause 3 provides that representatives who lose their seats at a general election shall be entitled to three months' severance pay, or one-third of this for dual mandate Members. This is based on the House of Commons scheme. The remaining substantive clauses of the Bill, Clauses 4 to 6, deal with pension arrangements. They provide for the establishment, by order, of a pensions scheme closely related to the pension scheme for Members of the House of Commons. In this case, as is the case with all other pensions schemes made by subordinate legislation, the order will be subject to the Negative Resolution procedure.
The Government see this Bill as a straightforward implementation of the international agreement entered into by the previous Administration. On certain matters, the Government were able to accede to strongly held views expressed during the passage of the Bill in the other place. We believe that we now have a Bill which represents the fairest way to proceed, so that the representatives of the people of the United Kingdom in the European Parliament receive an appropriate remuneration for their responsibilities. I beg to move.
Moved, that the Bill be now read 2a—(Lord Belstead.)
3.30 p.m.
Lord BOSTON of FAVERSHAM: My Lords, this Bill is part of the historic sequence of measures which stem from the decision that this country should join the European Economic Communities and take part in direct elections. It cannot be described as a momentous measure in itself, no doubt; and it will probably be greeted with something less than unabated rapture by those of my noble friends and other noble Lords who have been consistently unenthusiastic about the decision to join Europe itself. But it is a necessary step, one which flows naturally from the decisions mentioned. Therefore, on behalf of the Opposition, I would support the Bill. In doing so, I should like to thank the Minister, the noble Lord, Lord Belstead, for his clear and very helpful introduction to it. I
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should also like to join him in an expression of good wishes to the new Members of the Assembly from your Lordships' House and from another place. The Minister has said that the Bill implements an agreement reached with our Community partners last December, and he has gone into a little of the background arising out of that agreement.
The Bill now before us is an improvement on the Bill as first introduced in another place. A number of changes were made in Committee in another place, including two major ones to which the Minister has alluded. Originally, the intention was that a Member of another place who was also elected to the Assembly, and so had what has been called a dual mandate, should get only his House of Commons pay and nothing extra for being a member of the Assembly. But now, under the Bill, he would get one third—as the Minister has mentioned—of a representative's pay in addition to his House of Commons pay. Again, the Bill made no provision at all for allowances to meet expenses; now it does contain power to provide allowances and facilities.
On the dual mandate, I believe it would have been quite monstrous to have failed to make some additional payment to a Member of another place who is also elected to the Assembly. I say that even though my party decided that Members of our own party should not be elected to both bodies. What I am not so sure about is whether the one third extra is the right amount. It is of course quite arbitrary; it has no logical basis. I suppose the only figures which would have any logical basis for dual membership would be either one full salary or two full salaries, and so any compromise is almost bound to be arbitrary. Even if it were possible to do so, I would not wish to suggest a change now. But what I would say is that we should look at this again later on, once we see how the system is working. Perhaps Lord Boyle's Committee should be asked to consider it at some future time. It would be more of a comfort to have some rational basis for the figure we choose. I mention that assuming that the Assembly is not given the task of deciding about these matters for the future.
There is one other point I want to mention, if I may, on the pay of a repre-

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sentative before turning to the question of allowances and facilities. In the debates in another place, there was a good deal of discussion of the fact that although the European election was on 7th to 10th June, representatives did not qualify for salary until last Tuesday, 17th July, and would not receive any money until about the middle of next month. That is very unsatisfactory and is a possible source of real hardship, for some representatives who left their previous jobs on election would not have been entitled to any pay for some five weeks or perhaps more. It was explained in another place that membership of the Assembly—the period of a representatives' office—ran from the day the Assembly met until the day before it meets after the next Assembly election.
It was also suggested—and no one challenged it, so far as I could see—that this was a situation which would not arise again: and that it arose this time only because this was the first election. But that is only partly true. It is true that for members of the Assembly who are re-elected, there will be no hiatus; their pay will continue next time without a break. And for the representative who is defeated a three month's severance grant will be payable. But, for all newly-elected Members of the Assembly, the problem will be always precisely the same as it has been this time. So it really is something, in my submission, that requires further attention before the next Assembly election; and one also wonders about by-elections in this context, too.
The most appropriate course would seem to be the one that applies to another place. Pay runs from the day after the election; and it would seem to be better for the Assembly representative if pay ran from election to election. There is perhaps an additional more minor reason for this. If the present system continues, a representative who is retiring might not be too conscientious about working and justifying his pay between the election at which he retires and the start of the new Session; whereas the newly-elected Member is not only more likely to be full of enthusiasm to get down to work from the moment of his election but indeed is very likely to be drawn into his Assembly work pretty well straight away, so the elector, by changing the system, might well get better value for money.
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I come now to allowances and facilities. The Bill originally made no provision for these. It is much better now that it does do so. As I understand it, these are supposed to be the responsibility of the Assembly. It is certainly our view that they should be. I am sure that your Lordships in all parts of your Lordships' House will be very heartened indeed by the very firm line that the Minister has expressed on behalf of the Government this afternoon in which I would very strongly support him. But to the extent that they are not provided by the Assembly—that is, allowances and facilities—Clause 2 enables this Parliament to pass orders providing for them.
It is clearly very important that no Member should be out of pocket in carrying out his duties. Expenses are likely to be heavy, especially travelling costs. Unlike those of all the other countries, our Assembly Members represent constituencies. The noble Lord, Lord Belstead, has referred to those today. Those constituencies consist of some eight of our parliamentary constituencies. In some cases they are enormous, as the Minister has said. One—the Highlands of Scotland, I am informed—is nearly half the size of Scotland. That representative could well cover thousands of miles a month within her constituency alone if she is to do the job properly, quite apart from travel between constituency, Westminster, Brussels, Luxembourg, Strasbourg and other parts of Europe as well in the course of her duties. It would be totally unthinkable that such costs should not be borne from public funds.
It may well be, as we are the only country with individual constituencies, and also that other countries have already decided to provide their representatives with free travel from national funds, that it will be difficult for us to persuade our European partners that this should he an Assembly responsibility. But one way or another, these costs must be provided from public funds. I agree with the Minister the noble Lord, Lord Belstead, that this really is an Assembly responsibility stemming from the agreement last year, and they really should be asked to face up very firmly to that responsibility.
I have a few questions that I should like to put to the Minister about these allowances. My first is rather similar to a

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point that I raised on pay: will a representative be able to recover expenses incurred between the date of election and the date the Assembly first met, 17th July? No clear answer was given in another place. I make no complaint about that: allowances and facilities, as the noble Lord, Lord Belstead, explained, came in rather late and so it is quite understandable that this and two or three other points which I should like to mention were not fully examined and fully answered in another place. It was said there that there would be provision for payments to be made retrospectively; but there was no specific answer on this point. And of course the provision for payments to be made retrospectively needs to cover the whole period between the election and the time the order or Assembly decision is made. I should be most grateful if the noble Lord, Lord Belstead, would be able to tell us about that.
Travel is not the only problem here. There is also the cost of mail during this period—that is, between the period between the election and last Tuesday. This problem of postal costs and whether perhaps franked envelopes—one suggestion that was made—for use within the United Kingdom could be provided were both raised in another place; but—and again no complaint about this—no specific answer was given, apart from an omnibus sentence from the honourable gentleman Mr. Brittan saying postage and certain other matters are for the Assembly. We are not able to leave it there, and again those queries relate to normal periods of time as well.
Again, the question of travel warrants for the spouse of a representative was raised in another place, but no answer was forthcoming about that. I would be grateful if the Government would let us know how things stand here. The need for this is, if anything, greater than for the Westminster Parliament, for the obvious reason that representatives will be much further from home. There might even be a case for children's warrants as well.
Clause 2 refers not only to allowances but to facilities as well. The Bill contains no insight into what facilities are in mind. In the debates in another place, some passing references were made by various
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honourable Members to the sort of items that ought to be included, but there was no authoritative view. Certainly I do not press for an exhaustive list at the moment and obviously it depends to some extent on what the Assembly itself comes up with, but it would be helpful to have some indication from the noble Lord, Lord Belstead, as to whether, for instance, he expects these to include, say, office accommodation and equipment, photocopying, telephone and postal services, travel warrants, secretarial services, library and research facilities, and so on.
I have just two other points that I should like to mention. The Minister of State, Mr. Brittan, was asked in another place about consultations on the proposed order on allowances and facilities, if one becomes necessary. The question of consultations is obviously very important because we have no idea yet what will be in the order and we shall not know what might be in it until we hear what the Assembly is or is not going to do. Presumably if the Assembly does not get moving pretty fast, within a couple of months or so at the most, the Government will need to be ready with proposals soon after we reassemble in October, even if they are only interim ones, to fill the gap until the Assembly itself acts.
The problem about orders, as your Lordships will know, is that they cannot be amended; and that is one reason why consultations are important. The honourable gentleman Mr. Brittan did give some words of comfort and said that it would be right to give the other place the maximum information. He added that the Government would not bring forward such an order without engaging in some form of consultation. Perhaps the noble Lord, Lord Belstead, could confirm that consultation will include your Lordships' House—for one thing, some noble Lords are directly affected as representatives—and perhaps the Government may consider issuing a short consultative document before finally settling the terms of the order.
Finally, I wish to look rather further forward to the future—something which perhaps we do not do often enough—and to mention briefly the question of co-operation and consultation between the Westminster Parliament and United Kingdom representatives of the Assembly.

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This is not, nor should it be, dealt with in the Bill, nor is it dealt with in any other legislation; but it is given a passing glance every time these matters are debated pretty well. However, we are still no further forward than when this idea was first broached. It may be that we do not want any formal arrangements at all for keeping in touch with this country's Assembly representatives—in which case, let us decide to dispose of the matter. But if we do want some arrangements, in my submission, it really is time we set them up. I believe they would be useful.
One suggestion has been made for a joint Select Committee of both Houses of Parliament, on which representatives of the representatives of the Assembly could sit. Another has been for a sort of Grand Committee on which the 81 representatives could sit, together with some Members of the two Houses of Parliament also on it, although I must confess that the likely efficiency of this sort of body is not immediately apparent. One thing we cannot do is to ask just those with a dual mandate and those noble Lords who are Members of the Assembly to fulfil this role—it would be too much to expect of them. Nor can we leave it to some vague hope that they will keep us in touch in some undefined way. Faith is valuable, but the spiritual Members of your Lordships' House advise us that practical elements are necessary too.
No one is to blame for our own failure to decide about this so far, except perhaps all of us. There was something in the argument that we had to wait for the representatives themselves to be elected first; but now that the Assembly has been elected I submit that it is important to tackle this with some degree of urgency, because it will be all the harder to do it as time goes on and it could be harmful if our Members of the two bodies, Parliament and the Assembly, were to be allowed to drift apart. So, my Lords, let us look a bit further ahead, this time at least.
3.45 p.m.
Lord SHINWELL: My Lords, no doubt there are Members of your Lordships' House whose perceptive quality is superior to mine and therefore perhaps they were
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able to follow the necessary—I use that term advisedly—but somewhat tortuous explanation furnished by my noble friend Lord Boston of Faversham. Because of his speech which, as I have suggested, was somewhat complicated, at any rate to me, I would ask several questions of the Minister. No doubt they will be answered in due course and in the usual ministerial fashion.
It would be noted that despite the controversy which has been troubling some Members of your Lordships' House and of another place and which has been referred to in the public Press concerning the substantial sums that we are called upon to pay to the European Comumnity for services rendered and for existing and future benefits, whatever they may be, we are now being asked to accept a Bill which approves further payment. What 1 gather, despite the complicated statement to which we have just listened, is that there will be some payment made to the elected representatives—and I agree they have been elected quite democratically—for which the taxpayers of the United Kingdom will be responsible. I stand by the principle of representation being associated with taxation and if that principle is acceptable to your Lordships' House, and it has been acceptable to the United Kingdom for many centuries, then I think we ought to ask—at any rate I propose to ask—whether, because of the financial obligations which we are asked to accept, we should be able to obtain from these " representatives " (that was the term used both by the Minister and by my noble friend Lord Boston) some idea of what happens at the European Assembly in the new Parliament. I would also ask whether they represent not only the electors but also the taxpayers of the country. The taxpayers are entitled to ask questions and to expect an answer.
The second point is that the Minister almost made my heart bleed. There are some of these elected representatives who were expecting their emoluments, whether salary, expenses or both, but apparently the money did not arrive and they have suffered hardship. What a shame that that should happen! Of course there is always social security available, but perhaps that never occurred to them. It could of course be made available to them. They ought to be informed about the facilities available.

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But there are other very desponding aspects of the situation. We are told about some of the elected representatives who have such vast territorial areas to deal with. One elected representative—I think that the noble Lord mentioned a lady—has a territory to cover which is almost as vast as Luxembourg itself. 1 wonder whether these elected representatives thought of these problems before they allowed themselves to be nominated. But why we should trouble ourselves about their difficulties, I cannot understand.
Only the other week we had some discussion—I took part in it, though, for some reason, very few other Members cared to take part in it—about our expenses. When I consider our expenses compared to the expenses that those elected representatives are to receive, not only from the European Assembly but from the national taxpayer in the United Kingdom—and it will increase our contribution to the European Community—I ask myself: Have we gone crazy about this matter? Or are we to understand that we are ready to " dish out " money to these representatives and to place further burdens on the taxpayers of this country, particularly at a time, as I read in the Press this morning—and I accept what they say; I dislike the policy of some of the Press people, but, for the time being, I read and accept what they say—when this country is now in a very precarious economic situation and the forecasts are by no means favourable? I read all that, yet here we are discussing a Bill, and concerning ourselves in a sympathetic, almost crying our eyes out, fashion, about a number of people who have been elected and are finding some difficulty about remuneration and expenses.
I now raise another question, and that is the duality that has been injected into this business; that it is possible for somebody to be elected to another place and to be elected to the European Assembly; and the assumption, despite the vast territorial area that has to be considered in the United Kingdom, is that they are able to occupy themselves with the European Assembly on the one hand, and with the territorial area of the United Kingdom on the other. That is a most interesting situation, and we ought
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to ask ourselves whether we should stop the whole thing at once and save ourselves a lot of money. I do not know whether these are reasonable questions, but they are the kind of questions that occur to any reasonable person, and I am satisfied that they occur to members of the public who, if they could follow carefully what we have heard this afternoon, would want to know what it is all about. Why are we troubling about these matters?
Finally, I ask this question. What we are asked to do is to approve a grant of money to certain persons. I should have thought that this was not at all a matter for the House of Lords, but a matter for another place. It is a Money Bill and I am surprised that it comes before us at all. But since it does come before us, we are entitled to ask questions, and we shall continue to ask questions about the activities of the people who have been elected. We shall also ask questions about the sums of money that have to be expended to satisfy these people, as regards both salaries and expenses. I hope that we shall get answers to those questions.

BRITISH AEROSPACE AND BRITISH SHIPBUILDERS: FUTURE FINANCIAL STRUCTURE
3.55 p.m.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, with the leave of the House, and in order to give my noble friend Lord Belstead time to consider the many points raised by the noble Lord, Lord Shinwell, may I at this point repeat a Statement made in the other place by my right honourable friend the Secretary of State for Industry. The Statement reads as follows:
" With permission, Mr. Speaker, I shall make a Statement on the future financial structure of British Aerospace and British Shipbuilders.
" Since taking office, we have carefully considered the circumstances of these industries, in the light of the undertaking, set out in our Manifesto, to introduce private ownership.

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" I turn first to aerospace. British Aerospace, with its spread of interests embracing civil and military aircraft as well as guided weapons and space systems, makes a substantial contribution to both our national economy and our national defence. Despite the fierce competition in this international industry, I am confident that our industry has the talents and skills to flourish. In the years ahead it will generate large internal funds, but substantial external funds will also be required. I have therefore considered how these demands may best be financed. As part of these considerations my colleagues and I have consulted, among others, the board of British Aerospace and the trade unions representing those employed in the industry.
"The Government propose that British Aerospace should in future operate within the framework of the Companies Acts. The ownership of the industry will therefore be transferred from the present statutory corporation to a company incorporated under the Companies Acts. Initially the shares in that company will be held by the Government, which will then make shares available to private ownership. Employees will be given a special opportunity to buy shares. The Government intend to retain a shareholding of about half.
"The change to company status will not result in any alteration to the present business; its assets, liabilities and contracts will all be transferred to the new company. I would also hope to secure continuity in management at board level.
"The Government look to the company to obtain the external funds it needs from commercial sources, although they w ill retain the power to provide funds on commercial terms, if this proves necessary. On that basis, we will not expect to intervene in the administration of the company as a commercial concern.
"Legislation will be introduced before Christmas to permit these policies to be carried out. We have considered a number of alternative courses, including the introduction of private
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capital into the Dynamics business. While the legislation the Government will be bringing before the House would not exclude this, the Government's strong preference is to maintain the present structure of the industry.
"I have also considered whether a comparable financial reconstruction might be made for British Shipbuilders. In principle, I should have liked to introduce private sector finance to this industry at the same time. I have concluded however that, in light of the particular problems of the industry and the consequent difficulty of predicting its future size, about which my honourable friend is to make a Statement later today, this is not the right time. The Government have therefore decided not to bring forward measures at the moment to introduce private sector finance to the shipbuilding industry."
My Lords, that concludes the Statement. May I say that when it has been made in the other place, I shall be repeating the Statement to which I have referred about the shipbuilding industry. But at this stage it seems to me appropriate that we should take any views of noble Lords on aerospace.
3.59 p.m.
Lord MELCHETT: My Lords, once again, I regret to have to say to the noble Viscount that he has been able only to come to your Lordships' House and make a Statement of extreme vagueness. The only likely effect will be to create further grave uncertainty, this time in two major and extremely important sectors of the British economy. If I give just one example, the Statement says, incredibly, that the Government will retain about half of the shareholdings in British Aerospace. The noble Viscount knows very well that the crucial question is whether the Government will retain over half or under half. To say "about half" seems to me to be an extraordinary statement. Perhaps the noble Viscount will tell us what effect he expects that that vagueness will have on the ability of British Aerospace to sell these shares and, hopefully, raise money for the desperately needed future investment in this industry, which it is clear that the Government do not intend to provide. As I think the

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noble Viscount will acknowledge, massive investment is needed by British Aerospace and, indeed, by the aerospace industry throughout the world, particularly in the next generation of civil aircraft.
I wonder whether the noble Viscount could tell us what is the view of the board of British Aerospace regarding the effect of this Statement. Will it mean that Britain will be unable to play its part as a full partner in producing and manufacturing the next round of civil aircraft? That seems to me to be the inevitable consequence of the cutbacks and the uncertainties which the Government are forcing on the British aerospace industry.
To return to the question of the sale of shares, I wonder whether the noble Viscount, with his extensive experience in industry and commerce, could tell us whether he thinks that selling shares under these circumstances—in effect, a forced sale, regardless of whether the moment is right, and based solely on ideological reasons—is the way to raise the maximum amount of money for this vitally important public industry.
One thing above all which I regret about this Statement, in particular when one compares it with the Statement about the National Enterprise Board, is the conspicuous absence of any words of praise or, indeed, criticism of those responsible for managing both British Aerospace and British Shipbuilders and of the people working in those two industries. I hope that he will find himself able—even if his right honourable friend who made the Statement in another place did not feel able—to say that my noble friend Lord Beswick and the rest of those involved in the management of these two enterprises have done a magnificent job in extremely difficult circumstances. It might have been wise for the Government to recognise that fact, and the contribution of the employees, when making a major general Statement about the future of the two industries.
It is clearer in this Statement than in any that the noble Viscount has had to make to your Lordships' House in the last couple of weeks that the Government's policy is based simply and exclusively on their desire to create the greatest public loss with the greatest private profit. I can tell the noble Viscount that the buestion of restoring these assets to public
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ownership, and on what basis, is something which the Labour Party will be considering urgently in the coming months.
4.3 p.m.
Baroness SEEAR: My Lords, may I thank the noble Minister for repeating the Statement. I should like to echo the noble Lord, Lord Melchett, on one point; namely, the tremendous importance of maintaining the aerospace industry as one of great significance to this country, with its very real need for further investment. We should also very much like to know whether the Government intend to retain a 51 per cent. ownership of the industry. In our view, this industry has suffered a great deal of disruption; and it will be extremely unsatisfactory if it is felt that its future is once again in the melting pot. It is very difficult for an industry of this kind to settle down to long term development if it does not know where it stands.
One would have hoped that there could be agreement between the Government and the Opposition that the aerospace industry needs a clear prospect in which to plan ahead on the very long term basis that an industry of this kind needs if it is to make the plans that are required. However, we welcome the suggestion that the Government are to offer shares to the employees of British Aerospace. We very much hope that this offer will be taken up and that it will be the fore-runner of greater encouragement by the Government, not only in the nationalised sector but elsewhere, of employees to share in the ownership of the undertakings in which they are employed.
I welcome also the suggestion contained in the Statement that the industry, with its proposed new future structure, will give greater freedom of action to the highly skilled, responsible and expert management which has to run an industry of this kind and that in future it will be free from intervention by people who are often very much less expert than that management in the running of the industry.
So far as shipbuilding is concerned, we can, sadly, only agree that the whole state of this industry is such that the Government will have to preside with the greatest care over its contraction. Any attempt to turn it into a profit-making enterprise is, to say the least, unlikely to succeed.
4.5 p.m.
Viscount TRENCHARD: My Lords, the noble Lord, Lord Melchett, has criticised us before for making vague statements. However, I believe noble Lords opposite know well that the development of plans in these important matters is a progressive affair, that there is a time for a statement regarding the Government's intentions, that there is a time for detailed consideration with the board of British Aerospace and that there is then a time for the production of a Bill in which a great deal of detail is answered. I do not believe this to be a new precedent. Indeed, I believe it to be an efficient system.
Both the noble Lord, Lord Melchett, and the noble Baroness, Lady Seear, asked me whether I could elaborate further on the phrase " about half ". The answer is that I cannot do so this afternoon. I do not think that this point will create the great uncertainty that has been suggested. I believe that the great uncertainty was originally created by the plans to nationalise and then by the nationalisation of this industry.
To take the last but one point which was made by the noble Baroness, Lady Seear, I believe that freedom of action for a company is far more important when it comes to a feeling of certainty about the long term and the ability of the very excellent management to work out their future with a high degree of freedom.
When I repeated the Statement regarding the National Enterprise Board, the noble Lord, Lord Melchett, suggested that we were following a policy of making sure that an industry became profitable and that, just when it had become profitable, we " flogged " it off—that was the noble Lord's word, about which temporarily I got the wrong end of the stick—to private enterprise. Today he comes to us and almost says the reverse: " Wait until you can make a bigger profit for the taxpayer ". I do not know whether noble Lords saw the leading article in this morning's edition of the Financial Times in which, in relation to the statement by my right honourable friend the Secretary of State for Trade, British Airways made the same point: that perhaps one would get more money for the taxpayer if one did not move so soon. We believe that the market adjusts these factors to a
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very high degree, but noble Lords opposite really cannot have it both ways.
Lord WYNNE-JONES: My Lords, we want it for the country.
A noble Lord: My Lords, so do we.
Viscount TRENCHARD: My Lords, both the noble Baroness, Lady Seear, and the noble Lord, Lord Melchett, are concerned about the maintenance of the efficiency of the industry and its morale. I should like to draw the attention of the noble Lord, Lord Melchett, to what was said by my right honourable friend in his Statement. He said:
" I am confident that our industry has the talents and the skills to flourish ".
There is no question in the Government's mind but that we have a very highly talented management and a very skilled workforce here, and it is simply the following of the best route to efficiency to maintain that and the necessary in-dependence—which the noble Baroness stressed so rightly—that leads us to follow this particular route.
Lord BALOGH: My Lords, is it not clear that what the Government are about to do is to infuse uncertainty into the situation, despite the denials of the Minister? Is it not true that all this dogmatic exercise is because they themselves say that the management was eminently very successful? Therefore, why the sale? The sale is because they have a dogma that whatever happens one ought to divest oneself of the control of these vital industries. It seems to me that for the Tory Party, which used to be the party of empirical experimentation, to pursue a policy purely on dogmatic faith is really scandalous.
Viscount TRENCHARD: My Lords, let me just comment on the question put by the noble Lord, Lord Balogh. We do not see it that way. We believe that we are not in any way being dogmatic. We know that this industry was being successful, has high skills, has had changes imposed upon it because of the dogma of noble Lords opposite. We believe that our plans will maximise the industry because for many years an effective majority of shareholding and a very powerful block of shareholding—with my experience in industry I know perfectly well that there are many times when even

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30 per cent. of shareholding can be absolutely dominant—will maintain the needs of the country and combine it with the greatest degree of efficiency.
4.13 p.m.
Lord MISHCON: My Lords, will the Minister reflect for one moment with a due sense of responsibility upon his answers to the speech made by my noble friend Lord Melchett ? The Minister said that statements were made and policy was then adumbrated by a series of graduated steps. Is the Minister saying that it is the policy of Her Majesty's Government, on a vital national matter of this kind, to make a statement of policy before Her Majesty's Government have even decided whether that policy is to take a majority or an equal or a minority stake in this vital national industry? My noble friend asked the question and spoke of vagueness; and the Minister replied, presumably, that this is a matter which has not yet been decided by Her Majesty's Government. If that he the position, woe unto the country that has a Government of such indecision and muddleheadedness.
I will now move to the next point which my noble friend made and to which this time there was no answer at all, or certainly no answer that I heard. It was this: With the Minister's own personal great experience of commerce and industry, does he regard it as usual that, irrespective of the suitable market time and irrespective of all other considerations, an announcement should be made in the course of this Statement that a part of this great industry will be available for private investment? Does he not feel it incumbent upon him again, as this is a vital issue and ought to have been considered even before a preliminary Statement, to give my noble friend the courtesy of an answer?
Viscount TRENCHARD: My Lords, the policy of the Government is as stated in the Manifesto, to maximise the private sector investments in these industries. My right honourable friend's Statement takes note of the responsibilities of Government in relation to aircraft. My right honourable friend's Statement also speaks in not exactly precise terms because in relation to the question of the timing of the correct moment to offer shares to the public, the interests of the shareholder, of the taxpayer and of the country, have to be considered against the actual time when this plan is
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put into operation. We said in our Manifesto that we would avoid abrupt changes, and so we shall. The policy is now declared in relation to this industry. The carrying out of the policy and the timing of it will be very carefully considered with the board of British Aerospace and will be operated at the best time in relation to the interests of all concerned.
Lord WIGG: My Lords, will the Minister be good enough to come away from an exercise in semantics and get down to brass tacks? Who is going to provide the risk capital? Before he answers that question, will he bear in mind that two of the projects which cost this country hundreds of millions of pounds had their origin in Tory thinking, namely, the TSR 2 and Concorde? Who is going to provide the capital, or do we take it that they will not be started unless somebody in the City can see that he can make a profit?
Viscount TRENCHARD: My Lords, I would refer the noble Lord, Lord Wigg, to my right honourable friend's Statement, in which he said that in the years ahead the industry will generate large internal funds but that substantial external funds will also be required. I do not think I can sensibly add to that.
Lord BERNSTEIN: My Lords, the question I should like to ask the noble Viscount is this: is there anything more valuable than an efficient organisation, which the noble Viscount says this is, and of which the Government are going to sell half?—because I do not know that any organisation can be better than the people who work in it. I am sure the noble Viscount will agree with that. I should also like to ask: have any figures been made available to the Minister, or to anyone else, showing how much the profit or loss would be on the sale; how much it will cost to obtain the money, and what proposals have already been put to the City of London about getting the money?
Viscount TRENCHARD: My Lords, we believe that at the present time there is too big an ambit of government in industry.
A Noble Lord: Poppycock!
Viscount TRENCHARD: And we believe that government, in so far as it can be efficient in industry, will be more efficient

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if that direct role is reduced and greater independence is created. I do not think that I can add further to the statement that I have already made.
Lord MISHCON: My Lords, I apologise to your Lordships for being so persistent, but may I again ask the noble Viscount whether it is not laughable that a Statement should be repeated in this House, and that he should be responsible for the comment upon it, when he has not yet answered the question as to whether the Government have made up their minds about the policy of whether they wish to retain a controlling interest, an equal interest or a minority interest in this vital concern?
Viscount TRENCHARD: My Lords, I say again that the Government will retain such an interest as is necessary to ensure that the vital results for the country as a whole, and in particular for defence, are properly looked after. They will not retain more than that.
Lord WYNNE-JONES: Is that 51 per cent., my Lords?
4.20 p.m.
Lord PLANT: My Lords, I want to intervene as an ex-president of the TUC. After the workers in this industry, who were in favour of nationalisation, have read this phoney prospectus, I do not believe that they will be queuing up to purchase the shares. I think that the Government have to reconsider their position, because I believe they have now introduced an uncertainty into a great industry which will do nothing but harm the country. That is the view that I believe the workers will express when the prospectus sees the light of day. I think the Government are diminishing our capacity to advance when the economic recovery comes.
Several Noble Lords: Order, order!
Lord DENHAM: My Lords, I hope the noble Lord will forgive me for half a minute. I appreciate that noble Lords in all parts of the House feel very strongly on this issue. But there is a note in the Companion to the Standing Orders which says that Ministerial Statements are made for the information of the House, and
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although brief comments and questions for clarification are allowed, such Statements
" should not be made the occasion for immediate debate unless the House so order "
Lord PLANT: My Lords, when I sat on the opposite Benches and when noble Lords opposite were sitting on these Benches I learned a great deal. I felt that they were not asking many questions; they were making pertinent statements to the Government of the day. Would the Minister agree that the Government are now destroying, or attempting to destroy, a nationalised industry and it will not be compensated for by more dynamic private industry? Would the Minister not agree, too, that the Government are now asking workers and others to purchase shares in this organisation so that they can finance the income tax reductions at the top rate from 75 and 80 per cent. to 60 per cent? Would the Minister also inform us what the trade union movement responsible for these workers has said? All the noble Viscount has said is that the trade union movement has been consulted; he has not told us what they have said. Will there be worker directors? I think we ought to be informed of the view of the workers as expressed by the trade union representatives who apparently have been consulted. I also wish to know what would be the Government's view if the workers in the industry do not purchase all the equity which is made available to them. Presumably it will go to the finance houses in the city. Will the noble Viscount please comment on some of the points I have raised?
Viscount TRENCHARD: My Lords, I have another long Statement to interrupt your Lordships' business later, and so I do not really feel that I can reply to that long statement. With regard to the ability of the Corporation on becoming a company, to place its shares, both in the market and with workers, time will show. We have a lot of faith in this industry and we believe that the market will bear a very considerable share of the future financing. We hope very much that the workers who are involved in the industry will consider purchasing shares in their own business; we believe that this is indeed a form of industrial democracy which should be encouraged. I have to leave the other points for another occasion.
4.24 p.m.
Lord MELCHETT: My Lords, if the noble Viscount is not able to answer all the questions my noble friend put to him, in particular about the views of those working in the industry—the noble Viscount may be finding it a little embarrassing to continually get up and not answer a series of questions asked by my noble friends—may I take him back to one question which I asked him which he did not answer: that is, whether British Aerospace's management have expressed any views on the effect that this Statement will have on the capacity of the British aerospace industry to take part in the manufacture of future generations of civil aircraft? May I put just one other point to the noble Viscount? He suggested that it was nationalisation which had caused the uncertainty in the aerospace industry. The noble Viscount may not remember, but in the arguments we had in your Lordships' House on the nationalisation of British aerospace the Government of the day, and I on behalf of the Government, constantly put forward the view that there was a good industrial argument for rationalising the industry, which is what we did in that Bill. Would the noble Viscount not agree that the Government have fully accepted that, and that no uncertainty was caused by it, because they are leaving British Aerospace intact while " flogging off " the profitable parts of it in conditions which will lead to the greatest public loss?
Viscount TRENCHARD: My Lords, I apologise to the noble Lord for not commenting on his point on civil aircraft projects. It is our view that an independent company operating at arm's length, and British Aerospace even before that, must decide within the general overall policy which civil aircraft projects are of the greatest value and which, commercially, within the financial possibilities of this country and British Aerospace, can be followed. I cannot comment on individual projects—not that the noble Lord has asked me to—but it is very much our philosophy that this is a matter for the management of British Aerospace.
So far as rationalisation is concerned, the question of whether rationalisation, which in many big industries is a need at points of time, is best performed by
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creating conditions in which it is likely to happen in any event, or whether it is best performed by nationalization, is where noble Lords opposite and we fall out.

THE SHIPBUILDING INDUSTRY'S FUTURE
4.27 p.m.
Viscount TRENCHARD: My Lords, with the leave of the House, I should now like to repeat a Statement made in the other place by my right honourable friend the Minister of State. The Statement runs as follows:
" One of the most serious and immediate industrial issues facing the Government on taking office was the state and prospects of merchant shipbuilding. The Government have now completed a review of the situation with British Shipbuilders, and have had wide consultations with unions, private sector interests, the shipping industry and the EEC Commission. I am now in a position to inform the House of the situation, and of the approach the Government propose to adopt. Plans for the Belfast shipyard of Harland and Wolff will be made known separately by my right honourable friend the Secretary of State for Northern Ireland.
" Our consultations have fully confirmed the view of the last Government—and indeed of those working in the industry—that further contraction is inevitable given the extreme severity of the world recession.
" At the end of last year, British Shipbuilders put their plans for dealing with this grave situation to the previous Administration, advising in effect contraction in merchant shipbuilding to an annual rate of some 430,000 tons by March 1981, with a reduction of manpower to around 20,000.
" With the severe difficulties in securing new orders—only 230,000 tons in 1978—British Shipbuilders recognised at that time the magnitude of the task facing them in avoiding contraction below 430,000 tons, and the vital need to increase competitiveness as well as for recovery in the market.

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" So far this year recovery has not taken place, and my consultations with British shipowners and others afford few grounds for optimism in that respect. Substantial over-capacity exists worldwide and at present there appears to be no early prospect of recovery. I must warn the House that British Shipbuilders will find it very hard to sustain their target capacity.
" In such circumstances the Government must judge how far and how much they can help.
" One of the Government's early acts on taking office was to seek a renewal of the Intervention Fund which they found had lapsed on March 15th, and a temporary agreement was reached with the EEC Commission. The Government are now making proposals for a fund of £120 million to cover the next two years. In putting these proposals to the Commission I have had to say that the capacity of 430,000 tons is the highest figure that in our view could be retained in 1981.
" In addition to the Intervention Fund, the Government will pursue other measures of support. They are ready to take part in a Community Scrap and Build Scheme providing that it is cost-effective; they are proposing credit for conversions by United Kingdom ship owners, and will support improved credit terms in current OECD discussions; and they will advance public sector orders where practicable.
" The Government will give British Shipbuilders a nil commencing capital debt. We are considering further the most appropriate means of financing the Corporation. In the meantime, British Shipbuilders will continue to be financed on an interim basis from the National Loans Fund.
" The cost to public funds will be substantial and British Shipbuilders is aware of the need for strict financial discipline. For the current financial year British Shipbuilders' cash limit of £250 million and trading loss limit of £100 million, after crediting Intervention Fund assistance, are not being changed. The Corporation is also
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being set a financial target for 1980–81 of limiting its trading loss, before crediting Intervention Fund assistance, to £90 million. The Corporation must make substantial progress towards providing in the longer term an adequate return on capital employed.
" It is unavoidable that contraction will occur mostly in localities where unemployment is already high. For the most part the shipbuilding industry is located in Special Development Areas and we are concentrating our regional industrial assistance on these areas. To help alleviate hardship to individual workers and their families the Government have extended the Special Redundancy Payments Scheme to the full period authorised by the Shipbuilding Redundancy Payments Act."
My Lords, that concludes the Statement.
4.33 p.m.
Lord MELCHETT: My Lords, once again I should like to thank the noble Viscount for repeating another depressing and gloomy Statement on a major sector of British industry. Once again, as I think has been the case with a number of Statements which the noble Viscount has made, it has, in fact, been possible to find out rather more about the Government's policy and decisions by reading the Financial Times the morning before the Statement is made than by listening to the lack of detail in the Statement when it is made in Parliament.
I wonder whether the noble Viscount can tell us more about the negotiations which have taken place with the EEC and confirm what seems to be the case: that, in return for a vague assurance about speeding up applications which I fear has been said by the EEC on a number of occasions in the past—a vague assurance about something which the EEC ought to be doing anyhow—the British Government have, in fact, agreed that the package of aid for the British shipbuilding industry will be temporary and tapering. Can he also confirm that that package of aid is already less than many other countries—for example, Spain and Finland—are giving to their shipbuilding industries; that those countries have given no assurance to

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anybody that the aid will either be temporary or tapering; and that we have, in fact, sold out what little hope we have of retaining a shipbuilding capacity in this country through the present slump, in exchange for this vague assurance from the EEC Commission?
Maybe the noble Viscount can tell us, in view of the decision that the Government have taken about how much they can help the British shipbuilding industry through the worldwide slump, whether they really believe that this country will he left—without the full and enthusiastic public support which we believe the industry needs given the worldwide conditions—with a shipbuilding capacity of any sort at all either from the point of view of merchant ships or from the point of view of this country's defence needs upon which I should imagine the noble Viscount and his supporters would place particular emphasis?
The Statement concludes by mentioning of the Redundancy Payments Scheme. As the noble Viscount knows, we on this side welcomed the order to extend that scheme which was brought forward only the other day in your Lordships' House. I hope that he will accept that we had little idea—and he gave us little indication—of the scale of the demands that would be made on this scheme as a result of the Statement that he has made today.
I particularly welcome at last the fact that the Government are admitting in this Statement that there will be job losses as a result of their policies and that those job losses will fall in the areas where unemployment is already highest. The Statement could have added: " and also those areas where the Statements that we have made in the last two weeks will be creating even higher unemployment ".
Once again, I should like to ask the noble Viscount for a little detail and some of the calculations which we all know his Department has made about the extent of those job losses. On previous occasions the noble Viscount has, if I may say so, avoided answering any direct questions of any sort and in particular this one, by simply saying that the Government's general economic
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policies will lead to an increase in employment and therefore he cannot give us figures for job losses. I hope that the noble Viscount will consider that answer on the basis that if a particular company is closed, it is perfectly possible to say how many jobs will he lost as a result of that closure. It may be that in the country as a whole unemployment is falling and there are more jobs available, but the information about the particular case is still relevant to the particular people involved—in this case those working in the shipbuilding industry—and that information is perfectly easily available and perfectly properly normally available to Parliament. I hope that the noble Viscount will not pursue his previous practice of simply avoiding answering this question, but will give those who are working in the industry a little more detail about the fate that awaits them.
Baroness SEEAR: My Lords, I, too, should like to thank the noble Viscount for repeating the Statement and to deplore, of course, as everybody must, the state of this once great industry. We must also recognise, however, that it is inevitable that this industry should contract and, indeed, a realistic approach to this industry by previous Governments over the past decade might have put us in a position much less severe than the one we are now in. Putting off the evil day does not help very much. However, we wish to retain a shipbuilding industry which has a future. I, too, would like to ask, what estimate has been made of the size of the shipbuilding industry which has a future, which will endure after the serious impact of the present recession? It is to that level—but not beyond that level—that a reduction should be made.
On the question of redundant manpower, I should like to make a point and to ask the noble Viscount for his comments. Within the industry there are a large number of people with a very high level of skill in shipbuilding. However, high levels of skill in shipbuilding are often high levels of skill which, with very little additional training, are transferable to other industries where, as we know throughout the country, there is a great shortage of skilled manpower. I cannot believe that redundant shipbuilders cannot,

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with very little additional help, be turned into extremely competent skilled persons in other areas, if the training services, the trade unions and employers who are searching up and down the country for skilled labour, are willing to take positive and urgent action to see that this takes place.
4.39 p.m.
Viscount TRENCHARD: My Lords, I should like to start by thanking the noble Baroness, Lady Seear, for her remarks. I believe that there is an element of putting off the evil day which has made a worse situation and not a better one. I believe overall—and this relates to what the noble Lord, Lord Melchett, said—that this very large problem will have to be squeezed from every side, including continued efforts to make our industry that much more efficient. I shall not comment on newspaper articles and forecasts of what Government action will take place. As a newcomer to the political scene, I have watched them over a number of years. The degree of accuracy and skill of the correspondents concerned seems to be fairly high, but I do not think there is any particular difference. I believe that the noble Lord is being quite unfair in criticising us for not being able to produce every detail, when, before a long summer Recess, the Administration wish to put before Parliament the state of their current policies and policy decisions rather than to leave it to speculation.
On the point made by the noble Lord, Lord Melchett, about other countries and subsidy rates, in industry circles there is a belief—indeed, there are suggestions—that other countries, even within the EEC (Spain is shortly to join) are giving more. The department is constantly looking for, asking for and would be anxious to receive real evidence that that is the case. My right honourable friend does not want to encourage—any more than would noble Lords—a subsidy competition within the EEC. Indeed, we believe that one of the aims of the EEC must he to reduce it. We have no evidence that, under the intervention fund arrangements or any other arrangements, countries within the EEC, are subsidising their shipbuilding industries to a greater extent than we have.
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I turn to shipbuilding capacity and what will be the final shape of the industry. We very much hope and believe that British Shipbuilders will make every effort to ensure that their preferred option—which is, of course, a 430,000 tonne capacity—comes about. The Statement makes clear that this will be an extremely difficult task, which will require the cooperation of all concerned working on competitive productivity in order to achieve that end. We very much hope that it will be achieved. The preferred plan of British Shipbuilders was known to the last Government and is now widely known. Therefore, it is not fair to say that we have not made available the shape and size of the targets for which British Shipbuilders aim.
In addition to the 430,000 tonne target, that would entail a reduction from the present workforce of approximately 27,000 to 20,000—a reduction of about two-fifths—against a one-third reduction in tonnage. I can give the noble Lord, Lord Melchett, those specific answers. I apologise for the fact that the note which I passed him, when we laid the Shipbuilding (Redundancy Payments Scheme) Order, giving the Scheme's cost to date as being in the £7 million bracket was slightly wrong. Having checked the figure right up to date, it is £8·8 million, with an average of £1,736 per person.
I agree very much with the noble Baroness, Lady Seear, about the transferability of skills. Fortunately, quite a large number of empty factories are located in the main shipbuilding areas, in the Special Development Areas. Therefore, factories are available and the services of Government, including those of the Manpower Services Commission, will do everything they can to encourage other industries to use those factories and to use even smaller-scale facilities which are being provided under one heading or another, in order to try to ensure that what growth industries we have in this country—and this reverts to our central plank of the need to get industrial recovery going on a national scale—will take up the extremely valuable skills and the valuable people made available by this sorry state of affairs.
Baroness SEEAR: My Lords, can the noble Viscount give us a progress report

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on the transfer of people from this declining industry to new work in those areas, say, in six months' time? Is that an unreasonable question?
Viscount TRENCHARD: My Lords, I do not find it an unreasonable request. I am sure that there will be future occasions which will in any event crop up when I shall, undoubtedly, be asked to make a Statement as to the progress being made in the regions in relation to new industries as against the problems of the old.
Lord GLENKINGLAS: My Lords, will my noble friend agree—I am sure that he will—that those of us who have lived beside the Clyde all our lives share the deep regret of everyone in the House that the shipbuilding industry should have been so seriously in decline? Will he not agree that there are still one or two very high-class shipbuilding yards left in that area? If there are to be redundancies, will he ask his right honourable friends to consider very carefully the provision of that large micro-chip factory which was to be built at Greenock, which is exactly the right area for the regional policy concerned, and will they do their best at least to bring that industry to this part of Scotland?
Viscount TRENCHARD: My Lords, I am grateful to my noble friend and entirely agree with his sentiments. Today I shall not comment on the particular proposition which he suggests might be helpful.
Lord MELCHETT: My Lords, I thank the noble Viscount for giving us the detailed information that he has in following up the Statement. I should like to make two quick points. First, on subsidies, the noble Viscount acknowledged that when I referred to our competitors and the level of subsidies which they give, the countries I mentioned were not in the EEC—in the case of Spain, not yet, in the EEC. But in his answer to my point he concentrated almost exclusively, if not exclusively, on the position within the EEC. In talking about the lack of information or the difficulty of obtaining
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information—which, of course, I recognise—about the level of subsidies in other countries, would it not have been wiser for the Government to reverse the burden of proof? In other words, to say that until they have positive evidence that other countries—particularly the two I mentioned as examples; namely, Finland and Spain—were not giving much higher subsidies than we already give, it would have been wise not to give so much away to the EEC for so very little in return.
I want to ask the noble Viscount one further question about Harland and Wolff. The Statement says that a further Statement will be made and, of course, Northern Ireland epitomises a region with all the appalling problems which the decline of an industry such as shipbuilding brings. I hope that I did not read into the Statement the suggestion that the Government will try to deal with such a very important matter for Northern Ireland by way of a Written Answer, as I think has been attempted on at least one previous occasion. I hope that the noble Viscount will be able to tell us that a Statement will be made in your Lordships' House, when my noble friend Lord Blease will have an opportunity to ask some questions about Harland and Wolff.
Viscount TRENCHARD: My Lords, I thank the noble Lord for those points. I shall talk to my right honourable friend about the matter of Spain in more detail. If the noble Lord has evidence, which is known to him, as regards Spain, I hope he will make sure that it is in my hands or in those of my right honourable friend. I accept what the noble Lord says about burden of proof in relation to individual countries outside the EEC: that a presumption is something of which we must take real notice. Within the EEC I very much hope that the efforts of the Commission to table what is going on will be the better route towards controlling an otherwise uncontrolled subsidy race. As regards Harland and Wolff, I can confirm my noble friend's suspicion, but not for the reasons he has in mind. However, before the Recess we shall try to make available the largest possible amount of information since we took office on a wide range of very important subjects. A Statement on Harland and

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Wolff will be found in a Written Answer which is being released in the other place this afternoon.
Baroness WARD of NORTH TYNESIDE: My Lords, may I ask my noble friend a question?—for I represented for very many years a shipbuilding area on the North-East coast.
Viscount TRENCHARD: My Lords, yes.
Baroness WARD of NORTH TYNE-SIDE: My Lords, I thank my noble friend. As he quite rightly said that many small factories are now empty and that they would help in dealing with this matter, could I ask him what special action he is going, to take to help to get work to those particular factories, in view of the fact that we have been trying to do this for many years without much success? If my noble friend has any special way of giving us this information, it would at least be something to encourage the shipbuilders in my part of the world to take action.
Viscount TRENCHARD: My Lords, I thank my noble friend for those questions and points. I think all I can say at this stage is that there is a considerable amount of growth of new industries in the area with which she is so much more familiar than I am. There are plenty of new factories which are occupied, and there are new industries which are growing. The trouble is that they affect very much smaller numbers than the very large industries which are declining. There must, I hope, soon come a point in time, with the continued emphasis of regional policy on developing in these highly impoverished areas, when the growth of new jobs becomes a bigger element than the decline of the old industries. Regrettably, in present conditions, and particularly present shipbuilding conditions, that still seems to be some way off, but we shall leave no stone unturned to try to accelerate it.
Lord DRUMALBYN: My Lords, may I ask my noble friend one question for clarification ? Is it not a fact that the
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shipbuilding industry throughout the Community is in difficulties? Is it reasonable to assume, from what he has said today, that the announcement and the plans have been worked out in close co-operation with the Commission, that the burden of any curtailment of production is going to be reasonably well shared throughout the Commission and that the burden will not fall unduly upon this country? It is important for us to be assured that this is an announcement which has been made in the closest collaboration with the Commission, and that the Commission is going to co-operate fully in ensuring that the regional interests of this country, as well as the national interests, are carefully safeguarded.
Viscount TRENCHARD: My Lords, I am grateful to my noble friend for raising those points. Yes, shipbuilding is in very severe difficulty—as I think your Lordships know—all over the world, and certainly in the EEC. We are in close negotiation with the EEC to ensure that the measures taken in the various countries are fair. In the past there has been an upper limit on intervention—as I think the noble Lord, Lord Melchett, knows—of approximately 30 per cent. The limit that will be fixed for the future is still being discussed, but I can assure my noble friend that there is every reason to believe that there will be a completely even-handed treatment, and that the EEC thus will be playing a positive role in relation to minimising this great problem and preventing too great a degree of tax-payers' money escalating in all countries.
Lord HARRIS of GREENWICH: My Lords, would not the Minister agree that the exchanges that have taken place this afternoon demonstrate the urgent need to increase the regional funds available to the Community?
Viscount TRENCHARD: My Lords, I think I must leave that as a wider subject for another day. Certainly in relation to regional policy we are in close touch to ensure that we use all the funds available to us from the EEC. The question of larger regional funds and larger contributions to the EEC is, I think, a separate subject which we should not enter into today.

EUROPEAN ASSEMBLY (PAY AND PENSIONS) BILL
Second Reading debate resumed.
4.55 p.m.
Lord ARDWICK: My Lords, I wonder whether I may make an uncovenanted intervention in the European Assembly pay Bill. When it was originally proposed to pay Members of the European Parliament the same salary—the same miserable salary—that Members of this Parliament received, I was very scathing about it, but since then the salaries of the Westminster MPs have been considerably improved. They are going to be further improved. We know that for the European MPs there are going to be generous allowances. I think that none of them is going to suffer the pangs of poverty over the next five years. Indeed, there are some ways in which they are going to be better off than Members of Parliament here, because they are guaranteed five uninterrupted years. That is, we are guaranteeing them something between £50,000 and £60,000, and perhaps more than that So if there were a delay of a few weeks in receiving their salaries, I think they would be able to take that without any hardship or hard feelings.
What I regret is that there is no link between salaries and attendance. I was not thinking only of this country, I was thinking of the general European situation. Obviously Members of the European Parliament are not under the close surveillance of their constituencies, and the Parliament is remote. Indeed, in the European Parliament there has not even been a gauge such as published division records. What is going to happen if a Member neglects his duties? I am thinking generally, and not just of Britain. If the new MEPs are as assiduous in their duties as the old ones were they will be among the most assiduous in this Parliament. I am quite sure that they will be good attenders.
It is a question of what happens if a Member neglects his duties. How will his dispersed electorate know what he is doing, how he is responding and how he is earning the money being given? Suppose a Member never goes at all, either through a degeneration of character or some mental illness, or perhaps out of a desire politically to boycott the Parliament? Have
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the electors any kind of right of petition? If so, whom do they petition? Do they petition this Parliament? It is a curious position. This Parliament pays the piper, and the other Parliament calls the tune. Are there to be any sanctions at all to see that an MEP performs his duties? If so, how would they operate? Would they operate here, or operate at Strasbourg?
4.58 p.m.
Lord BELSTEAD: My Lords, I am grateful to the noble Lords, Lord Boston, Lord Shinwell, and Lord Ardwick, who have spoken on the Second Reading of this Bill. I am grateful to the noble Lord, Lord Boston, for the welcome which he gave to it, and particularly for his acceptance of the abated salary proposal, and for the order-making power to be found in Clause 2 to allow expenses to be paid within the United Kingdom if necessary. As I said—and I think it is right to repeat it since there has been a long interval since the beginning of this Second Reading—the Government believe that it is for the European Parliament to pay expenses within the United Kingdom. I should like to thank the noble Lord for his support for that point of view.
The noble Lord, Lord Ardwick, has just asked me a direct question. The answer is that this is not provided for in the Bill before us. I think that the noble Lord would probably agree with me that if the sort of situation began to develop which the noble Lord said could develop—and he made it clear he did no0t necessarily suspect that it would, but he hazarded a guess that it could; namely, that a representative to the European Parliament might, either through force of circumstances or deliberately, absent himself or herself from the European Parliament—then it would be for the Parliament to take cognizance of that, and it would no doubt be necessary for a proposal to be made which would have to go to the Council of Ministers. I do not think I can go further than that in suggesting what I think the reply would have to be, but it is not provided for in this particular legislation.
The noble Lord, Lord Boston, asked about the payment of allowances between the date of the European election and the date when the Assembly first met, which was 17th July. He will be aware that Article 3 of the Decision of the Council

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of Ministers relating to the holding of the elections provided that the term of office began on the day when the European Parliament met, and when the noble Lord has been so helpful to me I feel that I should not, but nonetheless I cannot resist, pointing out that that decision was negotiated by the last Administration, in which he himself served. That is the position at the moment and, as with my reply to the noble Lord, Lord Ardwick, we must see what effect that has on representatives to the European Parliament before anyone, either in Europe or the United Kingdom, feels he wants to make a change in it.
That leads to the next point, which is the payment of expenses for the period from 7th June to the opening of the European Parliament. That of course would be for the European Parliament to consider; there is no way in which the United Kingdom authorities could meet those costs. However, let us bear in mind that very realistic expenses for secretarial help and office expenses have now been proposed by the European Parliament and, as Lord Ardwick rightly said, there should not be any hardship because of this period of about six weeks during which representatives to the European Parliament will have had to wait for receipt of those expenses.
Lord Boston asked—and the question was implicit in the remarks of the noble Lord, Lord Shinwell—how close relations would be between those who would represent us in the European Parliament and Parliament here at Westminster. The Government hope that relations will be close and cordial. The Government have already announced, and have told the leaders of the United Kingdom parties in the European Parliament, what Government can do by way of briefing, by giving access to Ministers and in such ways trying to assist, from Government level here in London, those who are representatives in the European Assembly.
As for relations between this Parliament—your Lordships' House and another place—and the European Parliament, the Conservative Party's election Manifesto promised that there would be full consultations, and we intend there will be a full opportunity for Parliament to discuss this question in whatever way each House thinks is the best way to go
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about it. Liaison between the representatives to the European Parliament and your Lordships' House is highly desirable and one of the reasons why this House is so valuable is the fact that we have rather easier rules in your Lordships' House and it is possible for the representatives to the European Parliament who are Members of this House to attend here whenever their duties allow and of course to speak whenever they wish.
Lord Shinwell asked your Lordships to " reconsider the whole thing "—I think those were the words he used—but I hope that at this stage of the Bill your Lordships will do no such thing. Much as I enjoy listening to Lord Shinwell, I do not agree with him on that point. This Bill is fair and right and I hope the House will now give it a Second Reading.
On Question, Bill read 2a: Committee negatived.

SOCIAL SECURITY BENEFITS UP-RATING ORDER 1979
5.5 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE rose to move, That the draft order laid before the House on 4th July, be approved. The noble Lord said: My Lords, it may be for the convenience of the House if we discuss two other Instruments at the same time—namely, the draft Supplementary Benefits (Determination of Requirements) Regulations 1979 and the draft Family Income Supplements (Computation) Regulations 1979, which were laid with the order and will be debated in another place on Wednesday 25th July.
The purpose of all three Instruments is to implement, in the week commencing on 12th November, the majority of the increases in social security benefits announced by my right honourable friend the Secretary of State for Social Services in his Statement in another place on 13th June. I think it will be helpful to your Lordships if I take the up-rating order first and then deal with the regulations. The order provides for increases in national insurance and industrial injuries benefits. The principal benefit rates are listed in Appendix I to the Government Actuary's Report on the up-rating order, but it may be helpful if I refer to some of the main items.
The most significant item, both socially and financially, is the standard rate of retirement pension. The order increases this from £19·50 to £23·30 for a single pensioner and from £31·20 to £37·30 for a married couple. This is an increase of 19½per cent., and it takes account of the expected 17½ per cent. movement in prices between November 1978 and November 1979 and of the shortfall in last year's up-rating. It is proposed that other long-term benefits be increased on a corresponding basis. Since 1977, the level of operation of the earnings rule for retirement pensioners has been linked with the general level of earnings. The amount a person can earn before his pension is affected will accordingly rise in November from £45 to £52.
As to the earnings rule for the dependent wives of certain pensioners, your Lordships may recall that the Pensioners' Payments and Social Security Bill, which has passed through both Houses and is awaiting the Royal Assent, removes the requirement to increase the earnings limit for those wives and we propose to maintain the limit at its present level of £45. This is the matter to which the Joint Committee on Statutory Instruments has specially drawn attention. The Joint Committee has pointed out in its report that the Pensioners' Payments and Social Security Bill has not yet received the Royal Assent and, to that extent, the draft order anticipates the enactment of the Bill. That is so, but the order is not intended to come into force until 12th November, and I understand that the Bill will receive Royal Assent on Friday of this week, 27th July.
Turning now to short-term benefits, the standard rate of sickness and unemployment benefit will rise from £15·75 to £18·50 for a single person, and from £25·50 to £29·95 for a married couple. These higher rates represent increases of 17½ per cent. Other short-term benefits will rise by corresponding amounts. For the first time, the up-rating order contains a provision relating to the earnings-related additional pensions payable under the new pensions scheme. These additional pensions began to be paid from April 1979 and it is proposed to increase them by 17½ per cent. from November.
I know that many of your Lordships are especially concerned with the welfare
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of the disabled and will be pleased to know that there will be increases in attendance allowance, which will rise from £15.60 a week to £18.60 at the higher rate and for people entitled to the lower rate of allowance, from £10.40 to £12.40. Noncontributory invalidity pension and invalid care allowance will both go up from £11.70 to £14.00. Mobility allowance will rise from £10 to £12 a week.
At this point, I should apologise for the fact that the printed copies of the order which were laid before your Lordships on 4th July contain two small errors. On page 1, in footnote (c), line 3, " 1975 " should read " 1978 ". On page 3, in footnote (b), line 3, the words after " regulations " should read
" as amended by regulation 8 of S.I. 1978/1123".
These errors will be corrected in the final version of the order. The order fulfils my right honourable friend the Secretary of State's statutory duty under Sections 125 and 126A of the Social Security Act 1975. It also fully discharges the Government's undertaking to honour the increases in retirement pensions which were promised before the election by the previous Administration.
Let me turn now to the Supplementary Benefits (Determination of Requirements) Regulations, which provide for increases in the supplementary benefit scale rates laid down in Schedule 1 to the Supplementary Benefits Act 1976. The increases proposed are the same as those in the related national insurance benefits and will also come into effect in the week commencing 12th November. We propose that the long-term scale rates, which apply to supplementary pensioners and to people, other than the unemployed, who have received supplementary allowance continuously for two years, should be increased from £19.90 to £23.70 for the single householder, and from £31.55 to £37.65 for a married couple. The ordinary scale rates, which apply to the unemployed and to other people who have received a supplementary allowance for less than two years, will be increased to £18.30 for a single householder and to £29.70 for a married couple. We also propose to increase the scale rates for other adults and for children. The special preference for the blind will continue at the same amount. Regulation 2 also ensures that the increases in attendance allowance

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are passed on to supplementary beneficiaries in need of attendance.
Your Lordships may also like to be made aware of other changes affecting supplementary beneficiaries which, though not provided for by the regulations, will form an important part of the up-rating. The Supplementary Benefits Commission has decided to increase the discretionary additions for extra heating and the standard additions for special diets. These changes will come into force at the same time as the increases in the scale rates.
I now turn to the Family Income Supplements (Computation) Regulations 1979, which provide for the prescribed amounts below which Family Income Supplement is payable and the maximum amounts of Family Income Supplement is payable. The prescribed amounts will be increased from £46 to £54 for a family with one child, and a further £4·50 will be added for each additional child. We propose to raise the maximum weekly rate of Family Income Supplement from £10·50 to £12·50 for a family with one child, with an extra £1 payable for each additional child. These amounts apply both to one parent families and to two parent families. Taken in conjunction with the Chancellor's Budget decisions on income tax, these Family Income Supplement proposals demonstrate our commitment to maintain and improve incentives for poor families living on social security to return to work.
My Lords, I should like to finish by giving the cost of these increases and explaining how they will be paid for. As my right honourable friend indicated in another place when he announced the Government's proposals on 13th June, the up-ratings, taken together with the Christmas bonus, will increase the annual expenditure of social security benefits by about £2,700 million a year. The present national insurance contribution will be broadly sufficient to meet the additional expenditure falling to be paid from the National Insurance Fund in 1979–80. We will consider later this year what changes to the rates of contributions and earnings limits will be required for 1980–81. I trust that your Lordships will accept the three Instruments now before you and I beg to move.
Moved, That the draft Social Security Benefits Up-Rating Order, laid before the House on 4th July, be approved.—(Lord Cullen of Ashbourne.)
5.15 p.m.
Lord WELLS-PESTELL: My Lords, we are grateful to the Minister for his statement relating to the three orders now before your Lordships' House. I am not unmindful of the fact that this House has several more hours' work before it, nor do I forget that I have already made two comments about these very matters on previous occasions since the coming into office of the new Government, and so I do not propose to go over that ground today, nor to ask the Minister any questions. However, I am sure that he would be the first to recognise that I, too, would wish to take the opportunity to register our concern at certain features of the matters that he has mentioned. Obviously we welcome the up-rating, but, as I have said previously, we are very disturbed that these and future increases are to be tied to prices, not wages. I know the Government's arguments on these matters, but I have in mind the effect of rising prices and the serious increase in inflation which many of us believe will take effect as soon as November of this year—let alone in the succeeding 12 months. The noble Lord mentioned an increase of inflation to 17½, per cent. by November 1980. I hope that it is no more than that, but we are fearful that it may well be, and we feel that the Government ought to have been a little more mindful than they seem to have been of that eventuality.
We are concerned with the widening, as we see it, of the gap between the short and the long term benefits which we feel will be aggravated by what I do not think it would be unfair to describe as possible widespread unemployment following on the Government's economic policies; in fact, I think they have been honest enough to say so. Furthermore, we find it rather difficult to understand the Government's failure to increase child benefit by 50p a week, as we ourselves promised we would do. We regard this as being of supreme importance to the ordinary family. I know that it is being done for the one-parent family, but I think that it is much more important, or just as important, for the ordinary family, bearing in mind the severe effect that the increase in VAT will have on children's

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clothing. This will be a very serious problem affecting the majority of school children, and we are rather surprised that the Government did not see their way clear to increase the benefit in the way we promised. We are not unmindful of the fact that such a proposal would cost upwards of £200 million, but these matters are important to the family. I do not wish to say anything more, other than to repeat my welcome for the up-rating, and to express the hope that the Government's view that inflation will not go beyond 17½ per cent. by November 1980 will prove correct.
5.19 p.m.
Lord BANKS: My Lords, I wish to join in thanking the noble Lord, Lord Cullen of Ashbourne, for his very clear explanation of the purpose of the orders. As he explained, they are the usual annual up-rating orders covering national insurance, supplementary benefit, and family income supplement. They have been described elsewhere as the biggest cash increases ever. But I think one can say without any hostility that that is no particular credit to the Government, because the Government are merely performing their statutory duty to increase the long-term benefits in line with increases in prices or earnings, whichever are the higher, and the short-term benefits in line with increases in prices. The size of the increases is really a measure of inflation and of the failure of successive Governments to control it.
As has been pointed out, the long-term benefits go up by 19·5 per cent., and that takes account of the shortfall last year. The fact that there was a shortfall last year demonstrates once again the undesirability of having a reference period which is half in the past and half in the future. The 17½ per cent. estimate of inflation between last November and next November is, of course, a worrying figure. The long-term benefits this year have been increased in accordance with increases in prices, since increases in prices were the higher, but the noble Lord, Lord Wells-Pestell, has drawn attention to the fact that there will be a change in the future, in that these benefits are to be related to prices only.
The Government argue that to have the double-barrelled arrangement, where it is
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either prices or earnings, is no longer sustainable. They speak about the ratchet effect, and the fact that when earnings are higher then the relation of benefits to earnings is maintained, and when prices are higher the relation to earnings is improved, so that gradually you have an increasing share of the national wealth, a higher proportion of the earnings, going on pensions. The Government say that this is not sustainable as something which is open-ended and will not come to an end. On the other hand, I think we would all agree that the relationship between pensions and other long-term benefits and earnings is not yet at a satisfactory level, where we really need to worry about that, and I would have much preferred to see them wait until the relationship was more satisfactory before they considered too seriously the possibility of difficulties a good distance into the future.
The Secretary of State in another place, when he was first announcing these increases, said that it was the Government's firm intention that pensioners and other beneficiaries could confidently look forward to sharing in increased standards of living. If there is an increase in the standard of living—and that may not look very hopeful just at the moment—then earnings must have exceeded prices for that to come about; but the Government no longer intend that benefits should increase as fast as earnings, so that, in a period of increased standard of living, while the pensioners and others may share in it they will not share in it to the full, and will fall relatively behind earnings. I think all that will have to be very carefully considered when the legislation to make the change comes before the House. Moving from that, I should like to welcome what the noble Lord, Lord Cullen of Ashbourne, said about the discretionary payments for extra heating in supplementary benefit, and I also welcome the increase in the mobility allowance.
Finally, turning to the cost of the increases, earnings-related contributions should of course meet the cost of earnings-related benefits, but when prices are ahead of earnings then earnings-related contributions may not meet the cost of prices-related benefits. However, as the noble Lord pointed out, for 1979–80 the Government Actuary anticipates a surplus in the

1679
National Insurance Fund of £35 million. But the first full year is 1980–81 and, as the noble Lord hinted, it looks as though income will be insufficient in that year, and we must therefore be prepared for increases in limits or in percentage rates, or both, later in the year, presumably to take effect next April. But that will be an additional part of the cost of prices running ahead of earnings, which in any event must reduce real income. With these few comments, my Lords, I support the passage of these orders through the House.
Baroness HORNSBY-SMITH: My Lords, I wish to intervene for only one minute, but the noble Lord, Lord Wells-Pestell, made a statement which I believe is quite inaccurate. Surely there has never been any VAT on children's clothing. Am I not right?
On Question, Motion agreed to.

SUPPLEMENTARY BENEFITS (DETERMINATION OF REQUIREMENTS) REGULATIONS 1979
Lord CULLEN of ASHBOURNE: My Lords, I beg to move.
Moved, That the draft Regulations laid before the House on 4th July, be approved.—(Lord Cullen of Ashbourne.)
On Question, Motion agreed to.

FAMILY INCOME SUPPLEMENTS (COMPUTATION) REGULATIONS 1979
Lord CULLEN of ASHBOURNE: My Lords, I beg to move.
Moved, That the draft Regulations laid before the House on 4th July, be approved.—(Lord Cullen of Ashbourne.)
On Question, Motion agreed to.

EUROPEAN COMMUNITIES (IRON AND STEEL EMPLOYEES RE-ADAPTATION BENEFITS SCHEME) REGULATIONS 1979
5.26 p.m.
Viscount LONG Viscount LONG rose to move, That
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the draft regulations laid before the House on 11th July, be approved. The noble Viscount said: My Lords, I am this afternoon concerned with Article 56 of the Treaty of Paris, and particularly with those parts of that article which allow the provision of assistance to certain redundant steelworkers, the costs being jointly supported by the Government and the funds of the ECSC. Before moving on to the details of the amendments to the Iron and Steel Employees Re-adaptation Benefits Scheme (ISERBS) which are now proposed, it might help our consideration if I described briefly the background of the steel industry itself and what part Article 56 of the Treaty of Paris plays in helping redundant steelworkers.
I am sure your Lordships are aware of the widespread depression in the steel industry, particularly in Western Europe, because steel demand has fallen below expected levels. There is consequently a substantial surplus in world steelmaking capacity, which had been expanded in anticipation of a continuing rise in the demand for steel. In addition, the competitive edge of our steel industry is blunted because of the lower manpower productivity achieved compared with our major European competitors. If the steel industry is making and selling less steel, it will inevitably be employing fewer men, and these factors have meant that there have been redundancies in the industry in the past and that there will inevitably need to be more in the future.
It was in recognition of the major part that the steel and coal industries must play in the future of western economies that the ECSC was set up in 1951 to bring about such conditions in these industries as would ensure a rational and efficient distribution of production. Since we joined the Community, both the NCB and the steel industry have been able to take advantage of ECSC aid in carrying forward their programmes of modernisation, which are essential to the profitable future operation of these industries. The provisions of the Treaty of Paris setting up the ECSC are therefore at hand to assist our coal and steel industries with their modernisation, and to cushion the blow of any necessary redundancy. Such provisions have already been used to great advantage

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in this country and by our Coal and Steel Community partners in equipping industries both to meet domestic needs and to produce exports.
There are three main ways in which assistance has been given to redundant steelworkers. First, tide-over payments to bring earnings in new jobs up to 90 per cent. of pre-redundancy earnings, and special unemployment benefits payable to those ex-steelworkers who are unemployed. Secondly, payments during approved vocational retraining courses, by which means the often highly-skilled steelworkers can enter another industry equipped with new skills. Thirdly, travelling and resettlement grants to encourage mobility within the steel industry. Over 33,000 steelworkers from some 79 locations have become eligible for assistance. Not all have needed aid, but, to those who have drawn scheme benefits we have paid some £27 million in all over the last five years. The cost is borne jointly by the national Government and the ECSC, the latter using funds which have been gathered in levies from the coal and steel industries of the member-countries. It is generally agreed that such assistance has been very valuable, both to those steelworkers who have been made redundant and in helping to provide in-house training for redeployed workers. It helps to smooth the path of reconstructing the industry into a modern, profitable and efficient producer which can compete effectively in world markets.
The readaptation agreement between the United Kingdom Government and the European Commission was concluded in September 1973 for an initial period of three years, and re-negotiated in 1976 for an unlimited period, subject to revision if either party wished. Amendments were made in 1976 and 1978 to bring certain benefits up to date and to introduce a more convenient method of paying training allowances. At all stages, consultation with the main interested parties—BSC, the British Iron and Steel Producers' Association and the TUC Steel Committee—has preceded the making of regulations. Consultation has again taken place on these amendments and no objections have been raised.
The Government are now seeking to consolidate the legislation and to make a number of amendments to the scheme.
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The majority of these amendments are technical alterations taking account of changes in other legislation. There are three major areas to which I wish to draw your Lordships' attention. Foremost among these is the inclusion of a ceiling on previous earnings for the purposes of calculating benefits. This will have the effect of placing a limit on payments to a small number of the highest-paid but now redundant steelworkers. It is proposed to base this on twice the limit imposed under the Employment Protection Act provision for an earnings-related lump sum payment to all redundant workers. At present this would provide for a ceiling of £11,400 per annum. The amendments also update rates which the Government feel have, with inflation, fallen behind. Under the scheme, those who remain unemployed after exhausting their National Insurance Earnings Related Supplement (ERS) received a flat rate special unemployment benefit for up to 52 weeks. The rate was set at £5 in 1973, and increased to £9 in 1976: these levels were approximately the amount of ERS payable to an unemployed man with average steelworker's earnings. The Government are now proposing to introduce an automatic adjustment to this rate of benefit in line with future changes in the ERS rate. The scheme rate is to be set at 90 per cent. of the maximum weekly rate of ERS. On this basis the new rate will be £14·50.
The final amendment of substance is a minor adjustment to the terms of eligibility for resettlement and removal grants in order to avoid the necessity of calculating in detail the difference in relevant costs of the old employment against those of the new when contributing to the costs associated with transfer to other work with the same steel company.
These are, in brief, the amendments which the Government would propose to make to the existing Iron and Steel Employees Readaptation Benefits Scheme. The aim of the scheme continues to be to help to reduce the grave social effects of the redundancies which are an unfortunate corollary of the modernisation of the steel industry in this country which is so necessary for the future health of the United Kingdom engineering industry as a whole and for our position as a major manufacturing nation. In encouraging the movement of labour into new skills, new industries and different parts of the

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country, the scheme supports the market forces which lead to the increased competiveness and efficiency of the whole country. I beg to move.
Moved, That the draft regulations laid before the House on 11th July, be approved.—(Viscount Long.)
5.35 p.m.
Lord WALLACE of COSLANY: My Lords, may I first thank the noble Viscount for his very detailed and clear explanation of this—may I say, with respect—extremely complicated order. On behalf of my colleagues, I would give it a welcome, albeit a limited and cautious one. Not having had much opportunity to digest the details of this complicated order, may I ask the noble Viscount whether there are in the order any changes detrimental to the workers of the steel industry; or is it the general assumption that the order is an advance on any previous order issued? There is another question I should like to put. I came across it by sheer accident but it is an interesting and important point. Why is it that the tubes and pipes division of the steel industry do not come under these regulations? This could cause a very difficult situation, for instance, at Corby, which we know is threatened, and possibly in other areas; but I am not sure whether Shotton is involved. It is a point that intrigues me. I should have thought that there would be a comprehensive order covering the whole industry.
There is another point which I think the noble Viscount touched on. I understand that very many workers are not aware of the benefits of this order and consequently many are not claiming. I am sure that the Government would like people to claim if they are qualified to do so. I am pleased to note from what the noble Viscount has said that there has been full consultation with all sides of industry. Is it possible that, in consultation with the unions and the British Steel Corporation, some steps might be taken to publicise generally the benefits and entitlements of the scheme? It could be done quite simply without getting involved in complicated memoranda and so on.
Finally I must make the point that the regulations are coming in at a critical time for the steel industry, facing, as it does, widespread closures which are not wholly
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but partially to do with Government policy. Today is Monday, and Monday is always a difficult day, but it seems to me, with the Statements that have been made, a day of gloom and despair—and it seems also to have affected the weather. But I can assure the noble Viscount that I do not blame the Government for that.
Viscount LONG: My Lords, I am grateful to the noble Lord, Lord Wallace of Coslany, for his kind words. I will agree that Monday is not a day to go to town on all the questions after having heard the Statements which have been made. I will give him a rest on that. He asked three questions. One of them was: Are the changes detrimental to the workers of the steel industry? As I have already said in my speech, it will, on balance, be an advantage to the steel workers. The order will limit, not eliminate, total benefits. That will have an effect on a small number of highly-paid men in the industry; and I think that I mentioned that during my speech.
The second question which the noble Lord asked was in respect of tubes and pipes. He mentioned Corby and Shotton. Of course, we are not speaking at this moment about the tube industry in Corby. The Corporation are not closing that particular industry down. It is only the steel industry with which we are concerned at this stage. If I can make the noble Lord's mind in any way happy, this has nothing to do with the tubes and pipes industry. This will not affect them at all.
The last question, which I understand concerned the publicity on steel workers knowing where they can get these benefits from, is an important question. So many people ask, " Why did I not know? " after the event has taken place. The Government are fully aware that the applications can sometimes arrive late. Even though they arrive late, they are still taken into account and passed. The individual might not be aware of such benefits; but I can assure noble Lords that, by and large, both the unions and the management are fully aware of the benefits. They would be looking after those people who are entitled to the benefits. I think that was all that the noble Lord said, except that he blamed the Government for the disasters and the

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redundancies that were going to take place in the steel industry. I can assure noble Lords that the steel industry in the United Kingdom is finding it as difficult as other steel industries throughout the world through competition.
Lord DAVIES of LEEK: My Lords, before we leave this vital point, may I ask what may seem an irrelevant question? When these compensations are given to steel workers, and should a steel worker he lucky enough to get a job in the Saar, Ruhr or even Pennsylvania, will there be any attitude of saying: " He has had a lump sum and we will reclaim it?
Viscount LONG: My Lords, I am not at all certain on that question. I should like to write to the noble Lord as regards reclaiming if a person has gone to Western Europe.
Lord DAVIES of LEEK: My Lords, I am very grateful to the noble Viscount. It was not meant as a trick question because I remember the establishment of the European steel and coal community. Mobility was one of the points that was supposed to be the forte of the scheme. I should be grateful for a reply and I thank the noble Viscount very much for his attention.
On Question, Motion agreed to.

WEIGHTS AND MEASURES (SOLID FUEL) (CARRIAGE BY RAIL) (AMENDMENT) ORDER 1979
5.43 p.m.
Lord TREFGARNE: My Lords, I beg to move that the draft Weights and Measures (Solid Fuel) (Carriage by Rail) (Amendment) Order 1979, laid before the House on 11th July, be approved. I hope it will not be necessary to detain you very long over this order. Its purpose is to make some necessary amendments to legal requirements affecting the carriage of solid fuel by rail which have remained unchanged since 1966. The order is concerned only with the whole train loads of fuel which are being carried by rail to a single industrial undertaking; it does not therefore affect coal intended for domestic consumption or where the train is to be broken up to make deliveries
1686
to more than one destination or industrial buyer. The provisions of the order are contingent upon prior agreement to the modified procedures being reached between buyer and seller. The Weights and Measures (Solid Fuel) (Carriage by Rail) Order 1966 provided that, where a complete trainload of steel wagons of minimum capacity of 24 tons was being dispatched to a single industrial undertaking, detailed information about the load carried could be given in a single document called (the train bill), instead of by means of labels attached to individual wagons on the train. This had the effect of speeding up the dispatch of coal trains and proved to be both more practical and convenient for buyer and seller and for the railway authorities.
The law is now being overtaken by technological developments and it is for this reason that I am seeking your approval of this order. The National Coal Board began experiments several years ago with new rapid loading equipment. They sub-sequently decided to invest progressively in the installation of costly but highly efficient, rapid-loading facilities at coal mines where they could meet a demand for speedy deliveries of large quantities of fuel to power stations and similar industrial undertakings. The facilities are contingent upon the wagons in the train being specifically coupled together for the purpose of weighing the train in motion, both before and after loading, by means of equipment which is designed to determine the total net weight of the fuel carried on the train. Effectively, since the wagons cannot easily be uncoupled, the whole train becomes one load-carrying unit. The order provides that only the total net weight of the fuel need, in such circumstances, be recorded on the train bill.
If the requirement to provide, in the train bill, detailed information about the load carried in each wagon in the train, were to be maintained in these circumstances, it would be costly and time-consuming and—in some cases, I suspect—probably impractical. It would deny to buyer and seller, as well as to the railway authorities, the considerable economic advantages that result from full use of these highly automated facilities.
The order makes one further change. It allows the railway authorities greater flexibility in the use of coal wagons.

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The 1966 order which introduced the train bill for large industrial consignments of fuel restricted its application to trains composed of steel wagons of not less than 24 tons capacity. This provision is to be amended to allow both smaller steel wagons and those made of materials other than steel to be used in the composition of trains destined for a single industrial undertaking.
The proposed amendments have proved uncontroversial and are indeed welcomed not only by industry but by local enforcement authorities. I commend the order to your Lordships. I beg to move.
Moved, That the draft regulations laid before the House on 11th July, be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

ECC ENERGY REPORTS
5.47 p.m.
Lord SHERFIELD Lord SHERFIELD rose to call attention to the growing urgency of the energy situation in Europe and to three relevant reports of the European Communities Committee, namely, the Twenty-First Report (Session 1978–79) on Energy Objectives for 1990 [H.L. 143], the Third Report on Energy Conservation [H.L. 18] and the Sixth Report on Fusion Research [H.L. 19]; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The energy problem is a global one and, as such, has rightly received the highest priority at the recent summit meeting. But it can and should also be considered at regional and at national levels. In the recent debate in your Lordships' House on 4th July, the problem was considered partly in the global and partly in the national dimension.
This evening I am asking the House to consider aspects of the problem which relate to Europe on the basis of three reports emanating from the Select Committee on the European Communities. As your Lordships are aware, this committee is enjoined to scrutinise documents issuing from the Commission in Brussels. These three reports deal with the most important documents in the energy field which have been issued in the past six
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or eight months, and which have so far been referred to the sub-committee on energy for scrutiny. One other matter in this field: a document on the programme of the Community's joint research centre remains to be considered, and a report on this will be completed before the House goes into Recess next week.
I regret that the reports on energy conservation and on the fusion programme have had to be circulated without some of their appendices. This is due to industrial action in Her Majesty's Stationery Office. I think that the documentation before your Lordships is sufficiently clear to allow of an informed debate; but its circulation has placed an additional burden on the staff of the committee and I wish to record my thanks to them for their efforts in making this debate possible. I might add en passant that a somewhat Gilbertian situation exists, in that these two reports are already available in printed form in bookshops. But as they are circulated to your Lordships through Her Majesty's Stationery Office they are held up on account of the aforesaid industrial action.
These three reports may not at first sight seem to be closely linked, but in fact they are part of a whole. The Report on Energy Conservation or what in the Brussels dialect is called the Rational Use of Energy (RUE for short) deals with what we can do here and now, without delay if we have the resolve, to mitigate the energy shortage. The report on the fusion programme deals with an as yet unproven contribution to the energy programme, which may or may not turn out to be of benefit to the grandchildren of the younger Members of your Lordships' House and, in my case, to my great-grandchildren. They therefore deal with opposite ends of the energy spectrum at which we are now looking. There is another important contrast between these two reports. Energy conservation, or RUE, is a process primarily dependent upon national action. The role of the Commission is that of a co-ordinator, a centre of information, and an energiser. The Committee think that the Commission has devoted insufficient attention to this activity but at the same time they recognise the difficulties in the way of their getting effective results.
The fusion programme, on the other hand, is a copybook example of a

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Community research programme: wide-reaching, fully integrated, amply funded, inherited from an original Euratom initiative, and being carried out in no fewer than 14 different research establishments. These two specialised reports for the immediate present and for the distant future have both to be considered against the sombre backdrop of the third report, which deals with energy objectives for the 1990s.
I shall say no more on energy conservation. The noble Lord, Lord Lovell-Davis, was the rapporteur on this matter to the Select Committee. He carried the burden of the investigation and he will be speaking to the report after I have sat down. I should like to thank him in advance of his speech for the effort he has put into the production of the report.
I will now take a few comments on, to give it its full title, The Proposal for the Research and Training Programme in the Field of Controlled Thermo-Nuclear Fusion, 1979 to 1983. This is, as I have indicated, an on-going programme. It is the fifth in a series of five-year programmes which, however, on a system known as " rolling programmes " is reviewed at the end of three years. We are therefore concerned with the programme for 1978 to 1983. The programme is based on indirect research—that is, on bilateral contracts between Euratom and national institutions, under which the cost is shared between the Commission and the institution concerned. Typically, the Community pays between 25 per cent. and 45 per cent. of the cost, depending on the type of project. The programme does not include the JET project at Culham, which is separately financed, or the fusion work at the Joint Research Council at ISPRA and elsewhere, which is an example of direct research wholly financed and managed by the Commission. There is also research work under the auspices of the International Energy Agency, to which the Commission contributes.
The programme provides for the continuation of the present activity, for its extension and for the introduction of new activities. This programme has already been endorsed, quite uncritically as a matter of fact, by a report from the
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European Parliament. It was due to be considered and adopted at a meeting of the EEC Research Council, which is the relevant authority, on 26th June last. That meeting was postponed, but it is likely to take place before the House again resumes.
After general approval by the Research Council, each individual project in the programme requires approval by the national authorities and the appropriate Community technical committee. I will not weary your Lordships by going into this programme in detail or discussing fusion in general. There is adequate information in the report and I am sure that later speakers will pick up specific points.
Your committee is concerned about three main matters: the absolute size of the programme; the question of its control; and its relation to other Community research and development programmes in the energy field. Obviously we are not suggesting that the fusion programme should not continue and develop, or that rising costs due to inflation should not be met, or that the JET programme at Culham can provide all the answers to the problems of the Tokamak type of fusion reaction of which it is an example; but the proposed programme is very large, both in absolute and relative terms. It is costed at the equivalent of about £500 million sterling up to 1983, which represents, even at 1977 prices, an increase of 40 per cent. To that must be added the inflation factor, the cost of the JET project, of the fusion work of the Joint Research Council and of the Community's contribution to the work of the International Energy Agency in this field.
It is inevitable that a programme of this nature should breed strong vested interests and should acquire an inbuilt momentum of its own. It also seems to be the case—unfortunately but perhaps inevitably—that the long battle over the siting of the JET project has left some wounds which could affect the development of the programme. Secondly, the committee voiced some concern about the management and control of so large a programme, carried out in so many different centres. This problem is inherent, and the committee have no reason to doubt that the difficulties are fully realised by all

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concerned in its management. Nevertheless, this needs watching. Thirdly, the committee were impressed by the fact that, whereas it is proposed to spend the equivalent of £500 million on fusion research, only £70 million is allocated to the committee's main non-nuclear energy research programme over the same period, and only £15 million of this goes to energy conservation.
These considerations led the committee to recommend that the Governments concerned should be fully satisfied, in advance of approving the programme even in principle, that so large an extension can be justified at this stage, that the management of the programme is effectively co-ordinated, and that the existing activities will be regularly scrutinised to see whether they should not be reduced or terminated to make room for new work. The committee considered further that caution and deliberation in approving a programme, fraught with so many uncertainties and geared to a time scale of half a century, is fully justified. In a sentence, there is absolutely no case for crash action, as there may well be in other parts of the energy field. Finally, the committee drew attention in a very general way to the fact, sometimes overlooked, that fusion reactors could have a substantial environmental impact. The committee were glad to be told that representatives of the Government are discussing the size and shape of the programme with the other Member States, and that there may well be changes before the programme finally goes to the Research Council. Perhaps the noble Earl, Lord Gowrie, in replying to the debate, may be able to give some indication of the Government's attitude to this programme.
I shall conclude with a few words about the Commission's communication on energy objectives for 1990. This is an interim communication drawn up before the revolution in Iran, but it is a useful document, considered by the committee to he more realistic and more valuable than earlier work by the Commission in this field. It goes no further than 1990, whereas it is desirable that projections should cover a longer time scale. Useful projections up to the year 2020 were contained in the last World Energy Conference's report on energy demand and supply, and the committee therefore make
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available a summary of this report, for which they are indebted to the noble Lord, Lord Hinton of Bankside, now, I am happy to say, recovering rapidly from an operation to relieve his lameness.
Your committee were informed that the Commission were at work refining the figures in this report and bringing it up to date. Last week, a revised communication reached London. It is entitled Energy Objectives of. the Community for 1990 and Convergence of Policies of the Member States, and it has attached to it a draft resolution for the Council. This is quite a meaty document which will require scrutiny by your committee, together with a number of supporting documents which the Commission are to issue but which, so far as I know, have not yet come to hand. It will, of course, also go to the European Parliament and the Economic and Social Committee.
At first sight, this communication, as might he expected, does not point to any amelioration of the situation in Europe. On the demand side, one might have thought that the figure of 3·8 per cent. for the annual average growth rate for Europe up to 1990, which is assumed in the previous report and was considered by your committee to be too high, would be reduced. But, on the contrary, it is stated in the new communication that estimates received from Member States updated to February last correspond to an annual average rate of 3·9 per cent. It must, I fear, be supposed that this will also prove to be too high.
On the other side of the account, the estimate of the yield from nuclear power in 1990, again thought by the committee to be too high, has been only marginally reduced. With such uncertainties there will continue to be difficulty in assessing the extent to which the rate of increase in energy demand is affected by lower than expected economic growth, or by the impact of energy conservation programmes.
Returning to the communication referred to in the Motion, the Commission emphasised the need for more public information on the prospect of an energy shortage and on the measures which might help to minimise it. To some extent, world events have since met this need. In this connection, the committee suggest that the Commission could usefully study

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the comparative risks involved in different forms of energy. This proposal has also since been underlined by the impact of the accident at the Three Mile Island nuclear plant, near Harrisburg in Pennsylvania. The emotional repercussions of this serious accident, which caused great anxiety and inconvenience to a great number of people, but which, in fact, led, so far as I know, to no serious injuries or loss of life, will retard the already lagging rate of nuclear building in Europe.
Only the French are comparatively unaffected by these reactions to nuclear development. Their tendency to think rather than feel has kept them steady on their course and enabled them to build up what promises to be a commanding lead in nuclear technology over the emotional Anglo-Saxons. I am glad that the present Government now seem willing to take a leaf out of the French book and give the growth of nuclear power the priority it deserves, for, as the Commission's communication shows, the energy shortage in Europe cannot be met without a much more substantial nuclear component than is at present in view.
The committee commented in their report on the failure to develop an energy policy in Europe. They expressed the hope, first, that the increasing prospect of shortages would enable the Community's energy policy to be conducted with a degree of coherence and urgency so far lacking; and, secondly, that the United Kingdom would take the lead in the Council in formulating an effective policy for the 1980s and beyond. Since your Lordship's committee reported, the new Administration has adopted a much more forthcoming approach to our policy within the Community. Nobody, I am sure, supposes that there are not plenty of obstacles to overcome. Nobody, I am equally sure, expects them to weaken in their defence of legitimate British interests. But the new approach should now enable progress to be made, in the energy field in particular. The new communication from the Commission, and its supporting documents to which I have referred, will form a basis for a fresh appreciation when the Energy Council meets again and will, I hope, give a new impetus to the coordination of policy.
The noble Earl, Lord Gowrie, made two masterly speeches in the same debate in this House on 4th July, in which he touched on
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most aspects of the energy problem. I, for one, do not expect him to repeat himself this evening. But perhaps he will be able to underline, and to elaborate on, some of the points he then made, which have particular relevance to the reports that are now before the House. My Lords, I beg to move for Papers.
6.9 p.m.
Lord LOVELL-DAVIS: My Lords, as the noble Lord, Lord Sheffield, has told you, I intend to talk on the committee's report on energy conservation. The two specific Community proposals referred to us for scrutiny are draft Directives on the indication by labelling of the energy consumption of domestic appliances and electric ovens, and the second four-year energy research and development programme for 1979–83. However, I should point out that the committee have gone wider than these proposals, and have taken them as an opportunity to conduct a general inquiry into the Community's conservation policy—specifically, its rational use of energy programme. We feel that this is justified in the circumstances and, indeed, the labelling proposals themselves are sufficient reason. They are not exactly impressive signs of the Commission's labours. The two draft directives on the labelling of domestic appliances simply propose a standard form of labelling and, secondly, apply specific standards only for domestic electric ovens—not even the accompanying hot plates and grills, just ovens. If this is the only tangible result of over four years of work, we have little reason to throw our hats in the air and shout, " Carry on, Europe! "
I should be wasting the time of the House it' I embarked upon yet another justification of energy conservation. Some of the case is encapsulated in paragraph 2 of the introduction to the report. It has been added to dramatically over the past few weeks by events in America, where the possibility of not being able to keep the energy bonfires burning seems to have induced near panic. The situation in America is symptomatic of what can happen to a nation—in this case admittedly the most profligate consumer of energy the world has ever seen—which fails to take seriously the message of energy conservation (that is to say, its rational and efficient use) and fails to build this factor into its overall energy policy.

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Conservation is to a large extent an educational process. It is a difficult, painstaking and long-term process. However, unless it is embarked upon, one gets into the situation in which we now find ourselves, where education has to be packed into an impossibly short time. It is rather like the old Robb Wilton story about the man he found struggling in the canal. " I said to him, I said, ' Can you swim? ' He said, No! ' Well ', I said, Now's the time to learn ' ". That is the position. We have got to learn to swim, until we can develop much more advanced and more dependable sources of energy to support us.
Some countries have taken the need to use energy rationally with much greater seriousness than the United States, but in Europe we can hardly congratulate ourselves. The overall pattern is very varied, and despite all that has been implied to the contrary it is clear that one of the most fruitful areas—the exchange of information in an attempt to raise standards across the Community to those of best practice—has not been pursued with much vigour.
I have never been an anti-Marketeer, but I confess that I am now a disenchanted Marketeer. And in a way it is ironic that I should have been asked to chair the committee's inquiry into energy conservation, because Community efforts in this field illustrate graphically some of the reasons for my disenchantment: bureaucratic delay, lack of initiative and new thinking and misjudgement of priorities. It is understandable that such matters as the approximation of company law in the Community, to which this House addressed itself last week, should, of their very nature, have to move slowly. But energy conservation is not the same sort of thing at all. Time and energy are running out. Every day spent in the bureaucratic dance sees the continuance of the present massive wastage of irreplaceable resources. The subject demands a sense of urgency and a high degree of priority.
In fact, although the Commission acknowledge the vital importance of energy conservation, the precise role which the Community can play is still obscure. Of course, the overwhelming responsibility must lie with national governments, but the Community must also become in-
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volved because, if energy conservation is to be a significant influence on economic activity, equivalence of effort has to be achieved. What is more, conservation should be a non-controversial subject. In fact, measures taken together should alleviate any impediments to competition and trade which might follow individual action by member-States. If we cannot get together on this, what are our chances of doing so in other more controversial areas, and what time scales are we then considering? Here we are talking simply about the immediate need to share experience and information and to take direct action in limited areas.
In our conclusions, we are critical of the progress, or lack of progress, of the Commission's rational use of energy programme. I believe that our comments are reasonable and necessary. On the other hand, it would be unfair not to point out—and we have done so—that the ultimate responsibility must lie with the Council of Ministers. It is up to them to advance energy conservation and to give the Commission not only the incentive but the specific direction to move rapidly and effectively towards producing and implementing a co-ordinated programme.
It is clear that Ministers have not faced up to this obligation. Not only could they give impetus to the programme but they could also help to overcome national prejudices which often inhibit the Commission when it comes to giving a strong European lead. Officials, given a general policy line, will go away and attempt to design and assemble the machinery to make that policy work. If you leave them to their own devices and forget about them, they will become obsessed with the machine and start taking it to pieces, examining it, reassembling it, making little bits of it move, and generally concentrate on the machine itself rather than its purpose. The Minister—in this case the Council of Ministers—has to make sure that the machine is started up and gets on to the road.
I come now to the committee's appraisal of the present situation, its background and the opinion of the committee. The perception of the need for energy conservation has occurred recently, assuming you consider that December 1974 is recent, for it was following the OPEC

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price increases of 1973 and 1974 that the Council adopted the Community's rational use of energy programme, with its main objective, and I quote:
" to reduce the rate of growth of energy consumption in the Community as a whole in order to achieve by 1985 a level of 15 per cent. below the January 1973 estimates ".
It has not proved easy to monitor the work of the RUE programme, and a comprehensive list of the measures undertaken is not available in Community publications, although we have included an account of the measures adopted by the Community in Appendix 1 of the report. In the main, the work of the Community has been limited to recommendations for energy conservation in specific areas. As noble Lords will know, recommendations and opinions have no binding force within the Community, and the eight made during 1976 and 1977 make the broadest possible suggestions, without any assessment of the likely benefits or consideration of the problems of cost and enforcement.
In only three specific areas has the Community advanced beyond these general recommendations. In February 1978 a Directive required member-States to set efficiency standards for heat generators in new or existing non-industrial buildings and for the insulation of distribution systems in new non-industrial buildings by 1981. The other two are the draft Directives which form the basis of this report. There is also a regulation, adopted in June 1978, providing for support to projects which demonstrate significant improvements in the efficiency with which energy is used. Thirty-six projects have been selected so far, involving some 21 million European units of account. Nine of these are United Kingdom projects.
The Commission has also tried to carry energy conservation forward through energy research and development, the first four-year programme of which expired on 30th June of this year. The division of the budget of 59 million European units of account does not indicate a very high priority for energy conservation, which was fourth on the list, with less than 20 per cent. of the total budget, after solar energy, production and use of hydrogen, geothermal energy and systems modelling. A second four-year research and development programme was pro-
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posed in August 1978 and is awaiting adoption by the Council. The upper limit of the budget has been increased to 125 million units of account, but energy conservation, although it has moved up to second place, still has only 20 per cent. of the total funding.
It is a source of bewilderment to me, and I think to other members of the committee, that solar energy is still given priority, with 58 million units of account, which is nearly 50 per cent. of the total budget. I was asked during a " World at One " broadcast last week why the report stated that too much was being spent on solar energy and not enough on energy conservation, particularly in the light of the priority which has been given to solar energy in President Carter's programme. The answer, I believe, is plain.
For a start, there are grounds for questioning the cost-effectiveness of solar energy in the northern latitudes in which most of the Community falls. Then solar energy in large quantities not only involves a long lead-time—President Carter stated that he expected 20 per cent. of the total US energy demand (a figure not everyone might find entirely credible) to come from the solar source by the end of the century—and we must take immediate steps to stop the waste of our existing, finite resources, but it involves also very advanced technology; not just solar panels and so on, but even the development of highly complex space satellites.
Not only do the committee feel that conservation attracts too few resources in terms of money, but the resources in terms of manpower are, we say in the report, " disproportionately small ". Personally I would rather say that they are ludicrously small. Within the Commission, conservation is simply a service within a division within the Directorate for Energy Conservation, Saving and Forecasts, within DG.XVII. No overstaffed bureaucracy here—it has the equivalent of a full-time staff of between three and four people!
To make matters worse, when it comes to the exchange of information as between Member States and the Commission, the contacts have been almost entirely at official level and no attempt has been made to involve organisations such as the

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United Kingdom Advisory Council on Energy Conservation. Surely it would make more sense, without becoming loaded down with masses of additional committees, to involve some of the special advisory groups.
On the subject of the sharing of experience and information, it is clear that the Community has not established itself as an effective forum for discussion and no attempt has been made, in terms of mandatory measures, fuel pricing policy and the assessment of conservation measures, to draw up a common approach to the major issues which will confront all members of the Community in the short and medium term. Periodic reports describe the technical potential for energy conservation and refer to some of the measures undertaken by Member States, but they lack any critical analysis of the political difficulties involved in implementing policies and they do not attempt to compare the varying programmes of the Member States.
So far as the Commission's power to initiate legislation is concerned, the picture is one of very slow progress and of legislation which does not always relate well to national legislation. A telling piece of evidence which the sub-committee received came from Sir William Hawthorne, the Chairman of the United Kingdom Advisory Council on Energy Conservation. He implied that the EEC Directive on labelling had, if anything, actually delayed the introduction of a United Kingdom labelling requirement.
Mention of Sir William Hawthorne prompts me to say how much the sub-committee appreciated the assistance it received from all those who appeared before it to give evidence—in particular, officials from the Department of Energy, Sir William Hawthorne and his colleagues on the Advisory Council and representatives from the Energy Technology Support Unit and industry—and we were particularly grateful for the informal discussions which we were able to have with senior Commission officials.
Let me turn again, my Lords, to the matter of research and development, where the picture is no more encouraging. The committee looked at three specific aspects of the first four-year programme—its balance, its results and its justification
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—in considering the impending launch of the second four-year R and D programme.
I have already referred to the fact that solar energy claims nearly 50 per cent. of the budget, but even hydrogen, with an allocation of 15 million units of account, begins to approach the figure reserved for energy conservation. This indicates to us a preoccupation with supporting existing Community facilities—following established paths—and continuing with projects involving hydrogen and fusion, while contributing little in terms of resources or new thinking to energy conservation.
One of our more bizarre discoveries about R and D was that there has not yet been any adequate assessment of the results of the first programme and it seems certain that the second four-year R and D programme will commence without any satisfactory evaluation of the first. We have also been unable to detect any evidence of a close link between the Community's general conservation policy run by DG. XVII and the conservation R and D programme run by DG. XII. We have even quoted in the report one piece of evidence from a member of our own Department of Energy, who announced that he had been—and I quote—
" trying very hard to have some guidance from the Committee dealing with energy policy in Brussels … to guide the R and Din conservation ".
Consequently, we have stressed in our report the vital importance of the relationship between general policy and R and D policy in the demonstration projects programme—in which there appears to be a signal lack of continuity—the existing R and D programme and the proposed second programme.
In brief, my Lords, in looking at conservation as an objective of the energy policy of the Community, we conclude that a satisfactory mechanism for influencing events has yet to be found and that progress since 1974 has been slow, to a large extent because conservation has been given a low priority and limited resources have been allocated to it. We accept that this is a difficult policy area for the Community, but we believe that the Commission has a crucial role to play—particularly in providing a forum for discussion and comparison, which should lead to detailed and critical analysis of the conservation policies of the Nine.

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The committee welcome the increase in funding proposed for energy R and D, but we do not believe that a correct balance has been struck and we feel that greater funding should be allocated to energy conservation. We also feel that, so far, the programmes have lacked direction and continuity. Finally, as I have already said, we consider that the ultimate responsibility for promoting the rational-use-of-energy programme and establishing a suitable role for the Community must lie with the Council of Ministers. Only if they act will the programme be pursued and be seen to be pursued in a vigorous and concerted fashion.
My Lords, your committee's report does not present a very encouraging picture. However, there are signs of things stirring in Brussels. I have today been given two recently deposited Commission papers: one on new lines of action in the field of energy saving and the third report on the committee's programme for energy saving. I think they represent some improvement in the scene. Perhaps they are a hopeful sign. It may be, too, that the new American initiative and the urgency which attends their programme will help to stimulate Community activity. I hope that the report of the committee may also play its part in furthering the Community's energy conservation programme. It is intended to be constructive. I hope it may prove to be so. I look forward to hearing at the end of the debate the views of the Minister, the noble Earl, Lord Gowrie, on the success of the programme to date and the role which he considers the Community can play.
6.29 p.m.
Lord STRABOLGI: My Lords, these three reports are most relevant to the current energy problems that face us in Europe, and I am glad that the House has been given the opportunity to debate them before the Recess. We are most grateful to the noble Lord, Lord Sherfield, for initiating this debate and to both him and to my noble friend Lord Lovell-Davis for introducing these reports.
I speak not only from the Opposition Front Bench but also as a member of the Energy Sub-Committee, although I was not a member of that sub-committee when
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these reports were produced, as I was at that time the Government's energy spokesman in this House during the previous Parliament. If I may, I should like to congratulate the committee on their care and attention to these proposals, and for their lucid and sensible reports. I agree with the noble Lord, Lord Sherfield, that it is a matter of regret that two of these reports are only available in proof form, due to an industrial dispute. We are particularly indebted, as the noble Lord, Lord Sherfield, has said, to the noble Lord, Lord Hinton of Bankside, for writing the most useful summary of the World Energy Conference Report on Energy Demand and Supply to the Year 2020, which was published as Appendix 2 of the Committee's Report on Energy Objectives. I am sure the whole House is sorry that the noble Lord, Lord Hinton, is not able to take part in the debate today, although we are delighted to hear that he is on the road to recovery.
My Lords, the conclusions of the World Energy Conference bear out many of the same conclusions contained in the Labour Government's Green Paper on Energy Policy published last year. It is clear that, unless some more positive action is taken, there will be an energy shortage by about the end of the century, just 20 years away, and this could become an acute crisis by the year 2020. Fusion, as the Select Committee's Fourth Report makes clear in paragraph 22, is unlikely to make a significant contribution to our own energy supplies until some time in the second quarter of the next century at the earliest. The Commission, in their report on Energy Objectives, identify three priority areas; these, of course, are coal, nuclear energy and conservation. We shall certainly need a much greater production of coal in the future to provide fuel burn in order to generate more electricity. And I see from figures just published by the Electricity Council that, due to the shortage of oil, the demand for electricity is nearly eight times as high as in the same period last year, and I am sure this is a trend that is likely to continue. We must also press on to ensure that coal liquefaction and gasification become feasible on an economic scale within the next few decades. May I ask the noble Earl to confirm that there is not going to be any cheeseparing by the Government on R and D expenditure over

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the whole energy field. I hope that they will take the long view. Otherwise, all their fervently held economic ideas and all those other sacred cows will have little relevance, I am afraid, in what could be a very austere and uncomfortable world. It has been estimated in Appendix 2 that by the year 2020 what remains of oil and natural gas supplies will have to be reserved for premium users. Does the noble Viscount wish to intervene?
Viscount AMORY: My Lords, the noble Lord is very good. Just now he gave us what seemed to me a most interesting and astonishing figure for the increase in demand for electricity. I wonder if he would be kind enough to repeat the figure because I was not sure that I heard it correctly. It did seem to be an astonishing figure.
Lord STRABOLGI: My Lords, these were figures published the other day in the Press by the Electricity Council; that due to the shortage of oil the demand for electricity is nearly eight times as high as in the same period last year. This is, of course, for central heating.
Hydro-electricity and other renewable sources, such as solar, wind, wave and tidal sources, will probably not be able to supply more than a small percentage of world needs by the end of the century. As the Green Paper makes clear, these are limited by the availability of the right climate and suitable sites, and most of them, except, of course, hydro-electricity, are at a very early stage of development. I noted what my noble friend Lord Lovell-Davis said, but I think that the one of the most promising of the renewable sources, for domestic use at any rate, could well be solar energy, as my noble friend Lord Collison reminded us in previous debates from his direct experience. There are, indeed, two articles in today's Guardian about solar energy describing how two enterprising householders, one in South London and the other in Merseyside, have more than halved their electricity bills by using this source. May I ask the noble Earl to let the House have the Government's view on the use of solar energy in this country and what they are doing to encourage its wider use?
But we must face the fact that these are early days yet in the field of renewable
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sources. We shall soon be faced with the need to decide whether or not to expand nuclear power, and it will be necessary to resolve the important question of nuclear safety. There is also the question of future world supplies of uranium. I think it is not generally recognised that there may well be a uranium famine as well as an oil famine. If thermal reactors alone are used uranium will probably become scarce by the 1990s, and, as the Green Paper recognised, could place restraints on the rate of nuclear power station ordering. With fast reactors the demand for uranium is about one-third lower, so that supplies should be sufficient to last, if one is optimistic, until fusion can take over, if it can, with increased coal production.
On the question of safety, the Report on Energy Objectives says in paragraph 17.
" There is no such thing as absolute safety and the possibility exists that too much attention will be paid to the risks of nuclear power in comparison with other forms of energy ".
Perhaps the Government would care to comment on this.
In their Report on Fusion the Commission stress the need to exploit other Tokamaks and Toroidal devices throughout the Community, as the noble Lord, Lord Sherfield, has said, and it is clear that the fusion programmes receive more aid than any other single Community project. The select committee is concerned about the proposal to construct at least one Tokamak machine when construction of the large one at Culham has only just started, and the committee is also concerned about the lack of co-ordination and the danger of overlapping if so large and vitally important a programme is carried out in so many centres. Perhaps the noble Earl, Lord Gowrie, would let the House have the Government's view.
The committee consider that much of this expenditure is very large compared with R and D expenditure on the rational use of energy, particularly energy conservation and saving, as my noble friend reminded us. The R and D energy conservation budget itself is also less than 20 per cent. of the total RUE programme budget. Within the Commission, energy conservation is merely a service within a division, within a directorate, with, as my noble friend Lord Lovell-Davis has said, only three to four people on the full-

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time staff. The committee recommend, I think rightly, an increase in staff, and more funding for this poor little departmental Cinderella. Above all, they recommend that the Community should work towards a greater European awareness of the need to save energy.
The Council have already recommended better driving habits, more economical cars and more control over central heating, but much more, surely, will be needed, particularly over the insulation of buildings. In this country the Labour Government planned to continue and develop the " Save It " campaign, and about £8 million had been spent on this campaign by the end of last year. Do the present Administration intend to continue this expenditure, or will it fall a victim to their economy axe? I trust not. It is surely vital that we put as much effort as possible into creating public awareness of the need to save energy.
The Government, I fear, will have to do rather more than asking people to share their cars. What we need is a really intensified campaign as President Carter is putting under way, to drive home to everyone that life will be very bleak indeed within 30 to 40 years—roughly the same period as that since the end of the war—unless we pull ourselves together and begin to save energy now. At the same time, we must plan for the future by increasing coal production, making nuclear energy safer and more acceptable, and by rationalising the fusion programme and making it more effective for the long term—otherwise it will be too late.
6.40 p.m.
Lord TANLAW: My Lords, we are grateful on these Benches to the noble Lord, Lord Sherfield, for bringing about what is a very wide-ranging debate on the three reports put before us today. I am particularly disappointed to hear what the noble Lord, Lord Lovell-Davis, had to say about the European efforts regarding conservation. It would appear from his remarks that a campaign for conservation is not only not being taken seriously, but it is being grossly underfunded. I hope in my short remarks to be able to tell the House and the noble Lord how perhaps some steps forward can be taken to improve our thoughts, at least, on conservation. However, before doing so
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I should like to make some more general comments.
The world has reached a stage of industrial development when men and motor cars are inseparable; they even took one to the moon. It is the love affair with the motor car and other engines of comfort and convenience, which in part has brought about this debate today. The other reason is set out starkly on Page XVI of the 21st Report of the Select Committee which says:
" It is clear that non-renewable conventional energy (oil, gas, coal and nuclear) cannot meet world needs at the end of the century ".
In view of that inescapable conclusion, regardless of the growth rate of the future—be it zero per cent. or 3·9 per cent. as mentioned by the noble Lord, Lord Sherfield—man may well be divorced permanently from the motor car by the turn of the century, and world industrial development may be seriously curtailed or cease altogether; that is, unless a major conservation programme, such as is outlined in the Third Report on Energy Conservation, is fully implemented, and all countries pursue a flexible and multiple approach to their energy policies. Such policies will have to include a nuclear element—as has been said by the noble Lord, Lord Strabolgi—subject, of course, to adequate safeguards to the public and society in general. The same must also apply to alternative energy strategies, which will have a vital role to play in the future, subject in this case to adequate safeguards to the environment. Whatever the source of energy supply to replace the oil and uranium deficits, it is clear from the Fourth Report, entitled Fusion, that the world must be moving towards an all-electric society by 2030, if present ways of life are to continue and the opportunity remains for developing countries to develop industrially.
The main report on Energy Objectives for 1990 has been very careful to point out that it is using a broad brush approach. The figures can, therefore, only be seen as indications of the energy situation predicted in Europe by the turn of the century. One basic assumption has been made, however, which could throw all these figures out of the window, if it is proved incorrect.
The Select Committee may have assumed, too optimistically, that, during

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the next 20 years there will be a regular and uninterrupted supply of imported oil from the producer countries. The figures and conclusions, depressing as they are, will be seriously worsened if there are interruptions in supply due to political upheavals in producer countries or States or a change of policy by OPEC for one reason or another. It is far too optimistic to imagine that those interruptions will not occur over a period as long as 20 years covered by the Commission's report. Therefore, I believe that it is only right that we look very closely at the social and political implications of an interrupted supply during this period and how it could affect the figures in the tables shown on pages X and XI.
Those figures show that the net imports for Europe as a whole still exceed 50 per cent. by 1990 and, therefore, emphasise the vulnerability of all the EEC countries, except perhaps our own—the United Kingdom. Assuming, therefore, that there will be interruptions in supply, what should be given the main priority to maintain the way of life and the minimum dislocation of a sophisticated urban society in which the majority of Europeans are living today? Recent events in Iran, which disrupted the supply of imported energy to the whole industrialised world, gave a timely reminder of things that may be to come. We should be thankful that this has allowed the Western world to rethink its energy requirements for the future. The question is: Can we learn from this lesson in time? I should be grateful if the noble Earl in his reply could perhaps give an indication of how our own Government would react if these supplies are interrupted again.
It depressed me to know that when we had this crisis a few months ago the public systems of transport, especially the railways, were curtailed at the same time as motorists were curtailed. I think that we must think again about what is to happen because this situation will occur again. Are we doing enough, for instance, to electrify the railway programme faster than has been done up to now? Are the Government thinking in terms of the not too distant future when the motor-buses, diesel driven as they are, will have to be replaced by some electrical form of propulsion? Is enough being spent on research and development re-
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garding the electric motor car and delivery van facilities? I hope that the Government can give an indication as regards these matters because I, at least, was left with the impression that the country was caught short at a time of need. I would be grateful if the noble Earl could refresh my memory as to why motorists on the Continent were able to get petrol at their petrol stations, but we in this country were not able to do so. Perhaps he can think about that matter and give us an answer when he winds up the debate.
I turn to conservation. The so-called "energy crisis" is a crisis of consumption, not of supply. Therefore, it is only by putting into operation a European conservation programme with the same rate of funding and priority as is put into the expansion of energy producing industries, that the required economies can be achieved. The consequence of an effective conservation policy can do more for society in Europe than increased energy production can ever do, simply because of the limitations of the world's finite energy resources.
The areas where conservation can be most effective is in alternative energy strategies and the substitutions that can be made by them, and I shall touch on those later. However, there is another point which has so far not been mentioned and which will need to be clarified, in my view, before an effective conservation policy can even begin to be implemented. I refer particularly to the number of expressions of energy units used in all energy conversion tables, including those printed in the main report on Energy Objectives. An example of this appears in the minutes of evidence given by Dr. Richard Eden, who pointed to a 5 per cent. difference in value of the basic unit: one tonne of oil equivalent. That was due to the various interpretations given in different countries. Not wishing to go into the details of this particular criticism, I would prefer to make a much more general one on the basis that all consumers of energy do not know how much energy in real terms they are using because of the different sources of energy available, and because of the different units of measurement required for payment.
I am suggesting that a European conservation programme should be based in future on a single unit of energy, which is used in all forms of energy conversion, tariffs and even the labelling of appliances.

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I believe it must be an improvement on the Euro-oven, to which the noble Lord, Lord Lovell-Davis, referred, which was the result of four years' work. This is a hopeless approach and demonstrates how conservation is not being taken seriously by the European Governments. It is an example that should be waved in front of them.
If I may be permitted, I should like to continue with some remarks about the energy unit. The most obvious candidate for this purpose is the joule, named after James Prescott Joule, which is now universally recognised as the unit of energy, work, or quantity of heat. Noble Lords will no doubt recall that one joule equals the amount of energy delivered by one watt of power in one second of time. The joule is accepted by scientists as being the correct unit for energy. As a result of an article published as long ago as 1972 in Science Weekly, Mr. Bruce B. Barrow of the Technical Activities Board, Institute of Electrical and Electronics Engineers, had this to say:
" Today the only internationally acceptable unit of energy is the joule. The practice of using different units to measure mechanical energy, electrical energy and thermal energy is obsolete, and both the British thermal unit and the calorie should be avoided in technical writing. Likewise, there is only one acceptable unit for power or heat transfer, the watt (or joule per second).
" When energy and power are expressed in joules and watts respectively, many hidden relationships immediately become obvious ".
Those hidden relationships are most important for the purposes of labelling, such as was mentioned by the noble Lord, Lord Lovell-Davis. Because it can be seen by the user of a domestic appliance, which is the example the noble Lord gave, the user is enabled accurately to gauge the efficiency of the appliance and the amount of energy which is used. For instance, if an electric oven, to which I have referred, was given a joule rating of I to 3, it would indicate to the consumer that he would get 300 watts of heat for 100 watts of power. Without such information, it would be virtually impossible to distinguish between an efficient oven and an inefficient one.
Therefore, the appropriate economies upon which a conservation policy must depend are almost impossible to achieve, simply because we do not have a unit of energy that is understood by everybody. The " Save It " campaign has been
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I mentioned. Exhortation is fine, but how can we expect people to save energy when they do not know how energy-efficient their machines are. That is why I believe that before we even get down to labelling, we must go one stage further and educate the adult public of today and the children and grandchildren of tomorrow as to how to assess energy-use in terms of the machinery and heating which they have all around them.
It would appear from the report that there is no provision of funds for an education programme, which was again referred to by the noble Lord, Lord Lovell-Davis. It will not be cheap to educate people about energy, and anyone who thinks it will be has made a mistake. Yet no funds have been put aside for it. Again, it would appear that there has been no mention of an educational programme that goes right through to the schools.
I do not see why this redefinition should he confined merely to electrical appliances. In my view it could be applied—if we are talking about the joule—to all domestic tariffs and even include the rating of motor-cars. The present horsepower and cubic capacity rating give no indication at all of a vehicle's efficiency in energy conservation terms. In his reply perhaps the Minister could indicate whether the Government will press the Select Committee on the European Communities to allow for the extra cost involved to be incorporated in future budgeting. Will Her Majesty's Government also indicate whether the committee consulted the Système Internationale des Unites, commonly known as the SI, for advice as to what energy unit should be chosen. It would seem that the committee may need some guidance in this area and some stimulus, because I am sure that the SI would approve of the use of the joule as the basic unit of energy for Europe for the future. I am not clear these days what the Metrication Board is doing, but perhaps its energies could be more suitably and profitably diverted towards an energy conservation programme, along the lines mentioned by the noble Lord, Lord Lovell-Davis, and myself in search of a basic energy unit.
I should like to say a few words about alternative energy strategies—to which all speakers have referred—including wind and solar energy, which are the most

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commonly quoted alternative energy strategies. I am a sponsor of the Parliamentary Liaison Group for Alternative Energy Strategies, and I must repeat that there is a myth that alternative sources of energy have no real relevance to an energy debate or to the saving of energy. Many people have said in this House and in another place that the contribution of alternative energy strategies will be minimal. I strongly disagree with that view: first, because the papers written to date—and a great many papers have been written, but very few prototypes on alternative energy have been produced—have mainly been hostile and there is, therefore, a need to produce working prototypes of aero-generators, solar panels and so on which can be adequately tested, even in this country. For what it is worth, my view is that aero-generators should be tested in the upper atmosphere—in the atmospheric jet stream where there is a permanent wind—at 30,000 feet. It is also my belief that the solar panels should be put where the sun is, outside the earth's atmosphere. However, these trials or prototypes will cost a great deal of money and involve much research and development. However, until these things have been made or manufactured up to prototype state, no one can judge whether they will make a contribution or the necessary contribution to the shortfalls in energy that are being predicted.
I have been told that, although there are funds for alternative energy strategies or inventions, very few inventions of any practical nature have been put forward. I happen to know that there is in existence an external combustion engine which, using multi-purpose fuel, is quite capable of replacing the internal combustion engine by the turn of the century. Many experiments are taking place on electrical vehicles by small and private companies, including my own, and here I declare an interest. Many individuals have the wherewithal in terms of knowledge, but they have no idea how to approach the Government or the Government agencies for funds: often only a few thousand pounds are needed to produce something that can be presented and discussed at a much bigger and wider meeting. I hope that in his reply the Minister will be able to give us an indication as to the area of Government, which these people in this
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country, who have the technological ideas of alternative energy strategies, should approach to ask for advice and funds.
In conclusion, I have attempted to show the vulnerability of the urban industrial societies in Europe, which are currently powered from external energy supplies and which have a high internal energy consumption. Market forces are assumed to provide a number of the solutions to cutting down on consumption throughout the world. Although we must agree that that is a sensible and practical approach, we must not forget that market forces will seriously affect the industrial aspirations of the non-industrial societies of the developing world. The less developed countries may not have the options open to them that allowed Western societies to go through their industrial revolutions. In my view, this factor alone could tempt some of the less developed countries actively to interfere with the supply of oil to Europe and the United States during the next 20 years, on the basis that they will not have the benefits or the opportunities that were available to us here in the West.
It must be remembered that great countries like India and China, representing a large percentage of the world population, are attempting to make the very difficult transition from a feudal to an industrial society. If this process is interfered with due to over-consumption of energy by the industrialised countries, or through failure of their conservation policies, then the future is very dark indeed. In fact, those commentators who are already talking about the dawn of the post-industrial age by the year 2030 may be proved right after all.
7.1 p.m.
The Earl of BESSBOROUGH: My Lords, we must all be most grateful to the noble Lords, Lord Sherfield and Lord Lovell-Davis, for drawing our attention to these three reports, all of which are important in their own right. Perhaps I regret, in a way, that we could not have had separate debates on them. Incidentally, it is worth noting that the first two sets of Commission communications—that is to say, those on Energy Objectives for 1990 and those on Energy Conservation—have not yet been debated

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in the European Parliament, due, no doubt, partly to direct elections. On these subjects, therefore, your Lordships are ahead of our colleagues in the European Parliament.
When I think how long it took in the early years of Community membership to catch up on the backlog of Commission communications, I think that this is a satisfactory situation for your Lordships to be in, and it should also be an advantage to our new Members in the European Parliament when they come to debate these subjects in, I suppose, the autumn or winter. In this way they will at least know Her Majesty's Government's views on these subjects from my noble friend Lord Gowrie, the Government spokesman, because he will, I hope, have told us the Government's views. Of course other noble Lords on all sides of the House will also have made important contributions, because all of them without exception are very well qualified to express their views on these questions. Therefore, I should like to congratulate the noble Lord, Lord Sherfield, for having managed to time the publication of these reports so appropriately.
In regard to fusion, this is of course a subject which has been much debated both in committees in Brussels and in plenary session. I was indeed responsible for presenting the Budget Committee's opinion on the fusion proposals, as well as discussing them as a member of the Parliament's Energy Committee. I am also glad to have had the opportunity of giving my views on this subject to Lord Sherfield's sub-committee, which I have had the honour of joining.
To take the first report, that on energy objectives, I agree broadly with the opinion of the committee, starting at paragraph 16, and I do not wish either in this case or on the other two reports to repeat too much of what I said on Lord Strabolgi's Motion on 4th July, except to say—and I think it must be repeated—that the energy situation in Europe, and indeed in the free world as a whole, gives cause for considerable concern. The cut-back in oil supplies from Iran, the failure of the West to develop nuclear energy at the rate anticipated, the continuing question-mark over United States energy policy despite President Carter's recent statements, can all lead to the conclusion that
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even assuming increased Saudi oil production there could well be an oil shortage in the West of some ten million barrels a day by 1990.
Also, as I said on 4th July—and this is the only repetition I shall make, and it was a view which was happily supported by the noble Lord, Lord Wynne-Jones, opposite—even assuming increased nuclear capacity, nuclear power cannot at present drive your Lordships' Rolls-Royce or executive aircraft—in the very unlikely event of your Lordships having one! I go along very much with the Select Committee's suggestion that the Commission could usefully study the comparative risks involved in the different forms of energy. This has of course already been done by various bodies but I think they could well look at it again. I agree with other noble Lords who have said that there is no such thing as absolute safety, and that is also said in the committee's report. I agree too that much as we deplore the loss of life in an explosion at Aldermaston this afternoon—I gather that fortunately no radioactive substance is involved—too much attention may none the less be paid to the risks of nuclear power in comparison with other forms of energy, and indeed other forms of human activity. I am certain that, since the publication of the Select Committee's report in April this year, the Commission must have given considerable attention to this question of risks and must have concluded that we should continue to expand nuclear power.
Lord AVEBURY: My Lords, will the noble Earl allow me to intervene? Who does he think is the arbiter in this question of whether too much attention is given to the matter of nuclear risks? Is it not the people of the European nations who should have the final word on this through elected representatives, and through public inquiries in which they can fully participate?
The EARL of BESSBOROUGH: My Lords, I think that the risks can be judged by the figures given by Lord Rothschild in his recent lecture, and also by the figures (perhaps even more important) given by the Commission on environmental pollution. As a matter of fact I have also given some figures in this book on Energy for Europe, which I and my colleagues in the last European Parliament produced. I should like to draw Lord Avebury's

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attention to those figures. It seems to me that the risks have been fairly clearly stated by these responsible bodies.
I also see the point of the committee's comment about the critical areas of uncertainty in regard to annual economic growth in the Community, which may be too high—despite the fact that the latest figure is even higher, I gather, from the noble Lord, Lord Sherfield, at 3.9 per cent.—and that the predicted expansion of nuclear capacity may be too optimistic. I might add here, however, that the observations in regard to economic growth, and even perhaps nuclear power, may perhaps recently have been more applicable to Britain than to France and Germany.
I am certain that the Energy Commissioner, Herr Guido Brunner, and indeed members of the Energy Council, must by now have taken full account of the committee's hope in paragraph 20 that the Community's energy policy should be conducted with a greater degree of coherence and urgency. With the committee, I also hope that the United Kingdom, as by far the largest producer of primary energy, will take the lead in the Council of Ministers in formulating an effective policy for the 1980s and beyond. I hope that my noble friend Lord Gowrie will urge his right honourable friend to take this lead when he attends these Council meetings.
It is indeed true that, apart from a relatively modest, if not negligible, common research and development policy, referred to by the noble Lord, Lord Lovell-Davis, in conservation, the use of hydrogen, solar and geothermal energy and systems modelling and, of course, the more massive joint research programme on thermo-nuclear fusion, no true Community energy policy has yet emerged. I should like to see a Community energy policy developed, having perhaps learned from the less happy aspects of the Common Agricultural Policy.
Moreover, the Community should certainly concentrate not only on objectives and forecasts, but also on the success and failure of national policies and on the means of improving them. As to conservation, or rational use of energy—RUE, as it is called—I agree that perhaps this has been given too low a priority.
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If your Lordships will forgive the obvious pun, do not let us rue the day for not having done so! No doubt the Energy and Research Commissioner, Herr Brunner, will be looking into the question of expanding the relevant division or creating a new directorate on its own account; I do not know whether this will be within DGl7 or DG12 or whether it might bridge both, which it perhaps should, and I hope that my noble friend Lord Gowrie will look at this carefully with is right honourable friend.
There can be occasions in my view, despite our unhappy experiences over the Common Agricultural Policy, when increased Community expenditure and perhaps reduced national expenditure can he beneficial in avoiding unnecessary duplication. Again, however, let me say that in evolving a CEP we must learn the lessons of the CAP. Also a detailed critical analysis of the conservation policies of the Nine would certainly be useful, and it is no doubt possible that the Community might be able to do this more effectively than the International Energy Agency in Paris. But as the report indicates, the responsibility on all these questions, as other noble Lords have said, must in the end be with the Council of Ministers, and I hope that our new Secretary of State for Energy will play a leading role in the Council.
In regard to fusion, I am glad that in paragraph 15 the committee have noted the desirability, which I strongly stressed in the European Parliament, of bringing together the whole fusion effort under one budget. The present situation certainly lacks clarity from the budgetary point of view and I hope that our new directly elected Members in the committees on budgets and energy will continue to pursue this point. There is no doubt that the fusion programme is large and ambitious with possibly large and ambitious extensions. It is evident that as the projects are likely to continue for several decades a disciplined attitude towards staffing and financing will be called for. Co-ordination, in my view, must be more effective than it has perhaps so far been so that overlapping can be avoided as far as possible.
I understand from Lord Sherfield that the Community's Council of Research Ministers, which was to he asked to

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approve the fusion programme in principle on 26th June, will now be meeting only in October or November. Energy and research Ministers should therefore have ample time to consider your Lordships' very wise comments and perhaps those of the new Members of the European Parliament. I hope too that Ministers will give serious consideration to the question of priorities and the proportion of the effort to be deployed on alternative energy sources
I concur, despite the enthusiasm of the European Parliament, that the resources allocated to fusion should be looked at more precisely in the wider context of other alternative sources such as those which have already been mentioned today—solar, wind and wave, and I would mention tidal, even hydraulic energy and particularly, for example, the project concerning the Severn barrage where Her Majesty's Government have agreed and financed feasibility studies. I would be interested to know if my noble friend has any information in regard to progress on those feasibility studies, and to know what progress has been made with the four wave power projects also sponsored by the Government. I might also ask my noble friend whether he thinks that Community funds might ultimately be used to support these projects through perhaps the Ortoli Facility or the European Investment Bank.
In conclusion, I believe that the Community must exploit its abundant coal reserves, including the liquefaction and gasification of coal; it must search for and exploit existing and new sources of oil and natural gas; it must maximise the use of nuclear power and, as I have said, hydraulic power, which after all provides 23 per cent. of the world's electricity, even if the percentage in Europe is much lower; and it must identify indigenous sources of uranium and seek all reasonable and economic means to conserve energy. As I said in my farewell speech to the European Parliament, the destiny of the Community could well be decided by Europe's determination to forge an effective energy policy.
7.15 p.m.
The Earl of HALSBURY: My Lords, I am sure the whole House is grateful to the noble Lord, Lord Sherfield, for
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bringing this Motion forward today, so enabling us to take notice of and debate the three reports which we have all prepared under his very able and competent chairmanship, and the report of the working party under the noble Lord, Lord Lovell-Davis. It has been a great pleasure to work under both of them as my chairmen and, together with the three reports, I must pay tribute to the booklet which was referred to by the noble Earl, Lord Bessborough, which he and his European parliamentary friends prepared in the last parliamentary Session. It is an admirable compendium of relevant facts and statistics which I read and studied with the greatest of interest.
I should refer to the pleasure with which I listened to the remarks of the noble Lord, Lord Strabolgi, the pleasure one always has in encountering Saul among the Prophets because many a time have I prodded him as I shall of course be prodding the noble Earl, Lord Gowrie, in due course—into stopping playing hide and seek between the Government and the CEGB with regard to the safety of fast reactors, the CEGB saying, " We will not order one until we know it is safe " and the Government saying, " We will not set up an inquiry until they have ordered a reactor ". That really must be stopped.
The contribution I wish to make to the debate is to pick up a point which was referred to by Lord Sherfield about the difference between Britain and France—the difference between feeling and intellect—the difference between our tenderness towards the environmentalists and their ruthlessness in clobbering them if they get in the way. In a certain sense I would say I was an environmentalist, but not in the obsessional or panicky sense. I try to keep my environmentalism in perspective by thinking of what happens when I fly. I go up into the air and as I rise I see more and more of England until there is nothing underneath me except England, until I cross the Border and get to Scotland. As I go on, the works of man become smaller and smaller until they fade almost into nothingness, and one is left with a great pattern of green fields and forest and moorland underneath one, every acre of it a human artefact, every acre something that man has determined should look as it does, instead of as nature determined.

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When we talk about the natural environment in Britain, we should think of Britain as covered in forest and scrub; even our moorland would be covered with scrub, impenetrable scrub through which one could not find a way. What we call the landscape is, with the exception of the Chalk Downs, what we have made. The Chalk Downs are the natural highway through England because the short turf over the chalk does not permit the sort of heavy vegetation one otherwise gets. But where the chalk is overlaid by clay with flints or some glacier drift, there one gets admirable soil for beech trees and the beech masts kill the scrubby vegetation and one gets beautiful places like Burnham Beeches and the hills outside High Wycombe which are such a pleasure to motor through when on one's way to Oxford.
I have been sitting for a month on the Dartmoor Commons Bill, an opposed Private Bill, the Committee stage of which has finally been brought to a close recently, and there I have been listening to all the arguments about environmentalism in relation to Dartmoor and how Dartmoor itself is an artefact, made by the pastoralists who go in for rough grazing. Without the sheep on Dartmoor and the shepherds who look after them and the farmers who maintain them it would revert to scrub, except for the blanket bog on top where nothing at all would grow.
What man can make, man can unmake, or remake or of course conserve, but when we talk of conservation, we are talking of conserving what it happens to be fashionable to admire in this day and age. If you think back in time, Pope and Dryden, in the context of landscapes, would have thought of forest glades and murmuring fountains and the nymphs that went with them, where Dr. Johnson would have preferred formal gardens. With Wordsworth we enter the romantic age with its dramatic landscape of crags and caverns and precipices and foaming torrents, and so on. Now in relation to the rather constricted life that we lead in cities and in the industrial environments we tend to admire the wide-rolling moorlands and the estuarine mudscapes where the breeding birds allow themselves to be seen as a sort of beginners' study, a first course for the ornithologists. But if ornithology became
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a little more sophisticated and people became interested in listening to birds rather than looking at them, the forest glades would come back and we would be interested in the songs of the warblers rather than the antics of the waders.
The unprecedented developments of the last century, and of the first half of this century, have made very little mark on this landscape. One can scarcely see it if one flies high enough. But such marks as have been made have been concentrated into a few places where they strike one as highly objectionable, though I think probably they can be rectified. There are the south-eastern approaches to Swansea—a terrible squalor of deserted lead mines and zinc mines. There are the old ruined tin mines of Cornwall—and these go back not to the last century, but to the 18th century and earlier. There is the wasteland of old worked-out drift mines, opencast mines and so on lying between Birmingham and Wolverhampton. There are the slag heaps and the coal tips of the industrial North. But none of these is being repeated in this day and age. On the contrary, they are being cleared away. If one drives along the motorway from Edinburgh to Glasgow, when one comes to Broxburn, with the slag tips of the old Scottish shale oil industry, one sees that those slag tips are being slowly dismantled in order to make aggregate for the concrete of which the Scottish motorways will he made. So we are slowly dismantling the damage that we wrought to our countryside locally in the last century.
I am told that in America the price of learning how to farm a new continent was this. They ruined about 1 per cent. of their land, and they damaged about 10 per cent., most of which is recoverable. If anyone thinks that very serious, I invite him to stand as I have stood on the edge of the painted desert and see what nature, unassisted by man, has done to the landscape by turning it into a complete wilderness of pulley erosion, beautiful only because most strangely the iron in the rocks has been oxidized until it is the colour of the very brightest lipstick.
I have been birdwatching many a time under the shadow of Sizewell A nuclear power station, and I assure your Lordships that while birds do not mind nuclear power stations, the one thing to which

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they object is bird watchers. This is what scares the birds away. My old friend—we were at school together—the late James Fisher, the very popular ornithologist, always told me that nobody had seriously tackled the problem of shifting populations of wild animals away from habitats that might be threatened. In the context, for instance, of the brent geese which nest on the Essex coast and the Thames Estuary he told me that he was quite sure that by a determined effort the brent geese which occupy only a portion of the potential habitat open to them could be shifted eastward in order to make room for an airport without any damage to the brent geese at all. One would merely have to control their Western boundary and interrupt them a sufficient number of times with human beings, and they would shift further East and conservation would be achieved.
I think that your Lordships know that my interest in life is not writing essays about crises, nor reading essays about crises, but going to the spot where the crisis is, talking to the men on the spot, coming back and perhaps telling your Lordships about it. I did that with Dounreay some years ago. A fortnight ago today I was up at Westfield in Fife, which has the largest open-cast mine in Europe, the biggest man-made hole in Europe. I went there to see how the environment is being restored. They really made a wonderful job of it. Starting with 800 acres, most of it bog, they will end up with 500 acres, all of it good pasture land, and a hole which will serve as the rubbish tips of Edinburgh and Fife for at least a century to come. They have won a very large amount of coal out of it, though it is coming to the end of its days.
While I was there I found out how serious is the environmental threat to our prospects of winning coal. In the last 23 years there were for the first 20 of them 19 environmental inquiries into open-cast mining. During the last three years there have been 24. Counter-attack by the environmentalist on the energy supplier has gone up by a factor of eight; and this is something that needs watching very carefully indeed. It is said that the inquiry into the Belvoir mine will take three years. Why, my Lords? What is
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going to emerge in the last two and a half years that will not emerge in the first six months? How long will an environmental inquiry into the hazards of the fast reactor take?
Harrisburg was of course a gift to the environmentalist. But lest your Lordships might put it in the wrong perspective, I should like to read to your Lordships what I said on 1st February 18 months ago on a Motion by the noble Lord, Lord Wynne-Jones, in which I was carrying out a sort of general review. Dealing with the pressurised water reactor, I said, as reported at columns 792–3 of the Official Report:
" Many of these American reactors are now operating all over the world, some of them in unskilled hands. Sooner or later a mistake will be made and what is fashionable to call an incident will occur. Because of past history, that incident will be blamed on the design. Then all past history will be resurrected and there will be a public demand to shut down those PWRs. Do we want to have our PWRs shut down? "
That was in the context of the proposal to order a PWR for this country at a time when two AGRs were being ordered.
So you see, my Lords, it is not a question of being wise after the event. I said that this was going to happen. I said that the reactor would go into unskilled hands and that anything might happen then. Am I going to say that American hands are unskilled? After all, they designed the reactor and they have operated many of them. Well, my Lords, Yes, I am going to say that because I have noticed in America that when everything gets into routine production it is reorganised with one eye on the cost accounts in such a way that every component job in the task is broken down into units, each of which can be managed by someone with the minimum requisite intelligence, costing the minimum amount of the almighty dollar necessary for the job, so that if anything goes wrong the result is that nobody knows what is going on and nobody can cope with it; and that is exactly what happened at Harrisburg.
Just as naughty boys tied tin cans to the tails of dogs—which is a very horrid thing to do—so in my unregenerate youth I used to tease American hotel organisations by inventing situations with which they could not cope. One of the ploys that I found most rewarding was to launch a new piece of banana peel before they had recovered staggering from the first one, and this really brought the entire organisation to a

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standstill, just as happened in Harrisburg. I could have predicted—and did predict—the whole thing and the course of all those events. Nobody knew what was going on. Nobody knew what to do. Nobody had the overall picture!
Notwithstanding all I have said,
" Never was heard such a terrible curse.
But what gave rise
To no little surprise
Was that nobody seemed a penny the worse "
Nobody was hurt. Nobody was killed. Nobody received a serious overdose of radiation. Everybody got into a panic, the population was moved out, and so on. But the keep of the reactor was designed to withstand the type of accident that took place, and it withstood it. I see no reason to suppose that anything we design will be any different.
I think the situation is serious. I do not believe it can be coped with by essay writing. The shortage of fuel is a delightful subject about which to write essays, but anybody who is tempted to write essays should be made to take a cold bath in the morning until he is reminded that life is earnest; and he should be given a spade and told, as a good environmentalist, to use the spade to cover up some of the rubbish of the last century instead of objecting to the rubbish which he thinks is going to be created in this century. The year 2000 is not a long way away. It is very easy to say, " Of course, that will not concern me ", but I have something between a 5 and 10 per cent. chance that in the year 2,000 I shall be the same age as the noble Lord, Lord Brockway, two years younger than the noble Lord, Lord Barnby, or the noble Lord, Lord Shinwell, and three years younger than the noble Lord, Lord Rathcaven. I cannot look upon odds of only between 5 and 10 per cent. as something I can altogether disregard. I may, with others, be cold, hungry and unhappy in old age, and my concern is to see that that does not happen if I can possibly do anything to prevent it.
My Lords, I am going to close—and I am sorry I have gone on for more than my 10 minutes—with a warning which I am sure I shall repeat again even if I have not said it before. One of our human failings is that we run away from imaginary dangers into the jaws of real ones. The imaginary danger is that a nuclear station or reactor is going to go
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off like a bomb: the real danger is that, by running away from the imaginary ones, we shall lag in the steady progressive development of our nuclear stations, so that when we finally realise that we have no alternative we shall build a very large number of stations in a panic, and then, very likely, incidents will happen. That, my Lords, is the danger against which I wish to warn your Lordships' House.
7.32 p.m.
Lord BOWDEN: My Lords, it has rarely fallen to any man to have a more difficult task than to follow the noble Earl who has just sat down, so I think I had better confine my remarks to one particular topic. I want to remind your Lordships that when we speak of our own nuclear programme, and even of the programme of Europe, we should remember that it is only a pale reflection of the enormously bigger programme in the United States. Nearly all the world's nuclear power stations are either in America or were built by Americans and sold abroad, or have been built in Europe to American designs. It is extremely important, therefore, to realise that the industry, which was probably the biggest of its kind ever to have existed in the history of the world, has suddenly and almost completely collapsed in the last three or four years. In 1972, I think I am right in saying, something like 50 nuclear power stations were ordered. Last year, the scale on my graph is so small I cannot tell whether it was one or two. This is a most dramatic collapse, and I think it acutely important that we should realise that the troubles which beset us and our commercial opportunities in the nuclear reactor business are all determined by the vast growth and the totally unprecedented collapse of the American industry which we have observed in the last couple of decades.
Now is not the time to repeat the story of nuclear power, but I think it worth reminding your Lordships that it was only in 1942 that the very first pile was ever made in America, in Chicago, by Fermi, and in 1946—and this is what I really wanted to say—he initiated the programme which seems to me to be dominating the world to this day. I want to persuade your Lordships, if I can, that the time has come to reconsider what I can call the original Fermi programme, which I shall explain in a moment.

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I am inspired to suggest this to your Lordships because I have been looking into the general question of the reliability and the performance of the world's reactors. I have the figures for the two years ending on 31st December last year, 1978, and on 31st December the preceding year; that is, 1977. The list to which I am referring includes all the world's reactors of more than 500 megawatts which were in service on the day on which the list was compiled. There were 82 of them 18 months ago, and they were tabulated in order of performance; that is to say, reliability. Of the first eight, one was American, one was German, one was Japanese and five were Canadian. Last year—that is, up to the beginning of this last January—another dozen reactors had been added. Out of the first 10 reactors, six were Canadian and most of the others were American, Japanese and German. Our own reactors appeared in the list effectively for the first time. All three were in the bottom 10 out of the 92 reactors then in operation in the world. I felt that here was a problem which needed analysis and which should be drawn urgently to the attention of the Government. If the Minister would care, I can let him have copies of all the relevant papers.
The point is that while the Americans' main power stations were developed as a result of the work inspired by Admiral Rickover, who wanted to get nuclear-powered submarines and produced the first effective portable station, the PWR and the boiling water reaction were both copied from Rickover-inspired designs. The Canadians went ahead and developed a design of their own. I spent a lot of time last year unsuccessfully trying to persuade members of our own Department of Energy and members of the GEC to go and look at it. I am afraid I failed. In fact, I went so far as to bring over to this country the physicist who had been primarily responsible for the Canadian work, but I failed to persuade the Ministry to see him when he was here.
However, there is the most reliable reactor to be found anywhere in the world, and it is the one reactor which no one in this country is prepared to take the slightest interest in at this moment. I have figures for the performance of all the big reactors over a period of years, and it turns out that the boiling water
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and pressurised water reactors are both about the same, at about 60 to 65 per cent. Our own gas-cooled reactor is about 45 per cent.; and the Canadian is about 86 per cent.—enormously better than any other reactor in the world.
I want to urge upon the Government that they should seriously look into the possibility of collaborating with the Canadians and developing reactors which are demonstrably so much better than any others currently in production anywhere in the world. I have been to see them myself. They are really most remarkable. They work, people take it for granted that they will work, and they go on working.
Another point of some interest is that, in the whole history of reactor development, five reactors and the associated electrical gear have been finished ahead of schedule. Most reactors, of course, are one, two, or even five years late, as we know to our cost, but five have been finished ahead of schedule, and three of them are Canadian. This is an extraordinary achievement for a relatively small country whose industry is not really so tremendously sophisticated. Furthermore—and this is acutely important—they have been able to make the whole thing for themselves.
If we buy the pressure water reactor we shall have to buy with it enormous welded steel tanks into which they have to be put because we are not able to make them ourselves. The great snag about the AGRs that we have built has been the enormous amount of work which is done on site. The Canadians build their reactors in the factory and assemble on site. That is why their power stations are finished on schedule and why they work so well.
The Ontario hydro people have done a comparison between the Pickering station and the coal-fired station of about the same power at Lampton. They reckon that the cost of electricity from Pickering is about half the cost of that from Lampton. Furthermore the actual cost of Pickering was about 750 million dollars and it has already saved them 1,200 million dollars worth of coal which they would have had to buy from the United States. Already, since it was built about six years ago, this nuclear station has saved 50 per cent. More

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than the total cost in coal. And if they had bought the coal and burned it. what would the resulting fumes have done to the atmosphere of the district around the power station? This is an extraordinary story. It is true to say that the price of power generated from the nuclear power stations in Canada is less in real terms than the price of electrical power before the war when it came from Niagara. I tell your Lordships this because I believe this to be so remarkable that it should be better known in this country. It is a very remarkable achievement of a small country which should be properly appreciated. That is the first point. I think therefore that the opportunity for collaboration in building this type of reactor is very much better than the possibilities of building the pressurised water reactor. Your Lordships will remember that we were persuaded to build one in this country in the expectation that we should be able to share the world market for pressurised water reactors with the Americans. Since the market has disappeared and there is an enormous unusable capacity for building these in the States, our chances of selling them abroad are zero. The chance of making a commercial success of the pressurised water reactor is nil. The chance of making any sort of success with the gas-cooled reactor, which is the least reliable reactor in production in the world, seems little better. I feel that it would be well if the Government contemplated the possibility of collaboration with the Canadians.
Now I should like to pass on to an even more important point. The Canadian reactor is, in certain fundamental ways, quite unlike anything else in the world. First, it uses heavy water, and the Canadians make their own and, indeed, have a surplus that they would like to sell. It is so designed that the fuel can be burnt up much more completely than in any other reactor that I know of. In fact the spent fuel which emerges has so little useful radioactive material in it, so little plutonium and so little uranium, that under no circumstances would it pay to process it. The Canadians do not need anything like Windscale. They leave their spent fuel in big tanks about the size of this Chamber and it lies there peacefully, glowing quietly, and it is perfectly safe for the next 100 years or so when the
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tank will be full; after which they will take it out, coat it with plastic and bury it somewhere else in a water tank. They have no anxieties about processing nuclear fuels. The real problem about Windscale is that once you take out the fuel which has been burned up and cut open the cans and try to treat the stuff chemically, it becomes dangerous in case any of the radioactivity gets into what I call the human food chain or exposes people to the risk of radiation. By leaving it in the cans, as the Canadians do, it is safe.
I ask myself why, if this is so, cannot we carry out the same process? The answer is a curious technical fact that our own advanced gas-cooled reactors use stainless steel in the cans and this will not last for as long as the zirconium cans which are used in Canada. The Canadians can leave their cans indefinitely. The next point is this. It is possible to develop this reactor to enable it to burn thorium. The amount of thorium in the world is much greater than the amount of uranium. I would like to mention one fact. There is not such a shortage of uranium as one may think. The amount of uranium in the sea water which is used to cool the nuclear reactor in a submarine is greater than the total amount of uranium which is burned in the reactor at the same time. There is uranium in large quantities to be had and it is not impossibly expensive to extract it. It is possible to develop the CANDU reactor and to burn thorium in it and also it is possible to improve it by using organic liquids to cool it which will improve the temperature of the steam, make it more compact and cheaper.
It is the view of the Canadian who was responsible for most of this work and who developed it in the first place, that if such reactors were developed, and thorium were used as the primary fuel, the world would have enough electric power to satisfy its reasonable needs for several hundred years, perhaps for thousands of years. There are enormous quanties of thorium to be had. If we had such a system in this country, then we should not need Windscale.
Any inquiry into our present system of nuclear power ends up by saying that we need it all because it was designed originally that we should have it all. When I tried to give evidence to Mr. Justice Parker's

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Committee on Windscale I was quite properly told that the evidence I wanted to give was not within his terms of reference. I did not want to tell him that Windscale was unnecessary but that the type of reactor which made Windscale necessary was wrong. If you have the type of reactor that we have, and you have enough spent fuel which must be processed, then you must have a Windscale. When you have a Windscale you get plutonium running out of your ears and you need a breeder reactor. But burning this in the breeder reactor is still dangerous. When Fermi first suggested it, he said that this will be more difficult and dangerous to develop than the ordinary reactor that we are now talking about.
By 1970 the Americans had convinced themselves that the breeders were coining, that by 1980 the ordinary reactor would be virtually obsolete and that the breeder would have succeeded it. It has turned out now that no one has yet made a large, successful, reliable, commercial breeder. We have gone a long way, but that statement is still true. If we ever are to use breeders, we need a lot of them to burn up the plutonium which we are making which we do not want and which we need not have and should not have were we to use this alternative type of reactor. I have tried to explain—
Lord AVEBURY: My Lords, does the noble Lord agree that it is possible to burn plutonium in thermal reactors?
Lord BOWDEN: It is, my Lords, but normally it is burned in breeders and that is what the breeders are for. If one has read Dr. Marshall's paper, one will have found that he advocated the use of breeders to get rid of the plutonium which otherwise becomes an embarrassment.
This case is a very technical and complicated one. Very few people understand it; I cannot claim to understand it myself. All I ask the Government to admit is that the case for a proper investigation is very strong. If what I am told is right, we need not have Windscale, we need not have breeders and we need not have advanced gas-cooled reactors. Most certainly we do not want the pressurised water reactors which we are about to build. We could have a more realiable cheaper form of power which
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would satisfy the world for thousands of years.
I believe that I am right in saying that the Prime Minister has said, very properly, that there will be an inquiry before it is announced that breeders are to be built. My point is that the type of inquiry which has usually been mounted in the past will not be sufficiently detailed to answer the problem, which lies in the question: Do we need the rest of the system? If we have the rest of the system, we must have breeders. I want to impress upon the Government the importance of a completely impartial, thorough investigation of the whole system of nuclear power, because the manufacture of nuclear power stations has totally collapsed in America and here and we are now trying to create a new industry out of the ruins, and that is no way to proceed to form policy in the most important technical decision that we shall ever have to make in our lifetime.
7.52 p.m.
The Earl of LAUDERDALE: My Lords, we are all greatly indebted to the noble Lord, Lord Sherfield, for introducing this debate and piloting the production of these three reports. As his predecessor as chairman of Sub-Committee F, which has produced them, I should like to congratulate him—and I am sorry that the noble Lord is not in his place to hear this—on the very effective way, astringent and incisive, that he now handles our discussions which, although given a rather jolly, cosy leadership in my day, were of course nothing like so effective as they are at the present time. In the same way, we are greatly indebted to the noble Lord, Lord Lovell-Davis, for his chairmanship of the working party that produced the report on conservation, bearing in mind that they had to work on a mass of woolly generalities and have produced out of them something greatly to our advantage.
Energy leadership could well be the Achilles heel of the present Administration in the United States. In Britain, energy policy could well be the litmus paper that tests the Government's leadership of the nation, for energy policy goes to the root of many of our old, lazy habits. A former report—the first major energy report produced by the same committee in the Session 1974–75—raised the ques-

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tion: " How far are energy needs required for the general advantage as distinct from the wasteful demands of mere comfort?" Here maybe is the touchstone of the Government's leadership of this country in matters that far transcend party politics and which are of very great significance for the future of the European Community as well.
The Energy Objectives report that is now before us expresses, in paragraph 20, the hope that in view of Britain's favourable situation in regard to primary energy sources,
" the United Kingdom … will … take the lead in the Council in formulating an effective policy for the 1980s and beyond ".
Whether the blind can lead the blind has yet to be shown; but that suggestion of British leadership does beg a gigantic question. It almost recalls Baudelaire's avowal: he felt a pressure of 20 atmospheres descended on his soul when he contemplated the impossibility of telling anyone anything. The question which is posed by that claim for British leadership is: What is our own Government's policy approach? There was little in the Conservative election Manifesto; there was nothing in the Queen's Speech. We enormously enjoy the repartee of a brilliant and popular Minister who answers for energy on the Front Bench but who, not being in the Energy Department, is inevitably poised mid-air in a strange fashion between cliché and indiscretion.
Of course at so early a stage in the life of this Government, one's comments can only be of an interrogative character. Beginning therefore with the subject of conservation, it is to be noticed—and several noble Lords have stressed this point—that the Fusion report before us suggests (in paragraph 29) that the allocation of research and development effort is right out of proportion and that far more should be invested in conservation. So a number of questions arise about this Government's approach to the subject. Since in Britain industry accounts for some 44 per cent. of energy use, is it not urgent to ensure the maximum economy here? A recent briefing paper by British Petroleum stated:
" Energy consumption per unit of gross domestic product could be cut by up to 30 per cent. in Western Europe by raising the efficiency of energy using equipment ".
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So, although the chemical industry has cut its own consumption of energy per unit of output by some 30 per cent. over 11 years, I should like to ask whether the Government recognise that there is still an enormous amount to be done on the industrial side in this matter. What is the Government's attitude to proposals put forward by the prestigious Watt Energy Committee for new licensing and inspection standards for industrial boilers and furnaces to ensure that fuel consumption is properly monitored? It is common knowledge that all factory managers know a great deal about the consumption of their cars in terms of miles per gallon but the same men know jolly little, as a rule, about the consumption of their factory boilers and furnaces and their efficiency or otherwise.
The conservation report before us says—and the noble Lord, Lord Lovell-Davis, drew attention to this—
" A satisfactory mechanism for influencing events has yet to be found ".
That is in paragraph 29. So, will Her Majesty's Government consider fiscal incentives—for example investment tax credits on energy-saving installations, accelerated depreciation, accelerated tax on inefficient equipment and buildings and tax incentives on district heating? Those are merely a few questions that come to mind.
My Lords, what about coal? There are two passages that are worth recalling to your Lordships from the first report of the Select Committee in the last session on Coal, which mentioned:
" Our problem in the year 2010 may not be to cover our total energy needs at the lowest cost but to cover them at all ".
It concluded:
" It is essential that coal be developed to the maximum extent and a deliberate decision to do this should be made soon before it is too late. The credibility of energy policy, not merely coal policy, is in question ".
That report was debated in this House last January. Do the Government accept that long-term investment in coal could be likened to long-term investment in defence? Do the Government consider that the target of 170 million tonnes per annum output of coal at the end of the century is anything like enough? What is the Government's attitude to the continued decline in productivity? Should not research and development now focus much more on liquefied and chemical

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extraction than on mechanical improvements? Should not underground gasification be given much higher priority in research? Should not closing-down pits be turned over to underground gasification as a method of extracting the remaining 40 per cent. or so of coal which is left behind? Also, have the Government yet given their minds to the North Sea deposits discovered by oil companies in their drilling? Are there any plans to encourage research and development here as to methods of extraction? Are there any plans to ensure that private enterprise gets stuck into it quickly and soon?
On the nuclear option, I could not take up the points made by the noble Lord, Lord Bowden—I wanted to call him " my noble friend " because in these energy matters we are all colleagues and these are not party matters that we are discussing. In that sense we are a council of state and I hope we treat each other as noble friends. I, being illiterate in these matters, am not qualified to comment at all on the very interesting points made by the noble Lord, Lord Bowden, on the CANDU reactor, but I should like to ask the Government for their view on the focus placed by the Central Electricity Generating Board on the thermal nuclear programme. Have the Government noted in our Objectives report the evidence given by Dr. Richard Eden at Question 7?—that was when he pointed out that a uranium nuclear programme is nonsense unless one is sure of a uranium supply for 20 or 30 years. While I agree that that point begs the question which was raised by the noble Lord, Lord Bowden, it is a question at any rate that Dr. Richard Eden considered relevant. He pointed out that there might not, in the view of studies put before the World Energy Conference, be sufficient uranium for the entire European uranium reactor programme at the year 2010.
So, taking up the point made right at the start of his speech by my noble friend Lord Halsbury, I ask: Will the Government give up its game of hide-and-seek with the CEGB on choosing a site and getting the proper inquiry going so that a commercial fast reactor can be set in hand and can actually be operating not a day later than 10 years from now? That would still give only 10 years for the proving of it before the end of the century, when there would be a great need for
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others, if the public are satisfied by then that it is safe.
On the subject of gas, which has not so far been mentioned in this debate, my noble friend, Lord Gowrie, did tell the House on 11th July:
" Because we have a surplus in gas stocks, there is no need to interfere with domestic gas prices ".
since when, however, the Price Commission has suggested, on 19th July, that the domestic price should rise by 30 per cent., and the Brindex Conference, which is a conference of British independent exploration companies, has said that the gas price policy is jeopardising exploration. That is the very point I made in my question to the noble Earl at that time.
In general, surely the Government must now accept, in view of their general philosophy and their readiness to be realistic in a great many fields, that pricing is the key to conservation, and that pricing is the key to exploration—so why not amend the Gas Act accordingly? I have one other particular question to mention before I finish, and that relates to geothermal energy. Has the Energy Technology Support Unit at Harwell considered the possibility of adapting used oil wells in the North Sea for geothermal power?
Those and many other questions could be posed. Of course, not all of them can be answered now, but what we do look for is a coherent approach. In this energy dilemma we find ourselves rich in resource to the envy of many; yet the Community is crestfallen in a marathon of mediocrity and baffled by its predicaments. The thinking British nation and the European Community itself desire a realistic lead, not patching their grief with proverbs and rounded generalities exuding a faint aroma of weak tea. If a poor society cannot be too poor to find a right order of life, neither can a rich society to too rich to have the need to seek it.
8.6 p.m.
Lord AVEBURY: My Lords, the noble Earl, Lord Lauderdale, says that in energy matters we are all colleagues, but I think most of us would agree that when you have no opposition it becomes very dangerous. Therefore, if I try to inject a note of controversy into this debate I hope I shall be forgiven. It seems to me

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that, so far, all the speeches have dealt with energy policy as though it could be viewed in isolation from the general objectives of society. The noble Earl, Lord Lauderdale, was not altogether innocent of this—
The Earl of LAUDERDALE: My Lords, not innocent of anything!
Lord AVEBURY: My Lords, as the noble Earl says, " not innocent of anything ". He asked whether 170 million tonnes of coal would be anything like enough by the end of the century. Enough for what? Should we concentrate on underground gasification?—again for what? Should be ensure that private enterprise gets stuck into the exploitation of the sources of supply below the North Sea? Again, for what purpose? Should we have a fast reactor in operation within the next 10 years?—Cui bono?
The noble Earl, perhaps, if he were to reflect on it, would agree that, before we start to think about energy policy objectives, whether they be for ourselves, the EEC as a whole or the individual components of it that are discussed in these reports, such as fusion and conservation, we ought to consider whether the Treaty of Rome or the Euratom Treaty still accurately reflects the aspirtions of the European peoples and whether they take into account the practical constraints which might lead to a variation of those goals. If we look at Article 2 of the Treaty of Rome we see that it says that the Community's task is to promote
" a continuous and balanced expansion of economic activities and an accelerated raising of the standard of living ".
In 1974, when we were negotiating to join the EEC, I wrote to the then Foreign Secretary who is now the Leader of the Opposition, suggesting that we should try to amend this fundamental Article so as to reflect present-day realities. The alternative form of wording that we suggested—and when I wrote to him I was speaking as President of The Conservation Society—was as follows:
" The Community shall have as its task, by establishing a common market and progressively approximating the economic policies of Member States to promote throughout the Community a harmonious development of economic activities, the highest quality of living conditions for all people within the Community that are consonant
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with the paramount need, having regard to the interests of succeeding generations, to conserve the national resources and the environment, and closer relations between the States belonging to it'.
The Government then took the view, and I suppose that many people would still agree with them, that the Treaty was capable of dynamic interpretation and that conservation in the environment may be construed as within the meaning of the basic Article. He did, however, conveniently ignore that part of my submission which related to resource constraints, which could well force us towards policies that are directly contradictory to Article 2. I note the Council decision which preceded the Summit in Tokyo, that consumption of oil within the Community should be limited to the amount that we are using at the present day, which might well be incompatible with the objective of raising living standards and
" continuous and balanced expansion of economic activities ".
Of course, it is very much harder to work for higher quality of living conditions, because we then have no simple measure of achievement such as we thought could be applied to " continuous and balanced expansion ". People use the gross domestic product as a yardstick for measuring the EEC's achievement, and in doing so they count as pluses many goods and services which are of dubious benefit—tobacco, alcohol and dental services necessitated by the excessive consumption of carbohydrates are examples that spring to mind.
But if indiscriminate growth were not still seen as the principal objective of industrialised nations, then obviously there could be repercussions for energy policy as well. We shall never be able to judge what this could mean in practice, as long as the policy-makers imagine that publication of highly aggregated targets or forecasts for some future year is an adequate performance of their function. What matters, with great respect to the noble Earl, Lord Lauderdale, is not how much of a particular fuel we may use, but whether we are warm enough at home and at work, whether we have an efficient and reliable transport system and so on. If all the Commission is going to do in the field of energy policy objectives is simply to put together Member States' forecasts,

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comment on their feasibility and deliver a few pious exhortations, then the whole exercise is a waste of effort. I am disappointed that our own Select Committee has made no comments on the Commission's methodology, but has endorsed a similar exercise which concentrates, as the Commission has done, almost entirely on the supply side, taking the figures for the year 2020. Turning to the Euratom Treaty—
The Earl of LAUDERDALE: My Lords, just to defend the committee, these reports, one assumes, are read in the light of earlier reports. We have, of course, criticised the Commission's methodology a good deal in the past, and therefore do not want every time to repeat what we have said before. I think that that is fair to my colleagues.
Lord AVEBURY: My Lords, the noble Earl may have heard me say earlier, when we have debated reports of the Select Committee, that there is a gap in the loop, in that the Select Committee goes to a great deal of trouble to comment on the Commission's reports. We then have debates in this House—and the noble Earl, Lord Lauderdale, may have made that point on previous occasions—but we do not get any feedback, because we do not have the faintest idea whether people on the Commission pay attention to speeches in this House. I very much hope that the remark of the noble Earl, Lord Lauderdale, will be noted in the Commission.
The EARL of LAUDERDALE: My Lords, I am sorry to intervene again, but this is important, because it relates to this Parliament's relationship with the Community. The fact is that as Sub-Committee F and the others have grown in stature, confidence and competence, we have found that Commissioners get on the telephone to us jolly quickly and the first 50 copies, if not more, of all our reports are immediately ordered from Brussels. So I think that our word does carry.
Lord AVEBURY: My Lords, the noble Earl has not quite got my point. There are people who take part in these debates who are not members of Sub-Committee F, but they may be equally interested in the matters that are discussed in those reports. What I am saying is that if Members of
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your Lordships' House, or indeed of another place, take the trouble to read and study the reports and make comments on them, then we are entitled to some kind of reaction from the bureaucrats on the other side of the Channel. It is very disappointing, if one goes to a certain amount of trouble to try to understand these issues and to make comments on them, to find that one is greeted by a deafening silence from Brussels.
But I was turning to the Euratom treaty, and was going to say that it includes a commitment to,
" creating the conditions necessary for the speedy establishment and growth of nuclear industry ".
That would certainly be necessary if, as the Commission's energy balance sheet for 1990 suggests, installed capacity is to be doubled between 1985 and 1990 from 78 gigawatts to 155 gigawatts. It is no wonder that the noble Lord, Lord Hinton—who I am very glad to hear is progressing well—referred to the proviso that environmental objections would have to be " overruled " if programmes of anything like this magnitude are to be launched. There has been no public debate in any of the countries of the EEC about such an enormous increase in our nuclear capacity, and I very much doubt whether it would be politically acceptable even if such an expansion were industrially possible, which throws some doubt on that enormous expansion.
While most of the recommendations of the Commission depend on the willingness of member States to carry them out, the Council has empowered the Commission to grant loans for the construction of nuclear power stations up to an amount of 500 million European units of account, or £335 million, and some of this money is being used to support what is described by the Commission as,
" further work to keep open the fast breeder option ".
The former Secretary of State for Energy, Mr. Tony Benn, boasted that he had thwarted Commission proposals for the breeder, yet when he was President of the Council he signed the two instruments permitting these loans; and among those loans was one of 66 million European units of account for the construction of Super-Phenix, the French demonstration fast breeder reactor. So that while the

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Government were assuring an anxious public in the United Kingdom that no decision to proceed with a fast breeder would be taken without a wide-ranging public inquiry, at the same time they were helping to finance one across the other side of the Channel. I am not quite sure whether I should be accusing the former Government of naïvety or duplicity, but they must have been guilty of one or the other.
Also, the details of these loans were not given in the first report on Euratom Borrowing and Lending Activities (corn (79) 26 final), even though the information was available at the time when the report was produced and it was extracted by the European Environmental Bureau from sources in Brussels. I should like to ask the noble Earl, Lord Gowrie, whether a second report has been produced on these Euratom loans and whether it is any more informative than the first one. Should there not be some better means of ensuring that major initiatives of this kind—loans for the construction of fast breeder reactors—are announced as and when they occur? Will the Government try to see that this is done, by seeking to amend the original Council decision signed by Mr. Tony Benn or by some other means?
The existence of a treaty which deals solely with nuclear power in isolation helps to create and sustain an imbalance in the effort of the Community, to which several noble Lords have referred. According to the Select Committee's report on fusion, the total amount being spent on atomic energy research throughout the Community is £1,100 million, out of a total energy research budget of £1,700 million—and I might say that none of that is ever recovered from the ultimate consumers of electricity or from the utilities, for whose benefit it is undertaken; where are the market forces, one would like to know, in operation in that sector?—while, as noble Lords have remarked before, the energy conservation unit within DG. 17 has a full-time staff of between three and four people. I do not know whether there is a figure for total Community spending on conservation, but the amount which is shown as being directly funded by the Commission is a mere 11·38 million European units of account.
I think that it is the Euratom treaty
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which psychologically helps to create this imbalance, and both the present Secretary of State for the Environment and his predecessor have agreed with Mr. Nigel Haigh, Vice-President of the European Environmental Bureau, that they would be prepared to support amendments of the Euratom treaty, so as to give it much wider objectives. But why do we have to sit back and wait for someone else to take the initiative in this matter? Could not the Government draft suitable amendments and put them forward for discussion, so as to enable us, under the Euratom treaty, to consider much wider policy objectives and to fund research on matters which are not within the nuclear field?
Finally, I want to make some brief comments on the evidence taken by Sub-Committee F from Dr. Richard Eden, and particularly the criticisms which he makes of the IIED Report, A Low Energy Strategy for the United Kingdom. Dr. Eden says that the growth assumption made for the purpose of the Commission's energy objectives paper of 3·8 per cent. compound between 1978 and 1990 is optimistic. his terminology implying that the higher rate of growth is ipso facto better. It is not surprising to me, therefore, that he should have tried to discredit the work of Gerald Leach and his colleagues, holding that point of view.
However, I must disagree with the noble Lord, Lord Hinton of Bankside, when he describes Dr. Eden's criticism as " brilliant ". I thought that it was extremely feeble, as I shall attempt to show in a moment. But if the Select Committee wanted to get at the truth, why did they not call Mr. Leach to defend his own report? And if Mr. Leach was given no opportunity to defend his report in public, while Dr. Eden's comments are left unanswered on the record, is not that contrary to natural justice? And what opportunity, I wonder, do the Select Committee intend to give to Mr. Gerald Leach to explain his report and put on the record his defence against the criticisms which have been expressed by Dr. Eden?
Lord SHERFIELD: My Lords, the committee was informed that this question of a low energy strategy was being further considered in Brussels, and it was thought to be premature to go into the matter in detail in relation to this report until the

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results of this further study had been received. In that case, no doubt the committee will consider it when they have a document to consider.
Lord AVEBURY: My Lords, if it was premature to consider low energy strategies generally until the report from the Commission had been received, surely it was premature to allow Dr. Eden to comment in public about a report, the author of which had not appeared before the committee. This was improper, and no doubt on reflection the noble Lord will agree that it would have been only just and wise to have allowed Mr. Leach the opportunity to defend himself.
As Mr. Leach was not there to do so, I shall now proceed to deal with some of Dr. Eden's criticisms. He pointed out, correctly, that Mr. Leach specifics measures which are necessary if the lower levels of energy consumption delineated in the LIED report are to be realised. Then he says that doubt should be cast upon that report because it does not say that these measures will be achieved in practice. If it did say that, I think that Mr. Leach certainly would have merited severe criticism. However, Mr. Leach said that if certain measures are taken, these will be the reduced energy demands. Of course, he cannot say whether Governments or consumers will take the measures outlined because he is not a prophet, and that is not what his report set out to do.
Secondly, Dr. Eden criticises the methodology and gives the domestic sector as an example. What Mr. Leach has done is to take the number of households, the ownership of appliances, the degree of insulation, the amount of space per household and the temperatures which people will maintain. Dr. Eden says that if all these factors are wrong by 10 per cent., then we have got a cumulative error of something like 60 per cent in total. That of course is arithmetically wrong, because the number of households might be over-estimated by over 10 per cent., although I imagine that this is extremely unlikely, while the amount of space per household might be underestimated by a like amount, thus cancelling the first error. It would only be true to say that the total error was 60 per cent. if all the 10 per cents. were in the same direction.
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Then Dr. Eden says that if the average income per household increases by a factor of three, it is inconceivable that people would not be living in much larger houses. The noble Lord, Lord Hinton of Bankside, remarked that Mr. Leach had badly underestimated the lead times. It seems to me that the lead times on replacement of housing stock are very long indeed. What I think has happened as people have become richer, on average, since the war, has been not so much that the amount of space per household has markedly increased but that the number of persons per household has declined. And Mr. Gerald Leach has provided for this trend to continue, albeit at a slower rate than up till now, because we are approaching a universal minimum nuclear household. Also, the standard of housing will be upgraded and, therefore, houses will cost more.
Dr. Eden asked what is the person who lives in the same size of house going to spend his extra money on. One thing will be the same sized house, with improved amenities. But there could he a very large rise in the standard of living of the poorest members of the community, bringing them up to the position now enjoyed by the élite. Some fraction of the increased wealth which Mr. Leach postulates would be, I hope, devoted to repairing substandard public services, if anything is left of them by the time that this Government have finished their term. If the experts are so eager to destroy the notion that mankind would be able to enjoy reasonably high living standards, with much lower use of energy, what hope is there for the lay policy-makers whom they advise?
The present Secretary of State said that maintenance of civilised values goes hand in hand with increasing energy use. This is no doubt the kind of rubbish which is being fed to him by policy advisers. Increasing energy use in turn requires a substantial nuclear element, as the Secretary of State put it at the 25th anniversary celebrations of the United Kingdom Atomic Energy Authority. So we are being driven inexorably down the nuclear path, not by any real needs of the people of Europe but by a wholly irrational commitment to growth for its own sake. It seems to me that Mr. Howell is so mesmerised by this concept already that

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he even describes conservation as a " crucial energy resource ", thus enabling him to put it on the wrong side of the balance sheet.
I am just as keen as the Secretary of State for Energy on maintaining civilised values, and I assert that if you raise material expectations to a level which cannot possibly be realised you have the perfect recipe for social conflict and disintegration. Much of the dissatisfaction which people feel today arises from the conflict between the assurances that they have been given about everlasting growth by trade union leaders, businessmen, advertisers, politicians and the media, and their personal experience of a static or even of a declining purchasing power. They feel, with some justification, that they have been cheated. Real leadership today means telling the truth about the prospects for material and energy consumption. In future, it will be essential to make all natural resources go further, and energy in particular. The era of abundance is over.
8.28 p.m.
Lord REAY: My Lords, at this late hour, after a succession of the most well-informed speeches, I shall confine the few remarks that I wish to make to some aspects of the Community's infant energy policy and to the part which Britain could perhaps play in it. From many different points of view I am sure that there needs to be some form of Community energy policy.
From the point of view of conservation—which is plainly desirable, and I agree with what was said by the noble Lord, Lord Lovell-Davis—it is obviously helpful if Member States can be encouraged to take similar action at the same time from the point of view of preventing distortion of competition. If economic convergence is to be sought between Member States, it would be reasonable if there was also some convergence of energy policies, given the close relationship that exists between economic growth and growth in energy consumption.
Because of the Community's high degree of import dependence upon energy, there if a close link between energy policy and foreign policy. Supplies are more secure if the Community acts and speaks to-
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gether. The Community should pool research to avoid unnecessary expense. Above all, perhaps in conditions of shortage or threatened shortage, I am sure that it is desirable for industrialised countries to seek to align their responses—as, indeed, they have instinctively sought to do, whenever a crisis has arisen, and most recently at the Summits, concluding with the Tokyo Summit. If they wish to be able to align their responses to an international crisis, then it is better if they seek to work out their response in advance to any crisis that can be imagined—and the energy field is, of course, full of crises which can be imagined. For those reasons, I think we need a Community energy policy.
Also, I think that we in this country should play our full part in forming such a policy. I think that we should avoid any temptation to stand aside because we think that our position is in some sense different, since we have North Sea oil and since no other country has a comparable primary energy resource. We should avoid any such temptation which we may be subject to and play a strong and constructive part—and possibly a leading part, as my noble friend Lord Bessborough has called for.
I should like to put two questions to my noble friend Lord Gowrie, who will be replying for the Government. First, one relating to the communiqué that was issued at the Tokyo Summit. In that communiqué it was announced that the Community intended to maintain its oil imports from 1980 to 1985 at an annual level not higher than in 1978, and it was also announced in the same communiqué that four Member States—France, Germany, Italy and the United Kingdom—will have as their individual target in 1985 for oil imports the same figure as in 1978. The question I should like to ask is how is North Sea oil treated from the point of view of setting these objectives? Was North Sea oil, to the extent that it is consumed in the Community, treated as an import into the Community from the point of view of compiling these objectives, or was it ignored?
Obviously, if it was treated as an import, then the objectives promise a much greater degree of self-restraint than if North Sea oil was ignored. Obviously, it is quite a different thing for a country

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like Japan to aim to maintain its oil imports in 1980 at 1979 levels (as she pledged to do) than for the Community to do so if at the same time the Community is benefiting from the rapid progress of this country towards a position of self-sufficiency in oil. It also seems to me rather strange to announce that France, Germany, Italy and the United Kingdom (in the same breath) will have the same goal for oil imports in 1985 as in 1978, as if Britain was in the same position as the other countries.
As we all know, Britain is not in the same position at all, not so much because she is an oil producer as because she is moving towards a position of self-sufficiency in oil. In other words, it would be possible for oil imports to be maintained at the same level into the United Kingdom and to be compatible with an increase in the consumption of oil in the United Kingdom, whereas it is not at all possible for the other Member States of the Community. So I would be critical of that communiqué not being clearer, but I also suspect that this very ambiguity may owe something to the tendency of this country to wish to ignore North Sea oil when it comes to our relations with the other Member States of the Community—a tendency which I think we have shown in other contexts, particularly when we have asked for a reduction in our contribution to the budget on grounds of national poverty. There are times when it looks as though we ignore our possession of North Sea oil and ignore the fact that our partners in Europe are aware that we have this asset, and I think this is a dangerous tendency on our part and one that will lead to serious misunderstandings within the Community unless it is corrected.
To come to my second question, this concerns the part which the present Government may play in the formulation of a Community energy policy. How, in the view of the Government, does North Sea oil affect the part that we should or could play in constructing a Community energy policy? The Select Committee stated, in words repeated by my noble friend Lord Bessborough and by my noble friend Lord Lauderdale,
" The Select Committee stated that they also hope the United Kingdom, as by far the largest producer of primary energy within the Community, will, despite its coming self-sufficiency, take the lead in the Council in formulating an effective policy for the 1980s and beyond ".
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Do the Goverment agree with that recommendation and, if they do, what initiative do they plan to take? In particular, what scope do they see for a Community energy policy? Do they agree with the Select Committee that so far as energy conservation is concerned it is important to achieve an equivalence of effort between Member States? Would they go so far as to agree with the Commission that a greater convergence of energy pricing policies within the Community is essential?
It may not be entirely fair to press the Government too hard on this subject as this is still quite an early period in the Government's term of office and no doubt the Minister is preoccupied at the present time with various aspects of domestic energy policy which have yet to be worked out, but I think it is important that there should not be too much delay in formulating a British policy and bringing that policy before our partners in the Community.
To illustrate the danger of delay I should like to quote from the Commission document, The European Community and the Energy Problem, which they produced last year:
" There are frequently long delays between the submission of proposals by the Commission and the decisions of the Council. The Community often reacts too late to the rapid development of circumstances and the delay is sometimes so great that proposals become out of date before being adopted. Moreover often the Member States, being conscious of this delay are led to take unilateral action in some respects as a precaution, which makes agreement on the measures proposed more difficult if not impossible ".
So in other words the very insufficient common energy policy which we have at the present time could stay in that state merely by continued inactivity on the part of the Government. So I hope that not too much delay will be allowed before the present Government (as I hope they will) take their proposals, as to what can be done to improve the Community's energy policy, into the Council. One possible inhibition which the Government might feel, and one possible point which the Government are bound to take account of, is the excitability of public opinion during these years in which Britain acquires self-sufficiency in oil. After the experience of the last five years in Scotland, no Government can be insensitive to those dangers. The Government have to consider whether this or

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that conservation measure will be felt to be incompatible by the public with our present oil wealth.
In fact, I think that only in the event of shortages—which now seem to be behind us for the time being—or if conservation measures are markedly unpleasant for the consumer (which they need not be), are public objections likely to be aroused. For the rest, the public will expect the Government to lay the foundations of a policy that will enable our country, together with our partners, to survive as industrialised economies as oil ceases to be available.
In Europe, the Government must decide what can be expected from a Community energy policy and then what Britain's contribution can be. The fact that the previous energy Minister was a consistent anti-Marketeer must mean that a gap exists to be filled in the network of our constructive relationships within the Community. How the present Minister decides to fill the gap will be what many of us will be looking at in the months ahead.
8.39 p.m.
Lord HOWIE of TROON: My Lords, I was not terribly sure what dangers were to be found by the noble Lord, Lord Reay, arising from Scotland over the last five years. I have found the Scottish scene over these years extremely interesting and in the recent election the Scots certainly behaved with a great deal more care and percipience than the English. But that is by the way. In many respects, the matters of conservation and the rational use of energy (as the report calls it) are the keys to our energy problems. As the Select Committee report itself says, in paragraph 33,
" Energy conservation, which will soon become a matter of continual rather than sporadic urgency, depends above all on changing social attitudes ".
That is true, but there seems to be very little evidence that these attitudes are likely to change rapidly enough to be of great use to us, despite official efforts to encourage better energy management, and I think my noble friend Lord Lovell-Davis showed in his speech earlier today how feeble some of these official efforts often are. So, despite efforts to conserve energy and use it rationally, correct and proper as these are, there will still be
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need for the provision of increased energy provided, despite Lord Avebury's attitude, we intend to continue to increase our standard of living and assist others to do the same.
Where could this increased energy come from? I recall Thomas Tredgold's definition of engineering in 1828; he described it as the art of directing the great sources of power in nature for the use and convenience of man. These great sources of power are presumably nowadays sun, wind and wave. We have seen coal and timber and other fossil fuels, uranium and so on, in that guise, but now I think we see sun, wind and waves—all renewable sources of power and all sources of power which are in a sense free. The initial investment has to be made and there is a certain amount of running expense to be met, but the source of power itself—the wind and the waves appears to be free. But none of these are likely to be available to us for some considerable time. It is quite right, of course, that money should he spent on research and development in trying to derive power from sun, wind and waves, windmills and solar power, but no results of any significance will he seen from these this side of the turn of the century. So they will be of little help to us with what the Motion before us today calls " the growing urgency of the energy situation in Europe ".
Therefore other means have to be found. So far as possible these should be found from well-established engineering, from nothing ethereal which might produce results in the distant future. We want results which come from orthodox proven engineering, usable now, and which will produce the energy we need in the short term rather than the long term. The Committee ask the Community to concentrate on the successes and failures of national policies, and I want to mention some of these fairly briefly. First, there is combined heat and power. That is partly a mere matter of management and partly a matter of changing our investment in generating stations. Using combined heat and power would roughly double the efficiency of electricity generation, and that must be important; it seems worth doing.
At the moment, the CEGB is pursuing a policy which in general terms can be

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described as closing down the small stations in the cities and opening new big ones far out in the country. Well, it happens that the small ones in the cities are exactly the stations which are usable for combined heat and power and the big ones in the country are not. So it is quite possible that the Electricity Board would in fact achieve greater efficiency by reversing its policy; instead of closing the small stations in the cities it should keep them open, and if it had to close any it could close down the big ones in the country. There is nothing new about this. Combined heat and power has been known for many years and is used in Britain here and there on a small scale; it is used abroad sometimes on a larger scale. This is an obvious failure in public policy and an obvious failure which could be put right without too much difficulty.
The second item I want to turn to is one which was mentioned earlier on by the noble Earl, Lord Bessborough. Why not build the Severn barrage? We all know that, according to Lord Rothschild's Think Tank, a tidal barrage such as the one proposed in the Severn is potentially less productive than wave power, on which a number of people are now working But the important thing is that, so far as I can make out, the Severn barrage is within the state of the art of civil engineering; it could in fact be built. That is not yet true of the various wave proposals being talked about. They will probably come within the state of the art, but 30 or 40 years hence. So why not go ahead now and build the Severn barrage, which could, according to the committee's figures, provide 5 per cent. of the electricity needs of this country? Why not go ahead and build it now instead of waiting 30 years for wave power which might not even happen in that time?
Thirdly, it is normally assumed here and abroad that hydro-electric power has been almost fully exploited. I know that one scheme is now being proposed for the Peak district at a cost of some hundreds of millions of pounds, and it is now running into the usual environmental difficulties. I do not think there is much more in train in the hydro-electric field, at any rate on a big scale, in this country. But what about small hydro schemes? Not every scheme which is proposed need be producing several hundred megawatts.
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On the edge of Dartmoor, for instance, there is a group of three small hydro installations which added together supply a total of 3·4 megawatts to the grid; 3·4 megawatts taken against the total needs of the grid is a small amount, but in the area where it is generated it might well be a significant amount. On the global scale it is small. On the local scale it might very well be enough.
There is not much interest in small scale hydro schemes in Britain, but there is some arising in the United States. Incidentally, I should say that in the United States small-scale hydro schemes are usually defined as those producing less than 15 megawatts and they use dams not less than 6 feet high with a minimum drainage area of about 10 square miles. They are quite small installations. There is a research team at the Polytechnic Institute of New York, Brooklyn, which has identified over 1,600 existing dams in New York State alone. Many of those, by the way, already have disused turbines installed. They were built in the 1920s for hydro power but with the growth of economies of scale they fell into disuse. The team estimates that New York State's undeveloped and abandoned hydro-electric potential is around 1,300 megawatts, which would be a useful addition to the supply; it would be equivalent to a sizeable but not large new power station, with one additional advantage; whereas it takes perhaps up to 10 or 12 years to bring in a new power station—I am not talking about a nuclear one, which takes rather longer—that amount of electricity could, these people estimate, be produced in round about half that time.
Small scale hydro-electric power is taken seriously by Congress, and last year Congress voted 330 million dollars for a three-year national programme of investigation into this subject. Europe could follow suit. It is possible that there is no great potential in Britain, but there certainly is some, and in other parts of Europe there is in all probability more.
For all of that, for all these marginal areas of potential power which I have mentioned, it seems extremely likely that we shall have to depend to an increasing extent on nuclear power, despite the misgivings which have been published and which have been expressed in this House.

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However, there is a problem arising from the 21st Report of the Select Committee. It points out that although uranium is not really scarce, there could be a supply problem in the 1990s, just beyond the target date of the report, which is, 1990. It also points out that the price of uranium, because of the scarcity, might rise to a level which made the fast breeder reactor economic. If the noble Lord, Lord Bowden, is correct that will be less of a problem than the committee has suggested, partly because of uranium from the sea and partly because of what he quite rightly said about the CANDU Reactor. However, if the Government do not change their mind and go ahead to " go Canadian ", it is extremely likely that the problem will remain. According to Sir Francis Tombs, the Chairman of the Electricity Council, Britain has almost as much energy stored in depleted uranium already used in stations, as in the whole proven coal reserves. That uranium could be used in fast reactors.
The 1990s are not very far off, at any rate in terms of a technological time-scale. They may seem far away in ordinary time, but in technological time the 1990s are quite close. So, if the arguments presented by the noble Lord, Lord Bowden, are mistaken or are not taken up, it seems to me absolutely essential that we go ahead with a quick decision on the fast breeder reactor. That decision must be taken now, because if it is not the fast breeder reactor will not be available in the 1990s. and the problem which the committee has identified will be facing us in all its starkness.
I believe quite honestly that energy is now the single most important policy issue which faces the Government, regardless of party. It is not a party matter. It is the most important, crucial and most dangerous policy matter which faces the Government. Time for debate on it is long over, and time for action is overdue.
8.53 p.m.
Lord WYNNE-JONES: My Lords, first I should like to thank the noble Lord, Lord Sherfield, for having introduced this debate and also the noble Lord, Lord Lovell-Davis, for having made a most impressive contribution. As everyone has pointed out, we are faced with the problem which confronts the whole of the world—
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not just this country, not just Europe, not just the so-called Western world, but the whole of the world—the problem of energy. The problem with which we are faced is one which is constantly being confused because we are mixing up different things.
As I pointed out on a previous occasion, we are mixing up different types of energy. We are mixing up heat—thermal energy—with electrical energy and with special energy required for high grade chemical processes. They are different, but they are all important. We are also tending to mix up short-term with long-term problems. When one talks about nuclear fusion I think that so far as we in this House are concerned we might as well forget it. Certainly there are not many of us who will still be alive when nuclear fusion becomes operative—if it does. I am extremely sceptical as to whether it will become operative because it will be far too expensive. However, that is another matter. In any case I do not think that it is a matter that will concern us during the remainder of this century. We should be concerned with those things that matter now.
Why do we talk about an energy crisis? It is not because we do not have energy; it is not because when we go and turn on the gas tap no gas comes out and it is not because there is no electrical supply. In fact, from the point of view of crisis we were in a far worse state 30 years ago than we are today. We were in rather more of a crisis at that time than we are now. What is the crisis with which we are faced? It is essentially one of supply of oil and nothing else. What is worrying us about the supply of oil is that the oil producing countries have realised their power and that they can exercise some control. In 1973 they suddenly bumped up the price of oil. I do not blame them. We have done the same sort of thing ourselves with all sorts of commodities. But the point is that they suddenly increased the price of oil dramatically and it has been going up since, although in real terms it has not gone up as much as we imagine it has. However, it has increased. We now know that we are in a very serious position as regards the price of oil.
We do not know what will happen to the price of oil. I suggest that the most important action that can be taken now is to take the advice given in today's Guardian

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by the noble Lord, Lord Lever, and try to see whether we cannot come to an agreement—an agreement between the OPEC countries, the oil prducing countries, and the consuming countries. It is in the interests of both of us to reach some sensible agreement on this matter. It may take time, but it is essential that we reach agreement because if we do not what will happen is that first, so far as we are concerned, the price of oil will go up and throughout the whole of the Western world it will become increasingly difficult to manage our economy. Indeed, our economy depends not just on the use of oil as a fuel, but on the use of oil for chemical purposes. There is a wide and extensive use of oil.
Unless we come to an agreement, our costs will increase and at the same time we shall find that, if our economy—that is, the economy of the whole of the Western world, because I am not talking about just this country or Europe—decreases then the oil producing countries will not make as much money because they will not be able to sell as much oil. Therefore, it is in the interests of the oil producing countries and the oil consuming countries that we should try to reach an agreement. I suggest that in the short term—I am not now talking about what will happen in 10 or 20 years, but about what will happen within the next five years—it is vital that we work towards an agreement with the oil producing countries in order to reach some rational solution.
Only this morning I heard, as perhaps did other noble Lords, a remark on the radio which was a quotation from some graffiti in a lavatory in, I think, Manchester. It might be appropriate for virtually all energy administrators. It went as follows:
" I used to be indecisive; now I am not certain ".
That is almost exactly what happens with all energy administrators: they have never been either certain or decisive. That is the trouble throughout the whole of our Western world. In the United States, which is the biggest country in the world, an energy administrator has been relieved of his post. One can only hope that they appoint someone who is a little clearer and more decisive than Schlesinger. Two
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years ago I happened to be in America and I was appalled at the lack of decision on energy matters—a country which consumes more energy per head than any other country in the world and which has no clear energy policy at all. Let us beware that we do not fall into the same trap. We must be careful; we must try to find a clear energy policy—not simply in this country, for that is not enough as we are a small country; but, as the committee which the noble Lord, Lord Sherfield, chairs suggests, it should be a policy for Europe, at least to begin with. If we can do that, we may begin to get somewhere.
What are the problems with which we are concerned? The problems are put before your Lordships in part tonight. There is the problem of conservation. As the noble Lord, Lord Lovell-Davis, pointed out, conservation is absolutely clear and essential, and can be carried out, but it must be carried out with determination. If the Government do not have determination, if they merely make nice, bland statements and have pious hopes—I know that the noble Earl will not want to do that and I hope that he will ensure that the Government do not do it—it will lead us nowhere at all.
There is then the problem of electrical energy. Sometimes people talk about nuclear energy as though it could cover the whole of our energy field. It cannot. Effectively it deals with electrical energy. At present it supplies only about 13 per cent. or 14 per cent. of electrical energy. I believe that it can supply much more.
I am sorry to see that the noble Lord, Lord Avebury, is not present because I wanted to comment on what he said. The noble Lord remarked upon the fact that our committee had criticised Dr. Leach's booklet on energy requirements. The fact is that Dr. Leach never gave evidence before us; he never offered to give evidence; I believe I am right in saying that he was invited to appear before us but found it awkward to attend. I am not making any accusations at all about Dr. Leach. However, when Dr. Eden was asked rather casually at the end of our sessions of evidence what he thought about Dr. Leach, he said—and this makes it clear that there was no essential criticism of Dr. Leach:

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" I would like to say firstly that the report is very well-presented. The assumptions and methods are stated at a level of clarity which one rarely sees in energy reports ".
In other words, there was no question of Dr. Leach being denigrated in any way. I should like to make that clear because, from what the noble Lord, Lord Avebury, said, one might be left with the impression that perhaps Dr. Leach had been unfairly treated. I do not think that there was any such intention at all. Dr. Eden went on to say:
" I just say that scenarios normally represent targets rather than forecasts, and the presentation by Gerald Leach is a target for low energy growth ".
That is a perfectly fair statement. The committee was under no impression that it was getting a detailed, careful analysis of the whole position, and we did not have Dr. Leach before us in order to undertake such an analysis. I mention that simply because it would be unfair to Dr. Eden to leave the position as suggesting that Dr. Eden had criticised Dr. Leach in his absence. He was specifically asked whether he had any comment to make on this general report.
I should like to make one other remark about the matter of the production of electrical energy by nuclear methods. My noble friend Lord Bowden has had the advantage of going to Canada and seeing what they do there. I have not yet had the advantage of looking at his report, but I hope to see it in October. All the evidence that I have been able to obtain, from both talking to people and reading about it, is that the fast breeder reactor ought to be pursued. I have no idea whether it will ultimately prove successful—that is not the point. But at present in this country, at Dounreay, we have a fast breeder reactor. They have a fast breeder reactor in France, which incidentally I hope to see in September; they have one in Japan and in Germany; and they have one in America which was closed down quite arbitrarily by the administration there about two years ago. These are all small, experimental reactors; not one of them has been built on a commercial or semi-commercial scale. All that is being suggested now is that it is vital to build one on a commercial scale in order to see whether it really can work as the people
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who are running the present ones think they can work.
I have here the report of the General Accounting Office of the United States on the fast breeder reactor. The report only came out in May. There they criticise the administration in America for not going ahead with the fast breeder reactor. The Accountant General in America says:
" There is considerable disagreement and concern over the extent to which nuclear power should be pursued as compared to coal, solar, and other energy options. In any event breeders "—
that is the fast breeders—
" are the essential ingredient of making nuclear fission a long-term energy source. A decision not to develop breeders implies the phasing out of nuclear fission as an energy source. Exactly when this could occur depends on our ability to recover uranium and further improve the efficiency of light water reactors ".
In other words, they say there that the stage is a critical one. If we say that we do not go ahead with fast breeder reactors, we say that we are not having nuclear energy.
I am sorry that the noble Lord, Lord Avebury, is not here because I rather suspect that that is what he would say; that he does not want nuclear energy. But that is the decision we reach. You either go ahead with the fast breeder reactor, in which case for probably a thousand years you will have enough energy, or you say ," No, we are not going to have it ". I personally feel that it would be irresponsible for us to say that we do not go ahead with examining further the fast breeder reactor.
9.10 p.m.
Lord IRONSIDE: My Lords, this debate follows quite naturally and logically the more general debate that we had on energy resources on 4th July. But I think that the key to Lord Sherfield's Motion is the growing urgency surrounding the energy situation in Europe, and the three reports, interrelated as they are, cover aspects which will have to be faced by all Member States of the Community, and just as much by us after we have lost our self-sufficiency rating. The reports include these two major research activities; namely, the second energy R and D programme, and the fusion research programme.
I think it is worth noting that the Community has been committed to a total

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annual R and D expenditure rate which has grown from 70 million European units of account in 1973 to 255 million European units of account in 1978, with a large proportion devoted to energy. There is great support among member States for this level of research and development, as I understand it, but the biggest problem is that the European research system must be made to work more efficiently.
The Commission has a staff deficit in the research and technical areas, and is now faced with a situation where it must either consider increasing its resources to cope with programme management, or must find other methods of managing the direct, indirect, and concerted action programmes, perhaps through better consultative machinery in partnership with industry. This, I think, is a real problem, and the Commission is searching for ways in which to solve it. The advisory committee on programme management have been more concerned with project selection than project management in the indirect action programmes, and the Commission is now in the process of developing the Community's R and I) policy which was originally proposed in the council resolution as long ago as 14th January 1974.
Two factors now arise in the R and D field. First, the need to analyse any research and development proposal in terms of the impact it will have—assuming it is successful—on environment, society and industry. Secondly, there is concern that European research and development effort should be initiated early enough in relation to world developments so that the Community has an adequate technical base to safeguard the future. With some new technology lead-in periods of 20 years or more it is essential that early action is taken so that our industries are ready to serve the community with the products of the future.
In certain areas it is critical that the Community should be seen to be up with the leaders instead of down with the laggards. Micro-processors, advanced electrical storage batteries, coal liquefaction, just to mention a few of the things, are common areas of interest to all Member States. In energy conservation, which the noble Lord, Lord Lovell-Davis, has dealt with very clearly, compare our
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own national effort being co-ordinated by the Energy Technical Support Unit at Harwell with its staff of 40, and the Commission effort being co-ordinated by DG. XVII on energy with a staff of four.
As the committee concludes in its report on energy conservation and as many noble Lords have said, it does not make sense for the Commission to allocate so little effort to back such an important and urgent matter as energy conservation. We are told they have plans for giving greater status to the conservation activity in the Energy Directorate, which is a good thing and I hope we shall hear positive moves in this direction soon.
One particular measure which the Commission now advocates is to intensify efforts on more efficient energy use in transport, which was referred to by the noble Lord, Lord Tanlaw, who was very concerned about this whole area. I could not agree more with them and I believe we should look at the potential of electricity in transport much more seriously. On railways, British Rail say their network will be completely electrified by 2000, including the probable use of advance storage batteries on some lines. But I think there is a good case for speeding the programme up and it is not encouraging for anyone to see so many diesel locomotives hauling trains over electrified lines.
One expects difficulties to arise in the changeover period, but if we want to look at the wider use of electricity in transport, we should examine whether there are legislative constraints which discourage the exploitation of electric propulsion. For example, Continental cities are able to use electric tramways efficiently. One reason for that is that very high voltage supply standards are used and used safely. In the United Kingdom there may well be a good case for having further thoughts about tramways and exploiting new standards, but in view of the fact that the Tramway Act 1870 and Light Railways Act 1896 are still in force, we may find that they constrain further development, especially if we remember that the 1870 Act was drafted for horsedrawn carriages. The Light Railways Act was an attempt to deregulate mainline standards and spread railway use and the Light Railways Commissioners were appointed to authorise suitable undertakings. The de-

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regulating Act now needed, I believe, is one to enable the user to take what in today's parlance is a hike in technology.
The Government are at present reviewing the functions of the Energy Commission, which is there to advise and assist the Secretary of State for Energy on strategy matters and specific aspects of energy policy. I suggest there is one useful function which it could perform in addition to many others, and that is to examine whether on energy grounds new legislation is needed to replace various transport Acts, like the ones I have mentioned, which are almost certainly counterproductive in the energy conservation context.
The promoters of the Tyne and Wear Metropolitan Railway Act 1973 took a leap forward with a rapid transit system, but in the 1979 Act, the title of which is the Tyne and Wear Passenger Transport Act, we do not know whether it is really a tramway or a railway. The fares structure applying to the metro is the one applying to a railway which has the nature of a tramway. We have none, so what on earth does it all mean? Obviously this is not the subject for debate on the Floor of your Lordships' House. I am told that the promoters are faced with the problem of who drives and reaching agreement with the unions involved, that is to say the NUR and the TGWU. On energy grounds, it would surely be more beneficial to all of us for potential promoters to face a more sensible path to the statute book.
On the road, we now see considerable efforts being devoted to improving the performance of petrol and diesel fuel engines, and this is essential. There is no doubt that engine performance can be stretched over the next few years if the vehicle industries round the world are prepared to spend money to do it. We shall also see synthetic liquid fuels appearing at the petrol pumps probably after 1992, which is the target date set by the National Coal Board for bringing its liquefaction plant developments to a point where large-scale coal refineries can be constructed and operated on a production basis, when the economy will demand it for sure.
The Commission now regards electric road vehicle developments very seriously,
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and part of the second four-year energy research and development programme is involved with the electric vehicle sector, which includes advanced battery development. With my interest in the Electric Vehicle Association here and in the European Electric Road Vehicle Association, the point I wish to make is that we must not forget that the electric vehicle holds out a promise of being a much more important energy option in the transport field in many cases, and we should not therefore put all our development money into synthetic liquid fuel projects. We must put money into the further development of electric vehicles to satisfy many of the transport needs of the future and to provide the best economic answer. We are in a unique position in the United Kingdom, having 45,000 licensed electric vehicles on our roads. The yearly output is 1,500, and it is estimated that even now there are some 65,000 internal combustion engine goods vehicles which could be directly replaced by electric vehicles. This would indicate a market of some 4,000 per year, which is easily within the capacity of the United Kingdom industry.
In any case synthetic fuel is likely to be highly priced by today's standards and the case for electric road vehicles may then look much more attractive. The second Four-year Energy R and D Programme is regarded by the Commission as being a rolling programme which was proposed in the last year for the First Programme, which was officially terminated on 30th June this year. But, my Lords, the Second Four-year Programme has not yet been approved by the Council of Ministers, and with the best will in the world one cannot regard this new programme as being a rolling one if there is to be a yawning gap between the two programmes.
The Second Programme was due to come before the Research Council on 26th June, and this was cancelled. I am told that COREPER themselves considered the programme at their meeting in Brussels on 28th June and I understand that there was full agreement as to the balance and total funding, with greater emphasis on energy conservation and much less on solar. But one member-State registered its disagreement with Article 2, which sets an upper limit for expenditure commitments. This one member-State ap-

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parently supports the European Parliament's amendment to Article 2 for all research and development proposals—that the programme figure should have an indicative value only. The Energy R and D Programme raises again the Article 2 syndrome (as I call it) and one member-State has now carried its contentions through to the Council level. I understand that the position will now be considered at the Foreign Affairs meeting scheduled for tomorrow morning. Eight member-States agree with the ceiling figure proposal, and a decision on this energy programme now hangs in the balance.
I think it can be said that this one member-State has made its point about the principle involved in the Article 2 wording, and I hope that it will manage to join the other eight, so that a unanimous decision can be reached on approval of this most important Energy R and D Programme. The next Research Council is due to take place in November, and I think that it would be a very sad reflection on the Community if a decision cannot be reached now on the Energy R and D Programme, when energy is such a crucial issue in our lives.
I realise that the Government are in a difficult position, but I hope that they will he able to bring their influence to bear in such a way that the programme will be approved. If the noble Earl the Minister can give any indication as to what progress is being made and whether approval has actually been given, I am sure that the House would welcome this.
I will now move on to my next point, which concerns the Fusion Programme. This programme is of world-wide interest and is very long term. No crash action is needed (as the noble Lord, Lord Sher-field, said) and in fact one can say that it creates distinctive career opportunities for young people in most countries. But there is a danger that the national programmes will create a series of competitive empires and that the overall co-ordinating role of the Community will become unmanageable and get out of financial hand. There are formidable areas of technology involved and effective programme control is needed, especially if the total value of the programme as it stands at the moment is only an indicative sum. The noble Lord, Lord Sherfield,
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said that it would be most essential to keep a careful watch over the way this Fusion Programme develops, and I think he is quite right in saying that.
The situation at the moment is that we now have in the United Kingdom a major experiment in the form of JET at Culham, which will allow our own scientists and technologists to take direct interest in the Commission programme. This is the first time that a Community centre has been located in this country, and I think that this will help industry to get a much closer understanding of the technological needs which will arise in the next stages of experimentation. The lead-in time for fusion power, if it can be achieved, will be of the order of 50 years, as Lord Sherfield said.
The lead-in period for the next post-JET experiment will be of the order of 10 years, and the Commission programme makes it quite clear that the next experimental study cannot be achieved unless the magnetic confinement of the plasma in the Torus vessel is intensified by using super-conducting technology. From the European point of view, if we are to go ahead, we must therefore rely upon the development of super-conducting magnetic coils to provide the only way of containing a burning reaction of the Tokamak type. Although we did not take evidence on this particular point in the Committee, we had our attention called to the fact that the Science Research Council, through its engineering board, is drawing up more plans for developing super-conducting technology through its super-conductivity panel. The Science Research Council is concerned that a national R and D programme is aimed at underpinning a significant United Kingdom involvement in the development of large experiments, and to allow the British heavy electrical industry to build on its considerable experience in super-conducting magnet technology, which is so vital if it is to be competitive in the international field.
I think that if the United Kingdom is to play its part in the post-JET experimental field, then we should now be devoting our efforts to supporting super-conductivity technology so that we are ready to offer suitable designs, either for the large coil projects, which are multinational and which are contained in the American programme at the Argonne National

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Laboratories, or for the next European experiment, which will probably be sited in some other country of the Community. The United Kingdom has made a good start in the design of super-conducting magnets and machines over the last 10 years—and I declare an interest here—but we shall be overtaken unless we are prepared to spend some money now to take the technology forward in such a way that we can meet the requirements of the fusion programme at the right time.
The Commission basically believe in three methods of financing R and D projects: through direct action, indirect action and concerted action. In their experience, these are the methods which are most suited to the needs of the Community, and which have proved to be successful and acceptable to the Member States. Indirect action rolling programmes are being structured in such a way that a new bloc of actions is published in the last year of the old programme. In principle, such a system is worthwhile if it can be operated in such a way that there is continuity of effort; and the indirect action rolling programme in particular provides the opportunity to employ the existing research teams and laboratories in the Member States and assemble the most competent research teams at any time. However, as soon as any new rolling programme is approved, invitations to tender are invited from any interested sources, and the result is that there are risks of breaking up successful research teams between one programme and the next. I feel that the Commission should pay very much more attention to the question of trying to preserve this element of continuity with the research teams that they are supporting; and Lord Lovell-Davis drew attention to this particular point. I think that the rolling programme principle will help to ensure a continuity of research, but the missing factor is the one which encourages research and development teams to keep together where they are succeeding in critical areas.
I think we are all interested in improving the efficiency of the European research system, and I am very glad to see that the Commission are now holding an energy R and D seminar on the results of the first energy R and D programme in Brussels between 23rd and 25th October.
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If Lord Lovell-Davis would like to see details of this programme, I can show him them at any time. This will bring together all the people involved as contracting organisations, which will give the Commission guides on formulating and directing their second programme. I am told that 75 per cent. of the results will be available for discussion. Ideally, this seminar should have taken place before the second programme was formulated, but I should like to welcome the fact that it is now going to take place, even though it is taking place late. It will be valuable to the Commission and contractors alike. I hope that one of the lessons that will come out of the seminar is that there must be a much stronger link between research and development and demonstration in the energy field.
The reports referred to in the Motion emphasise the long-term issues in energy as well as the short-term ones; but think that the two principal messages brought out are those of urgency and scale. The scale is daunting but the urgency is the force driving us to look for solutions, and I believe that the Commission has a constructive role to perform in initiating Community energy action in the energy field, and I hope that the Government will take the lead in the Council of Ministers in determining an effective Community energy policy. CAP may be an obligatory item on which we do have a policy, but CEP, referred to by the noble Earl, Lord Bessborough, is a non-obligatory item and probably will be more important.
9.31 p.m.
The Earl of GOWRIE: My Lords, if your Lordships have a weakness it is that the House is occasionally, I think, prone to self-congratulation. We all tell each other how good the debates have been and how excellent individual speeches have been. But if I offer congratulations this evening with that warning, I think that I may be allowed to do so because I am one of the very few Members of your Lordships' House who is taking part in this debate who is not a member of Sub-Committee F on Energy, Transport and Research. The noble Lords, Lord Sherfield and Lord Lovell-Davis, the noble Earl, Lord Bessborough, the noble Earl, Lord Halsbury, the noble Lord, Lord Bowden, the noble Earl, Lord Lauderdale,

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and the noble Lords, Lord Wynne-Jones and Lord Ironside, all serve on this impressive committee; and the noble Lord, Lord Strabolgi, I understand, did so before the same official duties as I now have precluded him from doing so. I hope that I can say with neither flannel nor flattery that this is a first-class committee. I would doubt whether there are many legislatures in the Western world even at this point of crisis where one would find people so well-informed on energy issues.
I want to make, in my own order, my remarks about the reports (which I shall try to make as briefly as possible) before I attend to the individual points which noble Lords have put to me. I shall consider first the Community energy objectives for 1990, then conservation, with which the noble Lord, Lord Lovell-Davis, was concerned, and finally fusion. We are privileged to have had the chance to read these reports; and, as one who has to spend a great deal of his spare time wading through papers, I certainly found them a good read. It was a delight when I got down to them in the Box. They were well-written, lucid and clear.
My Lords, the Community communication Energy Objectives for 1990, was on the agenda of the Energy Council last December. It is based on forecasts by member-States to the Commission in the 1978 Review of National Programmes by member-States. On the basis of an analysis of the energy position of the Community against the Commission's forecasts of the world energy situation towards 1990, the communication concluded that it was possible to achieve the Community's energy policy objective of reducing dependence on imported energy to 50 per cent. by 1985 and proposed intensified action through savings and a greater role of coal and nuclear in electricity generation.
The Energy Council, last December, took note of this communication. The Commission have since prepared a further paper on 1990 objectives which was presented to the last Energy Council on 18th June. The paper concludes that world oil supply prospects do not justify much more than 470 million tonnes of net oil imports by the Community in 1990. This is the same as was set as a target for 1985 by the European Council in March, and again at Strasbourg in July. The
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Government take a constructive approach towards these objectives, which demonstrate the importance that, as members of the Community, we attach to energy questions. It was in this same spirit that we agreed at the June Council and again at Tokyo a series of energy objectves to cope with the supply situation by restraining demand for oil up to 1985. So I can assure noble Lords that we shall examine with great care and consideration the new objectives for 1990—for five years later—proposed by the Commission.
The Commission communication was right to emphasise the uncertainties involved in forecasting; none of us can accurately predict the future. This does not make sensible long-term assessments of the situation invalid. It means, though, that we should not place on them a weight they cannot bear by specifying over-detailed energy objectives covering the individual sectors of national energy programmes. I welcome the speeches this afternoon—and they were the majority—where a certain scepticism about forecasting crept in. We should look rather to ensuring that any objectives we formulate are practicable and realistic and give our member-States flexibility in meeting them. The Government will of course wish to play a constructive part in the development of Community energy objectives and be ready to agree sensible objectives in the EEC as well as in the International Energy Authority.
Turning now to conservation—with which, as I have said, the noble Lord, Lord Lovell-Davis, an ex-Minister in the Department, was specially concerned—I should like to welcome the useful report by the Select Committee, much of which is in accord with the Government's own approach to Community policy on conservation. The need to conserve energy has been stressed at successive Summit meetings—not to mention in successive debates in your Lordships' House—and recent events have underlined the importance for all countries of reducing demand. We certainly believe that the Community has a role to play in providing a forum in which information can be exchanged, national programmes compared and best practices shared. By its very nature, we see energy conservation as a field in which overwhelmingly the responsibility must lie with national governments. In the

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United Kingdom, conservation is now one of the major components in the Government's long-term energy policy and we do not underestimate the need for continuous efforts in the direction, or the need to bring our own pressure to bear within the Council of Ministers, as my noble friend Lord Bessborough wished us to do.
We have to recognise the validity of some of the criticisms raised by the Committee, but we must at the same time bear in mind that conservation is a relatively new art—though maybe your Lordships would say it is long overdue—and we are all learning, often from each other's experience. The report is rightly critical of certain organisational and policy aspects of the Community energy conservation programme, and it was the noble Lord, Lord Lovell-Davis, himself who expressed disenchantment. But we can take credit for having pressed in the Community for improvements which held to the Community decision to abolish the RUE Steering/Co-ordination Committee. This will make the link between policy guidance and the work of the individual sector working parties more direct.
We should not dissent from the committee's criticisms of the first Conservation R and D programme and have pressed strongly during negotiations on the second programme for a thorough evaluation of Community and national programmes. We have had some success here: we urged that a larger part of the funds should be devoted to conservation. We have " upped the ante " a little in that direction.
My Lords, we share your committee's concern at the previous absence of links between the Community's general energy policy and their R and D and demonstration programmes. However, member-States are more aware now than in the past of the importance of conservation and we are seeing an improvement in linking R and D to policy objectives. Your committee have also criticised the lack of continuity between the R and D programmes and the demonstration projects programme, but it is probably a little early in the day to expect the R and D programmes to have resulted in proposals for incorporation just yet. As I said, we have accorded energy conservation a central and permanent place in our policy, and we recognise the need to overcome
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the kind of difficulties raised by the Committee and the benefits to be had from these Community schemes. But we also recognise what is having to take place is a change in social attitudes. These will not be brought about by bureaucratic proliferation or promulgations. I think that it was the noble Lord, Lord Howie of Troon, who made that point.
I turn now to the fusion programme, on which the Select Committee has again produced an excellent report. Fusion offers a prospect of energy generation using virtually inexhaustible fuels. However, the path to this Arcadia is long, difficult and expensive, as the noble Lord, Lord Wynne-Jones, with all his expertise, told us. It is not a path which any one member-State can hope to follow by itself. That is why we fully supported the principle of a Community fusion programme which the noble Lord, Lord Sherfield, called a " copybook example " of a Community research programme. This includes all the fusion research being undertaken throughout the Community, and indeed it extends wider now that Sweden and Switzerland have associated their programmes with it. I, of course, welcome their association. This is in contrast to the Community conservation programme which is selective and which complements the more important national programmes. The size of the two programmes is not therefore, in our view, directly comparable.
The committee also drew attention to the increasing cost of the programme, and I should make it clear that the financial element of the proposals we are considering concerns only a part, albeit the major part, of the programme. It does not include the JET project on which separate decisions were taken; nor does it include the fusion research carried out at the Community's own establishment at Ispra. The substance of the proposal concerns the work carried out by the associated laboratories in member-States. Thirty per cent. of the cost of this would be borne by the Community Budget and the rest would be funded by the national laboratories. In effect, therefore, the Commission are seeking approval to increase their funding of this part of the programme by some 40 per cent. to around £150 million over the quinquennium 1979–83. Some increase in cost is inevitable as the programme moves progressively into the

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engineering area, and no appreciable increase in scientific staff is foreseen. Nevertheless, the Government feel that the increase in funding of the size proposed is excessive, particularly in view of the long-term effects of the policy, and they share the Committee's view that a more cautious and deliberate approach is called for.
If I may, I should like now to turn to some of the individual points that have been made. Some noble Lords—notably the noble Lord, Lord Sherfield, on whose introduction of this debate I must warmly congratulate him—drew our attention to the Government's nuclear programme and asked what our approach was to nuclear power. The Government believe that nuclear power has an essential role to play in our energy policy. We shall be looking to the future and exploring possibilities for its development to ensure that we have a nuclear strategy which enables stations to be built and operated efficiently, reliably and safely.
Nuclear safety was raised by the noble Lord, Lord Strabolgi, and many others. It is, of course, essentially a national responsibility. The buck has to stop firmly with us, but, as was agreed at the recent Tokyo Summit, there should be international co-operation to ensure an expansion of nuclear power under conditions allowing for the understandable public concern that we debated on 4th July and which the noble Lord, Lord Avebury, raised tonight. Nevertheless, I would say to the noble Lord and others that anyone thinking that there can be even limited or modified economic growth without development of nuclear power is, in my opinion, living in cloud-cuckoo-land.
The noble Lord, Lord Strabolgi, asked about the Government's views on solar energy.
Lord AVEBURY: My Lords, before the noble Earl leaves that point, has he read the ERDP Report and are we going to get any reaction to it from the Government whatsoever?
The EARL of GOWRIE: Not this evening, my Lords. The extent to which solar energy may be used cost-effectively in the United Kingdom—and I stress " cost-effectively "—is the subject of continuing
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work. The noble Lord may like to note that the trial project in Bebington, Wirral to which he referred is supported by the Department of Energy.
The noble Lord, Lord Strabolgi, asked me whether the " Save it " campaign would be continued. The Government are considering at present how best to use the advertising media of this country generally so as to help all consumers to use energy efficiently. The noble Lord, Lord Strabolgi, and his noble friend Lord Lovell-Davis asked whether the Commission's manpower on energy conservation was adequate. I am a little sceptical as to whether a mere increase in the wattage, if I may put it that way, of manpower serves to solve these problems or indeed to see to their diffusion. But I understand that energy conservation has now been upgraded to be the responsibility of a division within DG XVII, and a new head has been appointed. Of course, your Lordships will want to see whether that is an improvment, but we cannot yet tell. The noble Lord, Lord Strabolgi, referred to an article in, I think, the Guardian, about the South London Consortium Energy Group. We welcome and support proposals for research, development and demonstration, so long as they hold the promise of cost-effectiveness. For instance, we are supporting certain aspects of the work of this South London group and look forward to seeing the results. But future Government action will depend on the rear life savings achieved and on cost trends.
The noble Lord, Lord Tanlaw, reverted to the theme of the first energy debate under his name that we had in this House, and asked us what we were doing about the current crisis. We are, of course, committed as a Government to effective demand restraint, which is the best way to bring supply and demand back into balance. The electricity supply industry is reducing its oil burn to the practical minimum, by increasing the amount of coal which is used to generate electricity. The public sector is committed to a real and determined drive to save oil, over and above the long-standing campaign to conserve all fuels. Government are also in continuing contact with the oil industry to ensure that allocation schemes are equitably administered. We do, of course, look to the public voluntarily to make their contribution to saving oil.

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I am not quite sure whether I recognise a national crisis on any immense scale here. I certainly take the point raised by the noble Lord, Lord Tanlaw, who felt that we were caught short in a way that some of our European colleagues were not. But I think that some of my scepticism about the claims of previous Administrations, and a system of more control over the energy supply, was because it did not really produce as rapid a solution as was originally claimed for it. But, certainly, I do not think that we were in a disaster area, though there were shortfalls, difficulties and blockages, as farmers and others have experienced. I certainly agree with my noble friend Lord Lauderdale, and would point out to the noble Lords, Lord Tanlaw and Lord Strabolgi, who raised the matter, that high prices are a great educator of the public. That is not a simple matter of leaning on market philosophies or whatever, but certainly one tends to take the proper steps in conservation, and in many other subjects, when pain is felt in the purse.
I shall look into the question of whether the right energy unit should be the joule, as the noble Lord, Lord Tanlaw, suggested. The noble Lord asked me whether a better means could be found to inform consumers of the energy efficiency of appliances. In preparing Community Directives on energy labelling, considerable attention is paid to defining information which will be intelligible to consumers in all member-States; and this arises, too, out of his demand for a common unit of measurement. It is recognised that there is a need for an education campaign backing up labelling, but, again, given the differing social and economic environments of the member States concerned, education must principally be for the national States themselves.
My noble friend Lord Bessborough, as always on these issues, gave an educative and informative speech and warned us against having a common energy policy which fell into some of the pitfalls of the common agricultural policy. I am one of the very few mavericks in British public life who have a few kind words to say about the Common Agricultural Policy. But, in that context, I would point out that, when I was in Opposition and was trying to widen my portfolio of interests a
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little more, my noble friend the then Opposition Chief Whip, now the Government Chief Whip, said " You may take it as read, Grey, that the two subjects you will never be let loose on are military matters and agriculture." My noble friend Lord Bessborough asked whether we were able to tap Community funds for research and development in the wave field—that is, the Severn Barrage—and the noble Lord, Lord Howie of Troon, was also interested in that. I do not know the answer there, but I will look into it and write to both noble Lords concerned.
Lord HOWIE of TROON: My Lords, before the noble Earl leaves that point, may I point out to him that he had better distinguish between the Severn Barrage, which is tidal, and research into wave power, which is an altogether different thing.
The Earl of GOWRIE: Yes, my Lords, I do make that distinction. My point related to the Severn; I must have misread my notes.
I should like to hand a bouquet or perhaps, since he quoted several poets, a laurel to the noble Earl, Lords Halsbury, for his most interesting, imaginative and impressive speech which contained just the right sort of robust note that is going to result in our solving some of these problems.
On the subject of poetry, may I remind the noble Earl of the late and great (and I am honoured to have known her) American poet, Marianne Moore, who defined poetry as " imaginary gardens with real toads in them ". There is something about the unknowability of our energy future which makes that remark pertinent. Certainly I hope that if Maplin is chosen as the proper site for the next London airport—and I have nothing to say about whether it will be because I do not indeed know—it should be the noble Earl who is given the task of gently persuading the Brent geese to move a few miles up the road. Judging by his form tonight, I am sure that they would go very quietly. I look forward to being clobbered by the noble Earl, as he has suggested, and I assure him that, like himself, I shall not panic.

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The noble Lord, Lord Bowden, talked impressively and informedly about the collapse of the United States nuclear power industry and drew our attention to progress in Canada. The noble Lord was bullish about reactors. Certainly I should like to follow that up and get in touch with Canadian colleagues to see what we can learn from them.
My noble friend Lord Lauderdale said some kind things about me, for which I thank him, but, knowing my noble friend, there was a slight sting in the tail. He talked about my answers being poised between cliché and indiscretion. I have to confess that I recognise that description when I am facing officials for my briefing, and I shall be sure to ask them to try to increase the wattage of indiscretion and to reduce the incidence of cliché.
Lord AVEBURY: My Lords, does the fact that the noble Earl skipped past my speech mean that he is not even going to promise to write to me about the questions which I have posed and which he has not answered this evening?
The Earl of GOWRIE: My Lords, I assure the noble Lord that I have not skipped past his speech; I am coming to it after I have dealt with the speech which was made by my noble friend Lord Lauderdale. If, therefore, the noble Lord will be patient his turn will come, although whether he will he happy when it does I cannot say.
On the subject of the vexed question, I know, in your Lordships' House of not having a departmental Minister, may I point out to the noble Earl that we have now got three economic Ministers in this House. Of course, no economic department is independent of energy issues. For example, I was involved the other day in the tripartite conference on coal. I take the noble Earl's point, but I think we are in reasonable touch.
On that subject, the noble Earl drew my attention to what the Government are doing to ensure that coal plays its full part in meeting energy requirements. We are engaged in a review of the future development of the coal industry and we look upon it as an urgent review. The Strasbourg and Tokyo conclusions and the International Energy Authority coal
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principles underline the importance of promoting our coal industry and form one of the bases for encouraging increased use.
My noble friend asked me how much money the Government are providing for the development of coal liquefaction. We have agreed to provide up to £800,000 towards the cost of design studies for two 25 tonnes per day oil from coal pilot plants. If they were to work out successfully, more money would be made available. My noble friend also asked me whether the Government are to introduce incentives for energy conservation, tax reliefs and penalties. We are certainly attracted to fiscal solutions and my right honourable friend has announced that he is reviewing the balance of our energy conservation programme in that light.
I come now to the noble Lord, Lord Avebury. He asked me how the Community could make funds available to the fast reactor project in France, given that the Community has not taken up a formal position on fast reactors. The EURATOM loan scheme empowers the Commission to make loans at commercial rates for the construction of nuclear installations. The Community has not yet taken a decision on the fast reactor. It would therefore have been improper for the Commission to show bias one way or the other in considering the application for a fast reactor project. The noble Lord also asked about the report on the operation of the scheme. To the best of my knowledge, there has only been one such report, but I will see whether I am right there.
The noble Lord, Lord Avebury, made the point about low energy strategy. I understand that the working report in favour of an energy efficient society has just appeared and, although I may be wrong here, I think it is associated with my friend—though not in a political sense—Lady Young, the wife of the noble Lord, Lord Kennet, and I will certainly read it. The Government welcome this as an important contribution to thinking on energy plans and scenarios and long-term scope for reducing the rate of growth in consumption in relation to economic growth generally. The Department of Energy Technology Support Unit is also examining, with independent experts, several low energy growth scenarios pre-

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pared by United Kingdom organisations, so we are taking the noble Lord's points on board.
My noble friend Lord Reay asked me whether the EEC, in agreeing in Tokyo to limit oil imports between now and 1985 to the 1978 levels, were including North Sea oil in those imports. In fact North Sea oil does count as Community oil. The Tokyo Declaration said that for France, Germany, Italy and the United Kingdom the goal for the ceiling of oil imports in 1985 will be the 1978 figure. We also agreed to recommend to our Community partners that each member State should specify its contribution to the Community's own decision to maintain oil imports between 1980 and 1985 to the level of 1978. I take my noble friend's point that it is not as Draconian as he would like it to be, but it is a fairly considerable move forward.
He and other noble Lords asked me about our general approach to a common or Community energy policy. We will approach this in a positive manner. The main emphasis on a Community energy policy will of course continue to be on the national programmes of member-States. That is in the nature of the character and the structure of the Community, with action at the Community level simply complementing measures at the national level. It is inevitable that there will be some conflicts of interest. Some member-States will show closer concern on various aspects than on others. The position of each member-State will reflect its energy situation and its particular political priorities. The United Kingdom will be ready to explain its national viewpoint and its interests as necessary, but we shall also be ready to consider constructively how the common energy policy might best develop, and we will listen to any proposals for collaborative effort and for action at Community level where that is helpful in complementing our national policies.
The noble Lord, Lord Howie of Troon, supported combined heat and power. The group on that, under Dr. Marshall, has sent its report to the Secretary of State. It is to be published later this week, and of course the Government will be studying it.
The noble Lord, Lord Wynne-Jones, told us that the crisis was one of a supply of
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oil. I think if his noble friend Lord Kaldor had been sitting beside him again today he might also have added, " and also an overpowering supply of money on the part of the oil producers ". Certainly I am at least as frightened about the effects on Western economies of the petrodollar surplus as I am of the energy policy as such.
The noble Lord, Lord Ironside, with the noble Lord, Lord Tanlaw, raised the question of whether railway electrification was going fast enough. The programme of main line electrification is under review by the British Railways Board and the Government, and I will draw the attention of my colleagues to the views which have been expressed and will try to hurry it up. When briefing me the officials put in square brackets—that is to say, not for use—that the noble Lord, Lord Ironside, is well informed on EEC energy research and development. I do not know whether they were congratulating the noble Lord or trying to defend me from his superior knowledge, but I think that remark could be made about many of the things which have been said in this debate, which I have certainly enjoyed, which I have learnt from, and which I will see is fed into the Government machine to continue to inform our energy policy.
10 p.m.
Lord SHERFIELD: My Lords, I should like, first of all, to thank all those noble Lords who have taken part in the debate on this Motion, which they have certainly approached from a diversity of angles. I regret that the debate was pushed back, as so often these European debates are, by pressure of other business. One speaker has had to fall out, and I am all the more grateful to those noble Lords who have put off their dinners in order to speak. I should particularly like to thank the noble Earl, Lord Gowrie, for his very full reply to the debate, the way he has dealt with all the points, and I particularly appreciate his positive approach to policy matters.
The importance of evolving an effective energy policy in Europe, as the noble Lord, Lord Wynne-Jones, mentioned, has been greatly increased by the unfortunate woolliness of current American policy in this field, though we must hope that

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President Carter's words will eventually be translated into concrete measures. One of the documents before the House was an interim one, and there is a sense in which this debate is also an interim debate for, as I think the noble Lord, Lord Howie of Troon, said, energy policy is bound to be in the forefront of our agenda for a very long time to come.
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I have referred to a new wave of documents which is issuing from the Commission. Your committee will scrutinise these with care and, I hope, present your Lordships with appropriate material for renewed discussion when winter comes. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

AIR FARES IN WESTERN EUROPE
10.2 p.m.
Lord NORTHFIELD Lord NORTHFIELD rose to ask Her Majesty's Government what action they propose to take, particularly in the light of the Council of Europe Assembly's study and Resolution No. 694 (1979), " Air Transport Policies ", to reduce air fares to the major cities of Western Europe. The noble Lord said: My Lords, I am glad to be able to put this Question which stands on the Order Paper in my name to the Government, and I am very grateful to the noble Lord on the Government Front Bench for staying rather late to reply to it. I put this Question for three preliminary reasons. First of all, as a good European, I think it is slightly ridiculous that all the fare bargains in air flights are to the United States and other parts of the world, and transport between the great cities of the countries with which we are seeking greater unity is one big expensive racket, to say the least. It hardly helps the spirit of European unity.
My second reason is that I think it is appropriate to ask for a preliminary comment of the Government on Resolution 694 of the Council of Europe Assembly, and on the speeches, and reports and explanatory memorandum of Mr. Bjork, the very energetic Swedish Member of the Assembly who did the preliminary report in June 1978 and now a new report in 1979. I hope the Minister will agree that it is an excellent, balanced, informative report and resolution, and I hope he will be able to give us some preliminary comments by the Government on it, because of course all these resolutions from the Council of Europe Assembly depend on their being adopted by the Ministers for them to become effective.
Thirdly, I suppose I put down this Question because I am an irritated, though I hope not irritable, traveller in aeroplanes. As I said, it is ridiculous that, we pay as much to fly to Scandinavia as to fly to Los Angeles, and there are no walk-on shuttle flights to places as near as Paris, that fares to our nearest neighbours are scandalously high in the
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general sense, and that only some element of cheap fares is beginning to creep in in Europe. It is annoying to any traveller in Europe that there is a jungle of fare systems. I, like many business and other travellers, am reduced to buying a journal called The Business Traveller which exists simply in order to inform businessmen how to profit from all the cheap fares, all the ways round, the rackets, the evasion, so to speak, of the regular prices, in order to get to a business destination cheaply. Perhaps by taking a weekend trip to a pigeon fancier's fair in Munich one can halve the cost of the flight and have the hotel thrown in free. We are all reduced to those ridiculous stratagems in Europe, because there is nothing comparable to the system which has grown up for Atlantic travel of cheap, freely known, flight fares. So those are my reasons for putting down this Question in the first place.
Why are the fares in Europe so high? Clearly it is because of excessive protectionism of national airlines by the Governments concerned, and I can understand that. I understand that such an infant industry from the late 1940s onwards, like other infant industries in history, needs a period of protection in order to grow. I also understand that it could be quite a long period in the case of the airline industry because of the huge costs of aircraft, the huge costs of operation, and the dangers of large losses by cutthroat competition. So one can understand that there will be a long period of protection for " infant industries", as they are known to the economists.
One can also understand that a good deal of protection is needed for the opening up of new routes by this comparatively new form of transport, especially internally. For example, one thinks of the difficulties that Air Inter had in making its routes profitable inside France when opening up new cities to their internal routes. For all those reasons one understands why there has been a long period of protection.
Surely since 1976 we have been in a quite different period of history. We ought now to be recognising this new era and doing something as regards European fares. Since 1976 several factors have blown fresh winds through the

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whole system of world air fares. First—and I am glad to note it—we have had the liberalisation policy of the United States' Administration which has led, as much as anything, to the new Bermuda Agreement. We have the new pricing freedom inside the United States and, only a few months ago, the removal of restrictions inside the United States. There are calls from America for greater competition, for multiple designation in flight paths and flight destinations, liberalised charter rules, market place pricing, and, of course, the United States has been pushing its new policy of liberalisation even to the extent of making itself unpopular. This is new and it is having a great effect.
The second thing that has happened is that, as Mr. Bjork's excellent report points out, in 1978, at any rate, as regards international routes, we had a 60 per cent. load factor. That should now, I hope, make it possible to reduce some of this protectionism and allow more liberalisation to take place without fears of great losses and bankruptcies.
The third factor that has occurred since 1976 is what I would call " the Laker explosion "—the penetration of Sir Freddy Laker's walk-on Skytrain system into the American routes, which not only opened up cheap travel but forced the other airlines to adopt their systems of APEX, Super-APEX, budget and stand-by fares, providing a complete range of cheap fares which the traveller can now quite easily choose from when he wants to fly to America.
Finally, we come—if one likes to press it this way—to what we might call " Laker Mark II ", by which now the Laker organisation can offer the earliest possible reservation if it is unable to accept a booking on the day concerned. So this element of advance reservation is allowed in the Skytrain system. This is a great change in the system of international air traffic. All these three factors together—the United States liberalisation, the growth to a 60 per cent. load factor in international flights and the Laker explosion—are having a totally revolutionising effect on air transport. They make IATA more flexible and—miracle, miracle!—no airline has collapsed as a result of the
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" Lakerism ", although I understand that some airlines are flying the Atlantic at below cost. In any case, the important thing—and it may not be entirely due to Freddy Laker—is that last summer at least there was a 25 per cent. increase in traffic in the air between the United Kingdom and the United States. Therefore, this opens up travel to more people, and does so by offering cheap fares.
When I look at this revolution which has broken into the situation since 1976—this is my next point—I fully realise that conditions in Europe (and I know that the Minister will want to say this, too) put limits on the fare reductions which we can expect compared with what is happening in cross-Atlantic traffic and compared with what is happening to traffic inside the United States itself. There are quite different conditions in Europe which make such dramatic fare reductions much more difficult. We have smaller aircraft; we do not have the mass travel by air that the United States have—80 per cent. of major travel in the United States is now by air and they have the resulting economies of scale from this which we, in Europe, cannot match. We have more creaming-off of traffic in Europe by charter activity, which has now reached 50 per cent. of normal traffic in Europe. Until recently we have had more costly fuel, and more uneconomic routes which still need support from the profitable ones. Above all, perhaps we have the contrast with the United States in geography. The United States have a better ratio of flying time to ground time because of distances in the United States. That leads to better aircraft utilisation, and there is, therefore, less time on the ground—and a better ability to offer reasonably cheap fares.
I realise that all these factors—and I say this to noble Lords quite openly—mean that one must put limits on expectations about reductions in fares in Europe, compared to those across the Atlantic and inside the United States. Overriding all that, making it even more difficult is one of the factors which I mentioned at the beginning—namely, national sovereignty leading to bilateral agreements between countries on point-to-point flying only; that is, London-Paris, but never London-Paris-Frankfurt, which would enable greater economies to be made—all this hideous nationalism which is limiting the

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commercial growth of really profitable routes taking in several cities across the whole pattern of Western Europe. Therefore, I fully admit that the difficulties are substantial.
In those circumstances, what can we hope for? First, I hope the Minister will say that there is at least some hope of " Lakerism ", if I may coin a phrase, in some form in Europe. I do not expect the Minister to comment on the Laker application to have flights to 35 cities in Western Europe. But I am talking about " Lakerism " which is, in effect, also being pressed upon Governments by the Commission of the European Community.
Their White Paper, which has just been received, suggests in fact that airlines—presumably free airlines such as the Laker airline—should have the right to compete on routes that have been carved up between national airlines if, for any period, they prove that they can offer a better or cheaper service. So in effect we now have the EEC Commission backing some form of Lakerism; that is, the ability to compete on some of these routes where a cheaper walk-on, no frills, whatever it is, simple system of air flights can be offered more cheaply. I hope, therefore, that the Minister will indicate that the Government are behind some liberalisation of this kind in Europe.
Secondly, I hope that we could have an indication that there shall be more freedom for small airlines, and for market prices where no cartel system between Governments is operating; more small airlines that can open up unusual routings, and charging whatever the market will bear. Thirdly, I would hope that we could press British Airways and other national carriers in Europe to develop more shuttle services between the great cities at low rates with no frills. If you like, bringing in Lakerism Mark II that I spoke about earlier on; that is, Lakerism under which there is in effect a Skytrain system, but also you can be offered the next available flight if the one you go for happens to be fully booked already.
We need now to move on from this rigid, monolithic system that we have mainly in Europe to something like Lakerism Mark II. I say all this knowing of course that British Airways and others are just beginning to offer some cheaper
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fares. That brings me to my final point. I think that the fare system needs to be categorised, simplified, made systematic in the way that the one across the Atlantic is, with its four or five clear categories from which a traveller can choose when he makes his reservation, and can choose to make 21 days in advance, or whatever it is, and get the cheapness that that then brings. I do hope that we can press Governments to agree that the jungle of fares needs simplifying now into something that is comparable to the reasonably understandable system that operates across the Atlantic.
My final words are that I know that the United Kingdom Government cannot do all this alone. This is a matter for agreement with highly nationalistic Governments, each desperately protecting its own airline in Western Europe. But I hope that the British Government will nail their colours to the mast of progressive liberalisation. I am not—and I want to make this absolutely clear—asking for an immediate free-for-all. That would get us nowhere, and indeed would perhaps end with us all complaining about some airlines going bankrupt, some routes being cancelled, et cetera. But if we go for progressive, gentle, steady liberalisation in the way that could be imagined, learning from the lessons of what has happened across the Atlantic, then perhaps we could open up cheaper inter-city traffic inside Europe.
Last of all, I hope that the Government, in broad principle at any rate, will support Resolution 694 of the Council of Europe Assembly when it comes to the Council of Ministers. It is there, in the Council and in ECAT—the European Council, or whatever it is called, for Air Transport—that the battles will have to take place for this liberalisation. I hope that the Government will say broadly, and without undue commitment at this stage to detail, that they are behind these pressures to open up the skies much more liberally now that the days of protectionism are less necessary, and now that we have had the lessons of what can be done across the Atlantic, and we can perhaps apply them in the proper form to traffic inside Europe.
10.20 p.m.
The Earl of SELKIRK: My Lords, I

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had not intended to speak tonight but I, wish to say what an extremely valuable speech the noble Lord, Lord Northfield, has made and how worthwhile it is for him to have raised this whole question of the really astonishing complexity of air fares. I believe we are still suffering from the international cartel which descended on the world shortly after the end of the last war, in which more or less every Government was involved and interested in keeping fares high. That has been the lot in this international field for a very long time and has prevented people from getting the full cheap benefit of aviation which could have been possible.
As Lord Northfield said, we are moving out of that state of affairs and I hope the Government will—I am fairly confident they will—take a vigorous step to liberalise and allow the free element of competition to come right into this whole sphere. Of course, one reason which has kept the system up is that many people who go by air do so at cost, as an expense, and are not desperately interested in the expenditure. So we have the astonishingly sharp differentiation that exists between scheduled flights on the one hand and specialised flights on the other, producing a quite different price, the latter generally being in respect of tour flights. This is a ridiculous separation with an absurdly wide variation in price which should be got round in one way or another.
The United States has many advantages, not least of which is the fact that one can travel great distances without going through the bother of customs and immigration which in Europe necessarily play a part in the whole issue. I do not want to speak at length because Lord Northfield has covered the subject extremely well. I would only add that it is high time the matter was raised fully and forcefully, and that he has done. I look forward—I must admit, with not too much hope—to some steps forward being taken and I hope that my noble friend who speaks for the Government will be able to say something positive on this matter.
10.23 p.m.
Lord PONSONBY of SHULBREDE: My Lords, I join with the noble Earl, Lord Selkirk, in thanking my noble friend Lord Northfield for raising, despite the lateness of the hour, a matter which is
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of great importance to many people in this country. It is a matter which has needed to be highlighted, particularly since the arrival of the cheap cross-Atlantic flights last year.
I was interested to hear Lord Northfield say he subscribed to Business Traveller and I hope he will place a copy of that magazine in the Library so that other noble Lords may consult it and see what information of use they can glean from it. It is certainly true that lower fares will benefit many people; particularly they will enable travel to be further encouraged. The figures for arrivals from North America into this country last year, the first year of cheap fares on the North Atlantic routes, show what sort of effect they can have on travel, and my noble friend is right in asking why we cannot have the same sort of impact in Europe. In particular one hopes that, in the terms of the report to which he referred, we may be able to see some form of cutting of fares on the more mature routes.
The noble Lord, Lord Northfield, referred to the report of 10th May of the Parliamentary Assembly of the Council of Europe which pointed out that 80 per cent. of all travel by public transport in the United States is by air. The figure to consider with this is that in Europe only 20 per cent. of all travel by public transport is by air, which points to the very substantial differences in the mode of transport in the United States and Europe. The other interesting fact to emerge from the report is that in Europe 50 per cent. of all flights are made by non-scheduled services, whereas in the United States only 5 per cent. of all flights are made by non-scheduled services. Those factors of themselves show that there is a much greater possibility of fare cutting when there is a higher proportion of scheduled services instead of a whole mass of services being locked up in non-scheduled or charter flights. It is interesting to note that last year and this year the number of charter flights across the North Atlantic has substantially decreased, which is the corollary of the cheaper Laker flights.
We all, I believe, appreciate the role of IATA and of the European Civil Aviation Conference in shaping and co-ordinating air transport policies and procedures, but I am sure there is a need

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for the liberalisation of some of these policies. The noble Lord, Lord Northfield, referred to the very useful report on air fares published by the EEC on 6th July. This report should, I gather, be seen as a White Paper. It suggests a broader range of tariffs, which would have the effect of providing a low-price ticket which could be purchased, subject to certain conditions, such as advance payment, only partially refunded if not used and not interchangeable. There is a suggestion in the report, in relation to the specific capacity of aircraft, that roughly 50 to 60 per cent. of seats at an economy class tariff should be allocated to passengers paying lower fares, but of course such passengers would be expected to pay more for any extras. In other words, they would have a no-frills service, and one hopes that something on these lines might be worked out.
We are all aware that the present fare structure is very complex, and one is keen to see it simplified. I recall that on a visit to the United States some years ago I discussed these matters with officials of the Embassy in Washington. They were arguing as strongly as they could for the simplification of the structure on the North American routes. Considerable simplification has been carried out there, and one hopes that some of that can spread to the more mature routes in Europe. One is thinking particularly of services to such places as Paris and Geneva, which are very heavily used at present.
The EEC report suggests that a receiving country should not be able to say " No " to a particular new service, except on environmental grounds, and one certainly hopes that the addition of new services could lead to a lowering of fares. One bears in mind, too, that within the British Isles themselves the addition of extra services might also lead to a lowering of certain fares.
When one thinks about the whole question of air fares, I believe it is fairly obvious that the more we are able to fill aircraft, the cheaper will be the services. The fact that recent figures have shown that the percentage occupation of aircraft has risen means that, if we are able to achieve this on a broader field, we shall in fact be able to move towards an era of still cheaper air services. I think the
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noble Lord, Lord Northfield, has performed a very useful function this evening (although it is now very late) in prodding us into thinking again about whether we can in fact make moves to reduce air fares, particularly on the more heavily-used routes in Europe; and I hope the Government will be able to respond encouragingly to his remarks.
10.31 p.m.
Lord TREFGARNE: My Lords, we are, not for the first time, very much in the debt of the noble Lord, Lord Northfield, for giving us the chance to discuss this important matter tonight. But before embarking on what I hope will be a full and helpful reply, may I mention two necessary pre-conditions to an effective and lasting low-fares policy. First, there must be an economic return to efficient operators. It is no service to the consumer for an airline to offer very low fares and then find itself in difficulty, and having either to increase its fares substantially or go out of business. Secondly, there must be no cutting back of standards of safety. British airlines enjoy a high reputation for safety, and this must be maintained. Subject to these conditions, the Government are anxious, of course, to see fares as low as possible.
It might be helpful to your Lordships if I outline the way in which fares on scheduled services are agreed. The airlines are primarily responsible for recommending what fares should be paid for any journey. They are in the best position to judge the economics of any particular route. Often, recommendations on fares are made through the machinery of the International Air Transport Association (IATA)—much maligned here this evening, but not, I think, wholly justifiably. I emphasise that IATA is an independent association of airlines, not of Governments. Approval of fares, whether agreed between airlines in IATA or by some other means, is done by Governments.
So far as most international air fares are concerned—and this includes Europe—the fares on scheduled services are subject to bilateral understandings which require that changes take place by agreement, and not unilaterally. It is not open to one Government to force the hand of another on fares matters, since either can object to a proposed fare change and

1789
effectively prevent it. Most European Governments, as the noble Lord, Lord Northfield, mentioned, are highly protective of their national carriers and would resist any unilateral attempt to reduce fares in such a way as to damage them. We know of none who would welcome anything like an unregulated market at this stage. Nevertheless, the United Kingdom has made significant achievements in securing a better deal for travellers in Europe. A recent report by the Institut du Transport Aerien of Paris said,
" the United Kingdom … continues to play a pioneering role in Europe in the fares field ",
and so it does.
Both the Government and airlines have been successful in effecting fare standstills and, indeed, fare decreases on scheduled services on existing routes, and in introducing new types of fares on new routes in Europe. On routes to Scandinavia, the normal economy fares have been reduced, and on the Italian services the economy fares have been held steady as costs and other fares rise. It is as a result of intervention by the Government that the new low excursion fares to Spain, announced last week, will be introduced in the autumn. These represent a very considerable saving on the normal fares. This process still goes on. The Department of Trade is pursuing with the Civil Aviation Authority a steady policy of identifying those European routes on which fares are out of line with costs, and we hope to achieve real reductions—that is by holding fares steady as costs rise—in fares on other routes. This is not a subject on which opinion is divided on party lines or any other and I should like to pay tribute to what was achieved under the previous Administration. We shall seek to continue the process of urging lower fares where they are out of line with costs. May I mention, in parenthesis, that fares on non-scheduled services to which several noble Lords referred are not regulated by Governments in Europe.
May I touch on one or two specific points made by noble Lords, and, particularly, the noble Lord, Lord Northfield. He referred to information on cheap fares and to the publication which he uses to get the best bargain. Cheap fares are possible only if aircraft are filled. The noble Lord referred to the necessary increase in load factors. This can be
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done only if the lowest fares are subject to conditions as to their use. Such conditions are confusing to the traveller, but are necessary if they are to lead to the filling of all the aircraft seats.
We think it is for the airlines and the travel trade to make sure that the passengers are made aware of all the options available; and that this information is passed on to the customers. The noble Lord also referred to international shuttle services. He was thinking particularly of Paris and, perhaps, Geneva. We have now an hourly service between London and Paris which is only one step from a pure shuttle service. There are problems apparently in extending the present internal shuttle services on to international routes. There are questions of the necessary international agreements and the real problem of wasting resources in providing the duplicate or back-up services which may operate at low load factors and which are required to provide a true shuttle service.
The noble Lord also referred to services in the USA. Perhaps he will remember, as I do, that when the shuttle was first introduced on the eastern seaboard there about 15 years ago, the back-up aeroplane was a Constellation. I wonder what the noble Lord would think if he turned up to fly to Paris and found himself going in, say, a Viscount. He might not be pleased. I think those are the main points to which the noble Lord referred. There were others which I shall take up if he wants to intervene.
None of the action I have outlined can be said to be in response to the Council of Europe's Resolution No. 694. We were ahead of that resolution, but we welcome it as a stimulus to bring the thinking of our bilateral partners in line with our own. I should caution noble Lords about drawing too close a parallel between civil aviation in Europe and in the United States. I note that Resolution 694 does not recommend that Europe should follow the United States into deregulating civil aviation which is happening there. In any event, as I have already pointed out, this would, in Europe, require the agreement of each of the States concerned.
The market for air travel is different in the United States from that in Europe. Although both have widely spread, large centres of population because the United

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States is a single political unit, it is likely that businesses and families will become more widely spread and hence provide an incentive for air travel. In general, a European family does not have, say, parents in Paris, cousins in Copenhagen, a nephew in Nice and an aunt in Aberdeen. If the American wishes to visit his relatives or some branch of his business and does not wish to use his car, he has no alternative but to fly: there is generally no other public transport. In Europe, on the other hand, only 20 per cent. of all travel by public transport is by air, compared with 80 per cent. in the USA. I know that we have heard those figures before tonight. However, Europe does enjoy a network of very low-cost charter services catering mainly for holiday traffic. About half the passenger traffic within Europe is carried by such services compared with only 5 per cent. in the USA. The noble Lord, Lord Ponsonby, mentioned just those figures.
When comparisons are made between the high level of fares in Europe and those in the United States, it is often the normal economy fare in Europe which is contrasted with a low fare on a trans-Atlantic or American route and which is subject to many conditions which limit its availability. The holder of the ticket at normal economy fare expects to get a seat at short notice; to be able to cancel his reservation or indeed just not to turn up without any penalty; to be able to use his ticket on another airline; and to stop over at some intermediate point without extra charge. All these elements have a cost, in that they involve the provision of extra capacity in order to cater for the " on-demand " passenger. On the other hand, the passenger in Europe who is prepared to make his reservation in advance with the understanding that some or all the fare he has paid will be forfeit if he does not travel on that particular flight can often do so at a fare which will bear comparison with those available elsewhere.
There are other factors which favour cheaper fares in the United States. Fuel is cheaper and other operating costs are lower because of differences in employment conditions and marketing methods which lead to higher productivity. But it is true that British Airways were not always among the leading world airlines
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in terms of productivity. There have been significant improvements recently when increased traffic has been carried without an increase in staff, and the Government are glad to know that this policy is continuing.
My Lords, I now turn to the question of the EEC's involvement in civil aviation. A memorandum entitled Contribution of the European Communities to the development of air transport services has just been sent by the Commission to the Council. This will be subject to the normal parliamentary process, including—dare I say it?—scrutiny by the dreaded Committee F. The proposals by the Commission have among their objectives a network of efficient services at prices as low as possible; financial soundness of the airlines and an increase in their productivity, and safeguards for the interests of workers in the industry and the general public. The Government support these objectives. As we said in our Manifesto for Europe,
" The principles of competition which govern other industries in the Community should be applied to air travel ".
I note that the Commission intend to propose to the Council of Ministers measures to apply the Community's rules of competition to air transport. At this stage, the Commission's proposals are only a declaration of intent. When these are converted to specific proposals, we will judge them on their merits, examining them carefully with particular regard to the spread of the Community's powers. Most of the proposals will require the unanimous approval of the Council of Ministers before they are adopted. A programme of this nature is likely to take several years to pass through the Community machinery. But we shall adopt a constructive approach to these negotiations and our intention is that the outcome will be in the best interests of the air transport industry and the consumers.
Finally, I must make some reference to the interests of our airlines. Unlike most countries in Europe, the United Kingdom has a number of independent airlines operating scheduled and charter services in Europe. The Government have noted with satisfaction that the Civil Aviation Authority has pursued a liberal policy towards the licensing of independent airlines to mount scheduled services

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between provincial points and Europe. We seek to encourage competition between airlines as a means of achieving low fares. It is however important that these fares are consistent with the viability of efficient operators. In this way we can ensure a variety of air services at the lowest possible fares, with the flexibility required to meet the consumers' needs.
Perhaps just at that point I can mention as a caveat the IATA meeting just now in progress in Geneva, which is concerned with agreeing—I am sorry to say—higher fares in Europe, following the recent increases in fuel costs. There is no escaping the fact that increased costs of fuel will have an impact on the level of fares. However, any fares increases agreed by IATA, as I said before, will have to be agreed between Governments, and we will certainly be looking very carefully at any proposals which may emerge.
May I end by saying that the Government will pursue a policy aimed at achieving the lowest fares without departing from the need for securing a viable industry operating to the highest standards and providing the type of service required by the customer. Perhaps the most important way of achieving this result is by promoting effective competition among airlines; but, apart from that, we shall do our best to see to it that the industry operates in the best possible commercial environment, regulated only enough to secure proper standards of safety, compliance with our international obligations, and a generally healthy industry.

DARTMOOR COMMONS BILL [H.L.]
Reported from the Select Committee with amendments and recommitted to an Unopposed Bill Committee.
SCOTTISH EQUITABLE LIFE ASSURANCE SOCIETY BILL
Reported from the Unopposed Bill Committee with amendments.
SEVERN-TRENT WATER AUTHORITY BILL
Brought from the Commons, read la, and referred to the Examiners.