Lords Sitting of 21 June 1979

Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Norwich):
The LORD CHANCELLOR on the Woolsack.
Several Loords—Took the Oath.

RHODESIA SANCTIONS: BINGHAM REPORT REVELATIONS
Lord HATCH of LUSBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further action they intend to take over the revelations of the Bingham Report.
Lord TREFGARNE: My Lords, as your Lordships know, this is an issue which the previous Government were unable to resolve. My right honourable friend the Lord Privy Seal stated in another place on 13th June that the Government are considering the matter and that a Statement will be made as soon as possible.
Lord HATCH of LUSBY: My Lords, I thank the noble Lord for his courtesy in answering my Question. May I ask him to draw to his right honourable friend's notice the fact that it was a member of his party who stated that, arising out of the Bingham Report, the whole integrity of Parliament was at stake and that, therefore, there is a very strong inter-party case for further examination of the responsibility for the revelations that were made by Bingham in his report?
Lord TREFGARNE: My Lords, I will certainly draw those words to my right honourable friend's attention.
The Earl of LAUDERDALE: My Lords, would the noble Lord not agree
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that it is the integrity not of Parliament but of the United Nations which is at stake in this ridiculous performance of sanctions on Rhodesia which have been broken by country after country?
Lord BROCKWAY: My Lords, is there not a great danger—
Several noble Lords: Order!
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, I understand that the noble Lord, Lord Hale, was called for the next Question.

DIOXIN: CONTROL OF USE
3.3 p.m.
Lord HALE: My Lords, if it be the wish of the House, then, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps have been taken to restrict and control the continued import of products containing dioxin, in view of the evidence of its extreme toxicity and of recent drastic action taken in other countries.
Lord SANDYS: My Lords, the necessary safeguards in the United Kingdom relate to marketing generally, rather than only to imports. The Medicines (Hexachlorophane Prohibition) Order 1973 prescribes the very limited circumstances in which such products can be supplied for medicinal and allied purposes. When they are supplied for use on the land, their marketing is subject to the Pesticides Safety Precautions Scheme. In the light of data from our own and other countries, the Advisory Committee on Pesticides has lately undertaken a detailed review of United Kingdom safeguards concerned with dioxin. I am sending the noble Lord a copy of the reassuring report which the committee has rendered.
Lord HALE: My Lords, while thanking the Minister for that helpful Answer, it was not quite clear. I thought he said that the Committee on Pesticides was considering the matter, and then I under-

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stood him to say that he would send me a copy of the report. Does he mean that when it arrives one can still make representations and submit evidence to the committee, or what is the procedure? May I make just this quick point: Dioxin has been banned throughout America, or certainly throughout the State of Oregon and the forest there, by the Experimental Advisory Agency. It is the subject of what is nearly a civil war in Italy. It has been described by a prominent American chemist as the most dangerous poison in the world, and it is now known that under heat people are being killed by innocently putting herbs on bonfires.
Lord SANDYS: My Lords, the noble Lord underlines the fact that this is a very technical subject and certain other countries have indeed banned it. I would remind the noble Lord that it is banned in the United States of America for certain purposes only, and it is perfectly true that a ban exists in the Netherlands. It is, however, in use in France and Germany subject to limitations and inspections. But I would remind the noble Lord of one other factor, which is that the Advisory Committee on Pesticides is the body which advises the Government on all matters relating to this and no Government, past or present, has ever acted other than upon the advice of that committee.
Lord WYNNE-JONES: My Lords, will the noble Lord pay attention to the fact that, although he is quite right in saying that expert opinion has been consulted, and indeed a lot of trouble has been taken, there is still a good deal of disquiet about this matter? If the consequences are as serious as has been suggested by several people, they can affect mankind quite considerably. Therefore, it is not good enough simply to say that expert advice has been taken. I speak as one who in some respects is sometimes regarded as an expert, and therefore I know only too well how dangerous it is to rely simply on such expert advice. Therefore, will the noble Lord press the Government to pay the closest possible attention to this matter and to look into all the ramifications?
Lord SANDYS: My Lords, I will most certainly draw the attention of my right
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honourable friend to all the remarks made by both noble Lords in your Lordships' House this afternoon. Of course, this matter has very wide implications in the whole field of pollution.

LICENSING COMPENSATION FUND: DISPOSAL OF MONIES
3.8 p.m.
The Earl of KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the current position of the Licensing Compensation Fund.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, discussions have for a considerable time been in progress between the Home Office and the Brewers' Society and licensed trade organisations about a possible scheme for disposing of the funds. We are now waiting for those bodies to approach us with modified proposals as a basis for further discussion.
The Earl of KIMBERLEY: My Lords, I thank the Minister for that Answer. Is he aware that last July—which I agree was not in the time of this Government—discussions were taking place between the Department of Health and Social Security, the Home Office and the Treasury over the disposal of these funds? Secondly, is he aware that the National and Medical Councils on Alcoholism are charitable bodies? Therefore, if the Brewers' Society and the Licensed Victuallers' Association have given their blessing to donating 50 per cent. to charity, would this not cut down public expenditure by having the two alcoholic councils subsidised by that, instead of by the Government?
Lord BELSTEAD: My Lords, I am aware that discussions on the disposal of these funds have been going on for a very long time indeed, and my noble friend and other noble Lords have shown considerable patience with the replies which successive Ministers have had to give in answer to this question. But I ought to say this to my noble friend. Following informal talks in February, the Brewers'

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Society undertook to produce a draft of a scheme under which the Society would take on a major part of the administration of repaying 50 per cent. of the fund. If that can be done, then the last part of the noble Earl's supplementary—namely, about setting up a trust fund—could possibly also be achieved. So that, first, there has to be a repayment before a trust fund can be set up.
The Earl of KIMBERLEY: My Lords, I thank my noble friend for that answer.

BRITISH RAIL: CUTS IN DIESEL SERVICES
3.10 p.m.
Viscount SIDMOUTH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with British Railways' reported decision to curtail diesel services in rural areas, owing to shortage of fuel.
Lord MOWBRAY and STOURTON: My Lords, it is for the British Railways Board to decide what changes in rail services are needed in order to save fuel.
Viscount SIDMOUTH: My Lords, while thanking the Minister for that reply, may I ask him whether he is aware that British Rail already seem to be in some trouble about replacing their diesel stock, specifically the multiple units which run some of the commuter services? There is a danger, therefore, that the fuel shortage might be used as an excuse for cutting down or, indeed, cutting out some of these services, thereby increasing the use of petrol.
Lord MOWBRAY and STOURTON: My Lords, our understanding is that the British Railways Board intend to maintain freight services—for example, coal to power stations and services for work and business travel. The cuts are concentrated on off-peak local passenger services and are effected by reducing the number of trains and shortening them. Also, good housekeeping methods, such as not keeping engines running, are being implemented.
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I apologise for my laryngitis, which makes it hard for your Lordships to hear me.
Baroness STEDMAN: My Lords, is the noble Lord able to give an assurance to the House that while we expect British Rail and the National Bus Corporation to play their part in saving fuel in so far as they can, it is essential that our rural services should be kept going and that areas of the country should not be deprived of all kinds of transport? Is he prepared to give an assurance to the House that if the situation becomes worse he will see what he can do and what efforts he can make to ensure if necessary, that extra fuel is made available to British Rail and to the National Bus Corporation in order to maintain services in rural areas?
Lord MOWBRAY and STOURTON: My Lords, I appreciate totally what the noble Baroness is saying. The British Railways Board have every intention of keeping all the services possible going. If the situation were to worsen, they would certainly have consultations with my right honourable friend. At the moment, the amount of fuel coming into this country is the same as last year. It is merely that the fuel demand in this country has increased.
Lord SHINWELL: My Lords, is it necessary altogether to suspend railway traffic in rural areas simply because there is a fuel shortage? Is there not another form of fuel? I am no expert on this subject, but perhaps the noble Lord can inform me whether or not it would be possible to utilise some of the steam engines, using coal as fuel, as a temporary measure until the oil fuel shortage is overcome?
Lord MOWBRAY and STOURTON: My Lords, the versatility of the mind of the noble Lord, Lord Shinwell, is such as to command admiration from all quarters. I am sure that the British Railways Board, if the need were to arise, would consider such a measure, but at the moment it is not necessary. Services in rural areas are not being severely cut. The British Railways Board have every intention of keeping going as good a service as is possible. As I have already said, the cuts at the moment are minimal.
Lord NORTHFIELD: My Lords, is it not the case that we, the British, have agreed with our partners in the European Economic Community to cut by 5 per cent. this year our consumption of imported fuels? Is it not therefore inevitable that marginal services, like those in rural areas, will suffer unless a careful eye is kept on them? Can the Minister not respond to the question which was put by my noble friend on the Front Bench and say that, in the event of any danger of that kind, he will do his best to make sure that at least these services are kept going?
Lord MOWBRAY and STOURTON: My Lords, this is a matter for future policy. The necessity does not arise in the present situation. British Rail are hoping to cut their use of diesel fuel by some 4½ per cent., by cutting down on a few off-peak period trains and by better housekeeping. If the situation were to worsen, my right honourable friend would no doubt have consultations with the British Railways Board.
Lord MURRAY of GRAVESEND: My Lords, is not this the opportunity for the Government to assist British Rail in every way they can to bring people back to the railways and to take some of the traffic off the roads?
Lord MOWBRAY and STOURTON: My Lords, if that were to happen, the British Railways Board would be very pleased.
Lord WYNNE-JONES: My Lords, while I do not wish to exacerbate the noble Lord's laryngitis, may I ask him whether British Rail have considered an electro-chemical solution to their problem? —namely, the introduction of battery operated trains which 60 years ago in Ireland were run with great success. Battery operated trains are particularly suitable for running short distances and for this type of service. Would the noble Lord suggest to British Rail that the introduction of battery operated trains, which would not involve the use of diesel or, indeed, any hydro-carbon fuel, might be the ideal solution to this problem?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord, Lord Wynne-Jones, has given me much food for
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thought, none of which I knew about, and my brief does not inform me! However, I can tell the House that a joint review of main line electrification is in progress in the Department of Transport, and my right honourable friend the Minister of Transport expects to receive an interim report this summer. He will, of course, take into account any energy implications contained in this report.

MPs' AND MINISTERS' SALARIES
Lord SANDYS: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. this afternoon the Lord President of the Council will make a Statement on the pay of Members of Parliament and Ministers.

JUSTICES OF THE PEACE BILL [H.L.]
3.17 p.m.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I rise to move that this Bill be now read a second time. It consolidates quite a number of enactments relating mainly to the framework of organisations within which justices of the peace and their clerks exist and operate. The enactments date from as wide a range as 1742 and 1978. It is a pure consolidation Bill. It makes no changes in the existing law and, if read a second time, will be referred to the Joint Committee on Consolidation Bills in the usual way. I beg to move.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
Lord ELWYN-JONES: My Lords, I think that the House will welcome this consolidation Bill, like the one which is to follow it, as a helpful addition to the considerable achievement which has taken place in the consolidation of Acts of Parliament. Already during the course of this year there have been no fewer than 14 consolidation Acts, some of them very substantial. I think it is fitting to pay tribute to those who have done, and who continue to do, the difficult work of consolidation, particularly parliamentary counsel and those at the Law Commission and in Government departments who devote a lot of time and trouble to this

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task, and also to the Members of both Houses who sit on the Joint Committee on Consolidation Bills.
The immediate Bill consolidating legislation relating to justices of the peace will, I know, be welcomed by them, embracing as it does, as the noble and learned Lord the Lord Chancellor has said, legislation as old as 1742 and as young as 1978. Anything that can be done to help the magistrates in the performance of their duty is clearly beneficial, because they play a vital role in the administration of justice and do so voluntarily, often at great inconvenience to themselves. I think it is desirable that from time to time their work should receive acknowledgement in your Lordships' House.
The LORD CHANCELLOR: My Lords, I am very grateful to the noble and learned Lord for the gracious words which he has spoken. I know that they will give profound satisfaction to those to whom he has referred. I think I might say—and it will be no secret to either of us—that the preparatory work for the Bills which I am now proposing, and which for some time to come I shall be proposing, was carried on under the auspices of the noble and learned Lord.
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

SALE OF GOODS BILL [H.L.]
3.20 p.m.
The LORD CHANCELLOR: My Lords, I rise to move that this Bill be read a second time. This again is consolidation: it extends to the whole of the United Kingdom and is concerned with the very important legislation relating to the sale of goods. I am particularly glad that this consolidation has come forward so early in this Parliament, and I am sure that your Lordships will wish it to be speedily enacted. If the Bill is given a Second Reading, it will be referred to the Joint Select Committee under the chairmanship of the noble and learned Lord, Lord Keith of Kinkel, in the usual way.
There is one somewhat unusual feature about this particular Bill, to which I ought perhaps to draw your Lordships' attention.
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It restates the old law as it has been since 1894 as well as providing a clear statement of the position for the future. Why? Because in its nature it cannot be retrospective; different rules apply to contracts, depending upon whether they were made, for instance, under the old law which has been changed from time to time —in 1967, 1973 and 1978—and, of course, the older contracts are governed by the older law. I hope the Joint Select Committee, and indeed the eventual users of the statute, will find Schedule 1 to the Bill of assistance to them. I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
Lord ELWYN-JONES: My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor for his explanation of the interesting innovations in this Bill. It is long overdue, and I am grateful to him for his earlier generous references to myself.
The LORD CHANCELLOR: My Lords, I thank the noble and learned Lord. This, again, is something as to which I have to acknowledge the very large responsibility of the noble and learned Lord for the preparation of this, as of other measures.
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

CONSERVATION OF WILD CREATURES AND WILD PLANTS (AMENDMENT) BILL [H.L.]
3.23 p.m.
Lord SKELMERSDALE: My Lords, 10 days ago I was giving preliminary thought as to what I should say on this occasion, bearing in mind that it would have been the third time of asking your Lordships to give a Second Reading to this particular Bill. However, I am glad to be able to tell you that this afternoon the scenario is somewhat different, for reasons which I will now explain. Owing to the rather late arrival this morning of the Official Report in your Lordships' House, many of your Lordships may not have had the benefit—at least I hope it is a benefit; I think it is—of seeing my Question for Written Answer and the Answer to it

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given by my noble friend Lord Mowbray and Stourton, so with the leave of the House I will take the unusual step of actually reading from column 1102 of the Official Report. My Question was to ask Her Majesty's Government:
"Whether they intend to strengthen legislation to protect wildlife in the near future".
My noble friend's reply was:
"Yes. It is our intention to introduce in this Session a Bill which, in broad terms, will seek to strengthen the protection afforded to wildlife and their habitats and to embrace our international obligations".
As your Lordships are undoubtedly aware by now, the aim of my Bill, to which I had intended to ask your Lordships to give a Second Reading today, was to extend and strengthen the provisions for protecting and conserving wild creatures and wild plants, as indeed does the Government Bill which we now know has the draft title of the Countryside and Wildlife Bill. My own Bill, the Conservation of Wild Creatures and Wild Plants (Amendment) Bill, had the support of the Nature Conservancy Council, the Government, the Department of the Environment itself—which, I might say, do not necessarily go together—and all the voluntary conservation bodies, all of whom worked extremely hard and extensively with me in its preparation, as indeed did the loyal servants of this House, who so often do most of the work but so seldom get any of the credit, and I hope on this occasion they will take it as being given.
It is my experience in the field of conservation legislation that the Nature Conservancy Council and the various voluntary bodies, who in effect operate and police our wildlife legislation, need more time than other sections of the community to forward their ideas to the appropriate Government departments and the voluntary pressure groups. I shall be most grateful, therefore, if my noble friend will be prepared to elucidate just a little more at this stage as to the broad fields that the wildlife section of the proposed Government Bill will cover. Also, bearing in mind the great expertise in this subject held by Members of your Lordships' House, I hope he will use his best endeavours to ensure that this important Government Bill comes up for discussion in this House before it goes to another place. Notwithstanding the answers to
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those two questions, in the circumstances I beg leave to withdraw the Conservation of Wild Creatures and Wild Plants (Amendment) Bill.
Moved, That the Bill be withdrawn—(Lord Skelmersdale.)
Lord MOWBRAY and STOURTON: My Lords, I should like to thank my noble friend for having agreed to withdraw his Bill. I regret that I am unable to elucidate for him further what the Government intend to put in their Bill. We have said that we arc willing to take cognisance of all his proposed legislation, and if in the interval he would like to be in touch with me and with my right honourable friend, we will do everything possible to take his views into account. Whether it will start in this House or another place I am afraid I can give my noble friend no guarantee, but I can assure him that I will do my best to see that any wishes he has are put into practice, or those of any other of your Lordships who have special interests.
Baroness STEDMAN: My Lords, from this side of the House I should like to say how much we welcome the opportunity in the near future of perhaps having a rather wider Bill than this one; and, at the same time, I should like to offer my regrets to the noble Lord, Lord Skelmersdale, after all the work he has put into this Bill, that he is not going to have the credit for it.
Lord SKELMERSDALE: My Lords, I am very grateful to both the noble Baroness, Lady Stedman, and my noble friend.
On Question, Bill, by leave, withdrawn.

THE SHIPPING INDUSTRY AND ECC REPORT
3.28 p.m.
Viscount ROCHDALErose to call attention to the problems of the shipping industry and to the Twelfth Report of last Session of the European Communities Committee on EEC shipping policy (H.L. 70, 1978–79); and to move for Papers. The noble Viscount said: My Lords, in calling attention to the problems

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of the shipping industry and in particular to the Twelfth Report of your Lordships' Select Committee on European Affairs, I do not have to remind your Lordships how vital our shipping industry is to the United Kingdom. We all know that that goes without saying, but, regrettably, I suggest that it is all too often interpreted as being taken for granted and, while that may be regarded as a compliment, it is, I suggest, a rather dangerous compliment.
In my Motion, I refer to the Twelfth Report for 1978–79, which deals with shipping policy generally and with competition from cargo liner fleets of State trading countries in particular. Your Lordships will have noticed that the Committee recommended that this important matter should be debated in your Lordships' House but should be debated against a background of much wider shipping policy. That is the purpose of my Motion today.
The noble Lord, Lord Trevelyan, who is Chairman of Sub-Committee B, which really produced the Twelfth Report, did me the honour some time back to invite me to move the Resolution which his Sub-committee and the Select Committee itself recommended, and I am most grateful to him for that invitation. Originally, the Motion was down to be debated on 12th April but of course, like other debates, it fell with the general election. It is not without significance that there have been important developments in this field in the interim period, and of course, in saying that, I am not referring to the election but to other relevant developments. I mentioned the noble Lord, Lord Trevelyan. I feel I must say this. The noble Lord is regrettably not with us today because, as many of your Lordships will know, he has recently undergone some serious operations. I spoke to Lady Trevelyan this morning to find out how he was getting on, and your Lordships will, I am sure, be glad to hear that, while his progress is slow, progress is being maintained. I would like to send him, personally, a hope that he will very soon be in his place in this Chamber again.
My Lords, I want to start with a brief look at the United Kingdom shipping industry as a whole and its position in the world today, in order that, coming to more particular points, one can have
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the right perspective. The United Kingdom shipping industry has, I suggest—and I can say this as I have no personal axe to grind—much to be proud of. It stands fourth in tonnage in the world after Japan, Liberia and Greece. Its ships are today, on an average, no more than seven years old, and they are highly sophisticated. The ships owned and registered in this country represent something like 7 per cent. of world tonnage. The industry employs 80,000 people directly, and it contributes the remarkable —as I think I can say—figure of £l½ billion sterling a year to the United Kingdom balance of payments. Its record for investment as an industry can be said to be second to none in this country. That investment of course includes a lot of new technology, and it has been estimated that, between 1966 and 1976, the investment was the equivalent of £1 million a day. That is a pretty remarkable figure.
The industry has led the world in the development of container ships, and let us remember that, broadly, one modern container ship can be said to be the equivalent of something like ten traditional cargo liners. It has the largest refrigerated cargo fleet in the world, the second largest gas fleet, the third largest chemical fleet, and, along with those material assets, it has made great strides to match the selection and training of seafarers at all levels to the high standard of its fleet. Admittedly, it is no longer right at the top of the tree dominating the world's fleets as it used to be. But I do feel that what I have quoted are impressive facts, and although the return on capital has been rather varied at times, the United Kingdom shipping fleet really has nothing to be ashamed of in its efforts to keep right ahead and to meet the major problems that confront world shipping as a whole today.
I would suggest to your Lordships that shipping is probably the most vulnerable of all industries to outside economic influences. If we look at the world shipping picture since the OPEC crisis in 1973, what do we see? We see that it has experienced the worst recession since the 1930s. A massive slowing down in the demand for shipping, together with a huge world order book inflating the world's fleets, resulted in a collapse in freight rates and severe over-tonnaging.

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Although, of course, the situation varies with different sections of the industry, if we take one example—that of tankers —current thinking for tankers is that the proper balance between supply and demand is unlikely to be achieved until at any rate the early 1980s. This world surplus of tonnage, which has been with us already for some years now, is not correcting itself anything like as quickly as one would like, perhaps due to some extent to the understandable desire of many Governments to see what they can do to maintain employment in their shipyards.
In mid-1978, just a year ago, the deadweight tonnage of ships laid up worldwide was 57 million tonnes, and it has been estimated that slow speed steaming disguised at least a further similar amount. In short, one-sixth of the world's fleet, largely tankers, was surplus. During the second half of 1978, there was an improvement, laid-up tonnage falling to some 30 million tonnes and freight rates increasing to levels which provide, as I understand it, a degree of viability. But since then events in Iran and uncertainty of world trade, from whatever cause it may arise, have left a very inscrutable future.
The United Kingdom, of course, has not been immune to all these events but has probably fared rather better than average, at any rate up to 1977. However, in 1978 our situation deteriorated and in the middle of last year 6 million tonnes or 13 per cent. of our fleet were inactive. There have, of course, been some bright spots—ferry operations, cruise ships. The position for container ships, to which I have already referred, has also been good, but even here there are now signs of over-tonnaging. At any rate, our laid-up tonnage has dropped to some 3½ million tonnes, and this includes some disposals, but the outlook is still very obscure. So the situation is a very difficult and murky one, and it is in that situation that we have today three major problems, among others, which I want to look at.
There is, first of all, the United Nations Code for Liner Conferences. There is the friction caused in Western circles by certain aspects of United States shipping policy. And then there is the matter
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referred to specifically in my Motion—the impact of unfair competition from the cargo liners of State trading countries. I shall largely confine my comments to those three issues in the order in which I have mentioned them, because I think they build up logically in that way. But there are, of course, other problems. There are the efforts in UNCTAD to deal with and regulate bulk trades; there is the question of flags of convenience; there are the discrimination practices of certain countries, including the State trading countries. No doubt other noble Lords who will be speaking from great experience will deal with those points as well. I may make just a very brief comment later on the bulk trades.
As regards the United Nations Code for Liner Conferences, I should remind your Lordships that there are in the world something like 300 conferences. They play an extraordinarily important part in the United Kingdom shipping industry. They have, of course, from time to time—let us admit it—caused critical comment from various directions. They have been regarded as cartels, and in fact they are. I certainly shall not go into any details as regards that now: suffice it to say that when the Committee of Inquiry, of which I had the privilege to be chairman, reported to the Government of the day in 1970, we came to the conclusion, after very careful study and taking a great deal of evidence, that if shippers who were not able to charter complete ships for their own trade were to have the regular and efficient service required for their trade at quoted prices, and if shipowners, with their capital intensive industry were able to provide that on a viable basis, then the so-called "closed conference" was the answer. We pointed out that the system must be properly monitored and that it was really essential although one recognised then, as one does today, that the closed conference is anathema in the United States. In passing I should like to stick my neck out and urge some of our more leading industrial shippers to take a more active personal interest in shippers' councils, the work of which is so important when it comes to the consideration and operation of conferences. However, I must, of course, remind your Lordships that shippers' councils are also, I think, illegal in the United States.

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The problem to which we now particularly come as regards liner conferences concerns the question of developing countries, which naturally want to have access to membership of these conferences that serve their own trade, and they want to have some allocation of their own trade. The United Nations Liner Code of 1974 tried to bring that about—indeed, that was its purpose. The United Kingdom shipping industry and, I think, successive Governments, have always recognised that some access to these conferences was reasonable. But the United Nations code, which as I say was intended to bring that about, caused considerable doubts and difficulties. The United Kingdom did not accept or ratify it. I shall not go into the details. They are involved and admirably laid out in another report of your Lordships' Select Committee—the 25th Report for 1977–78 —although that report, at the time, was not discussed in your Lordships' House.
Very briefly, the code provided for access to conferences by developing countries and the sharing of their cargoes to and from them on the basis of the so-called 40–40–20 formula which I have no doubt your Lordships know all about. The difficulty arose not only from the provisions of the code itself, which many felt were far too rigid, probably unworkable and even likely to result in the mandatory transfer of traffic from efficient lines to inefficient lines. That was one of the problems. However, the other problem was that it created considerable differences of opinion in the EEC as to how member-States should react to it, and there was uncertainty as to what should be the correct Community attitude under the Treaty of Rome to its members ratifying the code.
After considerable and lengthy discussions in Brussels, a compromise was arrived at only early this year—this has been going on since 1974. Briefly that compromise accepted the provisions as regards trade with developing countries, but agreed that trade between member-States of the EEC and OECD countries should continue to be allocated on a commercial basis. A Statement to that effect was made in another place by the Secretary of State for Trade on 17th May last.
Whether this compromise would prove
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adequate to maintain the viability of the shipping lines of the great maritime nations, including ourselves, with all their immense in-built investment, or whether indeed it would satisfy the aspirations of the developing countries was a matter for conjecture. At any rate, this compromise had to be ratified last month at the UNCTAD Conference in Manila. As I understand it, the outcome was that there were varying degrees of acceptability expressed by a great number of countries, some abstensions and a few outright objections. In the end, a resolution was agreed without dissent which, so far as I understand it, seems to have the effect of encouraging all concerned, including the developing countries, to get on with arrangements, and instructing the Secretary General of the United Nations to lend advice and help developing countries where called for, and to carry out certain monitoring to see how progress was being made. At any rate, it seems as though the resolution effectively closes the debate for the time being.
So much for that matter. However, before I leave the Manila conference may I say that another resolution on the bulk trades was also passed. That resolution dealt with bulk trades and flags of convenience, but it is quite clear that there was no meeting of minds between the West on the one hand and the rest of the world on the other. I imagine that these subjects will come up again for discussion at the Ninth Session of the UNCTAD Committee on Shipping, which I believe is due to take place in 1980. I hope that other noble Lords will pick up these points. What is significant—and this is the only reason why I say anything about it at all—is that the OECD countries, taking theirlead from the United Kingdom, urged that the present commercial basis for the bulk trades was infinitely better than any form of regulations, but they were outvoted by the rest in an omnibus resolution dealing with this and other matters. What is significant, and really encouraging, is that on this occasion all the West voted as one. I hope that my noble friend the Minister will have something to say on that.
The instance of the West voting together is important and leads me to my next point—namely, that the Western maritime countries must make a concerted approach on a number of matters.

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However, the point that I want to make is one that makes this concerted approach more difficult and it stems from across the Atlantic, from the United States. In the United States shipping policy is, in many respects, quite different from that of other Western maritime nations. These Western nations, and indeed most others, recognise the importance in trading terms of the rationalisation which is provided by the closed conference system. For that reason, for the most part liner conference activities are exempted from the scope of national anti-monopoly legislation. But, on the other hand, when it comes to the United States, the spectre of United States' anti-trust monopoly legislation overhangs all the shipping operations, and American attempts to impose their anti-trust laws on international liner shipping have given rise to jurisdictional disputes between the United States and Governments at the other end of the trade. This has happened on a number of occasions. Considerable efforts were made—and I am very glad that the noble Lord, Lord Goronwy-Roberts, is following me because I am sure that he took part in this and helped it along—by the United States and Western European Governments to achieve some long-term understanding in their mutual trades. Progress was certainly made, but the events which I shall now mention have certainly threatened to set back that progress.
Following Grand Jury investigations in Washington, criminal indictments alleging breach of Section 1 of the Sherman Act were handed down to various shipping lines, including certain United Kingdom lines and United Kingdom nationals. Naturally, this prompted—and I think rightly—our Secretary of State for Trade and the President of the General Council of British Shipping to make very strong statements deploring this action, referring to it as quite prejudicial to any progress in understanding between us. It was unilateral action taken by the United States and does not help Western countries getting together on shipping matters.
In the event, some quite substantial fines were demanded and have been paid. One hopes that this will be the end of the affair, but that remains to be seen. Naturally, one cannot condone the breaking of the laws of another country by one's own nationals, but this surely is a
1122
different situation. It leaves a sour taste in the mouth and must be a serious setback to objective discussions in the future. However, some modus vivendi between the United States and its European shipping partners must be reached; that is absolutely essential. At a time when we are faced with very difficult world trading conditions, a recession of no mean magnitude, and with the non-commercial activities of Soviet shipping lines, we, in the West, cannot afford to argue among ourselves. It is farcical and tragic; we must work in concert.
That brings me to the point raised in the Twelfth Report about Russian shipping. I use the word "Russian" for short; I should perhaps say the Comecon countries. For the most part Russian shipping lines are not members of liner conferences. As the Twelfth Report admirably points out, they have a rapidly expanding fleet; they seem to have a bottomless purse; they undercut the conference rates substantially and take the cream of the trade. They are doing this to an alarming extent.
Judged on the basis of United Kingdom accounting principles that could be done only at a loss, but I understand that with their accounting approach they can conveniently claim that they are making a profit. Therefore that would exonerate them from the accusation of unfair competition. I have heard it suggested in this country that nations are free to run their own commercial operations and accounting procedures according to their own lights. That sounds logical enough. However, in a complex industrial world where international trade is so important to all of us, some degree of reciprocity is surely needed. In the past various attempts have been made to come to grips with this problem, both on a bilateral basis in the Anglo-Soviet talks in the Black Sea in 1977, and in such international organisations as the Consultative Shipping Group, which comprises Western European countries, Japan, and the OECD.
There has been no reciprocity from Russia and little has been achieved. With the impact growing worse, an attempt was made to discuss this whole question in Brussels in the hope that the collective muscle of the Community might prove to be effective. As the Twelfth Report

1123
shows, after considerable discussion a very promising suggestion was made. It involved concerted action, first, in the form of fairly widespread monitoring of the routes as to what was happening, which could then be followed, as necessary, by appropriate counter-measures. However, in the event, regrettably that was entirely dropped and all that was left was a very diluted form of monitoring on a minor number of routes. All one can say is that the will to do anything really effective was not there in Europe.
Of course, shipping is more important to some countries than it is to others. Some countries, even maritime countries, may have other reasons for not wanting to antagonise Russia in this instance. They know that Russia is already irritated by the reactions from the West. However, from the United Kingdom's point of view this situation is really serious. I understand that as far back as 1977 the spokesman of the late Government, Mr. Clinton Davis, made it abundantly clear that there could be no further bilateral talks unless the Russians could show some degree of flexibility in their attitude to individual cases. I am told that they have at last agreed to something that may be taken as a feather in the wind. A small degree of flexibility may now be possible in that they have agreed to join the India, Pakistan and Bangladesh Conference on conference terms. Whether or not this is to be seen as a degree of softening up, I do not know.
Last week there was a meeting in London of the Anglo-Soviet Joint Maritime Commission. I do not know what happened at that meeting. Perhaps my noble friend on the Front Bench will be able to tell us. I rather doubt whether anything relevant occurred. Failing that, I shall look with great interest to see what suggestions other noble Lords and noble Lords from both Front Benches have as to how this problem should be tackled. I am afraid that I have spoken for a long time, but this is a very difficult and technical matter. I have tried to build up, in correct logical order, to the point raised in the Twelfth Report. My Lords, I beg to move for Papers.

MPs' AND MINISTERS' SALARIES
3.59 p.m.
Lord SOAMES: My Lords, with the
1124
permission of the House, I shall now make a Statement similar to the one being made in another place by my right honourable friend the Chancellor of the Duchy of Lancaster. The Statement is as follows:
"The Top Salaries Review Body, under the chairmanship of Lord Boyle, submitted to the Prime Minister on 11th June, its Twelfth Report, which deals with the pay of Members of Parliament, Ministers and office holders of the House of Lords, and with certain allowances. The Government are most grateful to Lord Boyle and his colleagues for their thorough review and clear recommendations. The report was published today and copies are available in the Printed Paper Office.
"The Review Body draws attention to the fact that the parliamentary salary has not been brought properly up to date for seven years. They recommend a revised figure of £12,000 with effect from the due date of 13th June 1979. They also recommend that the parliamentary salary of Ministers and other paid office holders who are Members of the House of Commons should be increased from their present level to £7,000. They make a series of detailed recommendations about the pay of Ministers and of office holders, of which the most significant are an increase in the pay of Cabinet Ministers from £14,300 to £25,000, and of Parliamentary Secretaries from £6,050 to £13,000, excluding in both cases the relevant part of their parliamentary salary. The other increases they propose are set out clearly in the report. These increases are large, although this is in part the result of action taken by previous Governments in holding back the recommended rates in earlier reviews.
"The Government accept the sums recommended. However, both sides of the House will recognise that it would be entirely wrong if we in Parliament were to treat ourselves on salaries more favourably than others. We have therefore decided to recommend to your Lordships that the full increases in salaries for Ministers and office holders should not be brought in immediately, but in three equal stages, the first in the present month, the second in June 1980 and the third in June 1981.

1125
"The Government also propose that the full recommended salary rates should be adopted for pension purposes from the appropriate date this summer. This too follows the treatment agreed for public service groups in recent settlements.
"The Review Body also recommend increases in the secretarial allowance for Members of Parliament from £4,200 to £4,600 as an interim measure, pending a final recommendation in the second part of their report, which is due shortly. They propose increases in the Peers' expenses allowance, together with certain changes in the definition of eligible expenditure, dividing the expenses into three categories instead of the two at present. They propose that Peers who have to stay in London overnight when they attend the House should be able to claim for expenses up to a maximum of £18·50. They also recommend that the present single category of day attendance allowance should consist of two categories. For day subsistence and incidental travel they propose a maximum allowance of £9, and for secretarial costs, postage and certain additional expenses a maximum of £8·50.
"The Government propose that these increases in allowances, including Peers' expenses allowances, should be introduced in full immediately. The Government have asked the Review Body to consider urgently the question of secretarial and other necessary expenses incurred by Ministers and office holders in the House of Lords in the course of their parliamentary duties.
"The Review Body considered how their recommended salaries could be kept up to date. Their view was that, for Members of Parliament and for Ministers alike, the proper course is regular independent review. They recognised, however, the practical advantage of finding a suitable way of keeping the salary of Members of Parliament up to date between reviews and described in detail the comparative advantages and disadvantages of some of the different forms of link which had been suggested to them. This is a difficult issue and there are arguments for and against a link of this
1126
kind. The Government prefer therefore to reserve judgment until they have had further opportunities to take account of the views of the House of Commons.
"The rates recommended by the Review Body for the Prime Minister and the Lord Chancellor are, as in the past, higher than those for other Cabinet Ministers. The Prime Minister is unable to be in the House of Commons today because she is attending the European Council in Strasbourg. She has authorised me to say that while she and the Lord Chancellor have agreed that the proposed rates are appropriate for their respective offices and should apply after the next election, they have decided not to accept any increase which would put their ministerial salary above the amount recommended for their Cabinet colleagues. Consequently, they will take no increase in ministerial salary until 1981. They have decided to take this course on the clear understanding that all other ministerial increases are accepted, subject only to staging.
"Your Lordships will have an opportunity to consider the Motions necessary to implement these matters so far as they affect this House."
4.5 p.m.
Lord PEART: My Lords, may I thank the noble Lord the Leader for his Statement repeating what has been said in another place. I am glad that our colleagues in another place are going to be helped. But I think it is not the time now to debate any of these issues because colleagues in the House should examine the Boyle Report, which is now available. I think it is absolutely right that Peers' expenses should be raised at this time, particularly those Peers who live out of London and have to stay overnight. I think the nation should understand that years ago the House functioned on a very part-time basis, but it is now increasingly a legislative Assembly. Indeed, now that more senior Ministers in the Government sit in this House, the accountability of Ministers means that the duties of Peers have become much heavier in the past few years. I am glad that action is taken on this.

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I am grateful for what the noble Lord has done and the way he has introduced this. I think that we must pay credit to the noble Lord, Lord Boyle, and his colleagues for their work. It is not long ago that I had the honour to lead an all-party delegation to the Boyle Committee and to discuss with them the problems which have now, I think, been settled. I thank the noble Lord sincerely for his Statement today.
Lord BYERS: My Lords, I should like to endorse everything the noble Lord, Lord Peart, has said in thanking the noble Lord for making this Statement. This is very much an all-party matter affecting Members in all quarters of the House. There is no doubt that an adjustment was long overdue in the rate of the allowances. On a matter of detail, may I ask the noble Lord how he interprets the phrase, "these increases in allowances … should be introduced in full immediately". For the sake of clarification, does that mean from today, or has the noble Lord some other date in mind?
Lord SOAMES: My Lords, might I thank both the noble Lord, Lord Peart, and the noble Lord, Lord Byers, for what they have said, and also say thank you for the part played by noble Lords who, in the interests of the House as a whole, gave evidence, and the noble Baroness who gave a considerable amount of evidence, to the Boyle Committee. It was obviously effective evidence that was given, and it has evidently been taken into full and due account by Lord Boyle and his Committee.
I fully agree with the noble Lord, Lord Peart, when he says that the business of this House has increased considerably. Anyway, the expenses have also increased considerably. I do not think that he should go too far in saying that the fact that there are three Cabinet Ministers in this House makes all that difference, because there was a time when there was a Prime Minister in this House. As to the specific point made by the noble Lord, Lord Byers, I am afraid that the exact date has not been decided. All I can say as a guide is that the last time such a change was made it was done during the month of June, but I am afraid that I cannot give an exact date today.

THE SHIPPING INDUSTRY AND ECC REPORT
4.9 p.m.
Debate resumed.
Lord GORONWY-ROBERTS: My Lords, the House will be grateful to the noble Viscount for introducing this useful debate and for the manner in which he did so. We are also extremely appreciative of the work of the sub-committee—one of the most important sub-committees of the Select Committee on European Policy, the Sub-Committee on Trade and Treaties —for the work they have put in on this extremely important matter. Incidentally, we were glad to have from him a report on the improving health of the chairman of the sub-committee, my noble friend Lord Trevelyan, and I am sure the House will wish the noble Viscount to convey to Lord Trevelyan our general wish that his recovery will be a speedy and full one.
The work of the Select Committee under the able chairmanship of my noble friend Lord Greenwood is already a matter of frequent commendation in this House; it is one of the substantial reasons for the retention of your Lordships' House as a full part of the parliamentary process in our democratic system of due scrutiny. The report is admirable, in that it is brief, concise and comprehensive. Practically everything the noble Viscount said will bear further reading and study when it appears in the Official Report; it was a most able statement of the implications for the future of the matters raised in a report that is commendably brief but very much to the point.
As the noble Viscount reminded us, we in the United Kingdom have the largest shipping fleet in Western Europe. We are fifth—I think he said fourth; we are either fourth or fifth—in the world and we are second in containerised tonnage. Moreover, our fleet is modern, well-equipped and well-managed, and there is a growing consensus of purpose and effort between management and men and between both sides of this considerable industry and the Government of the day. We have a major interest in tackling the undoubted difficulties which have arisen in the field of conference liner operation and various other related shipping matters. We employ 30,000 of our people in this industry and

1129
we hope to employ more. We carry a great deal of the world's tonnage already and our fleet, in addition to being well managed, is also competitive, and that against a background of increasing competition from outside, particularly from Eastern Europe—from the Comecon countries.
The Soviet merchant fleet is today the sixth largest in the world and this reflects a remarkable expansion over the past 20 years or so. The Soviet fleet has quadrupled since 1960, and this increase reflects the increase in Soviet foreign trade which in turn increased Soviet dependence on foreign shipping which spurred them on to add to their own supply of shipping. The 1970s saw a rapid expansion of Soviet merchant shipping, in fact an addition of some 1 million tons annually, against a background of a general cutback during that period in world ship construction.
The greater part of Soviet cross-trading takes place outside scheduled liner services and their ships have succeeded in capturing considerable trade from certain world shipping conferences. We would not automatically object to that if they succeeded in capturing an increasing amount of trade by fair practices, but there is, to say the least, and there has been for some years, considerable doubt as to whether all Soviet practices in this field constitute fair competition. It is the methods by which the Soviet Union competes which have been causing concern in Western Europe, and particularly in this country. It is principally a question of undercutting rates. Undercutting is supported, for example, by subsidy (these are State trading agencies); by incomplete relevance to commercial costs (here again, the State is omnipotent); by longer amortising periods than are usual in the West (this is an indirect subsidy to say the least); and by the State itself meeting insurance costs and the costs of training crews.
The noble Viscount referred to Eastern European methods of accountancy; some of us are familiar with these in various fields. It is particularly interesting and ominous to meet it in this field because the net result is that they are able, by methods which do not square with Western standards, to increase their
1130
share of trade and, in using the undercutting of rates to do this, force the West, which is already operating to a very economic margin, to reduce its own rates. So we lose both ways: we lose an amount of trade and, on the trade we manage to retain, we manage to retain it only by losing on the lower rates we are forced to charge.
There is another method whereby the Comecon countries, particularly Soviet Russia, achieve an advantage. Their foreign trade organisations—again, they are State trading organisations—buy f.o.b. and sell c.i.f., and that is a great advantage to them. It is said that this concern, which has been mounting in the West and in this country, about rate cutting has been somewhat exaggerated. Perhaps the Minister will tell us when he replies how he sees the present position. I do not believe it is in the least exaggerated. It may have abated in one or two instances in the last year or so—I cannot definitely say—but we should be grateful if, as no doubt he will, the, Minister will give the House his view of the present position.
There have been discussions between Soviet shipping Ministers and ours over the past year or so at least and in the Anglo-Soviet Maritime Commission, which I believe met last week. Perhaps the Minister would tell us if anything has resulted from such bilateral discussions at ministerial, official and commission level.
My next question to the Minister is about the attitude of the Community towards this whole question, and the noble Viscount put it fairly and forthrightly. Indeed, the report puts it very frankly. The committee whose report we are now debating consider that the situation is "most unsatisfactory" as a result of the developing attitude of the Community to these problems. Paragraphs 4 to 8 inclusive of the report give details of the attempts within the Community, principally by the Commission, to set up a system of monitoring of the activities of the Comecon cargo liners.
One cannot escape an impression of disunity, if not of disarray, in the Community on this important matter—indeed, an impression of a certain amount of obstruction in some quarters. It would be invidious to specify countries by name in a suggestion that they have in mind

1131
purposes other than the correction of the situation relating to cargo rates. But one gets the impression from this and other documents that a number of our friends and partners—more than one—in Europe are perhaps more concerned about diplomatic recrimination and commercial repercussion promised in Europe than they are about dealing with a situation which cries out for a united approach by Europe to secure reform.
First, the date of implementing a monitoring system, after being somewhat reluctantly agreed, was postponed. Secondly, there was less than united enthusiasm for preparing counter-measures which could be applied if the results of the monitoring operation showed such measures to be necessary. I should like to know whether in fact the Community is studying what kind of countervailing measures could be applied if the monitoring operation showed that they were necessary. Thirdly, the number of routes to be monitored has been reduced from four to two. In fact, as the report puts it in paragraph 8,
"This most recent Council Decision"—
that refers to, I think, the 23rd November decision—
"represents a further dilution of the Commission's original proposals. The provision for concerted counter-measures has been dropped,"—
I asked whether studies were proceeding. They may be, but the reports says that they have been dropped—
"and the geographical scope of monitoring is much reduced"—
it is reduced from four to two—
"As such, the Decision is a disappointment to the United Kingdom".
I would draw the attention of the House to what the report further says; namely that our Department of Trade submitted a note on the Council's Decision of 23rd November, stating that the United Kingdom
"requested an entry in the Council Minutes to the effect that the study of possible counter-measures, commissioned by the Council in June 1978, should proceed forthwith so that measures could be adopted if need were established".
Perhaps the Minister can tell us how far we have got with this very reasonable request: that while monitoring is established, albeit for a reduced number of routes, nevertheless the necessary and
1132
useful study of the kind of countervailing measures that might prove to be necessary should proceed regardless.
Finally, may I invite the Minister to tell the House what steps Her Majesty's Government intend to take to raise these matters and press them forward in the Council of Ministers. I recall that last year in the other place there was a short debate on this matter in which the then Government was represented by my honourable friend Mr. Clinton Davis. to whom the noble Viscount paid a well merited tribute for his work in this field. He, and the Government with him, were accused of dragging their feet in this matter and not showing a robust enough belief in the rights of this country. Well, now those accusers have their chance. The then Opposition is the now Government, and no one would be more delighted than I and my noble friends if the Minister is able to tell me that on commercial grounds, and possibly on strategic grounds too, the British voice on this matter will be raised loud and clear in the Community. Although there are certain reservations among our friends in Europe on various aspects of the matter, I believe that if our voice is maintained, and is raised clearly enough, we shall have very substantial support in Europe for the proposals that we have already made.
4.26 p.m.
Viscount SIMON: My Lords, when I first came to your Lordships' House we used to have quite frequent debates on the shipping industry, many of them initiated by the noble Lord, Lord Winster, whom older Members of your Lordships' House may remember as being very keen on anything concerned with our Merchant Navy. Recently we have not had the opportunity to discuss these matters, even though the position of our shipping industry is very much graver today than it was 20 years ago; and so we are all most grateful to the noble Viscount for having both tabled the Motion and introduced it to us with so full-ranging a speech. I am also very grateful to the noble Lord, Lord Goronwy-Roberts, for what he has said, particularly regarding the international situation. It makes it almost unnecessary for me to say anything about the report which is referred to in the Motion before us.
I agree entirely with what both the noble

1133
Viscount and the noble Lord said. The report shows that for some reason the Council of Ministers is very half-hearted about a matter which has been strongly urged upon the Community through the Commission. I venture to think—and I suspect that the noble Viscount also hinted this—that this is perhaps because although most of our partners in the Community, with the exception of Luxembourg, have substantial shipping interests, in none of them is their shipping interest so vital to the economy of the country as is our shipping interest to us. This has made the Council of Ministers, or clearly some members of it, unwilling to pursue the line which the shipping industry has asked for and which the Commission has suggested.
There is only one point about the report that I should like to add to what the noble Lord, Lord Goronwy-Roberts, said. As he rightly pointed out, the scope of the monitoring has been greatly reduced, but I regard as even more unfortunate the attitude in regard to countervailing measures. Is it really sensible to postpone as the Council of Ministers seem to wish to do, the preparation of countervailing measures—which will clearly take time to prepare—until we have had the result of the monitoring? If the result shows that serious damage is being done to British and other Community interests, which is what current experience shows practical people, are we then to have to wait another year or two while measures are being prepared and put into effect? Fortunately, as a result of the Merchant Shipping Act of earlier this year, our Government have the power to take countervailing measures when the occasion arises.
If this is to be done on a Community basis, clearly everybody must agree first on what has to be done. Countervailing measures are only a type of warfare and I think that it is open to question how far they are going to get us. They could lead possibly to repercussions in other directions. I must say that I was very satisfied to read in the speech of the new President of the General Council of British Shipping that in his inaugural address, when dealing with this matter, he used these words:
"We have the hope that one of these days it may prove possible, against a background of
1134
strength, for some understanding to be reached with the Soviet Union on shipping questions".
If that can be done, it is a far more satisfactory arrangement than having a guerrilla war with counter-measures and Heaven knows what other action taken by the other parties.
If I may turn to some of the wider issues, the economic problems facing the industry, apart from those arising from these Comecon activities, are very serious. We have over-tonnaging throughout the world; there is too much tonnage, I would suggest, even if trade were buoyant. We have the extension of the developing countries' fleets, some of which are more for prestige reasons than economic reasons. But on that point, we must understand their position. Those of your Lordships who were connected, as I was, with shipping during the last war will know that many of these small areas, then largely colonies of the different great powers, depended for their livelihood on being serviced by ships of other nations and particularly by the British fleet. When the whole fleet had to be requisitioned for the purposes of the war, they suffered seriously. I can understand, to take the example of our own colonies, their saying, on achieving independence, "Should another war arise in which the great powers are involved, we must not be entirely reliant upon them for the supplies that we need to maintain life in our own territories". I think that we should take an understandable and understanding attitude towards these moves by the developing countries.
Then we have the oil crises, and particularly the latest oil crisis arising from events in Iran and the expectation that this may lead to a further trade crisis. Shipping has always been a cyclical business, but a cyclical business does not, unfortunately, follow the geometrical circle. I am afraid it looks as though in this case, having reached the bottom of the circle, it is going to be a long time before it starts the up turn. That, at any rate, is how it seems to me. But I am glad to see that the noble Earl, Lord lnchcape, and the noble Lord, Lord Inverforth, arc going to speak later. They have in these matters much greater knowledge than I. To me, the prospect seems extremely gloomy.

1135
My Lords, I should like to say something now about the men, and a few women, too, who man our ships. I hope that I shall be forgiven by noble Baronesses if I use the verb, "man"; for I do not feel that one can say, "who 'person' our ships". Having spent nearly 35 years in the shipping industry, though it was a long time ago, I have been privileged to know personally and to appreciate the sterling qualities of our seafarers. We often remind ourselves that we are by geographical necessity a seafaring nation. I do not know whether these qualities which make our seamen the finest in the world are inherited or whether they are acquired afresh in each generation; but certainly these qualities survive. Of course, the increasing complexity of modern ships demands of seafarers qualifications which were not necessary in the old days. The job is quite different; the work is less hard physically than it used to be. This, curiously enough, introduces a new problem: for if men are not now as exhausted physically at the end of their watch, their period of duty, it is easier for boredom to creep in during the off-duty hours, living as they must be, and are, in rather cramped conditions and in small, closely-knit communities. Moreover, as life ashore has become increasingly easy and pleasant —and let us be frank, whatever criticism we have of successive Governments. life has grown easier and more pleasant than it used to be; and even the curse of unemployment which we discussed yesterday is made easier to bear than it used to be—so the particular disadvantages of life at sea, the absence from home, sometimes for long periods, sometimes for indeterminate periods, becomes harder to bear. And it is harder to bear not only for the seafarers but for their families as well.
What has the industry done about this? I should like to take your Lordships hack about 60 years, to just after the First World War, when the industry in consultation with the trade unions concerned set up the National Maritime Board. And before any noble Lord on the Benches opposite starts to get hot under the collar, this is not a Quango. It is called the National Maritime Board because it was a board which dealt on a national basis with the relations between employers and employed in the shipping industry, but there was no Government repre-
1136
sentative on it. Within the ambit of this board, wage negotiations were carried on, but also there were full and frank discussions across the table, or, rather, round the table, because at the only meeting that I attended we all sat round the table and not facing each other across the table. All the problems of the industry were tackled in a co-operative spirit between the employers and the unions.
It is so long ago that I cannot remember and give credit to the man on the side of the employers who started this idea, but I remember that great leader of the National Union of Seamen, Havelock Wilson, who had a great deal to do with the establishment of this body. It worked marvellously. There was real understanding and really frank discussion. The only one sad result was that, in a sense, the owners and the unions got so close together, because they understood each other's point of view so well, that it was possible for Mr. Harold Wilson, as he then was, during the seamen's strike in 1966, to accuse the owners of having put the unions in their pockets. This was a very unfair criticism. What had happened was what we all would wish to happen in more industries: that the two sides (if you have to call them two sides) were recognising that they were really part of the same organisation and that they could discuss frankly what the problems were and how best to solve them in the interests of the industry.
This general concept has been developed since then. Recently, I have been interested to learn about a body under the chairmanship of a very old friend, Sir Frederick Bolton, a body representing the owners and the unions—on this occasion with the help of a representative of the Department of Trade—who have been continuously examining and exploring all the kinds of problems which arise in the rapidly changing conditions of a developing industry. The terms of reference of this body interested me very much. I am glad to say they are quite short. They are as follows:
"To examine ways in which life at sea in the United Kingdom shipping industry can be made more attractive to the United Kingdom seafarer from which the effective use of manpower can be developed".
I thought that was a splendid term of reference. This body has been working for about five years and now it is about to wind up its work. To follow that,

1137
there are proposals for a similar body working in the same direction. I believe these matters are being considered this week, and it may be that the noble Earl, Lord Inchcape, will be able to tell us something about that.
This is an indication of a state of relationship in this industry which is much to be admired, one which justifies the industry in the hope that it will get through whatever difficulties there are. I believe that, if the present Government take up the problem—as they must in the next five years; and the sooner they do it the better—of the question that was left by the Bullock Report, which I am afraid most of us on all sides of the House did not like very much, and deal with how we are going to spread what I still like to call "worker participation" (because I dislike the phrase "industrial democracy"), and spread that spirit through all the industries in this country, that will do far more to improve the efficiency of industry in this country than tax relief.
Finally, I want to say just a few words about what the Merchant Navy has done for us. Some of us—perhaps most of us here—have lived through two World Wars, in each of which we were saved by the skin of our teeth by the Merchant Navy. The courage of the men who brought what was needed to our beleaguered island and to the theatres of war is something which should be more frequently remembered. If any noble Lord wants to remember it, he can go down to Tower Hill and look at that splendid war memorial with the names of thousands of sailors upon it.
We must all hope and pray—those of us who can pray—that our country will be spared another war. If by any unfortunate chance that does happen, the men will be as courageous as they were in the last war. I remember being told that in those terrible Russian convoys going around the North Cape—one of the most dangerous routes in the world during the war, with the German aeroplanes in Norway—no ship ever missed a convoy because the crew were not there. That spirit will be repeated again. The question I ask the Government—and I hope that the Minister may be able to give us some reassurance—is this: does he and do the Government realise the immense importance of ensuring that,
1138
if such an occasion does arise, we shall not only have the men but we shall have the ships?
My Lords, before I sit down, may I say 1 am sorry that I have to apologise to the House and also to the noble Viscount and the noble Lord, Lord Trefgarne, that I may not be able to stay to the end of this debate on account of a previous commitment. I have never had to do this before and I am extremely sorry to do it on this occasion.
4.44 p.m.
The MINISTER of STATE DEPARTMENT of INDUSTRY, (Viscount Trenchard): My Lords, the House indeed owes a debt of gratitude to my noble friend Lord Rochdale for moving the Motion and the way in which he moved it. The House also owes a debt of gratitude for Lord Rochdale's part in the Twelfth Report and of course for all his very distinguished background services in this area, and particularly that "Bible", his 1970 Committee of Inquiry Report. Let me add my thanks to those which he expressed to the noble Lord, Lord Trevelyan, and other members of the committee and say, as others have said, that we wish Lord Trevelyan a very speedy recovery.
I have to add an apology that I shall not be able to stay to the end of the debate. My reason is that I find ministerial "pull" to get night sleepers is not adequate to enable me to get to the South West on a regional visit—the third of my regional visits—which has to be fitted in a very tight timetable. I shall stay for as long as I am able, but my noble friend Lord Trefgarne will wind up the debate. I believe he is decidedly more knowledgeable than I am. I know that there must be a limit to the number of times that I am able to get away with apologising for this, being the first time that I have stood here doing something for another department. On this occasion I have to answer on a subject which is the responsibility of another department. I see the noble Lord, Lord Goronwy-Roberts, smiling as he recognises the signs that experience is growing of the problems that that produces.
My knowledge is very small in the shipping world, and perhaps the House will not take it amiss if I were to say that

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really the only serious tuition I had was in my very early training days in Unilever in their shipping department, when a manager of a department—who was not the most enlivening of lecturers—was going on and on about a bill of lading. I found myself with a pencil writing a poem. I cannot remember it all, but I can remember the last stanza:
"No matter where your trading;
It has to go by boat;
While on the bill of lading;
The steamships stay afloat".
My Lords, I have listened with very great interest to the speeches made by the noble Lords who have preceded me, and particularly to that of my noble friend Lord Rochdale, with his immense knowledge. I am also aware, in addition to commenting that the Twelfth Report is, as he says, an excellent document—and we have taken note of it very carefully—that the Merchant Shipping Bill went through this House at a very fast speed just before the dissolution of Parliament, and that there may well be points that noble Lords had been meaning to raise in the debates on that Bill which may come out in this debate. Those points, along with all the points in this debate, will be most carefully drawn to the attention of my honourable friend, the Minister of State at the Department of Trade.
I shall concentrate on the problems of our industry in the international context. I shall touch a little on the domestic situation, but only briefly. It goes without saying that I agree that shipping is a uniquely international industry and the current problems of the industry stem from many of our international problems. As a newcomer, I put the problem slightly differently, and maybe it is just my lack of education. The word, "recession" is used a great deal in this context. The whole of world industry is having a difficult time. But of course it is not strictly true that trade by ships has gone back, which could be implied from the word "recession". It is still growing at 4 per cent. per annum.
While all the world's shipping lines are undoubtedly feeling the pinch in regard to profitability, it is regrettably true that our own industry has, to a greater degree than most, lost a share of the market. Of course this situation, whatever name we
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use for it, comes from the continued building of ships, albeit at a slower rate than some years ago, at a faster rate than the building up of world trade and the need to carry cargoes.
The level of world trade itself is, of course, terribly important to us and, as is well known, we are more dependent on it than most. Until now, as noble Lords have said, the Free World has been generally served well by its shipping industries; and with the tradition of free and vigorous competition, albeit with a degree of voluntary self-regulation via these conferences, of which my noble friend Lord Rochdale spoke, this vigorous, competitive industry with its self-regulatory element has provided efficient services.
The changed conditions which I have just outlined have produced, as my noble friend said, severe price competition. They were bound to do so. If supply is increasing faster than demand this is the inevitable result, and it has produced to a degree the calls for protectionism and for Governments interfering in shipping. It is well known, of course, that virtually all our exports go by sea and that United Kingdom lines are still the largest single factor in that area. It has been mentioned that the United Kingdom's fleet is still the fourth largest in the world. It has also been mentioned that we continue to do relatively well in the liner sector and in fact are leaders still in two sectors, and very close behind in two others. I accept entirely what my noble friend Lord Rochdale has said: that this is due to heavy investment, wise investment, and efficient investment by the industry. The figure that I have is £4,500 million over 10 years, which incidentally is 15 per cent. of the investment in Great British industry as a whole. I also accept all that has been said about the record of the industry on all sides, and there seems no point in my repeating that.
It is, therefore, in that context, rather sad that we have lost our share, and sad also to record, as I am informed—and here I am informed slightly differently, I think, from my noble friend—that the balance of payments contribution from shipping has now moved from being a small positive one to a negative one. This is in terms of the amount of shipping that United Kingdom residents provide, compared with the amount of shipping we have

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to buy from operators in other countries. I understand that in 1978 it moved to a minus contribution to our overall balance of payments of £300 million. This is indeed very sad, and I can assure your Lordships that the Government are very aware of this sitution and are studying it very carefully.
My noble friend has given a much more effective and comprehensive review of the problems that I can hope to do, although I will tell him as I go along what I believe my right honourable friend feels on these subjects; but before coming to the detailed problems I want really to say first that it is still early days in the period of office of this Administration. Paying attention to a very knotty problem is one thing: getting to the stage of being able to give specific answers, as all your Lordships will know, is another.
I think the first thing we want to say is that while we would like to see world trade speed up, and indeed we hope that it will do so, we are not counting on the fact that it will. In cautiousness and commonsense, I think we have to assume that the growth of trade by sea will not accelerate very much. Within that context, we shall do everything we possibly can to ensure that our shipping industry is given a fair trading opportunity. The noble Lords who have spoken already have covered a great number of points which show only too clearly how difficult of accomplishment that is, but it is certainly our determination so to do. We are very aware—and I shall return to this later—of the problems of lower-priced competition, but we separate them mentally from the problems of aided competition. We believe, in relation to the latter, that we must work in concert with other nations. We accept that flags of preference generally are not the most effective way of ensuring a competitive and efficient shipping industry, but we do recognise the developing countries' point of view, which the noble Viscount, Lord Simon, mentioned—although we sometimes wonder whether they are wise in some of the attitudes they have taken.
I want to introduce at this point the industry's attitude, as I understand it, on this very difficult situation, and to say on behalf of my right honourable friend that he found their attitude and their recent statements, bearing in mind all that they
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are facing, which has been outlined, a thoroughly healthy one. This is not an industry which is rushing, cap in hand, asking for help: it is a sturdy, independent industry. The first paragraph of a statement recently released by Mr. David Ropner, the new President of the General Council of British Shipping, says:
"The most crucial challenge for British shipping in the coming year would be to maintain its competitive edge and at least equal its competitors in cost-effective manning operations".
My noble friend Lord Trefgarne will touch on the domestic points later but this industry, faced with these problems, is doing all it can to improve its own efficiency. The importance of it and the size of it have been already sketched, and I will not go over these statistics again. The tonnage of ships that have been laid up, taken out of service or sold has also been mentioned. These figures are serious, and we know that some of the latest sales have been of good modern ships. The profit position and the cash-flow position of the industry are known and the steps taken by the last Government to alleviate them are acknowledged in the short term. However, what we and, I believe the industry, want is a free and healthy industry and one that has a fair trading opportunity.
That takes me to the international problems. If I may, I should like to leave the very important points that the noble Lord, Lord Goronwy-Roberts, raised on the EEC until I have dealt with two of the subject headings here, but I shall come to some of them later. May I first comment on the UN liner code convention. I understand that the convention was adopted as long ago as 1974. It largely reflected the aspirations of developing countries in liner shipping and, in particular, contained the rigid provisions to which my noble friend referred on cargo shipping—the 40/40/20 per cent. suggestions. We recognise that successive United Kingdom Governments have been aware of the problems of developing countries, and we, too, are also aware of them. I think that all Governments have believed it totally inappropriate that the provisions designed to meet developing countries' needs should be applied to all shipping, including shipping serving trades between industrialised countries.
There is no reason to depart within the OECD area from the present free com-

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mercial régime, which serves both shippers and shipowners well. However, it is clear that in current conditions some OECD countries have become attracted by the protectionist elements in the code. The United Kingdom industry, as we know, has vigorously opposed this trend, and has done its utmost to maintain the free commercial regime which suits its worldwide shipping activities. In 1974, we expressed this attitude by voting against the convention.
However, as is well known, the European Community had come to a common position on the code. That position was finally agreed last month. The regulation in which this agreement is included represents, in our view, an important step both in the development of a European shipping policy, and in laying the basis of shipping relations between developed and developing worlds.
The United Kingdom stressed throughout these difficult negotiations the importance we attach to maintaining a free commercial regime within the OECD and between OECD shipping lines, and the dangers of a protectionist solution based on the code without any amendment. The final position adopted by the Community has been outlined, but the principles of it are, I think, clear; developing countries will enjoy the benefits of the code in their own trades; the code's most rigid features, notably cargo sharing will not be applied—my brief says "will be disapplied", but I prefer a different phrase—in intra-OECD trades, provided that other OECD countries adhering to the code offer reciprocity; competition will be encouraged between OECD lines in their share of trades with developing countries.
The maintenance of the present commercial régime within the OECD now depends largely on the response of the other OECD countries. We agree that the question of Western unity is critical. In this case, we believe that the Community has given an important lead and one that is based firmly on the fundamental free trading principles of the Western world. Some other OECD countries have already made it clear that they will follow the Community's approach. We welcome this and we hope very much that others will follow. United Kingdom accession
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to the convention will require legislation. Of course, the code must inevitably mean some changes in the operation of liner conferences, but we are confident that, in essence, the system will go on as before.
Let me now come—still before commenting on Europe—to the problem of Soviet Union shipping and Comecon shipping. Of course, the problem that is probably worrying the industry more than anything else is non-commercial competition from the Soviet Union in the liner trades. We accept that there has been what I think my noble friend called "cream skimming". It may be that later in the debate, and possibly after I have gone, the Department of Trade's internal report may be mentioned, because I understand that noble Lords taking part in the debate know of it. But I want to assure the House that my noble friend does not in the smallest degree underestimate the seriousness of this threat.
The Soviet fleet has grown enormously. Various statistics have already been given. It has doubled since 1970. Its predatory rate-cutting outside conferences has enabled it to win business from established conference operators, or to force conferences to cut rates and dilute their revenues as the price of retaining shipping. Because of the importance of the Soviet Union, this is clearly a problem that is best handled by nations in concert. The crucial need is to achieve sufficient Western unity and, as has been mentioned, the United Kingdom has made valuable initiatives in the European Community. We still have to establish the basis for a co-ordinated Western response to damaging Soviet practices. We would clearly prefer a policy of accommodation rather than confrontation and there are signs, as has been mentioned by my noble friend, that the USSR's attitude may be changing. We hope that those signs are indeed real.
I come to the points that the noble Lord, Lord Goronwy-Roberts, raised, and to his plea that the British voice should be heard loud and clear calling for effective action on an EEC basis. There is no question about the strength of British views on this point. I think that we have a great deal to do in the EEC generally, but we are not perhaps so convinced as the previous Administration that "loud" is the right word to use in this context.

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Effective action must be taken and we believe that the EEC can become a great help in this area. I have noted carefully what the noble Lord and others have said about diluting and delay—even about the monitoring exercise and not working on the possibility of countermeasures. I think that all I can do at this stage is to assure the noble Lord that this Administration is working on all those subjects, that it has opened discussions behind the scenes—and that is why I said I believed that in these areas negotiations are often more effective when they are not loud—and we shall press them as fast as possible within the context of overall EEC problems.
Nothing very spectacular came out of the tenth meeting of the Joint British/ Soviet Maritime Commission last week, but we welcomed the fact that they had joined this one conference and that they seemed more ready to talk about these things. I believe that the EEC can be a positive help. I accept what has been said about the fact that we have a much bigger shipping interest than the other members of the Community. In this context, I want to remind noble Lords that Greece will shortly enter the Community. As I understand it, when Greece enters she will hold a larger share than we shall of the shipping trade, and thus there will be two nations who are really interested in world-wide shipping. This should be a great help in ensuring that a positive view is taken by the EEC. However, we believe that the negative views of the past were perhaps influenced by other things. We hope that the positive attitudes of this Administration towards the EEC will produce the correct response.
It is much to be regretted that shipping relations with the USA are such a problem. The position has been well spelled out by my noble friends. Therefore, the only thing I shall do will be to repeat the statement on 1st June of my right honourable friend the Secretary of State for Trade, when he expressed grave concern about the situation. He said:
"Shipping is an international activity. It affects the interests of both countries. Any questions that arise should be dealt with jointly, and we consider it wrong in principle for the United States to exercise unilateral control over shipping between the two countries in disregard both of our economic interests and of our shipping policies. In the light of this latest development, the United Kingdom will be reviewing its attitude
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towards co-operation with the United States in anti-trust questions and on the enforcement in the United Kingdom of United States anti-trust judgments. Meanwhile, I hope it will be possible for the case to be settled as soon as possible. For the future, the United Kingdom looks to the United States to adopt a flexible and responsive approach to further discussions, with a view to reaching a long term agreement between us on shipping matters".
I shall overstay my welcome if I spend any length of time on UNCTAD. I endorse the remarks which were made by my noble friend Lord Rochdale in that respect. We believe that we shall keep trade in the OECD countries on a competitive and open basis, and we shall resist the demand for a cargo sharing régime in the bulk trades. We are aware of the industry's views on all the unfair competition questions which have been mentioned, and I should only be repeating what other noble Lords have said. We shall work as hard as we can to try to ensure a fair trading opportunity.
We are very heartened by the attitude and resilience of the industry. We are also very heartened by the fact that industry discussions are taking place, as the noble Viscount, Lord Simon, mentioned, among all those who are working in the industry to try to ensure a yet more efficient performance. Also, we are aware of the defence needs in relation to the security of this country. I am still a novice who has taken too long, and I apologise to the House.
5.13 p.m.
Lord HAYTER: My Lords, I, like other noble Lords, am very grateful to the noble Viscount, Lord Rochdale, for introducing this debate. So far, it has reminded me of Mark Twain's observation that everyone talks about the weather but nobody does anything about it. In this context, one asks the question: who does the talking? I noticed in a newspaper this morning that in one year the General Council of British Shipping held 1,200 meetings in their building. But what happened? Who listened? I do not think anybody did. And who acts in the context of what we are talking about today? To be truthful, it must be those nations who are not too mixed up with other nations—and that means Russia, China and the USA—and who do not get themselves too involved with allies who may not always agree with

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everything that they say. So I have been very depressed by the debate so far, but I hope that I shall cheer up.
There has been an air of euphoria about the debate which I do not think is realistic. However, noble Lords may well ask why I should have any cause for criticism. The answer is very simple. For some time now I have been the chairman of a little Neddy, that of the International Freight Movement. We have been hammering away at this issue for the last two years or so, with a minor result, as has been mentioned. The General Council of British Shipping and the unions have been intimately involved, and I hope that good will come from it. A variety of opinion is to be found on this little Neddy. The Government are represented upon it; so are the unions, and also the employers. More important, however—and he has not been mentioned a great deal so far—the customer is represented. On this little Neddy we have the British Shippers' Council, the CBI and the British Importers' Federation.
Unless we can solve this problem, my position in the little Neddy group will be very difficult. For is there not, in the National Economic Development Council, the theory of an industrial strategy? Are we not trying to put forward the idea that all of these working sectors should be increasing their exports? And how can they do that if they do not have the shipping which is right for them and which brings its share of payments into this country?
Although United Kingdom shipping, as has already been mentioned, ranks as the most efficient in the world, this is of limited avail if we meet subsidised foreign competition—or, should I say, foreign competition which is more subsidised than ours. It is good business practice to sell cif rather than fob, but if this means that the shipper does not have the facilities that he needs it leads us nowhere.
Now we come to the balance of payments question which has been mentioned. The same is true there. If, for any reason, our shippers can transport exports from this country only on terms less advantageous than those available from overseas, this is self-defeating in balance of payments terms.
On the question of the future prospects
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for the industry and looking at them from an abstract point of view, these to me remain very gloomy. I do not wish to rehearse once again all the problems; they are self-evident. It is the solutions which are so hard to find. The international aspect of shipping and the oil crisis brought their problems, with freight rates being pushed down and United Kingdom shipowners having to pare down their operations and sell their ships cheaply to their competitors. Most people will agree that since the great days of United Kingdom shipping supremacy Britannia no longer rules the waves. Several countries are determined to bring about a reverse and to build up their merchant fleets.
I take the point which was made by the Minister, the noble Viscount, Lord Trenchard, about the entry of Greece into the Common Market. If I may add a word of caution, this might not necessarily be to our advantage. We shall have to be a little more thoughtful as Greece, Spain and Portugal join these other people, whose permission we have to seek before we can carry on our own strategy.
Then other countries subsidise their freight rates, as we now know to our cost. They reserve cargoes for their own fleets. They create shipping fleets out of all proportion to their operations. This is an element of competition. It is one thing to recognise the competition and another thing to fight it with all the strength at one's command. One more factor which has to be taken into account is the mad scramble to build new ships in the 1960s and 1970s and the surplus capacity which then became available at knock-down prices to nations expanding their fleets.
The last point I have made a note of to which reference has already been made, relates to flags of convenience, a situation which, to a businessman, is quite extraordinary. It cannot be paralleled in any other industry in the world. If you have a flag of convenience, it entitles you to make up your own rules as to how you are going to conduct competition. If we are talking about long-term strategy—and I take it that we are—we ought to be much more precise about the nature of the competition, and that brings us back to the reference to monitoring, a point which has already been discussed in this

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debate. But unless we really can establish the potential growth of this industry we have some other serious problems.
It follows from the fact that we do not know where we shall be standing in 10 years' time in relation to shipping, that we also do not know how many training courses should be settled for our union representatives; the schools, the hospitals, the hotels, the recreation centres and the other union services again cannot be forecast. The time has come for an international system of educational support for marine qualifications. This was referred to by the noble Viscount, Lord Simon, and I entirely agree with him. The work in shipping has changed, and although some efforts have been made in this connection in the past, I personally feel ashamed when I hear what is happening in Rotterdam and elsewhere on the Continent in relation to the educational needs of their seafarers. The public are quite right in asking for an increase in standards, and if those standards cannot be supported by the sale of the shipping and of their services I think the industry is entitled to get some financial support. The same is true of safety standards and environment control techniques. One could argue that the Government should promote international safety standards and implement them in the United Kingdom and that if they affect the cost of shipping then the industry can turn round to the Government and ask for help.
With our EEC partners of course, as has been said today, we can press these countries to permit the same shore and commercial facilities for EEC shipping as we permit to them. It is a tragedy that a solution to that particular problem cannot be arrived at, but in a very short time will come the opportunity in connection with the Rhine/Danube problems when I hope that a stand can be made.
So the four aims that my little Neddy has in relation to shipping are very simple. We want our exporters and our importers —because they must not be forgotten—to have the most economical shipping services possible, but it must be on a continuing basis. We must avoid putting ourselves into a situation where, by our traders taking short-term advantage of cut price subsidised shipping they therefore kill off the non-subsidised shipping in this
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country, and we should later be faced with a shipping monopoly which we know we shall have to pay for through the nose. Secondly, I endorse entirely what the noble Viscount, Lord Simon, said: we must ensure that we have protection for our essential seaboard trade against a time of war or of a trade war, when international shipping is seriously disrupted. That is a major strategic point. Thirdly, so long as international shipping provides scope for worthwhile employment to our seafarers and ship managers naturally we want to have as large a share as possible of the international shipping business. Fourthly, there is the obvious point that we must play as strong a role as possible in ensuring safety at sea.
I would proffer two solutions—a major one and a comparatively minor one. The major one is that I would suggest that it is the role of Government to get established the basic level of UK shipping and seafaring. There must be a minimum number of ships that we should have against trade war or against any other kind of more serious warfare. That is a matter of judgment for the Government, and when we have made up our mind as to the basic level—and of course it carries implications that if it is the basic level of shipping, it is the basic number of seafarers, the basic number of seafarers' facilities—if we are forced down to that position, then the Government must maintain it by whatever form of protection is practicable. In just the same way as facing up to competition in business, when you are really up against it you have to be ruthless, so the Government will have to be ruthless, having established that minimum basic level.
The other small contribution that I should like to make is to say that if there is any opportunity which the Government or the other interests involved feel that my little Neddy can do, of course we shall be only too delighted. One of the curiosities of my little Neddy is that it gets things done. At Heathrow it was our little Neddy which put forward the great bonded facility which made so much difference to the freight forwarders, and if in the context of the Rhine/Danube connection we can help in any way at all to solve some of the problems, I should like that to be suggested to us. Whatever is said by the various interests represented in this debate, there are not many ways in which one can go. We could have a commission of

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inquiry, but we know what the time factor for that would be. We could leave it to the individual organisations, and that is exactly what has been happening all this time. The only other solution is to get together a body where all the interests can be brought together with a firm recommendation represented by the interests concerned, as to what the basic level is that must be maintained in a very difficult area from a national and also from an industrial point of view.
5.27 p.m.
Lord CAMPBELL of CROY: My Lords, I am glad to be following the noble Lord, Lord Hayter, in this debate. As we have heard, he is the chairman of the international freight sector unit of the National Economic Development Council organisation and therefore has been running one of the "little Neddys", as they are known. From all that I have heard of it, that body certainly has the reputation for getting things done, and I am sure he is largely responsible for that success. But I think I detected a complaint from him that there has been an air of euphoria in the debate so far. I shall certainly not contribute to that. He referred to a saying of Mark Twain, that everybody talks about the weather but no one does anything about it. That prompted me to think of another saying attributed to the same author, that a certain piece of music was "better than it sounded". I hope that the departments and all others concerned will examine carefully the contributions that are being made to this debate today when they read them in the Official Report, because I think they will find nuggets of good sense and good advice in the speeches.
Like others, I congratulate my noble friend Lord Rochdale on having initiated this debate and on having done so in such a helpful way. He dealt with a complicated subject in what he described as a logical sequence and it is a very well chosen sequence. Subsequent speakers have been able to avail themselves of his sensible division of this subject, as I intend to do myself. Of course the Motion was down for debate in April and it was postponed as a result of the dissolution of Parliament. I am very glad that it was only a postponement and not a cancellation. One result of the general election that intervened is
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that most of us are speaking today from places in the House different from these which we would have occupied had the debate taken place in April. I hope I shall escape any risk of accusations of introducing polemics into the debate by saying that I regard the new positions in the House as an agreeable change.
Parliament is greatly indebted to my noble friend Lord Rochdale, I think more than has yet been stated in this debate for his contribution in past years to this and to related subjects. He was too modest about this. After having done that exhausting inquiry into docks and harbours he was, between 1967 and 1970, chairman of the Committee of Inquiry into shipping. It examined the whole question of liner conferences, both open and closed, their usefulness and whether they cause restraint upon trade and upon competition. As a result, the committee approved in general such conferences, but did make some reservations. Those conclusions were accepted, and modifications were introduced at the initiative of the British; the British took the lead. As a result the modifications have been adopted by a very large number of the liner conferences throughout the world, notably in the CENSA code, as it is called. I will spell the name of that out, because it arises from the Council of European and Japanese National Shipowners' Associations. The point is that there is no "J" which can be sounded in the acronym, but it is important to recognise that the Japanese are involved. It was as a direct result, therefore, of my noble friend's committee's report that the liner conferences have been operating throughout the world very smoothly until 1974, when the United Nations code of conduct was adopted. The liner conferences situation would not otherwise have been disturbed.
But, as has been already stated, it was the developing countries who found that CENSA code not to their liking. Britain voted against the United Nations code, but Japan, for example, appears to be in favour of it. Indeed, the unity of the maritime developed countries has been upset by this new code, and therefore I very much welcome the agreement which my noble friend Lord Trenchard confirmed just now had been agreed last month among members of the European Economic Community. I understand that ratification of the United Nations code

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can be carried out by members of the Community with agreed reservations. That United Nations code was very hurriedly thrown together, and, as the Twenty-Fifth Report of the Select Committee in the Session 1977–78 pointed out, it had great disadvantages for the United Kingdom. Now the agreement reached within the EEC goes forward for discussion in the OECD. Very much is owed to my noble friend for these developments and the way that this is now going.
I would also like to join others in mentioning Sub-Committee B of the Select Committee and express regret that its chairman, the noble Lord, Lord Trevelyan, cannot be with us because of illness. I join others in hoping that he will have a very quick recovery after being in hospital and having his operations. I cannot refrain from mentioning that we worked together for the first time 32 years ago, when he was in the Economic Relations Department of the Foreign Office and I was working in one of the European departments; so I particularly look forward to further working with him in the future.
Turning to the state of the British shipping industry, I am to be followed in the debate by two noble Lords who are themselves in the industry and will give us the benefit of their knowledge, my noble friends Lord Inchcape and Lord Inverforth. So I will not go into those particulars myself. We all agree that the industry has been passing through a very difficult period and we are glad to see some signs of improvement in recent months. But there has been a substantial reduction in British-owned ships during the past year. The statistics for 1978 are available, and for that year certainly the United Kingdom is shown as fourth in the world table in deadweight tonnage. The noble Lord, Lord Goronwy-Roberts, said that he thought we might be fourth or fifth, but certainly in 1978 we were fourth.
Two of the countries who are ahead of us are Liberia and Greece. If we look closely at the registration of ownership, where Britain is concerned we find that the tonnage registered with the United Kingdom is 49·7 million tonnes. That owned in, and registered with, the United Kingdom is 46·7 million tonnes. So there is not a great difference between the
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tonnage registered and the tonnage owned by United Kingdom owners. That means that we are virtually with Japan at the top of the first division in the first league in the shipping of the world, because certainly where Liberia is concerned I think we can assume that considerably less of the tonnage which is registered with that country is genuinely Liberian in ownership.
My Lords, not only in size is the British industry in such a leading position in the world; we lead also in specialised cargo fleets, such as container shipping and other carriers. I think the importance of the United Kingdom shipping industry is not adequately known in this country, so I make no apology for emphasising these facts. I noticed a discrepancy arising, which my noble friend Lord Trenchard indicated, between the figures that he had for the contribution to the balance of payments and the figure which my noble friend Lord Rochdale had mentioned in his opening speech. I think we ought, if possible, to get this settled, and I think it might be possible before the end of the debate when my noble friend Lord Trefgarne winds up. The latest information I have on this is a statement made only a week ago by the president of the General Council of British Shipping in which he said—and this was published:
"In 1977 the net direct contribution of UK ships to our balance of payments was over £1,000 million and in 1978 the net contribution is expected to be of the same order".
So my understanding is that the net contribution is of the order of something over £1,000 million. It may be that my noble friend was considering the sea transport account rather than the net contribution to the balance of payments. I do hope that this can be sorted out later because it is an important fact, if it is a fact, as I believe it is, that the British shipping industry still does make this net contribution to our economy.
I would like to comment before I sit down on two matters bearing on the future health of the industry to which I believe the Government should be addressing their serious attention: first, the close links with our ship-building industry, and secondly, the threat posed by the blatant undercutting of freight rates by the Soveit Union and the East European countries described in the Select Committee's Twelfth Report. That can only be carried out by massive

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subsidies within the State trading and State ownership systems practised by those countries. On the first matter, with regard to shipbuilding, the United Kingdom industry is in a very difficult situation. This arises because there is in the world about three times the capacity that the world needs. The United Kingdom shipping industry is making its contribution to solving the problems. It is calculated that at the end of last year 66 per cent. of all merchant ship tonnage due for United Kingdom registration was on order for building in United Kingdom yards, and that was an increase upon the percentage at the end of the previous year, 1977.
In the coming months the Government will have important decisions to take on shipbuilding. There are serious economic and social problems in the shipbuilding areas. I point out that jobs in the smaller firms supplying components and in ancillary industries are also affected and they are usually in the same areas. I ask the Government to answer the following questions if they can today: In assisting with remedial measures, will the Government keep in mind the wellbeing of the British Merchant Fleet?
Not only the British economy, but also the shipbuilding industry itself, will suffer if the British Fleet is badly damaged by schemes which help foreign competitors. Orders from abroad are, of course, welcome, but if they are attracted only by massive subsidies enjoyed by foreign shipowners, the subsequent competition is likely to be most unfair placing the British shipping industry at a great disadvantage. The Polish deal is past history, but it was disquieting at the time. For example, the subsidy element could mean that a ship was acquired by a foreigner for £1 million less than a similar ship being built for a British owner. That means that during its lifetime that ship would enjoy a start of £1 million against British competitors in the world shipping lanes. The Government should find a balance between the interests of both industries, because both industries are interdependent.
I turn to unfair competition from the Soviet bloc countries. A great deal has been heard about the expansion of the Soviet Navy, and rightly so. However,
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not enough has been heard about the expansion of the Soviet Merchant Fleet in this unfair way. Action has been taken within the EEC, but the report of our committee points out that it has not been enough. We do not know what happens in the Council of Ministers because the proceedings are confidential. The fact is, however, that the proposals of the Commission, limited as they were, were very much watered down and all that we have as a result is the monitoring over a period of two years—which started at the beginning of this year—of only two routes: one between the EEC and East Africa and the other between the EEC and Central America.
I accept the need to avoid unnecessary provocation of the Soviet Union. The matter can be handled in a friendly way. I understand that there is to be a meeting between Western interests and Soviet interests in August. I do not know whether it is simply again another meeting of the British/Soviet Maritime Commission. It may be wider, and perhaps my noble friend can inform us about that. I am sure that it is welcome that the Soviet Union has apparently agreed to join one conference—the India/Pakistan Conference mentioned by my noble friend. It has been suggested in the past that it might join conferences, but there were technical difficulties. However, from outside the liner conferences, the Soviet Union has launched deliberate offensives to take over as much cargo as possible on certain selected routes, charging freight rates which on commercial terms are simply not possible. Those rates can only arise from very heavy subsidisation.
From the United Kingdom point of view more action is needed—and much more effective action than is now being taken. I was very glad to hear the assurances given by my noble friend Lord Trenchard in his speech earlier this afternoon. I hope that the Government will accept the recommendations of the Select Committee and will succeed in persuading our partners in the EEC to act accordingly; namely, to strengthen the very limited measures which are now in train.
5.45 p.m.
The Earl of INCHCAPE: My Lords, as chairman of a major British shipping

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company, I am doubly grateful to the noble Viscount, Lord Rochdale, first, for his past services over many years to the shipping industry; and secondly, for his service today in initiating this debate and for his full and forthright speech in which he covered all the salient points of the industry's situation. His Motion is linked to the Twelfth Report of our EEC Committee and having taken part in the deliberations of the sub-committee I welcome the opportunity to contribute to the debate today.
Indeed, my EEC involvement goes back some years, because as president of the General Council of British Shipping, I went in 1976 to call on the noble Lord, the Lord President of the Council and Leader of the House, Lord Soames, who was then Commissioner for External Relations in Brussels. He made it clear how important it was for the United Kingdom to consider our shipping problems in Community terms—to add as it were a "Brussels dimension". We accepted that inspiring message in the spirit in which it was given, but to do this sort of thing is never easy. There are bound to be conflicts between various national interests of which shipping is only one. Other conflicts will arise too, between national interests and those of the Community. So, it is difficult to start from the basis of a grand design for a European shipping policy and hope that everything will fall into place.
Those of your Lordships who, like myself, favour a more pragmatic approach will in recent weeks have drawn comfort from the attitude of the EEC to the United Nations Liner Code which has been mentioned by several noble Lords this afternoon. That international convention has been referred to and debated before in your Lordships' House. There has been no doubt, ever since the text was finalised in 1974, about its divisive character. It has divided many developed countries from the developing countries of the Third World. Equally, it has created divisions between member countries within the EEC. And yet, it was possible for the EEC Commission at the UNCTAD Conference in Manila, which has just concluded, to present an agreed front on this issue.
The so-called "Brussels package" has the support not only of the EEC countries and of the Commission, but I believe of
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other Western countries, such as Sweden, Norway, Finland and Greece. Ship-owners no less than Governments have accepted this compromise; for compromise it is, as the noble Viscount, Lord Rochdale, has said. I would not wish to burden your Lordships with technicalities, but it is important to see where the compromise lies. The basic provisions of the Code on cargo-sharing — the famous 40-40-20 formula—will apply as to trade between developed and developing countries. Cargo-sharing in the trade between developed countries will continue to be determined by commercial criteria. These arrangements seem to me to accommodate commercial and political realities. alike.
However, important though the Code is, I see it against a wider backcloth. It represents a major topic on which the member-States of the Community and of the Commission, and of the various national shipowner associations, have managed to reach agreement. So, the question then arises: cannot we build on what has now been achieved? I think that we can, for the code is not the only example that I can cite of agreement, although it is by far the most important one.
Following the anxiety by the Eastern bloc fleet, the Community (as has been mentioned by several noble Lords) has agreed to monitor non-commercial competition. There is widespread agreement too on the measures that should be taken on safety grounds against substandard ships. But I would like to insert a word of warning here. There is a role for the EEC in co-ordinating action under internationally agreed safety and pollution conventions. But for it to duplicate the work done at IMCO would be a serious waste of time and money for all involved.
What all this suggests to me is that if we are to follow the advice of the noble Lord, Lord Soames, and try to import a European dimension into our shipping policy, we should do so on a pragmatic and step-by-step basis. Let us first seek agreement on both shipowner and Government networks, on individual issues and gradually build up a European shipping policy. That is, I am sure, a better line of approach than to draw up an elaborate and ambitious blueprint which would have little chance of being implemented

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and might well lead to disappointment and disillusion.
The noble Viscount, Lord Rochdale, did not limit his Motion to the EEC. It goes on to call attention to the
"problems of the shipping industry"
generally. I should like to take advantage of that wide invitation. As has been mentioned by many noble Lords this afternoon, we do have problems, but I want to set those problems in perspective. As the noble Viscount, Lord Rochdale, has said, the British fleet is now 40 million deadweight tons. It includes all the major types of merchant ships: oil and chemical tankers, gas carriers, bulk carriers, container ships, ro-ro ships and off-shore vessels, as well as passenger cruise ships and cross-Channel ferries.
In recent years the fleet has made an annual contribution to the balance of payments—and I should like to confirm the figure given by my noble friend Lord Campbell of Croy—of £1,000 million a year. That is the net figure. In addition, a further £300 million is saved by imports being carried in British ships. If it was not for its shipping, this country's modest surplus on current account for 1977 would have been a not-so-modest deficit, and the same would have been true in 1978.
As we are frequently reminded, North Sea oil will not last for ever, and for balance of payment reasons alone we still need a major British shipping industry. As my noble friend Lord Simon has said, we are also an important employer of seafarers and shore staff, and we are an important customer of United Kingdom shipyards, indeed traditionally their most important customer. We are of major importance to the insurance, shipbroking and forwarding businesses. We carry some 80 million tons of this country's imports and exports each year. So we are not being boastful when we say that a strong British shipping industry is of vital importance to this country. However, we in the shipping industry do not believe that this should be taken for granted because we have problems about the future
During the last five years the major problem has been one of worldwide over-tonnaging, particularly in the tanker sector. Even now we are not clear of it.
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The surplus of the largest tankers is likely to continue for several years yet. In the shipping industry we have taken the necessary steps—the sometimes painful necessary steps—to adjust capacity, and slowly shipyards are doing the same. We hope that Governments everywhere will now recognise that the only sure remedy for the world's shipbuilding sickness is a genuine revival in demand, and the essentials for national shipyards are competitive prices and prompt deliveries.
In shipping, too, competitiveness is one of our problems. It is one which the industry collectively and companies individually are tackling. But we are competing in a free market against ships with far lower crew costs than ours, and if we are to prosper, not only in the short term but in the long term, we must match and better the total costs of our competitors.
Then there is the field of co-operation with the Government. Here I am happy to say that there is no problem. We have always been lucky in having excellent relations with the Government of the day. For example, the last Administration provided the Dell Moratorium Scheme which has been of considerable help to one sector of the shipping industry. Recently, as the noble Viscount, Lord Trenchard, mentioned, your Lordships passed a Merchant Shipping Act—albeit at great speed—which had general support from both sides of the House and from the Cross-Benches.
This close working relationship with the Government is one of the invisible advantages of the British fleet. Developments in UNCTAD, competition from the Eastern bloc fleets, and the regulatory activities of the United States all demand that Government and industry work as one. The same is true in the fiscal sphere. The Chancellor is aware of our need for consortium group relief, and there is a need to stop foreign Governments taxing British ships when we do not tax theirs. I hope that my noble friend Lord Inverforth will have something to say on that subject. Finally, there is the problem of ensuring that our fleet is able to take advantage of the revival of the market when it comes, as it surely will.
For over a period of 10 years the British shipping industry invested an average of £1 million a day, as has been mentioned

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this afternoon. That period is now over; indeed, it has been over for some time. Reserves have been used in keeping afloat during a long hard recession. Inflation has made a nonsense of depreciation based on historic costs, and many ships have been sold by companies to pay off debt and so improve their balance sheets.
Therefore, replacement of the fleet is a formidable task. We have the skilled seafarers; we have the management; and we have many fine ships. But if we are to make full use of those advantages, the time will come when we shall need to make further investments; not growth for growth's sake, but growth to meet the likely expanding world demand for shipping services in the 1980s. I am not asking for investment grants. Valuable though they were, we do not think that they are the right solution. Rather, we believe that there is a case for investment allowances. I hope that this case can be developed to the Government and that the Government will look favourably upon it. After all, we in the shipping industry do not get certain advantages which are available to manufacturing industry, such as stock relief. Although it is accepted that this industry has served the country well over many decades, we must ensure that it will continue to do so, as that is in all our interests.
5.56 p.m.
Lord INVERFORTH: My Lords, as chairman of shipping companies I, too, particularly welcome the initiative of the noble Viscount, Lord Rochdale, in enabling us to spend some time this afternoon discussing British shipping. I should like to begin by mentioning the termendous problem which has been facing my own family company regarding the Vietnamese refugees, as both the "Sibonga" and the "Roachbank" belong to us. Noble Lords may recall that "Sibonga" rescued from the South China Sea 1,003 and "Roachbank" 295 of these unfortunate people. We have been glad to save their lives, feed them and aid them with medical supplies.
When the "Sibonga" arrived at Hong Kong we took on board doctors and nurses to further their care. In all we had them on board the vessel for two weeks and, although much has been reported of this
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incident in the Press and on television, little has been said of the remarkable seamanship of the master in handling the vessel during the actual rescue operation. This was carried out under very difficult circumstances in heavy swell conditions, with severely dehydrated and weak refugees, the majority of whom were women, children and babies in arms totally ill-suited to boarding on the open sea a vessel such as the "Sibonga". Despite having to lift them with improvised cradles on to the decks of the vessel—which was rising and falling over 30 feet—the only incident was a young women sustaining a slightly crushed toe.
For a cargo vessel designed under normal circumstances to accommodate only 60 persons, suddenly having to cope with such an enormous number of people, needed considerable organisation. The problems presented by sanitation, hygiene, potential disease and fire hazards I need only leave to your Lordships' imagination. The fact that the whole operation was managed so well illustrates the many skills, professionalism and humanitarian outlook needed by the master, officers and crew of a British ship.
The problem of the "Sibonga" refugees, thankfully, has been resolved. However, the "Roachbank", I regret to say, still lies idle at anchor off Taiwan with her refugees on board. She picked them up on 23rd May and four weeks later they are still with us. In the present state of our shipping industry we can ill afford the resultant loss of earnings. I am sure your Lordships will appreciate that in these circumstances the charterer immediately puts the ship off hire, and so we bear a considerable loss, in addition to the cost of feeding and caring for the refugees. These costs together have run us into many thousands of pounds and so far have all fallen on the shipowner. It is ironic that my company should be penalised financially, when each master was committed to fulfilling his legal obligations under the Maritime Conventions Act 1911.
I know that Her Majesty's Government are deeply engaged on this difficult question with the United Nations High Commission for Refugees, and have proposed an international conference on the subject, but all this takes a terribly long time. "Roachbank" is under a year old, a modern and expensive ship, and the long

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delay we are experiencing whilst Governments and diplomats struggle with the problem is extremely worrying and costly —to say nothing of the ineffective impression we give by being unable to carry on the ship's commercial activity. We shipowners do need assurance that if we save life we shall be relieved as quickly as possible of any victims we have picked up. The solution to the problem of the refugees is surely one for governments and not for individual shipowners.
May I now turn to shipbuilding, the plight of which industry is now even more bleak throughout the world than when I last addressed your Lordships a year ago. As you are aware, my company has been a good customer and 100 per cent. loyal to building in this country. Indeed, since the Second World War we have built 82 vessels, with the 82nd being delivered today more than a month ahead of contract date. It is surely fair to claim the successes of British Shipbuilders as much as their failures so far as deliveries are concerned. The shipbuilding industry can only survive if it gives the customer what he requires, when he wants it. It is no good trying to persuade owners to build surplus to their own requirements at a time when there is already a surplus of tonnage worldwide.
I have always felt that this country should have an efficient shipbuilding industry—not only for defence purposes but also to produce ships of good quality for our merchant fleet. Shipbuilders, however, must concentrate on improving their efficiency, so that when an owner does want to build he can be quoted the keenest price and offered the best delivery terms with the assurance of both management and their workforce.
My Lords, there is another aspect affecting competition which I should like to mention. British ships operate with crew sizes which are legislated or recommended by the Department of Trade. These numbers are frequently in exess of those required by our EEC partners, or for that matter by other main foreign-flag carriers. The British shipowner is therefore at a considerable disadvantage. Is it not possible for IMCO to extend its legislation in this particular field? Meantime our own Department of Trade must seriously reconsider manning levels on British-flag vessels. Every single pound per day counts, and we look to the United
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Kingdom Government to see that we are not placed at a disadvantage.
Another example of this concerns safety and, while British shipowners approve the lead that the United Kingdom Government give at IMCO in producing new internationally agreed legislation, what we cannot afford is for the United Kingdom alone to go beyond such legislation, in a way which puts us at a competitive disadvantage. We cannot afford to pay more than our responsible competitors for survey fees, and we cannot afford to have safety requirements greater than those competitors, or the expensive testing of equipment which has already been approved in other reputable countries. These are not issues of safety but of cost. The British fleet's safety record is already three times as good as the world's, but please do not penalise us with extra financial burdens. An internationally agreed safety code, through the offices of IMCO, is the best solution—with such legislation adopted and monitored by all member-States.
My noble friend Lord Inchcape has mentioned briefly the problem of foreign Governments taxing British ships when we do not tax theirs. At this time of major depression our industry can ill afford the payment of unnecessary, unfair and at times discriminating taxes. Although developed countries on the whole incorporate the OECD principle of exemption for shipping, there is an increasing tendency for developing countries to tax our ships—usually by reference to turnover, which they quite wrongly equate to profits. United Kingdom shipowners therefore effectively bear a further overhead expense to which the foreign shipowner from the country concerned is not liable. Not only therefore are we less competitive but we are being obliged to pay out increasingly substantial sums of money at a time of losses and real financial stringency. What is more, we are paying these taxes to countries many of which in fact are in receipt of grants in aid from this country—let alone, on occasion, the gift of cheap ships. Just touching on capital taxation, we were very interested to see what the Chancellor had to say in his Budget statement and hope very much that we may look forward to some relief in this difficult area.
One final word about the EEC. Shipping is an international industry. The interests

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of the Community's merchant fleets are essentially directed outwards towards the rest of the world rather than to intra-EEC trade, although this has grown significantly. The problems that face the EEC in shipping therefore cannot be treated like transport problems, which are purely internal. Thus, in whatever way EEC competition policy may relate to intra-EEC trade, I believe it does not apply to international liner shipping. Shipowners are hungry creatures these days and competition is fiercely intense. On many of my own company's international trading routes our most formidable and persistent rivals are in fact fellow-members of the EEC. Consequently I hope that Her Majesty's Government will oppose any attempts by the European Commission to apply the EEC Competition Rules to international liner shipping. This is not just because liner conferences have a much wider basis than the European Community, but because we believe that relationships between shippers and conferences should continue to be established at a commercial level. The last thing we want is a European equivalent of the US Federal Maritime Commission to regulate the application of the EEC Competition Rules to shipping. We have only to look at the recent developments in the US trades to see what a disastrous effect this could have on the commercial operations of our merchant fleets.
Notwithstanding the competitive pressures of everyday commercial life which I have just mentioned, there are many wider policy issues where the shipowners of the EEC can co-operate closely to their mutual advantage. I was very happy that a compromise was reached among the EEC partners on their approach to the UN Liner Code, so that we were all able to go to the recent UNCTAD meeting in Manila with one voice on this complicated but important issue. It is on the wider range of shipping policies such as this that the EEC could well be very useful to us in the future. My Lords, I have spoken on a variety of shipping matters, but I hope that what I have said may be regarded as useful and that the Government will take note of my points.
6.8 p.m.
Lord RUNCIMAN of DOXFORD: My Lords, like other noble Lords I should
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like, at the risk of a desirable repetition, to thank my noble friend Lord Rochdale again both for starting this debate and for the manner in which he did so. I do so all the more because of the interest which I must now declare, which is that I have been a practising shipowner for something over 50 years, and still more or less am. That gives one a slight feeling of having seen an awful lot of this before.
It was no great pleasure being a ship-owner in the depression of the 1930s, but I think it is true to say that the current —I am told by someone in the House this afternoon that I must not use the word "depression"—situation with regard to sea transport is more difficult for the British owner than that situation was because of one or two technical things. It is much more difficult to deal with a small fleet of large ships than with a larger fleet of smaller ships. You have more flexibility with the latter. You have inflation as compared with, if anything, falling costs in the 1930s, and, above all, the political bedevilment of so much of international shipping, which has rightly been the subject the greater part of your Lordships' debate this afternoon.
I will not try to add to what people better informed than myself have had to say about the liner trade, except to echo something which fell from my noble friend Lord Rochdale when he urged that the commercial interests of this country should make more use of shippers' councils. I have seen something of it from both sides of the fence and it is disappointing that, in their own interest, let alone that of British shipping, shippers' councils are not stronger, more effective and more numerous.
Otherwise, I wish to speak briefly on the bulk cargo section of the British fleet. It is closely allied, of course, with the independent tanker section and the problems which face it; namely, that they are both subject to the charter market, which is itself probably the most extreme case of simple economics of supply and demand governing price, certainly that I know of, anywhere in the world. The liner conferences can to some extent cushion, or at any rate postpone or make less violent, the effects of supply and

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demand, but the tramp market, to use the old-fashioned term for it, cannot, and the fluctuations are quite startling. One remembers freights falling by 75 per cent. on a particular commodity in a large trade over a period of six months, which is not the kind of thing which has to be put up with by most industries.
Bulk cargo ships form a little under one-quarter of the total tonnage of the United Kingdom; or it would probably be more correct to say that it did so at the beginning of 1978 because, as has been suggested already this afternoon, it is pretty clear that the sales of United Kingdom ships to foreign owners have been mainly in the independent tanker and bulk cargo markets. The reason for that is simple—in fact I have just given it; namely, that they are immediately subject to falls in price which, if your standards are the sort of standards which United Kingdom shipowners have learned to observe and if your financial arrangements over the last years have been such that you have built ships on borrowed money and therefore have no fat, or not much, to live on, you are obliged to sell to keep a cash flow going, and I cannot see any immediate prospect of that process being reversed.
The only long-term remedy, so far as the bulk market is concerned, is a sustained increase in the demand for bulk commodities to be carried about the world by sea. There has happily been a welcome increase recently and, if this is sustained, I dare say those of us who are in that trade will feel encouraged to remain in it rather longer than we otherwise might. But it will take a very much larger recovery in world trade than anyone can foresee to enable the British bulk owner to compete successfully with those to whom he has sold, very often at a loss, ships which they can operate much more cheaply than he can, in matters of crew and the like, and also they are people who have had advantages in not paying taxes over the years which has left them with rather more cash available to see them through bad times. That is no new phenomenon either; one saw it not so early as the '30s but in the depression which followed the Korean war, and one has seen it at intervals since. I am afraid, therefore, that the chances of a suitable sufficient increase in demand are not really very great. The only hope for the moment,
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and it seems a slim one, is a diminution in the supply; in other words, a real cutting back in the building of unwanted ships by yards subsidised for that purpose in a good many countries. That is always difficult. You can buy or sell a ship or you can order a ship, and it does not take very long one way of the other. You set up a shipyard and you then have a very large establishment. Of course in shipbuilding, which is largely an assembling industry—mention has already been made of the number of sub-contractors involved in any shipbuilding operation—it is very much more difficult to unwind it without a great loss in the employment of the people you have taken on to run it in the first place. If you are talking about jobs in shipbuilding and jobs in shipowning, you will always find there are more jobs to be considered in shipbuilding than there are in shipowning, which is a most capital intensive trade.
There is always a tendency for people who are looking for the employment of their nationals to favour the shipbuilder at the expense of the shipowner. If that goes on, I take an extremely gloomy view of the future of the bulk cargo part of the United Kingdom fleet. And if we should find ourselves with a very small number of bulk carriers at a time of war or threatened war, we might find ourselves in the situation, which was described with just sympathy by the noble Viscount, Lord Simon, of being dependent on other people for our own vital necessities. I can pose the problem, but I cannot really attempt to answer it. I can only say from that point of view that I think the beginning of widsom is the reduction in unwanted tonnage.
6.18 p.m.
Lord TREFGARNE: My Lords, I rise armed with a sheaf of papers informed to answer almost every point that has been made in this debate, but we will see how we go and if I get a bit long-winded perhaps noble Lords will forgive me if I cut my remarks short and answer the rest of the points in correspondence. As my noble friend Lord Trenchard has already covered most of the foreign shipping relations matters that have been raised, I will concentrate my attention more narrowly on the United Kingdom industry and some of its specific and more domestic problems.

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First, I will make some initial general remarks. I am heartened by the emphasis that successive speakers have laid on preserving the essentials of our traditional approach to foreign shipping relations. The interests of the United Kingdom industry lie with maintaining a free commercial environment, particularly in the developed world, but we must bear that in mind when framing our domestic policies too and not let the recession become an excuse for adopting narrow or protectionist attitudes at home.
Secondly, and this also echoes much of what has already been said, despite its problems, we must recognise the success of our United Kingdom shipping industry. Nobody denies that times have been very difficult, but we pay tribute to the resourcefulness and ingenuity with which the industry has met its difficulties. Shipping remains a major United Kingdom industry and United Kingdom shipping remains a major force in the world. What is especially encouraging is that we are among the leaders in the most modern, efficient and dynamic sector; namely, the containerisation of liner cargo.
I am of course aware that United Kingdom shipping, like its foreign competitors, is suffering from the effects of a recession, perhaps the worst since the 1930s. It originated in the great expansion, largely outside the United Kingdom, of new shipbuilding in the 1960s, and was followed by the oil crisis of 1973, and then the slow growth of world trade since that time. Too many ships are chasing too little cargo. Freight rates and earnings are depressed. The oil tanker sector was earliest and hardest hit, and has not yet recovered. Meanwhile, over-capacity has spread, first, to dry bulk carriers—by which I mean those carrying dry cargo on regular services. So far the industry has weathered the storm well without Government assistance on any large scale, thanks to the enterprise, efficiency, and generally good management and labour relations. But there could still be difficult times ahead. Forecasts vary as to when the market for shipping services will return to balance, but it is likely to be years rather than months. The effects of such a prolonged recession are bound to put a strain on any industry's resources. I know that the industry is taking steps to cut costs and increase revenue and efficiency, and it is
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also discussing what further action needs to be taken in co-operation with the Government.
May I now turn to the various speeches that have been made and try to deal with at least some of the important points. The noble Viscount, Lord Rochdale, to whom we must record our gratitude for initiating the debate, made a number of points which I shall cover in a few moments. First, I want to make our position clear on the Grand Jury investigation to which the noble Viscount referred, and which has caused considerable concern in the Government. It is perhaps worth recording that the maximum fine in this case of 50,000 dollars was imposed on 13 individuals, two of whom were United Kingdom citizens. Furthermore, the maximum fine was imposed on two British members of certain consortia operating on these trades, totalling 1·8 million dollars. These latter fines were in fact agreed settlements made out of court. As my noble friend Lord Trenchard said, my right honourable friend the Secretary of State for Trade made a statement expressing Her Majesty's Government's grave concern at the recent prosecution by United States authorities of British shipping interests, and we are awaiting their response.
The noble Viscount, Lord Rochdale, also asked me about the joint British-Soviet Maritime Commission which held a meeting in London recently. The commission reviewed various trades where there is a significant Soviet presence. The United Kingdom side welcomed the agreement opening the way for a Soviet line to become a member of the India, Pakistan and Bangladesh conference, but we expressed regret at the continuing disagreement between the Soviet line and the East African conference. The commission reviewed the bilateral UK-USSR trade and, I am told, noted an encouraging increase in the proportion of trade carried by the United Kingdom flag.
The Soviet threat has been mentioned by almost every noble Lord who has spoken today, and several noble Lords have been critical of the progress being made in the EEC on this matter. But I would remind your Lordships that it is our policy, and indeed the policy of our predecessors, to proceed in these matters —not only in the EEC and elsewhere—

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wherever possible by negotiation behind the scenes and by persuasion and accommodation. While it may not be inappropriate to consider what retaliatory actions could be taken if the need arose, the time has certainly not yet come when we should consider taking those actions. But we certainly believe that the EEC ought to consider what measures could be taken, and we are continuing to use our influence to get them to agree to that. May I, in parenthesis, try to keep the matter in perspective. The United Kingdom Fleet in 1978 was 49·7 million deadweight tonnes, although there has been some small decline since then, and the Russian Fleet was still only 19·8 million dead weight tonnes. So, for the moment at least, we are still almost two and a half times the size of the Russian Fleet—
Lord GORONWY-ROBERTS: My Lords, before the noble Lord leaves the question of the possibility of countervailing action, may I put a point to him? I understand that the monitoring exercise which has been agreed—although it has been restricted to two routes, and there are a number of other reservations about it in some quarters—will take two years. The present EEC attitude (if I may call it that) is that countervailing measures should not be considered or thought out until the monitoring exercise—if and when it takes place—has been completed. That puts the point of countervailing action, if it proves necessary, at at least two years, and very probably at least three years, beyond today. In the meantime the pressures on our own shipping and that of others among our partners are real and may intensify. May I ask the Minister to give urgent consideration to pressing our friends and partners to engage in a notional exercise on countermeasures pending the end of the monitoring period? What is to be lost by doing that while the monitoring is going on, rather than postponing even the consideration of the measures until after the monitoring is over, which would be two years ahead?
Lord TREFGARNE: My Lords, I cannot hide from your Lordships the fact that we are disappointed by the present EEC position on this matter. We are certainly pressing them now as opportunity
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arises to reconsider the position in this regard and indeed to consider now what actions might be taken should they become necessary in future. As the noble Lord knows, we have to take our EEC partners with us; we cannot on our own steamroller the EEC into doing this. But the noble Lord may be assured that we are doing everything we can through the proper channels and by the proper means to get the EEC to change their ideas in this direction and to achieve what the noble Lord is seeking. Certainly the noble Lord and I are at one as to what ought to be done in this situation.
I now wish to turn to the remarks which the noble Lord, Lord Goronwy-Roberts, made in his speech. I believe that I have already covered his principal point about the need for more concerted and more effective action in the EEC. The noble Lord raised some other points, almost all of which I think I have now covered. Further, he raised the question of Soviet practices, which is really part of the same concern leading up to what we hope will be a better solution in the EEC, and he asked whether the matter is being raised in the Council of Ministers. As the noble Lords knows, it has been recently raised with regrettably unsatisfactory results, but we shall continue to press for it to be reconsidered, and I have no doubt it will be raised again in the near future.
The noble Viscount, Lord Simon, also referred, at some length, to the Soviet threat. I am glad that the noble Viscount (who is not in his place at the moment) also preferred accommodation to confrontation. That is certainly our preferred policy, and we hope that in this matter we shall be able to achieve that. The noble Viscount, Lord Simon, along with the other noble Lords, also asked me about worker participation and about what we were doing for what I think he called "crew comforts", for our seamen. This is of course a most germane point, and I shall write to him on it specifically.
The noble Lord, Lord Hayter, asked me about the Economic Development Committee for international freight movement. He referred to the activities of the little Neddy and its discussions on the state of the shipping industry. Shipping is a uniquely international industry and

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many of the factors which influence world shipping are inevitably outside our control. That alone makes it doubly difficult to forecast the future with any confidence. Because of its international nature, many of the central questions affecting shipping safety, pollution, the liner code, and so on are best considered in the appropriate international fora. Regular meetings now are well established between the General Council of British Shipping and the seafarers' organisations to discuss economic aspects. So far as I know, the little Neddy for international freight movement is the only body which brings together formally representatives of Government, management, the unions and the customers. Although its remit is wider than shipping, it has a role to play in the exchange of views and ideas, particularly during this difficult time for the shipping industry.
The noble Lord, Lord Hayter, also asked about overseas aid and special deals involving shipbuilding. Several noble Lords raised the potential damage to United Kingdom shipping through the grant of special terms to our competitors to order ships in this country or to assist in the purchase of ships under the aid programme. Perhaps I can say more about that in a moment. When I come to refer to the remarks of my noble friend Lord Campbell of Croy, I can refer specifically to the Vietnam ships deal where I think there are some lessons to be learnt.
If I may now turn to the remarks of my noble friend Lord Campbell of Croy, he asked me to try to clarify the apparent discrepancy between the remarks of my noble friend Lord Trenchard and the noble Viscount, Lord Rochdale, on the balance-of-payments situation. I think that there may be some misunderstanding about the different terms involved. Certainly United Kingdom-owned ships earned in 1977 about £1,000 million net; but the shipping account included payments by United Kingdom nationals for shipping services to non-United Kingdom shipping companies. If those figures are taken into consideration, then in 1978 the total shipping account moved into a deficit position, of (so I am advised) £300 million, and it may be worse in this year. The figure of £1 billion total deficit has been suggested for 1980, but we believe that that is unduly pessimistic.
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My noble friend Lord Campbell of Croy also asked about the August meeting on Soviet shipping matters. This is a meeting between the United Kingdom and the USSR shipowners which, by the nature of the Russian situation, is principally the Russian Government; but it really only relates to bilateral trade and is not part of the process of seeking a more general accommodation. The next formal meeting with the Soviet Government is the Joint Maritime Commission meeting next year, but contact between individual liner conferences and Soviet lines will be continued in an attempt to find an acceptable basis for entry into these new conferences.
I now refer to the sale of ships, with aid, as was done in the case of Vietnam. There is perhaps a general lesson to be learned from that case which may apply to other similar deals when considered in the future. The offer of £4½ million from the aid to trade contingency provision, as it is called, to assist with the purchase of four SD 14 general cargo vessels from Austin and Pickersgill was made by the previous Administration and embodied in a formal exchange of notes with the Government of Vietnam. The previous Administration explained in the other place on the 13th February the reasons for this step. Since then one ship has been delivered, various instalments paid on others, and almost £2.3 million remains to be paid. Under the terms of the agreement these instalments are paid directly to British Shipbuilders and we see no possibility of their being diverted by the Vietnamese authorities. The aid forms an essential part of the contractual arrangements for the sale of ships which Vietnam could otherwise have bought elsewhere in the world market at prices broadly competitive with our price after allowing for aid and put them into service in competition with our own shipping lines. The general lesson to be learned from these deals is that the developing countries will buy their ships from where they can and doubtless they will get them at least as cheaply from elsewhere; so that we face competition for our shipping industry whether we supply ships or not. It is therefore sometimes worth proceeding with these deals simply as a good means of providing additional business which is sorely needed in our shipyards.

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The noble Earl, Lord Inchcape, in an interesting speech asked me a number of points. I am not sure that I shall be able to answer them all this evening. I shall try to do so, but if I miss any I shall write to the noble Lord. He asked particularly about investment allowances. He asked whether there will be sufficient incentive for the shipping industry to reinvest when the recession comes to an end. Mention was made of investment allowances. The industry already enjoys the advantage of a 100 per cent. free depreciation on the purchase of new ships, which means that it is not badly off in relation to its European competitors. The Government will examine with care any proposals from the industry but obviously we can make no commitment at this time.
The noble Earl, Lord Inchcape, referred to the swift passing of the Merchant Shipping Act at the end of the last Session. The noble Earl will appreciate, I think, that they were unusual times and, although we shall be monitoring the effect of the Act as passed, we have no immediate plans for introducing any amending legislation.
The noble Lord, Lord Inverforth, referred to the serious problem of the Vietnam refugees with which his company has been particularly involved. We recognise the pressures and frustrations faced by ships' masters and shipping companies not only when rescuing Vietnam refugees in the South China seas but in the period afterwards when arrangements are made to provide at least temporary asylum. There is no question but that we support the action which ships' masters have taken in recent incidents. It reflects great credit on them and on the shipping companies. The difficulties which arise after the refugees have been rescued bring forward many conflicting considerations for the Government to take into account. We have decided upon humanitarian grounds to accept all refugees from the "Sibonga" and all those from the "Roachbank" which the Taiwanese will not accept. The scale of the problem is such that the Government cannot make an open-ended commitment. A solution has to be sought on an international basis rather than by the United Kingdom alone.
Both the noble Earl, Lord Inchcape,
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and the noble Lord, Lord Inverforth, complained of the double taxation which sometimes falls on British shipping companies. The Government are certainly concerned about the increasing number of countries which impose taxes on shipping revenue earned on turnover rather than on profitability. While we have some sympathy with the view that reserved countervailing powers should be available to the Government to be used in situations where our shipping interests are treated unfairly, there is a danger that the existence of such powers will be counter-productive when conducting negotiations on double taxation agreements. We will keep the matter under careful review.
Finally, I refer to the point made by the noble Lord, Lord Inverforth, about the application of stringent safety and manning requirements on British ship operators. I have taken careful note of what the noble Lord has said. The Government have no desire to place British fleets at any commercial disadvantage; but, as I understand it, the recommended manning levels are directed at securing the safe operation of these ships, which is surely the common object of both Government and industry. However, if the noble Lord has particular points that he wants to raise, I shall be happy to draw them to the attention of my right honourable friend. My Lords, I have spoken too long already, I fear. May I end by reminding your Lordships that British greatness was perhaps built upon the shipping industry as much as any other, and as it is a central tenet of this present Government's policy to restore this nation to its rightful place at the top table of the world, we feel sure that the shipping industry will help us do that again as it has done in the past.
6.41 p.m.
Viscount ROCHDALE: My Lords, I am sure that anyone moving a Motion in your Lordships' House, and having from every speaker the feeling that the debate has been worthwhile and has raised important matters, cannot but be satisfied. For my part, I am very pleased with the way that this debate has gone. I should like to thank all noble Lords who have taken part in the debate from their several points of view and experience, and from many points of view there has been great experience shown. I should like in parti-

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cular to thank the spokesman from the Front Benches, the noble Lord, Lord Goronwy-Roberts, who made a very important contribution, and also my two noble friends on the Government Front Bench, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Trefgarne.
The word "euphoria" crept in during the course of the debate. Obviously, it would be wrong if the message were to go out from this House that it was merely one of general euphoria in what was going on in the shipping world in the United Kingdom. But it would be equally wrong if we did not interpret the word "euphoria" as recognising and expressing appreciation of what the industry and all those who work in it are doing in the extremely difficult circumstances in which they have to operate today. Obviously, there are enormous problems; they have all been referred to and analysed. I hope that the result will not be merely words but will encourage the Government to continue with the department the excellent work of action to get some of these problems resolved as quickly as possible.
I am very grateful to my noble friend Lord Trefgarne for resolving the little problem of the contributions to the balance of payments. When we all read that in Hansard we shall find that we were both, broadly speaking, right; it was merely a matter of how the references were phrased.
Perhaps I may make one other point. Shipping is not a subject that lends itself to emotion; but I must say, listening to the noble Lord, Lord Inverforth, that there was a degree of emotion—and rightly so—when he reported and gave us a very interesting account of what went on in the case of the "Sibonga". It showed that those who serve at sea in these ships today continue to live up to the highest traditions of the Service. I am very glad he made that point. My Lords, having said that, and having again thanked all noble Lords for their contributions, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

ANIMAL WELFARE: PROPOSED COUNCIL
6.44 p.m.
Lord HOUGHTON of SOWERBYrose to ask Her Majesty's Government
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whether they will set up the Council for Animal Welfare announced in the last Parliament and, if not, what alternative they propose. The noble Lord said: My Lords, we pass from a debate on shipping to a proposal for the setting up of a council for animal welfare which perhaps, unlike shipping, does arouse emotions and is of deep concern to a great number of people throughout the land. In order to have the matter in full perspective, I hope that your Lordships will forgive me if I go back to the announcement made by the then Prime Minister my right honourable friend Mr. Callaghan on 22nd March of this year. In the House of Commons he announced:
"The Government share the growing concern about the treatment of animals and have decided to set up a council for animal welfare to maintain an oversight in this matter and to advise the Government.
The council will have the power to review existing legislation and recommend legislative or other action on any animal welfare matter and to propose improvements in the existing advisory machinery.
That machinery includes the farm animal welfare advisory committee and the advisory committee on the administration of the Cruelty to Animals Act 1976, which is soon to be reconstituted with new terms of reference. In addition, the Government are appointing a new advisory committee on the transport of farm animals.
The council for animal welfare, which will have its own independent chairman, will comprise the chairmen of these three committees, which will constitute its standing committees, together with a number of additional independent members.
A further announcement about the council's composition and terms of reference will be made as soon as possible".—(Official Report, Commons, col. 718).
That is the end of that quotation, but there was a Press release from No. 10 Downing Street on the same day. In notes to editors the Government's proposals were embellished a little:
"The Government decided to set up the council in view of growing public concern about animal welfare generally.
The council represents a new and independent approach to animal welfare and a focal point in what is a very diverse field. As the Prime Minister has made clear, the council will be empowered to review legislation concerning animal welfare and to recommend legislative or other action on any animal welfare matters.
Although its terms of reference have not yet been finally decided, it will be within the scope of the council to examine any aspect of animal welfare and make recommendations on action that needs to be taken.
Areas for consideration could include use of animals in laboratory work, seal culling, deer poaching, field sports, transport and export of

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animals, cruelty displayed on TV and in films and the treatment of animals in zoos and circuses.
Although the council is not being set up to investigate individual complaints, the public will be free to write to the council on any policy matter affecting the welfare of animals and the council will follow up matters raised by the public with the appropriate representative bodies".
That was an announcement made to the great satisfaction of a very large number of animal welfare societies. They looked forward to the appointment of this council and to see it begin its work. Then the general election intervened, so naturally those of us who had been working in this movement were anxious to know what the attitude of the new Government would be towards the announcement made by their predecessors. I raised this matter when I spoke in the debate on the Address on 17th May. The Minister, the noble Lord, Lord Belstead, in reply to what I said, teased me a little, and he half accused me of being a Conservative. It was all good natured and taken in very good spirit. But the disquieting aspect was that he said (at col. 219 of Hansard):
"I am bound to say that we do not agree with the previous Government concerning the desirability of having a council for animal welfare, but that is a disagreement about means and not about ends"
I let that pass. I realised that 17th May was early days after the new Government had taken office.
I ought perhaps to apologise now for not having given the Minister notice beforehand that this was the matter I was going to raise in my speech on the Address. He might have been better equipped to deal with it had I done so. However, the matter has been pursued further in another place, and on 14th June, Mr. Walker, the Minister for Agriculture, said, in column 600, in reply to a Question:
"The announcement by the previous Prime Minister was generally welcomed as an important advance in this area. Obviously we have studied the last Government's specific proposals and they will be influencing our thinking. I ask the hon. Gentleman to wait until we announce our own detailed proposals, but I assure him that the objective of those proposals will be exactly the same as the intentions of the previous Government".
That, so far as I am aware, is where the matter now stands. So I am hopeful that I raise this matter again at a timely moment to bring to bear on the Government's thinking considerations which I think should carry some weight.
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May I say in passing that if there is one piece of advice I could presume to give to Ministers, Governments, trade union leaders or employers all those who have to do with the contentious affairs of public opinion and the conflicting interests and points of view of many people—it is this: Always give full weight to moderate leadership. I ask the Government to give full weight to the united voice of moderate leadership in the animal welfare movement at the present time. When I was in government, one of my jobs was to try to bring together the voluntary bodies who were dealing with social affairs. It was not a rewarding experience. I have since done my best to bring together a diversity of organisations dealing with animal welfare, and I am very glad to say that over the last 12 months there has been a remarkable unity between those bodies in their approach to the political parties during the recent general election. Never before have parties been approached by such a solid and united voice of animal welfare societies—and may I add with pleasure that never before have political parties responded to that in such a way, by including in their respective election Manifestoes promises about animal welfare.
I am not going to prejudge the conclusions of the Government. Action is what is needed. What we are talking about concerns machinery and methods: how to get things done. Action is really the keynote to all this and, in some areas, speedy action, too. What I think I should say is that, if there is to be an alternative to the proposed council, then it should be something better and not something worse. It should be something that will yield action and not delay it, or, in some cases, postpone it almost indefinitely. It should bear unmistakable signs of the probability of positive action, and I am sorry to say that I do not feel confident about this. I feel I want some assurances here, if I may say so.
Why does this proposal for a council appeal so strongly to the animal welfare societies? The answer is that they were all unitedly in favour of it. They put forward this proposal to the three main political parties, and the Labour party and the Liberal Party Manifestoes pledge themselves in favour of this. The Conservative Party, while making very welcome and valuable promises on specific

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measures of animal protection, did not mention this proposal.
The Government have a proposal before them which has been so strongly backed by the welfare societies and also, may I say, welcomed by a number of the trade protection societies: that I do know. When the Minister of Agriculture went round asking various interests in the field of animal husbandry and so on, he found a very ready response to the idea of the setting up of this council. The Government must have very good reasons for dropping this idea, if they do drop it, in favour of something else. We, the representatives of the animal welfare societies, set out in our own booklet the reason why we strongly favour this idea and we were delighted when the last Government finally took it up and gave a pledge about it.
The great value of a council of this kind would be to have a clearing house for the wide range of animal welfare in a field where at the present time there is not only diversity but a great deal of disconnected activity, departmentally speaking. It would be a very good thing to have somewhere to go—a body which could watch for overlapping or for lack of co-ordination and get particular matters attended to by relevant departments. Where, for example, do we go in Whitehall for a study of conditions in zoological gardens or circuses? Where do we go for cruelty which is shown on films or on TV? Where do we go on a question of the realities of, say, live hare-coursing or stag hunting, to give a few examples? I know of no department which would take responsibility, unless cruelty were involved. It is a curious thing how the approach of human beings to animals has always been in terms of cruelty. Unless there is cruelty, it seems to be all right. Hardship, discomfort, psychological disorientation and things of that kind seem not to concern a lot of people who would normally think they were reasonably kind persons. So I think there is a great deal in this proposal which is probably not visible at a casual glance.
Finally, there are various aspects of the exploitation of animals which gather momentum when commercial interests are strongly backing them but which are not really noticed until they become so
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serious that it is difficult to reverse them. Therefore, I am going to end with a plea: If the Government are still reflecting on this matter and if their minds are still open to discussion, will they allow representatives of the animal welfare societies to see a Minister and talk it over? I do not think the Government should set aside a decision of the last Government on a non-political matter of this kind, to which so much importance is attached by the animal lobby, without first listening to the argument. Are the Government prepared to respond to that request? I earnestly ask them to do so.
6.59 p.m.
Earl GREY: My Lords, I am grateful to the noble Lord, Lord Houghton of Sowerby, for raising this very important Question, asking the Government whether they will set up the council for animal welfare. Dr. Shirley Summerskill, when Under-Secretary of State for the Home Office, said in another place during a debate on animal welfare on 23rd March last that the Advisory Committee on the administration of the Cruelty to Animals Act is to be reconstituted and is to have new terms of reference, which will give it a much wider role. Perhaps we may know this evening whether this new Government are prepared to carry out that commitment.
I can envisage only benefits if the decision setting up the council, outlined by Mr. Callaghan on 22nd March, is effected by the present Government. Considerations included in this council were use of animals in laboratory work, seal culling, deer poaching, field sports, the transport and export of animals and other measures. I should like to comment on one or two areas about which I feel strongly, although I admit that I am not an expert and the view is one of a layman.
One is the export of live animals to the Continent for slaughter. There are instances of calves being exported when only three or four days old. I believe this practice to be disgraceful and inhuman and it should be stopped. There are also cases of animals being cooped up in confined areas for long periods without food or water while in transit, before arriving at their destinations to be slaughtered. I have read of cases of over 24 hours and one of 48 hours, when animals were in this condition. It may seem ironic

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to advocate slaughtering an animal two or three days before necessary, but I cannot see why in many cases this is not done before export, thus alleviating suffering. I believe that our abattoirs are at the moment working under capacity and tanneries are facing a redundancy situation. What we are, in fact, doing is giving profit and employment to our competitors.
Anyone who has visited a battery henhouse in operation surely cannot condone a practice where hundreds of hens are cooped up in confined spaces all their lives, never seeing the light of day. I have seen this and it did not impress me one bit. A pet shop owner would be prosecuted if a pet bird was displayed in a cage so small that all it could do was either stand up or sit down. I should like to see legislation directed in this area. While speaking on the subject of pets I agree with Mr. Stephen Ross, who said in another place on 23rd March that he would like to see a ban on the importation of tortoises. The percentage of tortoises that are dead on arrival is terrifying, sometimes as high as 85 per cent. The same applies in the case of birds and many other animals which are imported after being taken from their natural environment.
So much has been written and said regarding experiments on live animals that I think the truth should be known. I believe that a lot of these experiments are painfully cruel and unjustified. I should like the Government to investigate thoroughly this area of experimentation and report to Parliament their findings as soon as possible. The Liberal view on animal welfare is straightforward and honest. It is that the human race should act as trustee for the rest of the natural world, and not as its master. It is a view that I believe in, and is one that should be universally held.
7.3 p.m.
Lord COLLISON: My Lords, I am very glad indeed that my noble friend Lord Houghton of Sowerby has asked this Question and, with him, I sincerely hope that the Government will be able to give us some kind of answer. Like him, too, I should like the proposition which was initiated by the late Prime Minister to be the proposition which is accepted. If this Government have other
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ideas, again I would endorse what my noble friend said when he pointed out that, if an alternative is to be proposed, then it should be a better one than the one already put forward. My noble friend has dealt with what was contained in the Press release and the last Prime Minister's Statement, and your Lordships will be pleased to know—because nobody would thank me for a long speech at this time of night—that that gets me over four or five pages of my notes.
In another place on the day following the Press notice, a debate was initiated by my honourable friend Mr. J. W. Rooker, and the report of that debate is contained in the Hansard of that day, 23rd March, at columns 1874–87. In my view, Mr. Rooker covered the ground completely and very well indeed. There is, of course, no time to reiterate all the points he made, and it would be wrong for me to do so. I should concentrate on those matters about which I am particularly concerned.
I know that people have been greatly shocked. Most of them have not read that speech of Mr. Rooker's, but they have seen Press notices and have also seen television. There is a tremendous groundswell, because people are concerned about the welfare of animals, seeing them as the responsibility of man, because they are themselves more or less helpless. But on television recently, my wife and I saw rabbits being forced to inhale cigarette smoke—to prove what? Surely we know enough about what cigarette smoking does to people in terms of lung cancer. Human evidence has shown that over and over again. So why subject animals to what must be sheer torture, for no good reason at all that I can see?
Furthermore, who can condone the dropping of substances into the eyes of animals to find out whether they cause smarting, blindness, distension of the iris and so on, simply in the interests of proving that cosmetics will not harm a woman's eyes or skin? I find that absolutely and completely disgusting. I am afraid that I speak strongly, but I feel strongly about this matter and so do women. My wife saw that programme. She is not more emotional than most people, but when she saw what was happening to those animals she almost burst into tears.

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Other things are being done. Animals are subjected to a stress situation to cause anxiety, in order to determine how animals react and how they behave in such circumstances. Are these things —and there are many others which Mr. Rooker quoted, but which I do not have time to mention—really necessary? Is it necessary to go to these lengths to find out something which, in any case, most of us know already? I think not, and I believe that many people like me also think not.
In the other place during the same debate your Lordships' House came under considerable criticism, because in May, 1978, your Lordships rejected the Hare Coursing Bill which had been passed in another place. One consideration, aside from others, was that that Bill was a Government Bill which would normally have been allowed to go through. I understand that it was because it was not in the published Government programme that that did not happen. I do not know for certain, but that is the explanation that was given. For myself, the fact that the Select Committee was divided, and that this was not made clear to the general public, still rankles. The general impression got about that this was a unanimous decision of the committee, but in fact it was not; the committee was divided four to three. My noble friend Lord Aylestone, the right reverend Prelate the Bishop of Chelmsford and I were opposed, and clearly opposed—if one reads the report of the meeting it is obvious—to the suggestion that the Bill should not proceed. We wanted it to do so.
As a result of the misunderstanding which was allowed to develop I, for one, received a number of letters, mostly from irate women who accused me of all kinds of character faults, of brutality and of being the kind of person who would set a dog on a cat just for the pleasure of doing it, and I suppose that I have a kind of conscience about this. At the time, I dearly desired that that Bill should proceed. It has been tried so many times, and has failed so many times, that I suppose I felt a little guilty, because my colleagues and I were not successful on that occasion. That incident taught me something which I was beginning to assess for myself.
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As the noble Lord, Lord Houghton of Sowerby, has said, this is a highly emotive subject. Where emotion is rife, reason and logic fly out of the window. The people who support hare coursing are, almost without exception, very nice, plain country folk—people one would respect and like to be friendly with without any qualms at all. Surprisingly, however, when it comes to the question of hare coursing they appear to have a blind spot. Because of this, I think that some of our debates went haywire. I am afraid that I found that some of the arguments which were put forward amounted to pure rationalisation, and some of them were entirely inconsistent. We were told, I think correctly, that shooting causes more pain and suffering for the hare than being hunted down by hounds. I am prepared to accept that argument. But it was also explained to us that in certain parts of the country hares are preserved for the purpose of hare coursing, and that at the end of the season they have to be shot so as to keep them under control. So what happens to the argument that shooting is more brutal and more painful for the hare than being hunted by a dog? It falls completely to the ground.
Other arguments were put forward which I was completely unable to accept. We were told by an expert called to give evidence that hares do not experience mental fear or mental pain when they are being hunted. I am sure that many other people besides myself cannot accept that argument. I cannot prove this, of course, but it seems to me to be obvious common sense that if an animal is being hunted and has to run for its life it must experience fear and that that fear must be painful and distressing.
My point in support of the idea of a council for animal welfare is that this kind of question which evokes emotion can better be dealt with by an independent body so that rational thought can be given to the points which are made and so that common sense, logic and persuasion can play their part as opposed to emotions running very high. I fully mean what I say. I know very well that the people who like hare coursing—blood sports, if you like—are perfectly respectable, decent, responsible people who have this blind spot. Having said that, however, I must add, with absolute sincerity, that my profound conviction is that man has a

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duty to other forms of life. He has a duty to treat them with respect and to allow them their own innate dignity. It is wrong for man to use animals, as they are used in hare coursing and in other ways, as a source of pleasure.
I shall leave that question and turn to my own industry. In agriculture, people are closely connected with animals, and I hope your Lordships will agree with me that farmers and farm workers would not willingly inflict suffering upon any animal. There may be exceptions when greed or something else intervenes. I am thinking of the way in which animals are treated when they are transported, particularly when they are transported abroad. By and large, however, the people who work with animals respect them and would not harm them or cause them pain if they could possibly avoid it. My own union, the NUAAW and the National Farmers' Union, have expressed concern about the transportation of live animals both at home and overseas. We know that very undesirable things sometimes happen, again particularly overseas. Cattle are kept cooped up for too long in cattle trucks, with no proper food and without water. There is no doubt that this does happen, but I believe, thank God! that it happens very infrequently. Of course, this is known not only to the farming industry but also to others. The RSPCA and other organisations which look after the welfare of animals have complained from time to time about this practice.
In this connection, I think your Lordships will be interested to know that Sub-Committee D of the EEC Committee have studied and largely welcomed the proposed implementation of Directive 77/489EEC on the protection of animals during international transportation. This was mentioned by my right honourable friend Sir John Silkin in the debate on 23rd March which I have already mentioned. If adopted, this Directive would ensure that a certificate stating the times of loading and export accompanied the consignment of animals and that the times of arrival at the continental port and at the final destination would be added up by competent authorities, together with details about feeding and watering. It is not possible to go into the details of the Directive. However, I can tell your
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Lordships that this Directive is welcomed by the industry and we hope that it will be implemented. We believe that improvements need to be made.
It is getting late and a long speech would not be welcomed. I want to repeat my thanks to the noble Lord, Lord Houghton of Sowerby, for asking this Unstarred Question and to say to the Minister that we sincerely hope that an indication of the Government's view will be given by him. I assure the House that this is a matter of quite considerable concern to the people of this country, and with us they would welcome the institution of a new body of the type which has been proposed.
7.20 p.m.
Lord STANLEY of ALDERLEY: My Lords, if in the few words that I say on this subject I irritate or indeed annoy the noble Lord, Lord Houghton of Sowerby, I hope he will accept that I entirely agree with his aim that animals, not just farm animals (although obviously I am most concerned with them), must be properly cared for, fed and protected from cruelty. Every livestock farmer knows that, if only for financial reasons. It is in the way of achieving that objective that I perhaps differ from the noble Lord. I am pleased indeed to hear that if I take an opposite view to that held by the noble Lord, Lord Collison, he is not necessarily going to condemn me to the nether regions.
At the moment we have the RSPCA, the Farm Animals Welfare Advisory Committee, the Advisory Committee on the Administration of the Cruelty to Animals Act of 1876, Codes of Practice introduced after the Brambell Committee, to which I shall refer later, an active and efficient veterinary service, not to mention special committees that are formed to look at specific problems, such as the one chaired by the noble Lord, Lord O'Brien. In passing, I commend his report to the noble Earl, Lord Grey. It is quite an interesting report. We now have a suggestion that we should have a council for animal welfare. Is it proposed —and I await the Government's reply with interest—that this council, if formed, should take over all the duties of all the bodies that I have just mentioned? If so, I hope the Government can assure me that it will have a majority of farmers

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on it. I ask this because my understanding of the work to be done by the council, reinforced by the words of the noble Lord, Lord Houghton, means that it will mainly apply itself to farm animals, whereas I suggest that it is in the domestic area, particularly dogs, where special attention is required.
So far as farm animals are concerned, I do not think the proposed council will achieve anything for two main reasons. First, it is dangerous to legislate or regulate to prevent cruelty to farm animals, partly because we ourselves differ—and I have said this in your Lordships' House before—on what is and what is not cruel, but more so because one person can do certain things to animals and cause suffering, whereas another person doing the same job does not.
I will bore your Lordships for one moment by giving a perfect example. I used to drive my own lorry to Anglesey from Oxford with cattle and when I got there, even though I had obeyed (as I thought) scrupulously all the rules and regulations when I unloaded my cattle they looked as though they had been on an overcrowded commuter train. Recently, I had somebody else drive the lorry. I am fairly certain, if not sure, that he breaks a considerable number of the regulations regarding breaks, but when the cattle get out they really do look as though they have had a first-class ticket on Concorde. Therefore, I say that one person can do something to an animal and get away with it and another person cannot.
I could give exactly the same story of a case of ewe lambs coming from Scotland, but I will not bore your Lordships further. However, I doubt very much whether the proposed council for animal welfare would appreciate such a thing, or indeed be able to countenance such rule-breaking. Indeed, I believe they would be tempted by their very existence to suggest and make even more regulations and rules.
Secondly, I ask, what will this council do? It will be a Quango. I hasten to add that I am not against all Quangos, quite obviously; what about the wool board or indeed the milk board—where would I be without them? But being a Quango it will be accused, it may be unjustly, of sitting in comfort in Whitehall for the sole purpose of irritating and
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pontificating. Your Lordships may say that I am being unfair and I accept that I may be—indeed I am—but what I will not accept is that the great majority of those whom the council will be trying to influence will not, for better or for worse, take that unfortunate view, and therefore the work and advice that the council will do and will give would be—or could be—non-productive.
I also believe that there will be a tendency for the council to make useless pronouncements. After all, they have to show that they are being useful and worth their money. As an example may I remind your Lordships of the criticism which was levelled at the welfare code for sheep. Originally these codes were set up to recommend rules for intensive livestock, but so carried away did they get that they very stupidly produced a code for the welfare of sheep which your Lordships may remember got a pretty rough passage in this House, but nothing like the criticism which it received from shepherds and the farming Press, who made the code a laughing stock as a piece of bureaucratic interference. That is exactly what I fear the council for animal welfare would be tempted into doing and, as a result, its efforts would be counter-productive.
So far as farm animals are concerned, I believe the answer lies in trusting human nature a little more and, in particular, the effects of financial loss which all concerned always suffer if cruelty occurs. I believe we have sufficient watchdogs already, and I certainly welcome such specific inquiries into cruelty as the O'Brien Report, but I ask the Government to think very carefully before saddling farmers with more committees, councils and Quangos. We surely have enough of them on our backs already.
I should not pontificate on domestic animals, but I think that the Government are quite capable of producing legislation, with the help of Parliament, to control, say, dogs eating my sheep, or updating the 1876 Cruelty to Animals Act, without having a Quango to advise them. Indeed, I agree with what I think the noble Lord, Lord Houghton, said; that such a council might actually stop the Government doing anything. They would spend their time thinking about it rather than actually doing anything about it, but I await my noble friend's reply with interest.
7.28 p.m.
The Earl of HALSBURY: My Lords, I should like to start by thanking the noble Lord, Lord Houghton of Sowerby, for raising this matter and giving those interested in it an opportunity to air their own views. At the same time I should like to apologise for missing the first few minutes of his speech, to which hurried when I saw his name indicated. I should like to refer first to his plea for moderate leadership and also to thank him for the exercise of that moderate leadership. Since he assumed the leadership of what I might call the animal protection lobby in Parliament it has been possible for the first time, because of his personal qualities, for the leader of that lobby and myself as the leader of the lobby dealing with the use of experimental animals for medicine and science to talk to one another and trust one another. The fact that I can tell the noble Lord in confidence what I am doing and he can tell me in confidence what he is doing, and that we trust one another and that he is an honoured guest at the annual dinner of the Research Defence Society, of which I am president, is entirely due to the personal qualities of the noble Lord and I should like to pay tribute to him. That does not mean that I agree with him or with his political friends on a large number of matters.
During the period of the party conferences last year there was a move—and I will not say that the noble Lord was entirely detached from it—under the slogan of "Bring Animals into Politics" to do the exact opposite of what I want to do, which is to keep animals out of politics. At the annual general meeting of the Research Defence Society, which exists in order to provide Parliament and the media with accurate information as to what goes on in the world of experimentation, I said that if the scientific community would back me I would take the responsibility for introducing a Bill into your Lordships' House to re-enact the Cruelty to Animals Act 1876 and to bring it up to date. That Bill is now in an advanced stage of drafting with the parliamentary agents and I very much hope that, with the consent of my scientific colleagues, I shall be able to clear it for submission to your Lordships for a First Reading before we depart for the holidays. The noble Lord, Lord
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Houghton, has been in my confidence in regard to this and he has had all the drafts of the Bill.
He has never broken confidence for one moment, and I am now telling him that he is released and he can talk to his heart's content from now on. I have had many valuable suggestions from him in the course of drafting. During the lifetime of the last Government I had many confidential discussions with the Home Office on the terms of the Bill and I was lucky enough to be able to engage an ex-Home Office chief inspector as my chief draughtsman, as it were. During the course of our conversations I was able to have a conference with the noble Lord, Lord Boston of Faversham, and the then Home Secretary on the subject, and so far as I know his Department highly approved of the terms of that Bill. I am looking forward to the opportunity of discussing exactly the same matters with the noble Lord, Lord Belstead, in due course.
This, I believe, illustrates the merits of taking one subject at a time and not setting up the kind of council which the noble Lord, Lord Houghton, has in mind. If one wants a forum for public discussion, rather like a court as opposed to the senate of a university, a body which could make, as it were, pronunciamentos officially, and ask people to take cognisance of them, I would not have any objection to that. But if you want a body to do something it must have sufficiently confined terms of reference for the places on it to be filled by people who know the subject matter; and we cannot have people who know the subject matter on every aspect of animal usage that there is. The animal on the farm is one thing; the animal in transport is another; the animal in the slaughterhouse is a third, and the animal in the laboratory is a fourth.
Different Ministries are naturally in-spanned, as it were, into the supervision of the animals. Naturally, it is the Minister of Agriculture, Forestry and Fisheries which is concerned with farm animals, and must be. The Home Office is the keeper of our conscience in relation to experimental animals, and so on. Therefore, I believe more progress will be made if we deal with subject matter blocks in parallel, rather than trying to wrap them up in one all-embracing organisation. Therefore, while the noble

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Lord has pleaded with the noble Lord, Lord Belstead, to follow up the announcement of the last Government, I would plead with him not to do anything of the kind but to follow the line I am indicating.
For twenty years I have been the spokesman in this House of the lobby that uses experimental animals for medical and scientific purposes. I have always pledged myself in this House that I would never justify publicly anything that I condemned privately and that my private conscience and my public utterances should be aligned with one another. During the course of that twenty years certainly over three million animals have been used in laboratories for which I have had executive responsibility. I have always taken the trouble to go and look at some of these experiments myself to satisfy myself that what was reported as taking place was actually taking place.
In the case of the smoking dogs I went up to Alderley Edge, where the dogs were used, and I talked to the dogs, which was the best way of getting information about the extent to which they objected to a habit which gives so much pleasure to human beings. The noble Lord, Lord Collison, is one of those who gets a lot of pleasure from it. Why should it necessarily be cruel to request animals to co-operate in finding out? I am sure your Lordships have all talked to a dog at some time or another. If it kisses your hand and wags its tail and jumps up and asks to be petted, you know it is not a frightened dog. The animals did their smoking for two hours in the morning and two hours in the afternoon, had an hour's exercise, an hour in company with other dogs and the weekend off. Generally speaking, they jumped for joy on Monday morning when their trainers came along to re-commence the smoking exercise. The object of the exercise was to test the carcinogenic properties of a new smoking mixture which had been evolved between ICI and one of the tobacco companies (I think it was the Imperial Tobacco Company) in the hope that it would be less carcinogenic than normal tobacco. Had that experiment succeeded —and it may have succeeded; I do not know—large numbers of human lives might have been saved.
I cannot accept the strictures of my old friend Lord Collison. We worked
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together as colleagues in the gas industry for many years, and know one another well, and have debated this privately. It is not an example of sheer torture. The Dray test, in which one uses the eye of a rabbit to see whether there are any ill-effects from a cosmetic, is, of course, only employed where one has good reason to suppose that the substance in question is innocuous. You do not drop sulphuric acid into rabbits' eyes to find out if it burns them; you know it does, because criminals throw sulphuric acid at human beings and we know what the effect of sulphuric acid is. The presumption on all these matters tested for safety is that they are safe. It is only the exceptional instance that is not safe, and when this occurs and the animal is in pain the experimenter would have to put the animal down in accordance with the requirements of the Home Office, which is the keeper of our conscience on this matter. Therefore, the Dray test on rabbits is by no means as horrible as it can be made to sound if you want to arouse emotions in people.
Lastly, perhaps I may deal with a matter which the noble Lord, Lord Collison, mentioned, stress situations. Following traffic accidents very large numbers of human beings die on the way to hospital from what is called multiple injuries. They do not die from loss of blood; they pass into a state of shock and they quietly die. Nobody knows why. If one could find a remedy for this, it would save very large numbers of human lives every year. Therefore, experiments are done to put rats, which are normally used, into a state of shock. At this point, the idea of inflicting multiple injuries on a rat might appear to your Lordships to be a very objectionable procedure and it could be reported in such terms that your Lordships would revolt against the idea. But you would not be told that, of course, the rat is aneasthetised first, and that it recovers into a state of shock in which, by comparison with human subjects who have recovered, we know that it knew nothing about what was going on. It eventually dies in a state of shock never having recovered consciousness in the normal sense of the word.
These experiments put that way sound very much more permissible than if they are reported the other way. I have taken

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a lot of trouble always to satisfy myself that I have personally seen anything that I was going to defend in your Lordships' House. The problems of the farms, the problems of the slaughter-houses and transport are not of concern to me. I believe that they entail quite a different philosophy to experimenting with animals. Something like five million animals are used in experiments every year and die in due course. We eat some thirty million animals, a very much larger number, and I imagine that however humanely you slaughter an animal there is some element of pain for it. You will never get a uniform philosophy about man's relationship to animals. It is emotionally charged; different people have different views.
I am not going to make a Second Reading speech on my Private Bill, which has not yet had a First Reading—
"Let not him that putteth his armour on boasteth himself as he that taketh if off".
If there is a printing strike between now and the holiday I shall not be able to present it to your Lordships for First Reading, but I shall try very hard in order that those who are interested can take it away for the holidays, before the next term begins, and, as it were, get it under their belts before we, I hope, give it a Second Reading in the autumn. I think that that concludes what I wanted to say this evening, somewhat spontaneously, as I have been attending an Opposed Private Bill Committee all day. However, I should once more like to thank the noble Lord, Lord Houghton of Sowerby, for the personal qualities which have put him in the position of leadership that he now occupies.
7.41 p.m.
Lord BOSTON of FAVERSHAM: My Lords, my noble friend Lord Houghton of Sowerby has performed a most valuable service this evening in raising this question. He has an extensive knowledge of animal welfare matters and a distinguished record on these matters both inside your Lordships' House and in the role that he fulfils outside. He has again shown his persistence and determination tonight in seeking reforms.
I had intended to be brief, but so comprehensively has my noble friend
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dealt with this subject that I am able to be even more brief. But, first, lest it should be misunderstood, I should perhaps declare what might be regarded by some as an interest, but is not in fact. I happen to live on the Isle of Dogs. However, I can assure your Lordships that so far as I know that does not affect one's judgment on this question one way or another; nor does it indicate a predisposition towards one type of animal—indeed, we happen to have two cats. My only concern is that we shall not be adjudged guilty of cruelty for keeping cats on the Isle of Dogs.
The subject which my noble friend Lord Houghton has raised is of great importance. Indeed, I believe that it is of growing importance. There is, I think, increasing interest and concern among people about animal welfare and protection and the treatment of animals. That could be bad as well as good: bad if it reflects increasing cause for concern, but good because I believe that a society which can show a growing concern for the well-being of animals is in fact for that an increasingly more civilised society.
The last Government shared the growing concern about the treatment of animals, which is one reason why my right honourable friend the then Prime Minister, Mr. Callaghan, announced on 22nd March this year the setting up of a council for animal welfare. In the last debate that my noble friend Lord Houghton initiated in your Lordships' House on the subject of animals on 7th December last year, his final question, at column 379 of the Official Report, was whether my noble friend Lord Strabolgi, who was replying for the Government, had anything more to say about the consideration being given by the then Government:
"to the setting up of a standing commission or committee to inquire into a wide range of matters concerning animal protection and welfare?"
I know that my noble friend Lord Houghton had occasion to assert, more than once, that the last Government did not do as much as he would have wished on animal welfare matters. But he also has occasion to praise them from time to time. It was within four months of that debate that the announcement for the council was made: and it was a measure of the importance with which that Government regarded the subject that

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it was, in fact, the then Prime Minister who announced that decision. The decision followed and no doubt stemmed partly from the pressure from my noble friend and others, and from suggestions from the National Executive Committee of the Labour Party and the Farm Animal Welfare Co-ordinating Executive, for some permanent independent advisory body which could advise the Government on animal welfare matters.
It is true that, as was made clear when the announcement was made—and as I think my noble friend has mentioned tonight—the terms of reference of the council had not yet been finally decided. But the preliminary guidelines and reasons for setting up the council were plain enough and my noble friend has already referred to some of the indications which were given when that announcement was made—albeit perhaps somewhat in parenthesis—and the kind of things it was envisaged by the then Government that that council would do, and indeed would wish to do. Among other things he referred to looking at the existing machinery for animal welfare matters. One part of that machinery is the Advisory Committee on the Administration of the Cruelty to Animals Act 1876. Here I should like to interpose a question to the noble Lord, Lord Belstead, who is to reply for the Government tonight, and ask him what is the present position concerning that advisory committee on the 1876 Act. It was—at the time the announcement was made—soon to be reconstituted with new terms of reference. However I hasten to add that I do not necessarily need an answer tonight and would be quite happy with a written reply later.
My noble friend Lord Houghton has also indicated that it was clear at the time that the announcement was made what could be the areas for consideration by the Council when it came to undertake its work. Here again I do not need to go into the details which my noble friend set out. One specific matter has been referred to tonight under the heading of "Field Sports" which was among those matters referred to by my noble friend Lord Houghton. My noble friend Lord Collison raised the question of hare coursing which is, indeed, one of the matters which could be considered by the council. He will no doubt be interested to know that, in fact, this very day my
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noble friend Lord Blease has drawn my attention to the fact that there is widespread concern, not only in Great Britain, but also in Northern Ireland, for action, particularly so far as that matter is concerned.
My noble friend Lord Houghton also mentioned that although it was not intended by the last Government that the new council would investigate individual complaints, it was envisaged —and this is no doubt a matter which the council itself would wish to encourage—that the public would be free to write to the council on any policy matter affecting the welfare of animals; and that the council would follow up matters raised by the public with the appropriate existing representative bodies.
So, it is true to say that even in the absence of precise terms of reference actually being announced, a great deal of background work had been done by the last Government before the announcement was made to set up a council. It was certainly not some hasty and ill-considered idea. Indeed, some people might say that its gestation period was perhaps too long. So it was a well thought out concept and the aim was to provide a completely new and independent approach to animal welfare in this country.
There is, as we know, a vast amount of somewhat fragmented legislation on this whole subject with, as some of the principal measures, the 1876 Act, the Protection of Animals Act 1911, the Slaughterhouse Act, and so on. It may well be that we are reaching the stage where consolidating legislation is called for; I do not know, but that is one major task that the council would no doubt wish to consider.
We must also bear in mind, when considering the revision of our law on this matter, the need for reforms in a European context as well. Here I would interpose my only other question to the Minister, and again I do not press for an answer tonight. However, further Eurpean moves are in train and I believe that meetings to consider reforms were planned for around the middle of this year. Any agreement reached as a result would be expected to give rise to new national legislation. I wonder whether the noble Lord, Lord Belstead, could give some indication of any progress being made or

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the stage now reached on the European Front. As I have said, later will do for an answer to that question as well.
We in Britain—despite the need that many people see for further reform here—have established something of a reputation for leadership in this whole sphere, including internationally. The 1876 Act itself is perhaps one early indication of this, albeit that it needs review and revision and we have heard of one plan for that from the noble Earl, Lord Halsbury, in the speech which he has made to the House tonight. It is vitally important, in my submission, that we may maintain and develop this leadership. Like my noble friend Lord Houghton and other noble Lords, I believe that the way a society treats its animals is an indication of the nature of the society itself. To tolerate the infliction of unnecessary suffering can coarsen the whole attitude to living things and diminish respect for life itself. I believe that the proposed setting up of the new council is one step towards creating a still more civilised society. Not to take that step would mean that a real opportunity would be lost. Therefore, I very much hope that the Government will seize this opportunity and go ahead with this proposal, or something equally suitable. I join my noble friend in pressing for that.
7.51 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, I am in no way surprised that the noble Lord, Lord Houghton of Sowerby, has raised this Question today, for no sooner had the new Parliament met than the noble Lord spoke in the debate on the gracious Speech on this subject. But animal welfare is an issue which concerns us all, as I know the noble Lord appreciates. Therefore, the Government are reviewing the proposal made by the previous Administration to set up a council for animal welfare and we shall announce our plans as soon as we are in a position to do so. As we made clear in our election Manifesto, the welfare of animals is a concern of the Government. In his opening words the noble Lord said that he wanted to see some action in this area. My answer to that is that there are
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problems to be faced—many of them have been referred to this evening—and we shall act where we find it to be necessary.
Before I go any further I should also like to answer the final question which I think the noble Lord, Lord Houghton, put to me—namely, the question of consultation with Government. The door to the department of my right honourable friend is most certainly open to the noble Lord. Indeed, I understand that arrangements are at this moment being made for the noble Lord to meet my right honourable friend the Secretary of State at the Home Office within the next few weeks.
As a Government, we are pledged to update the legislation on experiments with live animals. In his speech the noble Lord, Lord Boston of Faversham, asked me to refer specifically to the European context. At the present time the United Kingdom is making a substantial contribution to the current discussions on the draft of a European convention for the protection of laboratory animals. I suppose that the biggest change likely to come out of that is the introduction of a statute-based system of control over the breeding of and dealing in laboratory animals. I should like to record that earlier this year the Home Office had full consultations with the committee of the noble Lord, Lord Houghton—the Campaign for the Reform of Animal Experimentation—and with the research interests in this country in order to discuss the form and the content of a preliminary draft of this European convention. The interested organisations have been sent details of the latest Strasbourg negotiations, and I give an assurance that we shall maintain these consultations, which are obviously of great help to the Government.
The noble Lord, Lord Boston, also asked me about the updating of the 1876 Act. Here again I can give an assurance that, as these negotiations on the European convention develop, we shall undertake preparatory work on the revision of the 1876 Act; so that when the details of the convention have been finalised, the Government will be in a position to introduce legislation. In doing that, not only, of course, will the Government listen to views expressed both inside and outside Parliament, but we shall also listen care-

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fully to the views of the noble Earl, Lord Halsbury, who is preparing his own legislation.
In addition to legislative changes in this area of animal welfare, proposals for the reconstitution of the Advisory Committee on the Cruelty to Animals Act's functions and membership have been on the stocks for a number of years. Indeed, the noble Lord, Lord Houghton, and his colleagues have given consideration to the matter and formulated proposals. This evening I can simply say that the Home Secretary has this whole question under consideration. Meanwhile I must make it clear that we very much appreciate the work which the advisory committee has done in the past.
The last major work of that committee under the chairmanship of the noble and learned Lord, Lord Cross of Chelsea, was examination of the experimental procedure known as the LD50 test to which the noble Lord, Lord Houghton, referred in his speech on the debate on the gracious Speech. I thought that noble Lords might like to know this evening that the committee's report on this difficult subject, although received only last month, none the less leaves me in a position where I can say that the recommendations of that report are acceptable in principle. We are now considering how they may best be implemented within the resources available.
Lord HOUGHTON of SOWERBY: My Lords, does that mean that we shall have a sight of this report soon? For example, will it be published?
Lord BELSTEAD: My Lords, I am not in a position this evening to be able to say that it will be published. This is a matter which the noble Lord may care to discuss with my right honourable friend when he speaks to him at the Home Office.
As regards the future of the export trade in live food animals, about which many of your Lordships have spoken this evening, and the welfare of animals on farms, many of the problems are both domestic and international. In the domestic context we must bear in mind the veterinary and other staff resources which we currently command, and will be able to pay for, at a time when public expenditure has to be kept under very strict limits.
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We must weigh that use of resources against the benefit to be gained where the protection of farm animals is concerned.
The noble Lord, Lord Boston, asked me to go to the European context. In the international context we have already said that the Government will support the EEC proposals for the new Directive designed to implement in detail the current Directive on the protection of animals during international transport. The noble Earl, Lord Grey, expressed his concern about the whole idea of the export of live food animals. I was grateful to the noble Lord, Lord Collison, who spoke from his immense experience, for pointing out—and it may not dispel the noble Earl's concern, but coming from the noble Lord, Lord Collison, it should allay it—that one of the effects of the proposed Directive to implement Directive 77/489 is the introduction of what will be called the "travel document" which will log the times at which journeys start and when those journeys pass through particular checkpoints, so that intervals between feeding and watering can be adequately monitored and appropriate action taken.
In the European context we shall also continue to play a constructive part in the work of the Council of Europe's Standing Committee, which is preparing recommendations for the detailed implementation of the European convention on the protection of animals kept for farming purposes. The way in which this work is carried on will, of course, be dictated by the policy decisions now in the process of being reached. Therefore, although there are—as it is clear from this evening's debate—a number of farm animal welfare issues currently of great importance (and I have not referred to them all) we should not lose sight of the degree to which the welfare of these animals is already being looked after.
When all is said and done, in the United Kingdom there is a considerable body of legislation providing for the welfare of farm animals, and although some of it needs no alteration, some may well need to be changed. But it is built into the fabric of our society as a practical witness to public concern. This country has a long and honourable tradition of caring about the welfare of animals, and as our scientists and vets become more

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knowledgeable about the needs of animals, legislation and advice can be developed closely to meet them.
I was particularly glad that the noble Lord, Lord Collison, made the point that in this country the majority of livestock farmers and people working with animals on farms will never willingly harm their own animals. The two things, I hope, do not go together, but, in addition, they are also well aware that they will not maximise their profits if they do not care for their animals humanely. That, in itself, should be a safeguard.
As the House knows, agriculture Ministers have advice from the Farm Animal Welfare Advisory Committee; an independent body which they appoint. The State Veterinary Service carries out specific welfare visits to farms and other commercial livestock premises, and this in its turn provides a valuable safeguard. Moreover, our welfare organisations—which, as a matter of fact, rather uncharacteristically we have not mentioned this evening—are absolutely second to none in this country in the unremitting watch which they keep over the welfare of farm as well as other animals. In addition to all that, we have the general oversight of the Cruelty to Animals Inspectorate and the benefit of the Advisory Committee on the 1876 Act.
In drawing attention to this list of facts, with which I have deliberately ended up, I must stress that the Government are not in the same breath going to say that they are complacent about animal welfare. But, at the same time, we are not prepared to adopt proposals made at the tail end of the last Parliament without very careful consideration of the full implications. One of the implications, which was revealed so clearly in the shrewd speech made by my noble friend Lord Stanley of Alderley, was that it would be a matter of extreme controversy as to who should be sitting upon, and represented at, a new council. We are therefore studying the proposal for a council for animal welfare in the context of our undertakings, and in the light of our expressed views about the best way to make improvements.
As to the latter, I have in mind the views expressed by my honourable friend Mr. Peter Mills in the debate on 23rd
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March in another place when he left no one in any doubt that we want to act quickly where there are problems, but that we question whether the setting up of such a council, in addition to the two advisory committees and a third advisory committee on animal transport, which I understand the previous Government were considering, would really be the right way to deal with these problems. That is why we are taking a little time to go into these problems, their implications and the possible solutions. That is why I am asking you, my Lords, to be patient for a little longer until the Government can give a fuller declaration of their plans for the future.