Lords Sitting of 7 March 1979

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

LORD RICHARDSON
Sir John Samuel Richardson, Baronet, MVO, having been created Baron Richardson, of Lee in the County of Devon, for life—Was, in his robes, introduced between the Lord Zuckerman and the Lord Hunt of Fawley.

EEC COMMISSION PROPOSALS: ARREARS
2.47 p.m.
Lord BRUCE of DONINGTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that, as at 1st January 1979, there were 278 proposals from the EEC Commission, upon which the European Parliament had been requested and had given its Opinion, which still awaited a decision by the Council of the EEC; and whether they will state what action they propose to take within the EEC Council progressively to reduce the grossly excessive arrears.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, some of these proposals originated many years ago and are no longer under active consideration. Decisions in the Council broadly keep pace with the flow of new proposals, but at any given time a considerable number of proposals are undergoing the normal process of consideration and revision in the Council machinery.
Lord BRUCE of DONINGTON: My Lords, while thanking my noble friend for that reply, may I ask whether he is
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aware that the 278 outstanding matters go as far back as 1968 and that no fewer than 103 of them relate to 1978 and 53 to 1977, with the rest spread back over the eight years? Is he aware that the 278 matters which are referred to in the Question are after the exclusion by the Commission of those matters that are considered no longer to be relevant? Is he further aware that it might be considered to be for the better expedition of public business in the EEC if the proceedings of the Council were held in public, so the people of Europe could know what is happening instead of being treated at the hands of the various parties to a series of leaked reports that are regularly issued in Brussels after each Council meeting?
Lord GORONWY-ROBERTS: My Lords, in reply to the first point made by my noble friend, as the Council receives some 650 proposals in a year, and I understand disposes of about the same number, it is normal that at any particular time there should be 100 or 200 under consideration, and, given that some are no longer under active consideration, the number of proposals outstanding would not seem to be unduly high. However, my right honourable friend the Secretary of State and others have urged, and continue to urge, that these procedures should be constantly looked at with a view to speeding them up, and my noble friend has a point. As to the question of making Council meetings public—that is, meetings of Ministers—that is another question which would need to be looked at quite separately.
Lord GLADWYN: My Lords, can the Minister say how many of these proposals have been stuck with the Committee of Permanent Representatives and never been considered by the Council at all?
Lord GORONWY-ROBERTS: My Lords, the Committee of Permanent Representatives, as the noble Lord is of course aware, looks at all these proposals and is empowered to extract those of less than major importance, which they then propose should be dealt with, as it were, outside the procedure. That saves a good deal of time, but even before these, if I may call them such, less than major questions are considered, our own Ministers have to approve. The procedure

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the noble Lords suggests is in fact current. It is for inquiry to see whether that can be made even more effective, but I grant him the point that this is a very valuable way of saving time while at the same time not infringing on the necessary right of veto on questions of major national concern.
Lord HAILSHAM of SAINT MARYLEBONE: Talking about leaks, my Lords, though spelt perhaps in a slightly different way from those referred to by the noble Lord, Lord Bruce of Donington, may I ask the Minister to convey without the smallest disrespect to the Commission or disloyalty to the Community that, like all bureaucracies, the Commission sometimes tends to make itself ridiculous?
Lord GORONWY-ROBERTS: My Lords, it would be a very bold and experienced parliamentarian who for one moment would hazard the opinion that no commission or committee has not at some time or other contrived to make itself look a little ridiculous, and I have no doubt that the European institutions have a sufficient sense of normality as well as of humour to agree with that. As to the noble and learned Lord's reference to leaks, I am in the happy position of knowing everything about Welsh leaks and nothing at all about the other type!
Lord SHINWELL: My Lords, is my noble friend aware that in his original Answer he used the very familiar phrase that these matters were constantly under review? Is he further aware that for a very long time that has been the familiar kind of reply from Ministers of the Crown in the United Kingdom Parliament? Are clichés of that character all that we are to get from the EEC?
Lord GORONWY-ROBERTS: I very much hope not, my Lords. I would hope that any parliamentary assembly, present and prospective, would constantly keep under review matters of national and international importance.
Lord BALFOUR of INCHRYE: My Lords, would it not be better for the standing of the EEC in this country if we could have a holiday from what I would term minor irritations which are put
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forward, which interfere with our usual forms of national life, such as those involving the delivery of milk, or the abolition of duty-free shops? These matters are of comparatively minor importance, but they do the EEC's reputation no good at all in this country.
Lord GORONWY-ROBERTS: My Lords, I note very carefully and appreciatively what the noble Lord has said. There is indeed a body of opinion in this and in other countries in the Community which would agree with him. The Community is developing a thoughtful aggregation of institutions, constantly keeping under review matters such as those raised by the noble Lord, Lord Balfour of Inchrye.

GATWICK: RADAR SYSTEM INSTALLATION
2.56 p.m.
Lord BRAYE: 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, in view of the long delay expected in the building of a second runway at Gatwick airport, whether they would consider installing ground control radar at Gatwick, as at Heathrow airport.
Lord JACQUES: My Lords, the White Paper on Airport Policy does not envisage a second runway at Gatwick airport. The Civil Aviation Authority have decided on the eventual installation of ground control radar. The time-scale depends on other developments; in particular, the building of a new elevated control room in the terminal area complex. They are satisfied that the existing facilities are suitable for the present usage of the airport.
Lord BRAYE: My Lords, in thanking the noble Lord for his reply, may I say that considerable delay may occur before installation takes place. It does not need me to remind your Lordships that not very long ago—
Several noble Lords: Question!
Lord BRAYE: My Lords, is the Minister aware that there was a very serious accident not long ago on a runway in the Canary Islands? I am sure that we do not want a repetition of such an accident at Gatwick airport.
Lord JACQUES: My Lords, ground control radar is additional monitoring equipment installed in large, congested airports, in particular those which have a complex of taxiways and parking spaces. There are 12 in existence, and one of them is at Heathrow. In the judgment of the Civil Aviation Authority the volume of traffic and dimensions of the airport will not justify the installation at Gatwick until the mid-1980s. Furthermore, such equipment has to be very carefully located. In the development which is at present being planned there is to be a new elevated control room with the equipment on the roof. I have no doubt that we shall get better results by waiting for that.
The Earl of SELKIRK: My Lords, are the Government aware that there is only one runway at Tenerife?
Baroness BURTON of COVENTRY: My Lords, may I ask the Minister two brief questions which arise from the absence of a second runway? Does he not agree that it is impossible to arrive at an average number of flights if one uses the summer peak and the winter low as component parts? Secondly, is he aware that those of us who are interested in these matters do not believe that the summer peak at Gatwick can be augmented in the intervening years without a second runway?
Lord JACQUES: My Lords, first, I am advised by the Civil Aviation Authority that, in making their estimates, they have taken into account the summer peak. So far as a second runway is concerned, I would remind the House that on 22nd February—only two sitting days ago—I made a detailed Statement on why there should not be a second runway at Gatwick. I invite my noble friend to read what I had to say on that occasion.
Baroness BURTON of COVENTRY: I disagree, my Lords.
Lord BOYD-CARPENTER: My Lords, arising from the noble Lord's Statement to which he has referred his noble friend, may I ask whether he can tell the House how the British Airports Authority are getting on with their recently announced proposal to widen the taxiway at Gatwick so as to enable it to be used in an emergency as a second runway? Will the Government insist upon a public inquiry, or are they going to get on with the job?
Lord JACQUES: That is not at present known, my Lords. At this stage the Civil Aviation Authority are in contact with the airlines and have not yet made their decision as to whether they will make planning application. Therefore, the matter which the noble Lord has raised does not yet arise.
Baroness BURTON of COVENTRY: My Lords, is my noble friend aware that I have of course read with great interest his speech to which he referred, but that I venture to disagree with what he said?
Lord JACQUES: I have no doubt about that, my Lords, but I am putting forward the Government's point of view, and I am prepared to defend it. If the noble Baroness cares to table an Unstarred Question, I shall defend it.
Lord BALFOUR of INCHRYE: My Lords, on the grounds of maximum safety, have not the Government received representations from the British Airline Pilots' Association that GCA should be installed at the earliest possible moment?
Lord JACQUES: My Lords, I took the liberty of acquainting myself with this question as well as I possibly could, and I can advise the noble Lord that I know nothing of the issue which he has raised.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, is the Minister aware that the noble Baroness, Lady Burton of Coventry, almost always wins in the end?
Lord JACQUES: I can only say that i am not yet defeated, my Lords.

HOSPITAL CLEANING AND MAINTENANCE SERVICES
3 p.m..
Lord SEGAL: 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 are the existing restraints that inhibit hospital authorities from contracting out their cleaning and maintenance services to private firms.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of HEALTH and SOCIAL SECURITY (Lord Wells-Pestell): My Lords, health authorities have discretion, within the financial resources available to them, to put this work out to contract.
Lord SEGAL: My Lords, can my noble friend say what are the restraints that have prevented any of the hospital authorities from doing so hitherto? I speak subject to correction. Since the present situation has resulted in the closure of operating theatres and the depletion of blood banks, could not the hospital authorities be allowed the widest possible latitude in matters concerning the life and death of patients?
Lord WELLS-PESTELL: My Lords, I am not aware that the hospitals are under any constraint at all in this particular matter. It so happens that at the present moment about 30 hospitals employ private contractors for cleaning purposes.
On the question of cost as between employing a private contractor and having the work done by hospital staff employed to do it, there is hardly any difference at all in cost, but there is one overriding factor. That is that, in the case of a contract, it is necessary to have it set out very clearly in the contract what is going to be done, and you cannot depart from that at a moment's notice. That can be done only by negotiation with the contracting firm; and, in a hospital, it is often necessary to change routines and methods at very short notice. But, as I say, there are 30 hospitals at present employing private contractors.
Lord SEGAL: My Lords, arising out of that reply, would my noble friend not agree that some recognition should be made of the marvellous work done by hundreds of young nurses who have literally kept the hospitals going by undertaking the heavy extra burdens imposed on them by the action of able-bodied people in the National Health Service who have decided to go slow?
Lord WELLS-PESTELL: My Lords, notwithstanding the fact that that question is, if I may say so, wide of the original Question asked, I think I have said in your Lordships' House on more than one occasion how indebted we are to the people who are rallying round at this particular time.
Lord SANDYS: My Lords, if these constraints upon the administration are very small, would the Government actively consider reviewing the situation so far as concerns the many hospitals which have been obliged to close their operating theatres and hence lengthen the lists of patients?
Lord WELLS-PESTELL: My Lords, if we may get back to it, the original Question asked what restraints were inhibiting hospital authorities from contracting out. What I am saying, and what I have said, is that I am not aware that there are any such restraints. It is entirely up to the hospitals themselves to decide which of the two methods they are going to use.
Lord ROCHESTER: My Lords, would the noble Lord accept that, to the extent that hospital authorities do not contract out cleaning and maintenance services to the lowest bidder, the only satisfactory way of absorbing pay increases of the amounts now in contemplation is to insist on improvements in productivity, through which a given amount of work would be done by a reduced number of employees?
Lord WELLS-PESTELL: My Lords, I am not aware of the way in which the noble Lord is using the word "maintenance"; but if he means maintenance in respect of building and engineering, I can say that between 25 and 30 per cent. of building and engineering maintenance in the National Health Service is in fact undertaken by private firms, amounting

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to something like £40 million a year in cost. There are some very good reasons for using direct labour which have nothing to do with any political view. Much of the work on health buildings requires to be done immediately and there are special things that have to be done, and by employing people who are on the spot all the time it can very often be done more cheaply and more quickly.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will the noble Lord convey to his right honourable friend the Minister, who is at present in Westminster Hospital, our very great sympathy with him, critical as we may be of him in a political sense? We wish him a speedy recovery; and we deplore the discriminatory action taken against him.
Lord WELLS-PESTELL: My Lords, I am obliged to the noble and learned Lord, and I shall see that that is done.
Lord SEGAL: My Lords, while warmly endorsing the remarks just made by the noble and learned Lord opposite, may I ask my noble friend whether he can say what active steps the Government are prepared to take to acquaint the hospital authorities with the facilities which are available to them, and to see that far wider use is made of them as soon as possible?
Lord WELLS-PESTELL: My Lords, I think I can say to your Lordships that it is not necessary to do that. The hospitals are well aware of the authority they have, they are well aware of the authority that the Department has, and they are well aware of the fact that they are entirely responsible for running the hospitals in their particular area.

WATERLOO STATION RAPE CASE
3.8 p.m.
Lord MACKIE of BENSHIE: 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 action they propose to take with
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the British Railways Board and the Post Office Corporation with regard to the recent case of public rape at Waterloo Station.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman): My Lords, while the Government deplore this whole incident, I am assured that the British Railways Board take all reasonable precautions to safeguard passengers. Waterloo and other main-line stations are permanently manned and patrolled by British Transport Police. Noble Lords will know that the offender in question was arrested and convicted. Moreover, my right honourable friend the Secretary of State has asked the Railways Board to consider whether any additional safeguarding measures can be taken.
Lord MACKIE of BENSHIE: My Lords, I thank the Minister for her reply, and am very glad to hear that the Government have asked the Railways Board to consider additional measures. Is the noble Baroness aware that widespread reports in respectable newspapers said that a number of British Railways workers and a number of Post Office workers watched the rape until complained to by a passenger, whereupon they locked the door and sent for the police, while the lady in question was being raped and was screaming? Would she therefore join with me in condemning this callous and cowardly attitude, and in saying that public servants have a duty, public as well as moral, to come to the aid of passengers and citizens in distress, such as this lady was, and ought not simply to ignore it and send for the police? Would she also agree that such an attitude and such an action at a great railway terminus in London is a disgrace to the country and to the many decent people who are employed in the public service and who condemn this attitude?
Baroness STEDMAN: My Lords, I am in somewhat of a difficulty in giving a very full answer to the noble Lord's supplementary questions on this, because there is a possibility of some action being taken by the men's union with the Press Council, or through other means. The report in the papers has been denied by the Post Office workers involved. We

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have also been unable to find any railwaymen who were there at the time of the incident. There are also problems in so far as the inspector of the British Transport Police says that he was misquoted by the newspapers in question in the comments which he made about the action of the crew. I think that perhaps it might be best not to go further than that this afternoon, because I understand that the NUR and the Post Office Workers' Union are taking legal advice as to what they can do about the Press reports which have appeared.
Lord MACKIE of BENSHIE: My Lords, is it not curious that no denial was issued until this Question was asked in this House?
Baroness STEDMAN: My Lords, I am not aware of whether any denial has been issued or not. I only know that the men in question have taken exception, with the support of their unions, to the statements made that were in two newspapers and action is now being considered.
Viscount THURSO: My Lords, notwithstanding the gravity of the offence or the apparently moronic behaviour (as reported in the newspapers) of the bystanders, is the noble Baroness aware that it was claimed in mitigation that railway carriages in Victoria Station are frequently used as doss houses by vagrants? Are the Government happy with the situation where our rolling stock provides a form of public doss house?
Baroness STEDMAN: No, my Lords, we are not happy. We have problems with vagrants, in particular at Waterloo Station. We have them to a greater or lesser degree in other main railway stations; but at Waterloo with, I gather, something like 14 ways to get into the station, it is difficult to lock off any of the entrances at any periods of the day. There is the problem of supervision. We have 20 British Transport police attached to the police station on Waterloo Station who are continually patrolling the station throughout the day and night, and they patrol those trains where they are aware there are likely to be incidents and the problems with vagrants which British Rail are trying to overcome; and here British Transport police seem to
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spend most of their time trying to eject from one entrance vagrants who then find their way into another. Until we can find some satisfactory way of sealing off the 14 entrances—with all the difficulties that go with that, with passengers and the control of mail and parcels on the station—we are going to have problems. Unfortunately, the incidence of vagrancy at Waterloo Station is now such as to become the background to all that goes on there. Regrettably, in this particular instance it was not recognised for the offence that it was.
Lord BRUCE of DONINGTON: My Lords, will my noble friend bear in mind that it is not uncommon for published reports in newspapers of incidents to bear very little relation to what happened?
Baroness STEDMAN: Yes, my Lords; I think that is the point at issue which the men's unions are looking at now.
Lord MACKIE of BENSHIE: My Lords, will the noble Baroness publish the results of the inquiry?
Baroness STEDMAN: My Lords, there is no inquiry as such. It is the unions acting on behalf of their members who will give them advice whether they take action either against the newspapers concerned or through the Press Council. It is not a matter for the Government or British Rail or the Post Office Board. It is the men's unions.
Lord MACKIE of BENSHIE: My Lords, is the noble Baroness telling me that the Government have no intention of finding out more about this appalling situation and of doing more to police the station at Waterloo?
Baroness STEDMAN: My Lords, as I have already said, we have asked the British Railways Board to carry out a review as to what other safeguards can be instituted at places such as Waterloo. In due course, they will come back and tell us whether, within their resources, they are able to do any more, or what other resources they need. If that information is forthcoming I will pass it on, but it is not an inquiry in the Government sense following which a report will be published.
Baroness GAITSKELL: My Lords, should we not be careful about letting our indignation run away with us? These people are homeless. Should we not be as angry about that as we are about what we are discussing today?
Baroness STEDMAN: My Lords, the noble Baroness has a point. We are all concerned with the problem of the homeless people in London, and have expressed this concern on both sides of the House on many occasions. Some of these are the people who frequent Waterloo Station and other stations.

GOVERNMENT STATEMENTS
Lord JACQUES: My Lords, with the leave of the House, at a convenient time after 3.30 this afternoon my noble friend the Leader of the House will repeat a Statement being made in another place on pay comparability.
He will then repeat a Statement on the Council of Ministers' Agricultural Meeting held on 5th and 6th March.

ENERGY AND PRICES AND INCOMES PROGRAMMES
3.15 p.m.
The Earl of HALSBURY The Earl of HALSBURY rose to draw attention to the need for revising the current provisions of the energy programme and the prices and incomes control programmes in the light of recent events in Iran; and to move for Papers. The noble Earl said: My Lords, in addressing your Lordships' House this afternoon, I am mindful that it is the first occasion on which I have been privileged to do so since debating the Motion of my noble friend Lord Somers on the need for making shorter speeches. While it is not in mortals to command success, I shall endeavour to practise what I then preached. I shall not try to deliver an introductory chapter to a textbook on the subject but be content to act as compère to the distinguished list of speakers who have put their names down to speak this afternoon, and to highlight one or two topics which they may then clothe with garments of their own choosing in the course of the debate.
The crisis in Iran has its background and its foreground. Doubtless when the information is of no use to anybody, the historians will be able to fill in the details for the benefit of students. Here I can only refer to the foreground and treat it as coterminous with this Session of Parliament, since it was on 1st November that we here listened to the gracious Speech from the Throne, while in Iran the workers in the oilfields declared a general strike of a political character. Since then the crisis in Iran has deepened to the point where the Shah has been dethroned and we still do not know whether the situation will develop to a crisis level in this country or not.
It is characteristic of what some sociologists call "explosive degeneration" in human relations—and we have watched it sometimes in our own industrial relations at home—and it naturally raises the 64,000-dollar question: Where and when is the next explosion going to take place and what next will blow up in our faces? It also raises, to my mind, the most uncomfortable question: What about the treasure trove of small arms, light tanks and the apparatus of civil war generally which has now got into the hand of factional mobs? Where will it turn up next as the Middle East equivalent of Chileans available for the purposes of the world's arch-trouble maker, the Communist Party, the servant of Russian Imperialism? I cannot pursue these questions, though it may be for others to do so.
I want to turn to the immediate prospects. Iran produced approximately 10 per cent. of the world's supply of crude oil. When I say "the world's" I mean the WOCA countries—the world outside the Communist area as it is usually abbreviated. The actual estimates for this year were 52 million barrels for WOCA of which 5·4 million were from Iran, which is close to 10 per cent. Of that estimated production for the 12 months (let us say) from 1st November to 31st October this year, four months' production has been irretrievably lost. That is one-third of 10 per cent. which is 3·3 per cent. We must not suppose that during the remaining eight months the Iranian oilfields will be running at 100 per cent. of their rated capacity. If it is at 75 per cent. for eight months, that would add another

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1·7 per cent. to the world's loss which will bring the figure up to 5 per cent. overall. Something like this, give or take a few percentage points and give or take any alteration in stock levels, seems to have been the basis for the IEA request that all its members should try to achieve a 5 per cent. economy.
Nearly all equipment can be driven about 15 per cent. above its rated capacity if the will to do it is there. But if you are a world primary producer, 15 per cent. above rated capacity means a raid on your oil reserves. It means depleting your reserves in order to maintain Iran's. This raises the whole question of whether the other Middle East oil producers are going to be willing to do so. They are becoming increasingly sensitive to the implications of running down their reserves—for many good reasons as it appears to them. Some of the reasons for the utilisation of oil that appear good to us appear trivial in the light of their rather more austere Koranic-based faith; and it is understandable that they would not wish to run down their reserves for purposes of ours which seem to them frivolous.
That we must take into account in our reckoning. It is not necessary to go far off Araby to consider the implications of running down local reserves, for our reserves are local to us. North Sea oil and North Sea gas will not be there for ever, and I am much concerned about what I call the "squandermaniacal" depletion of our reserves of North Sea gas due to extremely unwise drawing of the contracts with the oil companies in years gone by. That is another topic and I shall not explore it in depth this afternoon.
Conservation, economy and the use of alternatives: it is a good opportunity to practice all of them. It seems to be very topical that British Aerospace is holding an exhibition of all these technologies upstairs on the Committee Room floor this afternoon, and I hope that as many of your Lordships as can find the time will go and see the very interesting exhibits that they have collected there.
I seem to have recruited some massive heavy artillery in the debate this afternoon, many of whom are specialists in their own subjects. The only casualty I am
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sorry to say—and I am sure your Lordships wish him well on his sickbed—is my noble friend Lord Hinton of Bankside, who unfortunately is laid up with influenza. I wish he was here this afternoon to take us all to account for our errors of omission and commission in the field of fast reactor installation and the initiation of inquiries into the safety of fast reactors. I am not going to wander too far from my own field by going into that in detail.
It is high time for the Central Electricity Generating Board and the Government to stop playing hide and seek over this inquiry and get down to brass tacks. I know exactly what the noble Lord, Lord Strabolgi, who is answering for the Government, will tell me, because he has said it to me before in answer to questions. He will say that when the CEGB say they want a power station and a fast reactor for that power station, then the Government will initiate an inquiry. That is his standard answer on this point. I must tell him now quite frankly on the Floor of the House that I do not think that is good enough. We ought to anticipate the need by launching the inquiry into fast reactor safety now, and we ought so far as possible to spike the guns of the conservationists by making it quite clear that the prototype commercial fast reactor will go down at Dounreay where the local inhabitants want it and the environmentalists can make the least amount of trouble. If we do not do that this whole project is liable to compete in historical interest with the abortive expedition to Walcheren, which your Lordships will remember from your school days was lampooned as follows:
"Lord Chatham with his sword drawn,
Stood waiting for Sir Richard Strachan.
Sir Richard longing to be at'em,
Stood waiting for the Earl of Chatham".
With a divided command there was nothing left but to go home, and that is what they did. I would produce an up-to-date version of this if I could find anything to rhyme with "CEGB". If there is a poet in the House—and I am sorry that the noble and learned Lord, Lord Hail-sham of Saint Marylebone, is not in his place—perhaps he would get his pencil out and give me some help.
Then we come to the immediate problem that we have to worry about, which is prices and incomes. We cannot pre-

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tend that we are beginners in this game. We are not even drowning men coming up for the third time. This is our fifth appearance. It started with the Suez war, and then there was the Six Day war, the Yom Kippur war, the 1973–74 OPEC raid on oil prices and now the dethronement of the Shah. We cannot suppose that North Sea oil will escape this same rise. We are not free to treat North Sea oil as the exception to the world's price structure for the very simple reason that a great deal of our North Sea oil is traded off abroad to pay for imports because it is of a higher quality than we need for our domestic requirements in this country. We can buy oil abroad at world prices cheaper than North Sea oil and sell North Sea oil at a premium; ton for ton, barrel for barrel, we gain on the exchange. But it must take place at world prices.
It is perfectly true that oil itself is only 3 per cent. of the world's gross national product. I suppose I ought to call it gross terrestrial product or something like that. Gold is very much less. But think what a rise in the price of gold does, my Lords—and oil is sometimes called "black gold". It enters into the price of everything; it helps to control the price structure. It is part of the servo-mechanism that drives the economy along. If we allow that to get out of control, we are going to be in for another bout of leapfrog inflation on top of the leapfrog inflation that we have not yet damped out of the system.
This is why I have to ask myself: what actually happens to an economy that faces this kind of alteration in its terms of trade? I imagine for purposes of simplification that I have a trading economy which is in a state of internal and external equilibrium. By that I mean that, internally, net income balances the output of consumer goods at full employment, investment balances the output of capital goods at full employment and exports equal imports. What then happens if there is a rise in the price of imported raw materials? Any of three basically different things can happen. First of all, you can borrow the difference, but you cannot keep that up unless you can find foreign investors who will transform short-term trade indebtedness
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into long-term investment. If you can, well and good, you can borrow the difference. The alternative is that more of the standard products of the economy are exported to pay for the increased drain on resources represented by the same volume of imports at a higher price, thus leaving a smaller amount of consumption goods available for consumption in this country, thereby reducing the standard of living. You find prices going up and you do not ask for more wages to pay for them, you just buy less.
The third remedy is that you can work harder or longer or, much more important, more productively, to turn out an increased proportion of goods to pay for the increased monetary volume of the imports. The one thing you cannot do is to say: "I do not want my personal standard of living to be reduced, so I shall pick my neighbour's pocket. It is true that not being a professional pickpocket, I lack the legerdemain to do this in the literal sense of the word. It is much easier for me to do it by beating him to a price rise." My Lords, this is not a viable way of coping with an alteration in the terms of trade. It only generates the leapfrog inflation from which we are already suffering. If you want a picture of what happens under these conditions, my Lords, just look around you in this winter of our discontent and consider the morale of the nation just at this point in time.
Can we in any sense of the word equate barring the road of the Good Samaritan with a picket line for the sake of more money with loving one's neighbour as oneself? What starts as theft ends as a deterioration in the entire morale and morality of the nation. Trying to beat inflation in this way is like trying to step on your own shadow. It cannot be done. It is quite true that in a Christmas pantomime Peter Pan did something rather like it; but Peter Pan was just a little boy who would not grow up. He is not a model for national leadership, political leadership or union leadership.
I am not one of those who think that the unions are big bad wolves. If I wanted a Disneyesque comparison I would much sooner choose Mickey Mouse as the Sorcerer's Apprentice—the little fellow who switches on more power than he knows how to switch off. If I seem to be laying about me and selecting the unions for the

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rough edge of my tongue, that is only because in a debate on a restricted subject they happen to be the most relevant. If I really wanted to get rough, I should get rough with everybody including myself for all the sins of omission and commission for which the Legislature has been responsible during the 30 post-war years.
It comes down to this, as I see it: we do not have to be cold, hungry and unemployed before we come to our senses in facing situations that we have faced before and have no excuse for not recognising. But, if that is the way we insist on having it, that is the way it will have to be. With your Lordships' permission, I can describe that situation and what we have to face with a very slight paraphrase of a couple of quatrains by Rudyard Kipling:
"This was none of the Lord's good pleasure
For the Spirit God set in man was free.
But what comes after is measure for measure
And not some fate that afflicteth thee.
As was the sowing, so the reaping is now and evermore shall be.
We are delivered to our own keeping:
not oil but ourselves have our fate in fee".
My Lords, I beg to move for Papers.
3.31 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, the Motion of the noble Earl was indeed drawn very wide and, although he called it "a restricted debate", in a speech full of evocative and impressive analogies the noble Earl has acted as a very genial compère and bas ranged very far. In particular, he has addressed himself to some financial implications. I wish to try to be selective and intend therefore to concentrate on the immediate problem of the shortfall of oil exports from Iran, which I do not believe justifies one part of the noble Earl's Motion where he talks about:
"… the need for revising the current provisions of the energy programme …".
I think what has happened is a timely reminder that we should not forget the lessons of 1973. At that time I said in one debate in this House that OPEC had done us a favour by pointing up the dangers of profligate waste— "squandermania" was the noble Earl's word—of the world's valuable resources and the implications of this for us nationally. I take very small comfort from the fact that if we have not learned the lessons, it appears that the
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United States have learned them even less well and they are now more dependent on imported oil and continue to use one-third of the world's output of oil; so the energy gap is widening.
There is no doubt that recent events in Iran present a problem. I do not think they present us with a crisis unless we lose our heads and panic ourselves into a crisis; but we are in a state of what might be called "yellow alert". I am sure that the noble Lord will give us more authoritative figures, but the figures I have been able to obtain might put the thing in context, as indeed did the noble Earl. The total world demand for oil is of the order of 60 million barrels a day, or 3,000 million tons a year, of which about 42 million barrels a day is internationally traded. Of that Iran used to produce about 5 million barrels a day. Since that oil was cut off Saudi Arabia has been producing an extra million barrels a day and the North Sea and other sources have been producing another million barrels a day, leaving us with a net shortfall of the order of 3 million barrels a day, which is about 5 per cent. of international consumption. Of course, this does not operate the International Energy Agency's 7 per cent. trigger, but the participants in the International Energy Agency have agreed to a 5 per cent. cut-back, and I think we have agreed, under the nondiscrimination agreement, that this Government will honour their obligations under the IEA. I hope that perhaps the noble Lord will be able to confirm that this is indeed the Government's position.
Having said that, can the noble Lord tell us what ideas the Government themselves may have about implementing a 5 per cent. cut? The Government themselves use something like 30 per cent. of the energy of this country—that is, the Government and Government-controlled agencies—so they can have a very considerable direct influence on this situation if they wish. It has been suggested, for instance, that more coal should be burned in power stations, but my understanding is that something like seven-eighths of the energy used by the CEGB is already coal; so there would not appear to be any great scope for increasing the utilisation, unless it be by reactivating some of the older and relatively uneconomic power stations which were coal burning—

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in which case, who is going to pay the CEGB for the extra costs they incur?
It seems to me that the International Energy Agency has proved its worth in these difficult circumstances by producing authoritative figures in an area where reliable information is notoriously hard to come by. I think the fact that they have been able to do this gives one added confidence for dealing with the situation and to be sure that the mechanisms exist for coping with the situation if it gets more difficult.
Both the oil companies and the Government have been mutually satisfied that emergency responses are not yet called for. I hope this does not imply that they have been either complacent or irresponsible. My understanding is that the Petroleum Industry Advisory Council gave this advice to the Government and they therefore said there was no need to summon the oil industry's emergency committee, because that very act in itself might have caused precisely the panic reactions that one would wish to avoid if everybody goes out and wishes to stock up, that is the best way of creating an immediate problem of shortages.
The basic message I am getting is that to make a 5 per cent. economy in our use of fuel need cause no great pain but calls for good housekeeping and careful thought in the interests of everybody. This brings another question that I should like to put to the noble Lord. I rather believe that the British National Oil Corporation—and incidentally may I suggest to the noble Earl, Lord Halsbury, that "BNOC" could conceivably be made to rhyme with "CEGB", but I still have not got any further that that—was set up to have some control over crude supply, among other things. Does the noble Lord believe they are capable of exercising any degree of control, and do they have the supplies to make good any shortfalls?
Having said all this, it is quite clear that in a month or two it may be necessary to reconsider where the energy supply situation has arrived, if by that time we have neither achieved a cutback in use nor a revival in production from the Iranian oilfields up to the order of, say, 3 million barrels a day—or at least a prospect of that happening. This problem is something
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which would necessarily show itself in a serious manner only in the autumn, when the industry's normal practice is to build up stocks through the summer for use during the winter months. I should like to ask the noble Lord, Lord Strabolgi, whether he can give us authoritative figures.
My understanding is that stocks have come down from something like 70 days to about 60 days, which has to be compared with what I believe is our IEA obligation to maintain 90 days. Also, one has to bear in mind that the companies say that they need something like 50 days' stocks to avoid running into technical problems of local shortfalls. Here, again, can the noble Lord tell us whether the Government are now satisfied that we have reached a rational, sensible basis of comparing what stocks really are? It sounds a very simple matter, but I am told that it is exceedingly complicated to allow, for example, for the oil which is on its way here, the oil which cannot be pumped out of a tanker and that kind of marginal consideration.
I believe it is right to say that the real problems have arisen from oil supplied by the so-called small independents who operate the spot market in Rotterdam. This comprises some 8 to 10 operators sharing, perhaps, 5 per cent, of the market. In the ordinary way, they perform a valuable service at a profit to themselves by living dangerously on the margins of the oil market, and, personally, I do not see that they have any cause to complain when the market conditions turn against them, as they inevitably do, about every five years or so. But one should understand how difficult the price factor has become, and I am told that it has become particularly acute in what are known as the light distillates, which I believe include jet fuel. For example, in October, 1978, the price of jet fuel was 162 dollars a ton on the spot market. In February, 1979, it was 320 dollars a ton, which is very nearly double. The United Kingdom price is 220 dollars, which means that you cannot go out on to the spot market to make up any temporary shortages.
This, in turn, points up another problem, which is the dangerous rigidity that price control mechanisms can impose upon this very highly organised and complicated market, because the only recourse that spot market operators would have would

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be to buy their oil expensively and to sell their oil expensively, rather than say that they cannot supply at all. I suspect it is this which is the background to the reports in the newspapers about what one might call the Walsall school syndrome, where schools have actually had to be closed because of shortage of fuel supplies.
I know nothing about this, but what I suspect has happened is that, in a laudable attempt to keep down the prices, these consumers bought from the small operators at a price below that which they had to pay to the majors. Then the small operators were unable to supply and, of course, when they went back to the majors, they were unable to help, because the majors were saying: "We can lust get by if we continue to supply our longstanding customers, which we believe we shall he able to do with careful management and by resort to such devices as monitoring what they had last year, as compared with what they are ordering now to make sure that they are not trying to take advantage of a shortage situation." This may be a harsh lesson in economics, but it seems to me to be the real world and not necessarily a wholly bad one, from which we, again, should learn the salutary lesson of the precarious balance within which the energy industries operate; and we should pay particular attention to the need for careful husbandry.
This brings me full circle back to something which we have said so often in this House, that I hope that this experience, assuming that it does not get any worse, will emphasise for us the need for systematic energy saving in both the short-term and the long-term, and I can assure the noble Lord that we on this side will give the Government all possible support in any really sensible schemes which they are able to bring forward. I draw comfort from the situation when we find that the IEA has demonstrated its usefulness, despite, incidentally, the apparent anomaly of having its head office in Paris when the French themselves are not members of the IEA. Nevertheless, it has proved its usefulness and its credibility. I also draw the conclusion, along with the noble Earl, Lord Halsbury, that we in this country have to recognise that we cannot isolate ourselves from the world, even although we are faced with the uniquely happy prospect among the industrial nations of the world of an
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approaching energy balance. If the world is short of energy, we shall feel it here.
Lord WOLVERTON: My Lords, before the noble Lord sits down, may I ask whether he can tell the House approximately how many of the power stations in this country are run by oil? My information is that they produce about 10 per cent. of the energy which the Central Electricity Generating Board generates. Some of these stations have been constructed for dual firing, and could there not be some saving if the dual firing ones were turned over to coal?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I think that I really ought to leave an answer to that question to the Government, when the noble Lord replies. However, I shall say two things which I believe to be correct, and I am sure that the noble Lord, Lord Strabolgi, will correct me if I am wrong. First, I do not believe that any of the dual firing stations have used oil for a very long time. Secondly, the figure which I produced was that something like seven-eighths, which I suppose is something of the order of 85 per cent., of the fuel used by the CEGB is coal rather than oil. There might be some correction factor to be brought in, if the noble Lord is talking about the amount of power produced, for the relative efficiencies of the older and the newer stations.
3.48 p.m.
Viscount THURSO: My Lords, in gratitude to the noble Earl, Lord Halsbury, for introducing this Motion to your Lordships' House, I should like to offer him the poem for which he asked:
"The Chairman of the UKAEA
offered to start the CFR today.
The Government said Let us wait and see.
This also goes for the CEGB'."
We must indeed be grateful to the noble Earl, Lord Halsbury, for drawing the attention of your Lordships' House to this most important matter, that of the need to look at the energy programme in the light of recent events in Iran. We should also congratulate him on the felicitous timing of the debate coming, as it does, like a douche of cold water the day after the publication of Energy Paper No. 33. Although we congratulate the Government and the sensible people

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of this country on having achieved a saving of 6 per cent. in energy consumption, we must at the same time recognise that we have lost 6·6 per cent. of our total energy supply temporarily, and there is no guarantee that we shall get it back or even a sizeable proportion of it.
The noble Earl, Lord Halsbury, does us a service in asking us to consider our energy programme in a worldwide context. Too often we are inclined to think in narrow, national terms, forgetting how quickly and severely we can be affected by international events. It is true that at this moment we are very nearly energy self-sufficient, but this has not always been so and we know full well that this happy state cannot last. We also have to be aware that, though we have ample reserves of coal, oil and natural gas, this is not true of many of our partners in the EEC. Nor do I believe that it is true of Europe as a whole.
Certainly if we turn our eyes outward to the wide world we should be able to see that if the just demands for an improvement in the standard of living, to even a fraction of that which the West enjoys, are to be met, it does not appear that there is enough energy capacity in the whole world to achieve it. This makes me wonder what proportion of the erstwhile Iranian oil production will ever find its way back to Western markets. Do you remember Argentinian beef, my Lords? Before the war it was the staple source of the "Roast Beef of Old England". Now we hardly see it, except as tinned corned beef. The reason is not a fall-off in demand in this country; it is the result of an increase in demand in South America itself.
What the events in Iran should make us realise is that the days when we in this country, or in Europe, or in the West could look for unlimited supplies of reasonably priced imported energy are over. Energy, from now on, is always going to become scarcer and more expensive. It follows, therefore, that more and more power will reside in the hands of those countries which possess large energy resources, power which may not always be exercised benevolently towards us in the West.
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So if we want to preserve our standards of life or, indeed, if we want to preserve our freedom and independence of action, we must see whether it is possible to supply our energy needs largely independently of overseas resources. I think that it will be possible to do this, and I am comforted by the thought that North Sea oil will give us time to make our strategic dispositions. But I am frightened by the very real danger that we may sit around for too long trying to make up our minds about our chosen strategy. The only thing I can think of for which to thank the Ayatollah Khoumeini is that his coup has made us once again concentrate upon the real problems in hand.
I think that up to now I may well have carried my colleagues on these Benches along with me, but I fear that it is at this point that I may be parting with some of them in thought. Certainly I agree that conservation of energy is very important, but recent events have shown that, with the best will in the world, it can contribute only slightly to the solutions to our problems. I applaud the success so far, and I should like to encourage the continuance of the programme. But the ultimate saving of 40 million tons of coal equivalent is less than the built-in energy gap of 50 million tons of coal equivalent which is built into the Green Paper calculations.
I do not, however, share the views contained in the publication A Low Energy Strategy for the United Kingdom, quoted in the recent debate on energy in your Lordships' House, nor do I share the starry-eyed optimism of those who hope to find solutions in alternative energy sources. As more work is done on these, it becomes ever clearer that not only will they be unable to produce the volume of energy needed to fill the energy gap but also that such energy as they may be capable of supplying will be immensely expensive.
There really are only four main sources of energy available to us out of which to fashion an energy strategy to take us into the next century. These are oil, gas, coal and atomic energy. Oil and gas are the energy sources of today and the next decade, but after ten years it is pretty certain that our supplies of them will be

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declining. It is important, too, to remember that oil and gas are important chemical raw materials and should not be burned up with profligacy. Coal is an energy resource of today and tomorrow and, indeed, for a long time ahead; but we must remember that coal also is an important raw material, and as oil and gas are used up coal may well be needed as a source of chemicals or even to be turned into oil and gas. There are also practical limits to the development of coalfields which may place certain constraints upon us.
Atomic power is the one source of energy capable of meeting our needs, both in volume and in price. Of this I am absolutely and clearly convinced. This, I fear, is where I part company with a number of my colleagues. In my own view, this country cannot afford any longer to hold back from a considerable and progressive investment in atomic power. I repeat that it is the only source available to us which will meet our needs in time, in volume and in price. If we hesitate much longer, it will not be in time, although it still might manage the volume and the price. The gap in timing, however, might well then have to be expensively bought.
Let me substantiate my claims. I said "in time", but there is only just time if we proceed at once with both thermal reactors and the fast reactor programme to achieve a balance of energy by the year A.D. 2020. If we do so proceed, we can look forward to ending uranium imports after about A.D. 2040 and our children and our grandchildren would then be able to enjoy our reserves of degraded uranium which would be equal to our total present coal reserves, if used in fast reactors.
I said "in volume". This is incontrovertible. I do not claim, though, that atomic power would solve absolutely all of our energy needs. Portable energy may well have to be provided still by forms of spirit or gas which could be distilled from coal electrolysed from water and so on. We shall look forward to hearing later in this debate from noble Lords with much greater scientific knowledge than I possess who I am sure will give us chemists' and other scientific views of these possibilities. It is, though, incontrovertible that atomic power is the
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only source of energy actually available to us now in this country and in the EEC which can be expanded enough to meet our future needs. In it we led, and perhaps in certain areas we still lead, the world. We have the know-how and the resources to develop it.
I said "in price". Here, if we take today's prices, it can be shown that electricity produced from coal costs 1·23p per unit, from oil 1·42p per unit and from nuclear energy 0·76p per unit. There is no doubt that at today's prices atomic power is much cheaper than power from other sources: almost half the cost of power from oil, rather less in the case of coal, provided one is assuming the use of low grade coals in power stations. "Ah, but", you may say, "do we not have to import uranium?" Yes, this is true, for a short time—for a start and for a start only. If we go for thermal reactors, with a fast reactor series ordered in the mid-1990s, then the cost of imported uranium would peak at between £400 million and £800 million per annum.
Lord DAVIES of LEEK: My Lords, I have listened with interest and have been stimulated, but in all these analyses of costs is the noble Viscount taking into account the cost of making safe all the effluents from this excess radioactivity?
Viscount THURSO: My Lords, I believe this to be so, because I am using Government figures. I do not think that the cost of making safe the effluents is great and in fact personal knowledge which I have of these matters, in which I have an interest—as noble Lords who read the Sunday Telegraph will be aware—leads me to believe that it could be a very easy thing to do. But as I have said, the cost of imported uranium would peak at between £400 million and £800 million per annum and would fall away steadily to nought by about the year 2055 AD.
We are like a human body which has suffered a series of warnings by heart attacks of an inherent circulatory disorder: the Suez crisis was our first heart attack, the coup in Iran was the latest. Like a person who ignores a heart attack we ignore these warnings at our peril. Now is not too soon to take the decisions which will avoid another, and possibly much more serious, attack.
4.1 p.m.
Lord RITCHIE-CALDER: My Lords, I will resist the temptation to follow the noble Viscount in his argument, not because I fundamentally argue that we have not only to consider nuclear energy, or any other kind of energy, but to consider every kind of energy if we are aiming for consistency in our programmes. I am exercising a very strong self-denying ordinance because I happen to believe in wave energy, I happen to believe in solar energy, and incidentally I happen to believe in thermal fusion energy and not so much now in the plutonium economy—but nevertheless, I shall confine myself to the need to find alternative sources of energy, and within that to one alternative, namely, oil from coal. I do that because we have made ourselves hostages to liquid fuel in the internal combustion age. I can think—and we can all think—of all kinds of ways, including marvellous expeditions into the ultimate hydrogen age, but we are still stuck with the fact of machines for which we still have to find liquid fuel.
Like the noble Earl, Lord Halsbury, I should like to ask your Lordships' indulgence in quoting something which I wrote 45 years ago in my first book, The Birth of the Future. I do it without any basic apology because—well, just listen:
"The need for a national plan is obvious. It must include the mines in the corporate industries. A far-seeing Government would set up carbonisation plants (for smokeless fuel) in the depressed areas which would convert the coal at the pithead. It would set up oil-from-coal distilleries, erect factories which would form the basis of the bakelite industry,"—
and I want to explain there that in those days "bakelite" was used as the generic term for what we now call "plastics," and was nothing to do with the trade name—
"and gas grids in order to commercialise the rich surplus gas. Another method (apart from the conversion of coal tar) of producing oil and motor spirits from coal is by pulverising the coal and hydrogenating it; that is pumping in hydrogen at high pressure and at high temperature. Experiments on a large scale and now capable of commercial output, have been carried out by the Imperial Chemical Industries. In five years the estimated cost of producing petrol from coal has been reduced from 2s. 6d. per gallon to 7d. a gallon".
I am talking now about 1934, and I leave your Lordships to do all the conversions from the old currency and indeed in terms of inflated prices today. I continue:
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"The Imperial Chemical Industries, with Government assurances of an adequate tax on imported petrol, is going ahead with a plant capable of producing 100,000 tons of petrol a year—that is 30 million gallons—for a start. The coal consumption for that will be 350,000 tons of coal a year, which is about one-half of one day's natural production. The plant will cost about"—
now wait!"—
"£2½ million".
Now multiply that by all the zeros that your Lordships have in your pockets! Then I say:
"On that basis two and a half weeks' output would supply the 10,500 million tons of coal required to supply the 1,050 million gallons of motor spirit imported into this country every year. 1935".
That was written 45 years ago with the insight of the Government Fuel Research Station under Dr. F. S. Sinnatt and of the ICI. But it did not work that way at all. Why did it not work? The story in Germany was enormously different, but nevertheless had a deplorable outcome. Hitler was planning a war and he bided his time until 1939, and we know that he was waiting for the assurance that Germany was self-sufficient in oil. They had no natural oil resources but they had to rely on being self-sufficient in oil, and he was waiting for the culmination of the hydrogenation process first suggested by Bergius in 1914, and it gave him what he wanted.
I would remind your Lordships that the mighty German war machine, the total blitzkrieg, all the bombing of London and everywhere else and all the submarines that took to sea, were all running on oil produced from coal. After Hitler's failure to reach the Baku oilfields and the bombing of Ploesti in the Romanian oilfield in May 1944, Germany became entirely and completely dependent on oil from coal from Leuna chemical works in Germany. If you read Albert Speer you will realise just what that amounted to. By the time we bombed, first of all, Ploesti, Hitler had been stopped short of the Caucasus so he could not get any oil there; but from the production of oil from coal the Germans went on from May 1944 until the whole German war machine ground to a halt for lack of petrol in the Battle of the Bulge. And Speer will tell you in his book—I will not quote it—that the fact is that the first attack on Leuna airfield was the

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end of the war for Germany. He knew what was going to befall then.
We are talking about something that somehow has got lost in history. Here is the biggest demonstrable commercial development of oil from coal, and we are still talking about it as though it is something to which we must find new answers. There are no new answers necessary. We in this country are making evaluations under the NCB, and so on, about better and more efficient processes. We have three main ones now under consideration and one is the liquid solvent extraction—and I may say that as recently as 1960 a Governent committee on coal derivatives said this in Cmnd 1120 (1969)—and I want to repeat it:
"Even a cursory inspection of cost data shows that hydrogenation of coal is a less economic route to oil synthesis. Moreover hydrogenation calls for specially selected coals of low ash content; therefore we shall not consider, in this report, hydrogenation as a possible method of making oil from coal".
1960!
Lord DAVIES of LEEK: My noble friend ought to read that again, my Lords.
Lord RITCHIE-CALDER: My Lords, I have not the time to repeat it; I am very scrupulous about time. But this is important. We said it in 1960. We are now unsaying it in some way, but what we are talking about is something which is manifestly so. We have heard the recitation from the noble Earl, Lord Halsbury, of five forgotten chapters, or five warnings, whatever it was. We have had these warnings. What worries me is that we are going to walk into the snare and delusion of atomic energy, in the sense that we are going to accept this as a panacea without alternatives. But the worst thing I can possibly conceive is that we are going to be lulled again into a sense of security by North Sea oil. The only reason why we are in this mess is that oil was cheap. The whole thing happened in the 1930s. Why did we not go ahead with oil from coal? Because oil from the Middle East was cheaper. We got ourselves trapped. I do not want to see us trapped again. If your Lordships want any more alternative sources of energy, I will give them, but let us concentrate at least on one thing
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—oil from coal—which has been here valid and real, for 45 years.

PAY COMPARABILITY
4.12 p.m.
The LORD PRIVY SEAL (Lord Peart): My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Prime Minister about the establishment of a Standing Commission on Pay Comparability. The Statement is as follows:
"In my speech to the House on 16th January I commented on the present methods of fixing pay and conditions in some areas of the public services, and expressed the Government's readiness to see a greater role for measuring their pay and conditions by making comparisons with pay for comparable work and effort in other occupations where both sides so requested.
"This suggestion was carried further in the recent joint Government/TUC statement as a means of averting strike action in areas which affect public health and safety, and we undertook to identify groups which might be covered by such agreements.
"The Government have a responsibility both to be fair to public service employees and to avoid arrangements which could in themselves prove inflationary. Comparability studies must, therefore, be made in a systematic and thorough manner, taking all relevant factors into account.
"A Standing Commission on Pay Comparability is accordingly being set up by the Government to examine the terms and conditions of employment of particular groups of workers, referred to it by the Government in agreement with the employers and unions concerned, and to report in each case on the possibility of establishing acceptable bases of comparison, including comparisons with terms and conditions for other comparable work and of maintaining appropriate internal relativities. Any further role for the Commission in each case will be a matter for agreement between the Government and the parties.

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"The Chairman of the Commission will be Professor Hugh Clegg and members will include Sir Leslie Williams, Sir William Ryland, Mr. Peter Gibson, Mr. Harry Urwin and Dr. Joan Mitchell. Other members will be announced in due course.
"During the recent negotiations on the pay of local authority manual workers, National Health Service ancillary workers, ambulancemen and university manual workers, it was agreed as part of the proposed settlements that a study should be made of acceptable bases of comparisons for these groups. It has also been agreed that these groups should be investigated by this new Standing Commission.
"In the case of these groups it has been agreed that the Commission will make recommendations which the Government and the trade unions concerned have undertaken to accept. The Commission is being asked to report on these groups by 1st August, 1979.
"The staging of implementation of these recommendations was also agreed as part of the pay negotiations. The Commission will start work on these assignments as soon as each settlement is reached. Other groups will be referred to the Commission from time to time by agreement.
"The TUC inform me that they fully associate themselves eith the establishment of the Commission. My right honourable friend the Secretary of state for employment will be responsible for these new arrangements, which should help us in future years to avoid the dislocation and hardship that the public has suffered in recent weeks.
"This is a difficult area in which to determine proper rates of pay, but I believe that these new arrangments will commend themselves to the public as a sensible way forward".
My Lords, that concludes the Statement.
4.18 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, the House will be grateful to the noble Lord the Leader of the House for repeating the Prime Minister's Statement, which I must say
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right away appears rather difficult to reconcile with his remarks on 1st November 1978, when he rather dismissively referred to the appealing argument that fair comparisons with similar work demand the same reward.
I think we on this side must have reservations about this Statement, if it is intended to be a response to the urgent and pressing problems of strikes which we have experienced in recent weeks. Setting up a Standing Commission may, indeed, by a sensible long-term concept, but it would surely be a fairly major institutional innovation, and it seems to me that it would be rather dangerous to ask it to do too much too quickly for fear that it got off to a bad start. Surely in this case it would have been right for Parliament to have had a chance to examine and debate the terms of reference that this Commission was to be given. Indeed, this was mentioned in the TUC statement to which the noble Lord referred.
There are various questions which arise out of that. For example, would it be possible for settlements to go down as well as up as a result of the recommendations of this body? It appears that the body is to be asked to recommend. It is more than merely a fact-finding organisation. In that case, does the reference to the fear of inflationary pressure mean that the Commission will be making recommendations within cash limits, for example? Presumably the Commission is not itself going to enter into negotiations, but what about the market forces for labour, what about the supply and demand for labour, what about local variations and regional variations, what about job security? Are all these going to be considerations which the Commission will have to bear in mind.
It looks as if it is going to be a massive new QUANGO. There are six distinguished names in the Statement, and it says,
"Other members will be announced in due course".
Can the noble Lord tell us how many other members they envisage having in due course? What will be the relationship of this Commission with the Office of Manpower Economics; will it complement the work of that body?
Reference to producing a report by 1st August 1979 takes me back to this

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question of whether we are not trying to ask a long-term organisation to produce an immediate panacea for the four particular groups referred to. Finally, would the noble Lord please tell us what the perfectly astonishing sentence towards the end of the Statement means:
"The Commission will start work on these assignments as soon as each settlement is reached".
I simply do not understand what that is intended to mean, if it means anything at all.
Lord BYERS: My Lords, while I thank the noble Lord the Leader of the House for repeating the Statement, I should like to ask him three questions. First, can he indicate how this new Board will differ from the Prices and Incomes Board, which was abolished by the Conservatives in 1970, and the Relativities Board, which was abolished by the Labour Government in 1974? What is the difference? Secondly, is the work of the new Board to be confined to the public sector, or will it have some relationship with the private sector and, if so, what? Thirdly, in view of the need for continuity and permanence, have the Government tried to get all-party agreement on this new Board so that it has some chance of becoming a long-term part of the incomes policy and not something which will be abolished as soon as a new Government comes to office?
Lord PEART: My Lords, I have been asked a series of questions which I shall try to answer. I did not think that the noble Lord, Lord Strathcona and Mount Royal, made a very helpful speech; if he will forgive me for saying so, I thought that he was nit-picking. He said that this is no response to an urgent and pressing problem. For the very reasons contained in the questions put to me by the noble Lord, Lord Byers, on behalf of the Liberal Party, I believe that it is a major response. His approach was much more positive. I am glad that he asked questions in which, basically, he praised the creation of this body and thought that this would be the sort of body which could be set up irrespective of party.
In this particular area, noble Lords opposite have always been pressing us to have all-party agreement. I detected no
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constructive approach from them today. I would ask questions about the difficulties which this body would have. May I remind noble Lords that there is in existence a Pay Research Unit which has been very successful. About two or three years ago noble Lords questioned me about its effectiveness. I wish that some of my noble friends, who I know are particularly interested in this, would appreciate that the Pay Research Unit has really inspired the sort of comparability studies which we require in a body of this kind.
Therefore, without responding to the smaller areas of the questioning of the noble Lord, Lord Strathcona, I believe that this body should be given a fair trial. There is no reason why we should not examine the pay situations of those in the public sector. I believe that it has been good for the Civil Service unions, despite the difficulties which we are now experiencing as a result of their strike action. However, I believe that it is a positive contribution. I hope that before noble Lords criticise this, they will study carefully what I have said.
Lord ROBERTHALL: My Lords, as a long-standing advocate of incomes policies, I should like to welcome the Statement just made on behalf of the Government because I strongly believe that some mechanism of this sort has a necessary part to play in the formation of an incomes policy. I particularly welcome the Statement because we are now drifting into a position of competition between muscle power; that is to say, the miners and the lorry drivers have shown that they can hold the community to ransom and now we are getting all sorts of people, who never dreamt that they could hold the community to ransom, trying to do the same thing. That is the anarchic state towards which we are moving. From its terms of reference I do not think that this Board will interpret comparability to mean comparability in the chaos that can be inflicted upon the country. I think that it is comparability almost in the market sense to which the noble Lord, Lord Strathcona, referred.
Lord PEART: My Lords, I am grateful to the noble Lord for what he has said. It enables me to mention a point raised by the noble Lord, Lord Strathcona,

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which I missed. He asked whether the Board will deal with matters like local variations and job security. That is precisely what the Pay Research Unit does; it will cover these points. I am glad that it has been welcomed.
Lord BYERS: My Lords, can the noble Lord answer one question which I asked him—namely, what relationship, if any, will this have to the private sector?
Lord PEART: My Lords, this covers only the non-trading public sector.
Lord SHINWELL: My Lords, is my noble friend aware that some of us—and we may be in a minority—have for a long time rejected collective bargaining as a solution of our wages problems although we have experienced collective bargaining since the beginning of the century? We have had the results quite recently: chaos, discontent and, to a large extent, muddle. Therefore we welcome even a minor, modest contribution which might lead to a better understanding of what is required when wages have to be determined. Comparability must be regarded as only a part of the general policy which sooner or later must be adumbrated if we are to avoid anything like what happened recently.
Lord PEART: My Lords, I am grateful to my noble friend, Lord Shinwell, for his remarks; he has had long experience of industrial negotiations over many years. I agree with him that this should be part of a general policy. Obviously, as I have mentioned, a body of this kind, created because of the experience of a body such as the Pay Research Unit—for which I have a responsibility—will enable us to sift the information far better. It is extremely important to obtain the right information before negotiations and before staff sides and the bodies concerned reach conclusions. I very much welcome this.
May I say to noble Lords that I am not running away from questions, but I have another Statement to make on another subject, and I should hate to hinder the fuel debate, which I believe has gone on so well. I hope noble Lords will understand that I am not trying to dodge questions, but I do not want to spoil
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what I believe will be a very fine debate. Perhaps I may proceed to the next Statement, which should be easier.

COUNCIL OF MINISTERS' MEETING ON AGRICULTURE
4.27 p.m.
Lord PEART: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement is as follows:
"I represented the United Kingdom at a meeting of the Council of Ministers (Agriculture) in Brussels on 5th and 6th March. I was accompanied by my honourable friend the Parliamentary Secretary.
"The main topic at this meeting was the future treatment of new monetary compensatory amounts—that is, increases in MCAs which might come about as a result of changes in central rates under the proposed European Monetary System. The Commission made proposals for the semi-automatic reduction of these MCAs. In so far as they related to positive MCAs, that is, the MCAs of countries with prices above the common price level—these proposals presupposed increases in common prices, so as to avoid any reduction of prices in those countries in terms of their own currencies. This would have prejudiced our resolve to ensure that there are no increases in common prices until structural surpluses are eliminated. I therefore refused to agree to the proposals unless they were linked with a decision to freeze common prices. In the event, the eight other member countries agreed between themselves to behave as though the proposals were in force. This is a decision for those member States but it has no effect in Community law. It in no way affects our ability to get a sustained freeze of common prices, nor have we accepted the automatic reduction of our own MCAs.
"The outcome of this negotiation formed part of a series of agreements by the Council. In particular the Council agreed in principle to the Commission's proposals for devaluation of various green currencies, including

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a 5 per cent. devaluation of the green pound, which I have supported as in line with the policies set out in the recent White Paper, Farming and the Nation. It was also agreed to introduce a franchise (or reduction) of one percentage point in new positive MCAs when these appeared. It remains to be decided when these various decisions will take effect.
"The Council also discussed the proposed co-responsibility levy on milk producers. I made it clear that we could not accept this proposal in its present form, which grossly discriminates against our own efficient dairy industry. I also pressed for an early decision on tariff reductions on imports of new potatoes from Cyprus. And I again urged the Commissioner for Agriculture to bring forward quickly proposals for measures to safeguard the welfare of farm animals in transit. He undertook to do so in the near future."
My Lords, that concludes the Statement.
4.30 p.m.
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Peart, for repeating the Statement. He said in an aside that he thought it would be easier. I am not certain whether he has found it so, nor perhaps have your Lordships. Perhaps I can take the last item first in regard to safeguarding the welfare of farm animals in transit, and say that it can only be a welcome piece of information that the matter is being brought forward. In relating the Statement to the recent Government White Paper, Farming and the Nation, I should particularly like to address myself to the question of the reduction of 5 per cent. in the value of the green pound.
It was the part of the Statement which said:
"It remains to be decided when these various decisions will take effect".
Can the noble Lord the Leader of the House tell us when it is envisaged that a time programme will be attached to that 5 per cent. devaluation? I also wonder whether the noble Lord will tell us a little more about the new compensatory amounts. As we understand it, this phrase attaches to the system as it has evolved since the adoption of the European
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Monetary System by certain member countries, not including Britain. It appears that the Statement is part of a series of agreements, but we should like to know when a time decision is going to take place on the green pound.
Lord MACKIE of BENSHIE: My Lords, I, too, welcome the last part of the Statement on safeguarding the welfare of animals in transit. In view of the Statement, I should like to ask the Leader of the House whether the Government really subscribe to the principles of the Common Agricultural Policy. We are well aware that there are grave snags in its working. We are aware that the structural surpluses must be got down. But I must say that while I agree with many things said by the Minister of Agriculture, I find his method of saying them extremely dangerous.
I ask the question about the principles of the Common Agricultural Policy because I see here a very dangerous statement:
"In the event, the eight other Member countries agreed between themselves to behave as though the proposals were in force".
I find that this is a consequence which I would have expected from the extremely aggressive attidude adopted by our Minister of Agriculture who is, after all, a known anti-Marketeer. I say this with the utmost respect and the greatest reluctance, but the fact that the eight countries have agreed between themselves to behave as though the proposals were in force appears to me to be a highly dangerous situation for the unity of the Common Market.
I welcome the proposed 5 per cent. reduction in the value of the green pound, although the farmers of this country will not think it a great deal in view of the fact that their costs are going to rise by over l0 per cent. I should welcome an assurance by the Leader of the House that the Government support the principles of the Common Agricultural Policy while accepting that we need to cut the structural subsidy.
Lord PEART: My Lords, the noble Lord, Lord Sandys, asked me about progress regarding the green pound. He really asked about the future. In other words, when will the green pound devaluation take effect? I think that that

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is what he was after. We now have Council agreement in principle to the 5 per cent. devaluation of the green pound, but the regulation must be formally adopted by the Council before taking effect. This regulation would introduce simultaneously the green rate changes for the United Kingdom, France, Italy, and Ireland. There is shortly to be another meeting of the Council and the matter will again be raised there.
I come to the important question asked by the noble Lord, Lord Mackie of Benshie, who defended most of the Statement and the need to curb structural surpluses. He asked whether we were committeed to the principles of the Common Agricultural Policy. We are. I am hoping to defend it tonight at an agricultural dinner. We are in the Community, and we have to make it work. That was my view, and always has been. It is the view of my Government. I hope that one would not read too much into this Statement. In fact there is no attempt in this Statement to criticise the CAP. What the Minister is trying to do is to improve it, and also to try to remove structural surpluses. I know that they can sometimes be exaggerated. But I believe that we are in the Community, and we have to make the Common Agricultural Policy work.
The Earl of BESSBOROUGH: My Lords, the noble Lord mentioned the relationship of these matters to the European Monetary System. Does what he has said mean that we are closer to achieving a European Monetary System at least among the eight Community countries mentioned by the noble Lord on the Liberal Benches that have agreed? Does this mean that at any rate other countries within the Community are coming closer to achieving the kind of monetary system which was drawn up at Bremen?
Lord PEART: My Lords, I cannot commit myself, or indeed the Government, to what may or may not happen. I personally am sympathetic to the move towards this European unity in the monetary field. If it is sensible to do it, I think it may well be that we shall one day accept it, but for the moment I cannot speculate.

ENERGY AND PRICES AND INCOMES PROGRAMMES
Debate resumed.
4.37 p.m.
Lord ZUCKERMAN: My Lords, may I add my thanks to those that have already been tendered to my noble friend Lord Halsbury for having initiated this debate. May I at the same time apologise to your Lordships if I am unable to stay until the end of the debate. We began on a slightly controversial note when the noble Lord, Lord Strathcona and Mount Royal, suggested that we were not dealing with a crisis. Whether or not with a crisis, I think we all agree that what has just happened in Iran has shown how vulnerable modern industrialised societies are to any dislocations in energy supplies. I do not think that anyone will dispute that proposition.
Equally—and this has not been raised yet, and maybe I shall conclude on this note—we have not yet recognised in this debate the enormous political consequences, both national and international, which may result from this kind of dislocation. In the very short term, as the noble Earl said, one country can buffer itself against the shock waves generated by a sudden dislocation of this sort, but at great cost, and it will not last. As everybody who has spoken so far has indicated, no industrialised country today can declare for itself a Monroe Doctrine for energy, and not only for energy but even for conservation.
Yesterday some of your Lordships were present at a sub-committee of the European Communities Committee where we heard from Dr. Riccardo Perissich of Directorate-General XVII about the success or failure of conservation programmes in the Community. He indicated that even those programmes—and the measure of their success he admitted he could not possibly attest to—reflect on all the other countries in the Community. We are quite definitely all part of a world nexus of supply. Yet in spite of that of course we all have our national problems. We have different mixes of supply: coal, oil, nuclear. France, for example, has most successfully embarked on—and here I would agree with the noble Viscount, Lord Thurso, in what he said—a splendid programme for nuclear energy. We are all lagging.

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Each of the countries concerned has its particular problems, just as we have ours. There are problems of employment; we have our balance of payment problems and, above all, we have different investment programmes; and when we look at the problems, even though we are tied up with the rest of the world in the whole situation of supply and demand, our problems come first. But for years this problem of energy supply has been an international one and has been recognised as such. There have been successive world energy conferences. When President Carter assumed office he also accepted the results of an inquiry carried out under the auspices of the Ford Foundation—it was known as the Ford-Mitre Study—which had an enormous influence on President Carter's approach to nuclear policies, not only in the civil field but so far as defence was concerned. He wanted a no plutonium economy; we did not quite agree with him.
Other international inquiries are going on. There is a most formidable one, which has been going on for three or four years, by the International Institute for Systems Analaysis in Vienna under the control and direction of a very distinguished German named Dr. Haeffle who has contacts all over the world. I have cited only three—the World Energy Conference (there was one last year in Istanbul) the Ford-Mitre Study and the Vienna Study—and because we all have our own investment programmes, in the end we pay very little attention to the results of these international inquiries.
Despite that, we all agree certain basic propositions. We know, for example, that regardless of the views of some people who are proponents of low energy policies, the demand for energy globally is bound to go up because of increases in population, because of the need—indeed, the demand —to increase standards of living, and because of our need to maintain our own standard of living. We would also, I think, not dispute the proposition, though nobody can put a date to it, that fossil reserves are going to dry up and will be exhausted at some time; as the noble Earl pointed out in his opening speech the price of fuel will change as these things happen.
Another point which I think no one will dispute is the environmental issue.
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We cannot have unconstrained access to fossil fuels—coal and oil—without affecting our environment, and that of course relates back to the whole problem of standards of living because, so far as the environment is concerned, ignorance and poverty due to low standards of living are a far greater hazard to the environment than greed.
In theory, we also agree with what I would call my fourth proposition—it was referred to by the noble Viscount, Lord Thurso—that nuclear power could solve all our problems. And even if there were a shortage of uranium ore—if the noble Lord, Lord Hinton of Bankside, were here today I am sure he would have spoken to this point—the breeder reactor would help look after us. We also heard from the noble Lord, Lord Ritchie-Calder, that one can make oil from coal. Everyone knows that is possible; there are possibilities in all these fields. We agree all these propositions, but we still cannot buffer ourselves against short-term crises such as the present one, partly because we have to deal with fears about the nuclear option.
In 1974 I had the honour of being invited to give one of the opening addresses to the World Energy Conference in Detroit. I spoke following Sheik Yamani, who opened the conference, and I was asked to address myself to the topic, "Can we have enough energy and an acceptable environment." I had forgotten this piece until I was reminded of it today, so with the permission of the House I will read a little of what I then said:
"Investment in new major sources of energy is held up, but if investment is held up then the environment, like every other aspect that makes for the quality of life, will be bound to suffer. In the end we shall have to rely on nuclear energy long before reserves of fossil fuels start dwindling, long before marginal inputs of energy can be gained from unconventional sources and regardless of what savings can be made by more efficient usage".
I said that in 1974, and I do not think anything has changed, except that nuclear programmes have been set back even further, set back because the public is scared stiff of the word "nuclear". We know there are risks, we know there are hazards in the operation of power plants and we know there are environmental hazards. We also know—President Carter made much of this point

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when he began his presidency—that there are major political consequences from the availability of plutonium.
I do not intend considering how the pro and anti-nuclear lobbies and factions can be got together. There certainly are risks associated with the nuclear option; there is the question of leaks and the problem of waste disposal to which reference has been made and questions asked, But I ask noble Lords this question: is it a nulcear option or a nuclear must? There are human errors, and the newspapers have been full of them this past two or three weeks. But these errors can and will be overcome with discipline. I would remind the House that they are overcome every day in the nuclear fleet of this country, the much bigger one of the United States, the even bigger one probably of the USSR and in the nuclear boats of France. Discipline in the operation of nuclear reactors is achievable and I trust will be achieved.
If the risks of the nuclear 'must', as I think of it, are as they are painted by Friends of the Earth and other enemies, if I may call them that, of the nuclear option, would any country entrust its national security to this nuclear option in the way we are doing today? Efforts have been made by many to provide a numerical assessment of risks, but unfortunately, as we know—Lord Rothschild discovered it in the recent lecture he gave—it is very difficult to persuade those opposed to the nuclear option that they are wrong by telling them there are risks somewhere else. The point is that there are major risks on the other side; there is the denial of economic growth and there is an environmental price which will also have to be paid if, instead of proceeding with investment policies—of the kind Lord Thurso mentioned—we go in for the much bigger exploitation of coal reserves.
There is also a new risk, Dr. Harold Brown, the United States Secretary for Defence, has recently been to the Middle East and so has Mr. Schlesinger, or at any rate he has spoken about the matter. They have both indicated that it is of national and vital interest of the United States that its supplies of oil are no further dislocated, and that there are no further threats. Whether or not they used the words, they left the thought that the
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situation could be such that there might have to be a resort to arms.
Dr. Kissinger was lately prominently displayed in the cloumns of the Economist in two articles. In the first he dealt with the defence issue of SALT and in the second he dealt with Iran. He was taken to task afterwards by George Ball, who had looked into the matter and who criticised Dr. Kissinger for his view of what has happened. Mr. Ball asked in his letter to the Economist what Mr. Kissinger would have done.
"Would he have sent the Sixth Fleet sailing up the Gulf?"
he asked. And Mr. Julian Amery commented on that in the current issue and said:
"After what has been allowed to happen in Iran, it is difficult to see what else can now protect the rest of the oil bearing gulf on which Western and Japanese industries are so dependent".
I mention that because it is a new risk. A confrontation of the super-Powers would carry the risk of nuclear disasters far greater than those that are discussed in relation to nuclear power plants. This is a point which has emerged as a result of the Iran crisis, and I sincerely trust that it is a point that will be taken into account by those people who are concerned with low energy policies or who are concerned to see that nuclear power is not exploited at all.
In conclusion, I believe that the consequences of disruption in short-term supply would be far less dangerous and violent if we had an assured long-term policy, if such a thing can in fact be formulated and agreed. But how do we learn to heed the writing on the wall? The other day, before I knew that the debate was to take place, I was reminded that in 1955 PEP issued a very big report on world population and resources. It was an anonymous report, but two Members of your Lordships' House were members of the panel which was responsible for the writing. I was one of the two, but I had forgotten all about it. After referring to what would be the likely increasing demand for energy over the years, and what would be the cumulative consumption of oil and natural gas et cetera, the report went on to say:
"One reservation, however, must be made. In an increasingly nationalistic world the oil producing countries may prefer to keep some of their oil resources against the time when they need

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them themselves, rather than to exploit them immediately. It is also possible that as a result of political factors some of the Middle East's oil—and it is in this region that the bulk of the world's reserves are situated—may be lost to non-communist countries. Subject to this, oil reserves et cetera will be ample to carry us on through".
Mr. Max Nicholson who was then the director, I think, of the PEP, in passing me this reminder, said:
"Message received in Whitehall in November 1973"—
the report was issued in 1955—
"time elapse 18 years five weeks. Distance from Queen Anne's Gate to Whitehall 300 yards".
There must have been many other groups and individuals who in 1955 saw this writing on the wall. I hope that we can realise that there will be more writing on the wall and that there will be more crises. I hope also that we buffer ourselves by having an assured long-term policy, at least in the nuclear field and, if it is economically feasible, also in such fields as the one to which the noble Lord, Lord Ritchie-Calder, referred.
Viscount THURSO: My Lords, before the noble Lord sits down, I should like to ask him whether, in my unavoidable absence to take a message, he said that I had suggested that nuclear energy would solve all our problems? I certainly did not mean to suggest that nuclear energy would solve all our problems, but merely that it was a key factor in any strategic solution that we might seek to the energy problem.
Lord ZUCKERMAN: I fully take the noble Viscount's point, my Lords. Of course nuclear energy cannot solve all our problems, but it is a buffer background to energy supplies. Prime movers will need oil. I see no way in which that proposition will ever be pushed aside, whether in agriculture, or on the roads. But then, of course, there may be other long-term options as well.
4.54 p.m.
Lord TEDDER: My Lords, it is with more than usual trepidation that I rise to speak in your Lordships' House sandwiched as I am in the list of speakers between my noble friend Lord Zuckerman and the noble Earl, Lord Lauderdale, both of whom are first eleven speakers, while I regard myself as lucky to get into
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the second eleven. As previous speakers have pointed out, events in Iran have shown how we need to be reminded how precarious are the supplies of oil on which so much of the Western World depends for its energy, but surely the most important lesson is not simply the precarious situation of the Western World's oil supply, but the lack of diversity in our energy supplies. Too many people in this country seem to take the attitude that we can lie back and use up our supplies of North Sea oil, and when these are finished go back to our large reserves of coal. I need hardly remind noble Lords how vulnerable are our North Sea oil supplies, or for how short a period the North Sea will provide adequate supplies of oil for our domestic needs. What is so much more important—and many noble Lords have already emphasised this—is the dependence of the whole of the Western World's economy on adequate supplies of oil, mainly from Nigeria and the Persian Gulf. We belong to the European Community, and we are also a founder member of the Western Alliance. We cannot separate our affairs from those of Western Europe and North America.
When we debated in your Lordships' House nuclear power and the environment I accepted that in the short term nuclear power must be developed, but I made a strong plea for the development of energy resources which would not affect the environment. I was then, and I remain, absolutely convinced that in the long term our descendants' primary source of energy must be what it has always been —the sun. Here I take issue with the noble Viscount, Lord Thurso, and my noble friend Lord Zuckerman. I am not saying that nuclear power should not be developed in the short term, but I am sure that in the long term the primary source must be the sun. While I accept that in certain circumstances wind and waves may be important sources ofpower, the really important source will eventually be, as it has always been, the conversion of solar electromagnetic radiation into fuels by photochemical processes.
All the fossil fuels which we currently use, from wood, to peat, to coal, and to oil itself, were formed by photochemical processes utilising sunlight to convert carbon dioxide and water in the air into

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complex carbon compounds. The simplest possible photochemical process is the direct decomposition of water into oxygen and hydrogen, and the subsequent use of hydrogen as a fuel. Some noble Lords may have seen the television programme on the use of hydrogen as a fuel, and this will I hope have convinced some of the doubters in the previous debate of the practicality of using hydrogen as a fuel source once one has elucidated a way of making it. In the earlier debate I discussed two ways in which solar energy can be used. The first was the direct conversion of solar radiation into either heat or electricity. The second was the use of electromagnetic radiation to promote chemical transformations which lead to fuels which can subsequently be burnt, releasing the energy stored by the chemical synthesis.
I have briefly retrod the path that I travelled in our debate on nuclear power and the environment because I wish to remind noble Lords that the key to all our energy problems is research, and of course this applies to nuclear energy just as much as to other and conventional sources. In the past this country was pre-eminent for the way in which its sons and daughters ventured out into the unknown. The now departed British Empire was by and large created not by conscious empire builders, but simply by the enterprise and initiative of British men and women as they explored the then unknown. There are no new continents to be found, few unsealed mountains are yet to be climbed, but there are endless continents and almost impenetrable mountain ranges to be discovered and to be crossed in the fields of science. The enthusiasm and initiative of British youth should be turned more and more to the exciting, but yet unpenetrated, fields of scientific research. So far what I have had to say though I believe important, has to some extent been platitudinous. My message is that in order to protect ourselves, and indeed to protect the whole Western World, we must diversify our energy supplies, and the only real way in which we can do this is by intensifying our research.
There is a EEC programme for research and development of non-nuclear sources of energy. It is an indirect programme, which means that research contracts are offered to interested laboratories on an
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approximately 50–50 cost basis. The four-year programme was formulated in 1974 and started in 1975. The programme comes to an end on 30th June of this year. The programme has fairly modest aims; namely, to reduce the Community's dependence on imported fuel from 60 per cent. to 50 per cent. When you remember that it was formulated in 1974, I think it shows how far-sighted some people were at that time. The total programme, costing about £35 million, includes energy conservation, the development of hydrogen as a fuel, solar energy, geothermal energy and systems analyses appropriate to the problem.
I wish to concentrate on solar energy, as it is the field about which I know most. The solar programme, costing £10 million approximately, involves about 125 to 150 laboratories in the United Kingdom and the rest of the EEC, both industrial and academic. The solar programme includes, first, habitat. I had a vague impression that that meant something to do with animals—I do not know—but what it in fact means is the heating and cooling of buildings, and it is in fact a very applied programme. It takes about 20 per cent. of the solar budget. Then there is the photovoltic programme. This is the direct conversion of solar energy into electricity. In the United Kingdom, this is mainly supported by industry; in the other EEC countries, the universities take a bigger share. It is a field in which the United States is unquestionably well ahead of Western Europe at the present time. That takes about 30 per cent. of the solar budget.
The next item is power plants. These are large focusing mirrors to heat boilers. This is, of course, not terribly suitable to this country, but the trial power station is being built in Italy. That takes about 25 per cent. of the budget. Then, photochemistry and photobiology, which is the area in which I have been interested, is just basic research at the present time; and that takes about 10 per cent. of the budget. Biomass—that is, the deliberate growing of trees and plants and the use of waste organic materials as fuel—takes 10 per cent. Finally, there is the assessment of radiation data. That is to collect the flux of the sun around the world, so that you know where to build your solar station. That takes about 5 per cent. of the budget.

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All this latter work is just the solar energy section of the whole programme. As I have explained, the whole programme was for four years, and it ends on 30th June. I am given to understand that the prime reason it has not been renewed is indecision by the United Kingdom. Even if a second four-year programme were agreed to in Brussels today, no new work could be started until the beginning of 1980. Once the new four-year programme is agreed by the Commission, they still have to decide which projects to continue, which projects to stop and what new projects to start. In the meantime, the highly-skilled research teams will have been broken up, and the best men will have left to do other things. The decision to proceed or stop should have been made at least nine months before the renewal date.
Noble Lords should appreciate that the United Kingdom receives from contracts given to British firms and British research institutes probably more than it puts in. This is a measure of the high regard and esteem in which our scientists, engineers and management are held by their colleagues in Europe. I tried to get a message to the noble Lord, Lord Strabolgi, and I hope I did, but what I should like to know when he answers this debate is whether he can give us some indication as to when a decision about the second four-year programme for the research and development of non-nuclear sources of energy will be made. But, above all, I hope that everyone responsible for scientific research, noble Lords and civil servants, will realise in the future that you cannot leave the question whether to continue or not to continue a research programme until the programme has almost run out. If you do this, you will get a very poor return for your investment. My Lords, as I said at the beginning of my speech, to protect the future of our sons and daughters and to protect the fabric of our Western civilisation, we must diversify our energy supplies, and the only real way to do this is to support and intensify our research effort.
5.5 p.m.
The Earl of LAUDERDALE: My Lords, the modest appearance of the noble Lord, Lord Tedder, is also a rare one, and, perhaps because modest and rare, is all the more welcome. I am sure that other
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noble Lords will share my view that it is a pity we cannot lure him down from St. Andrew's more often than has in fact been the case. Whether we go "nap" on his theory about the solar solution, we would certainly agree (I, at least, would) that we must diversify and must research to that end. My Lords, the noble Earl, Lord Halsbury, among so many telling phrases, asked whether we must be cold, hungry and unemployed before we learn the truth, or words to that effect. It is commonly said of energy that the lead times are long; but the learning times are longer still. It took the Heath Government three years to set up the Department of Energy; it took the Department of Energy five years to set up a conservation division; and it took successive Governments seven or eight years before they hearkened to the pleas of this House that an Energy Commission should be established.
Again on learning, my Lords, there are still lamentably few results from the Government's endeavour to encourage conservation by the "Save It" campaign, by taxing fuel or by cutting down the speed limits on motorways. Over the past year, two more million tons of oil were used in this country—a rise of 2· per cent. That included one million extra tons of motor spirit, a rise in that sector of 5·8 per cent.; half a million more in aviation spirit, a rise of 8·2 per cent.; and a third of a million more in fuel oil, a rise of rather more than 1 per cent. My Lords, although I, too, am a squander-maniac gas-guzzler in my motor car, I must endorse the view expressed, I think a year ago, by the noble Lord, Lord Sherfield, that while a rise in petroleum tax on cars is unpleasant for motorists it is in policy terms vital; and I have heard it said by oil men on the Continent that until there is a mammoth rise, whether by tax or some other means, in the cost of motor fuel at the pump—probably to some five times what we pay at present—the motorist's insatiable desire to move will not be stilled.
The noble Lord, Lord Zuckerman, drew attention to the great risks in the Middle East, and the noble Earl, Lord Halsbury, reminded us that the apparatus of civil war is now available to troublemakers in many quarters. Surely, indeed, the so-called Islamic revolutionary upsurge is something which is unlikely to be stemmed where it now stands. Whether

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or not it is going to spill over into the Soviet Union, presumably no-one in this House can tell; but we see the South Yemeni pressure on North Yemen, we see the Palestinians' contamination (if I may use that phrase) of all the Gulf States, and there are already whispers of an unholy alliance between Colonel Ghadaffi and President Amin with the eventual aim of unseating Prime Minister Sadat. All these are omens of evil.
So the search for alternative energy sources without the Arab world is necessary; and what can we see, at any rate in terms of oil? There is the Canadian Arctic, where there may be some hopes. There, a sedimentary basin of 500,000 square miles may bring some comfort. There are higher hopes of Alberta; there is Venezuela; there are shale resources in the United States; and there is the Mexican situation, enigmatic and curious though it is, where for 40 years a nationalised oil company has sat on its resources and is now denying anyone else the opportunity to determine independently what those resources are.
But whether with regard to Mexico or the United Kingdom Continental Shelf, I ask this question seriously: how much longer must it be before both sides of both Houses of this Parliament insist that, in the area of issues long outlasting the lives of most of us in this House today, ideology has no more place than demonology itself? My Lords, charlatans, albeit of fanatical integrity, really do not have any place in this matter.
Baiting the multinational oil companies reminds me of Lord Lovat's cry on his way to the scaffold: "The greater the mischief, the better the sport." There is really no bonanza for these companies in the current and prospective rise in crude prices. Even a 20 per cent. rise this year will still leave the crude price lower in real terms than in 1973–74. The supposition that the companies in the North Sea are going to get enormous new and extra profits out of the rise currently envisaged is not borne out by the most intelligent calculations to which one has had access in the City. One gathers that a rise from, say, 15 dollars to 18 dollars a barrel in the North Sea would, of course, raise the present value of future cash flows of the smaller fields like Beatrice and Maureen because they have practically a nil cash flow at the
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present time; so they might gain in value something like 30 per cent. But the major fields like Ninian and Forties that have been in production for some while do not stand to gain more than about 12 per cent. in the present value of future cash flows from crude oil rises of the sort to which we have been addressing our minds.
So, my Lords, surely one lesson is that Britain must once again undertake a radical reappraisal of policy in regard to the Continental Shelf. There are only nine wildcat rigs operating now as against 19 this time last year. Why? Not only because the main exploration drilling under the fourth round and some under the fifth round has been accomplished; but for lack of confidence. Nobody in the private sector oil industry would gainsay that assessment. It seems there is going to be an economic slowdown, in any event which, in turn, is bound to discourage further investment not only in industry generally but in the oilfields too.
What a time, then, to be proposing, as the Government have been proposing, to renege on the 1975 Varley assurances that the PRT régime would be stable! This, when more than £14,000 million has already been invested and committed before the latest promise of a rise in PRT. It is bad enough to plague the companies that have found and developed the oil (and most are private enterprise companies) by retrospectively changing the ground rules after the licence has been issued—an activity against which many protests have been made in this House and in another place—but, surely, the Government cannot go on asking us simply to take sides against arithmetic! It is better to go back than to go badly.
Surely it is time, too, for the Government to define and publish—I repeat "define and publish"—their policy in regard to the deeper waters between 1,800 feet and 3,000 feet on the Slope. It was not clever to invite those companies that had the drill ships available to spend great sums of money drilling seven or eight deep stratigraphic holes near the Rockall basin at about £10 million per hole without the prospect of any real reward in the certainty of licences thereafter. It is time that the Government stopped huffing and puffing in regard to deep-water policy. To blow and swallow at the same time is not an easy thing to do.

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The noble Lord, Lord Zuckerman drew our attention to the environmental problems raised by an extensive development of the coal industry. But I wonder whether he would claim that those difficulties apply to coal under the sea as well as to coal under the land. The fact is that we have not heard, we do not know, whether the Government have any policy whatever with regard to the coal measures already identified but not explored under the North Sea. When the National Coal Board already needs heavy subsidies, which I support, for its work on land, one must ask the question—and companies abroad are already asking the question—whether that monopoly, the Coal Board monopoly, is to be extended to the Continental Shelf; or is private enterprise to be invited to take the risks there as it has done in regard to oil, but with the confidence henceforth that the ground rules will not be changed halfway through the game?
Coal has also been referred to obliquely by the noble Viscount, Lord Thurso, and, since I agreed with so much of what he said, I wondered whether he meant to make clear the critical distinction in regard to nuclear policy between thermal reactors which use uranium indefinitely and fast reactors of the kind that he naturally hopes (and I hope) will come to Caithness soon but which will not require those enormous supplies of uranium. Unless the fast reactor is soon established on a commercial scale and unless several have been established and given 10 years to be proved, the nuclear answer will not be the answer for the year 2010 or the year 2020, for the reason that, on moderate estimates, uranium supplies in the world will run out.
Viscount THURSO: My Lords, the figures I quoted were based on a programme started with thermal reactors which would be necessary in order to build up stocks of degraded uranium and also because thermal reactors are available and proven and could be put into action now while the CFR programme was going ahead as a start with the fast reactor programme. Once this sort of combined thermal and fast reactor programme had got going and once the pipeline, so to speak, was fuelled with uranium through the thermal reactor, then, after about 1990, the fast reactor
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should be able to take it away without further imports of uranium. The reserves of degraded uranium so far available would, according to the figures I have, be greater than the total coal reserves at the moment.
The Earl of LAUDERDALE: My Lords, I think the House is indebted to the noble Viscount, Lord Thurso, for adding to his speech in such a way as to make his position clearer. It is a position with which I fundamentally agree. The critical thing is that unless we have the fast reactor proven and demonstrated by the mid-1990s or the end of the century and unless it has had 10 years to show that it is harmless so far as the public mind is concerned—unless that happens, a nuclear programme based simply on the thermal reactor will sooner or later run out of such uranium supplies as can reasonably be forecast.
The noble Lord, Lord Ritchie-Calder, referred to the renewed interest that there might be in extracting oil from coal. I am not sure whether he had the benefit of listening to an exchange on the Floor of this House when the noble Lord, Lord Strabolgi, gave the figures only the other day for oil from coal. He said that it comes out at about £100 a ton. The price of oil has not yet got near that price and it will be some time before it is likely to do so. But on the coal problem, if there is one lesson which comes out—and I think this chimes in with the message given us by the noble Lord, Lord Tedder, that we must diversify by research—it is that in the coal region there is an urgent need for research on means of making coal easily transportable, whether by emulsification or by other means. There is an urgent need for further research on a great scale into gasification; I refer to this both on the surface and in situ, and, arising out of that, there is need for research into the possibility of sub-sea mining by gasification or other means which one hopes will not encounter Lord Zucker-man's apprehensions on the environmental aspect.
In conclusion, may I say that none of the points that I have made is new. One only hopes that their repetition does not again recall the men who can still hear the decalogue repeated without a twinge of conscience. Within weeks of the close of a Parliament, a debate on

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long-lasting issues does have merit, especially when the issues will outlast the five General Elections which are to follow the next one, which itself cannot be far away. Without wishing to say too unfriendly a farewell to the noble Lord, Lord Strabolgi, who sits on the opposite Bench, whose leadership on energy questions has always been so courteous, agreeable and informative to this House, it would be a pity to miss the opportunity of saying before this Government departs that the only good Government is a bad one in a hell of a fright.
5.20 p.m.
Lord ROBBINS: My Lords, I cannot begin without expressing what has been said by others; that is, my extreme gratitude to my noble friend Lord Halsbury for having initiated this debate at very short notice, and for the stimulating way in which he opened the general horizon. The occasion of the debate is the Iranian revolution. It is not my intent on, however, to go into the political background. So far as one can see, the result which has been achieved so far has been the most peculiar combination of strict Moslems and extreme Marxists, from which it is not altogether rash to conclude that the situation is likely to change one way or another and, in any case, must be regarded as being extremely unstable.
The few remarks that I want to make this evening are entirely concerned with supply and prices, both in the short and long period. I suppose that unless things get very much worse in Iran—which is certainly not excluded—some oil will go on being produced there and some oil will probably be available for exports. I fancy that for some time it will be fractional compared to what was available before. My guess is that in the immediate future we shall witness what has actually been reported in the papers this weekend: fantastic prices being paid for such oil as is exported from that part of the world. I also conjecture that, if that continues on any scale, other oil producers may be tempted to break their existing contracts and cash in while the stocking up panic lasts.
On the whole, this is a matter which we can contemplate with a certain amount
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of equanimity. The period of abnormal and extraordinary bargains and prices will, if the general situation does not deteriorate, work itself out. I am reasonably sure that, whatever happens in the immediate future, the price of oil is likely to go up, and it will go up by more than was the prospect before these events occurred. In his opening remarks, the noble Earl raised the very important question: Should this cause further inflation? On that important question, I hope that there is one answer which need not promote controversy: It need not be so.
If an individual is faced with a considerable rise in the price of something which be regards as necessary for his standard of life, then his alternative is either to work harder and to make good the deficiency that way, or to economise on other things. These remarks apply not only to individuals but to communities and it is only if the Governments of this world respond to higher prices of oil by matching them with higher degrees of inflation that the vicious circle which the noble Earl described—and which is by no means excluded, politics being what they are—will take place.
The habit is for short speeches on this occasion, and I want to address my main remarks to the future of supplies of energy in general with particular regard to the almost inevitable diminution of the supplies of oil as time goes on. I think one should take that as one's assumption. Since I was a very young man I have imagined us as living on the edge of a precipice. Statistics used to be flung about in the 'twenties predicting a chronic oil shortage in the 'thirties, and so on. So far additional discoveries have seen us through. It would be absolutely criminal folly to rely on that process continuing for ever. The position which confronts us now is a position which was suggested to my mind by the very interesting debate that we had the other day on the population problem.
On the whole, speeches in that connection took what I regard as the right side. But there were authoritative voices raised arguing that one should not worry too much. I put to myself the following conjecture: Supposing we were to wake up tomorrow morning and find in our newpapers, if they still persisted, that the

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resources of the planet as it exists at the moment had contracted by half. We should surely be a little bit worried about that, and particularly worried about the resources that we are talking about at the moment. Sober demographers assure us that the present population of the world will have doubled by the early years of the next century, but, other things being equal, the relation between population and resources will be exactly the same as it would be if the catastrophe which suggested itself to my imagination had occurred yesterday. So I do not think we can possibly spare ourselves anxiety on this count. Either we must consume less or we must have recourse to other sources.
Coming back to the immediate oil question, which is the subject of this debate, I want to make the point that this is essentially a question for the Free World. We cannot control OPEC unless the dreadful possibility suggested by the noble Lord, Lord Zuckerman, were to take place and foolish attempts were to be made to coerce the nations which comprise that cartel. On the whole, I am inclined to think that the world is not badly served by the refusal of OPEC to increase supplies here and now to any large extent to meet the needs of the present or indeed of the next 10 years.
However, leaving that on one side, the problem for the Free World is this. If we do not act together, at any rate as regards consumption, then the activities of any one country may possibly put its balance of payments in a better position but it will make precious little impact, other than in one country which I shall be mentioning in a moment, on the world energy situation. More countries than one have to take steps of one kind or another before we can face the future with any sort of equanimity. Therefore, I welcome as a first step the decision of the IEA to restrict consumption in some way or another by 5 per cent. However, I fear that will not be enough to solve all our problems.
In connection with the further solution of our problems, I have only two points to make. The first one I want to emphasise is the good side of higher prices in this connection. Higher prices sooner or later force lower consumption, and in this particular respect there can be no doubt that the Free World situation would be enor-
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mously eased if the United States policy in this matter was reversed and if much higher prices were charged for oil in that important part of the world. Furthermore, higher prices not only restrict consumption of oil at the expense of other commodities but they force the substitution of near-substitutes for oil, and they stimulate thought on inventions for developing them. I have no doubt at all that in the next few years the probability is that the price of oil will rise to such a point that the further exploitation of, let us say, the Athabasca tar sands will become commercially profitable. Similarly, I imagine that the price of oil has only to rise a bit more than that for exploitation of the Colorado oil shales to become commercially profitable.
Lord SOMERS: My Lords, may I interrupt the noble Lord? I am grateful to him for giving way. Would he not agree that generally higher prices for oil would inevitably raise the cost of living in addition to raising the cost of transport, and so on?
Lord ROBBINS: My Lords, the noble Lord has anticipated the next sentiment I was going to utter; namely, that higher prices will only have this beneficial effect if, as I said earlier, they compel people to work harder and increase productivity and if Governments do not attempt to match the higher price of oil by increasing inflation.
Finally, I do not think we should be prepared to rely only on higher prices, whether they come as a result of market prices or whether—as may be desirable—they come about as a result of pretty swingeing increases in taxation. In the last analysis, as has been well emphasised by the distinguished speakers who have preceded me, we must look to the continuity of Western civilisation for developing other sources of energy. Those other sources of energy which must be sought demand further research and, before the research reaches its goal, they also demand, as has been urged by the noble Earl, Lord Lauderdale, much more immediate action than seems likely to be taken in the near future.
I agree 100 per cent. with what the noble Lord, Lord Zuckerman, said about the fundamental necessity of developing on a much larger scale the resources of

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atomic fission, especially in regard to fast breeders. It is no use sitting back and saying that in the long run it may be that the discovery of methods of atomic fusion will solve the problems of the world. That may happen. if it does happen, it will be a very happy event. But it certainly will not happen sufficiently soon to solve the problems which, other things being equal and if all the next period catastrophies to which some people have alluded do not occur, will certainly begin to emerge in the 'nineties. Here, I suggest, is a subject on which men of goodwill of all parties, whatever their belief in individualism or collectivism may be, can come together and urge on the Governments of the Free World more immediate action than, cynically speaking, is likely to take place.
5.41 p.m.
Lord SHERFIELD: My Lords, I, too, should like to thank the noble Earl, Lord Halsbury, for promoting this debate. He has certainly operated a very successful one-man whip on potential speakers, including, I am glad to say, one or two new recruits. I claim no special knowledge of Iran, but it seems clear that a large section of the Iranian people has reacted against a rapidly enforced change in their traditional habits and beliefs. This appears to be an example of grass-root resistance to rapid change and, in particular, to technological advance. The phenomenon is not confined to Iran. We are witnessing a similar kind of ground-swell in developed countries, and, perhaps most strikingly, resistance to technological advance in the energy field, where the opposition, manifested largely through environmental bodies, is holding up development which many informed people consider to be essential—and I am not talking only about the nuclear field—if our successors are to enjoy reasonable living standards.
The immediate consequence of the revolution in Iran has been brought out already in this debate; the interruption in supplies—the noble Earl, Lord Halsbury, put it at 10 per cent. of world oil production—and the concern that this disturbance might be followed by others in other oil-producing countries. If reasonable internal stability is re-established, it is, I suppose, probable, as the noble Lord,
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Lord Robbins, pointed out, that oil production in Iran will recover within a few months to something like two-thirds of its old level and will be fully restored in due course, though at what price remains to be seen. Iran will still want to develop its economy, though probably at a much slower pace, and can get the resources that it needs for this purpose only from the export of oil. It is useful, perhaps, to recall that in the Abadan crisis of 1951, when, as a result of Mossadeq's rise to power, the oil industry was nationalised, oil refining was interrupted and the expatriate staff expelled, many doubted whether refining would ever be resumed. Yet, in the event, oil production was resumed and the refinery was back in production in a surprisingly short time.
But while we may have reasonable confidence that the Iranian oil industry will recover, there will be a short-term shortage and we shall have a shock from which we should draw the necessary conclusions while we are still suffering from it. As the noble Viscount, Lord Thurso, so aptly suggested in taking his analogy from the medical world, the oil shortage arising from the Iranian situation is our mild coronary, and we should learn wisdom from the short-term inconvenience from which we are likely to suffer and adjust our regime, in the manner of a convalescent patient, to avoid much more serious trouble in the long-term.
There is, I think, general agreement between experts that global oil supplies will pass their peak in the 1990s and that thereafter they will decline. Forecasting in this field is notoriously hazardous but, as the noble Lord, Lord Hinton, pointed out in speaking in our debate on the coal industry on 23rd January—and I am very sorry that he cannot be in his place today —the best and safest guide through the minefield is the report made by the last World Energy Conference, to which the noble Lord, Lord Zuckerman, has also referred. This, as the noble Lord, Lord Hinton, said, painted a broad brush picture of the future, assuming upper and lower limits for both supply and demand of the different fuels. There are other forecasts, both much above and much below these figures, but I would follow Lord Hinton in accepting the World Energy Conference report as the basis for action since at any point within the

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limits it sets, what it calls for is something far more positive and specific than anything that has been attempted so far in Europe, in the United States or in this country. In the coal debate I also referred to a shorter range assessment made by the European Commission which also assumed reasonable upper and lower limits for supply and demand up to 1990 and from which similar pointers to positive action in the shorter term can be derived. Having accepted the assumptions in these documents I think we should ask ourselves what régime should now be followed to avoid disastrous trouble in the future.
A number of specific proposals have been made in this debate, and I shall not pursue any of them now but I should like to take one illustration from overseas. President Carter has just presented an Energy Bill to Congress. It provides for specific restrictions but only I think on a standby basis and that seems hardly good enough. Just before coming down to the House I picked up a paper on the energy outlook in the United States written last December by a Professor from the Massachusetts Institute of Technology. Let me quote from his summary:
"Even when the annual growth of US consumer needs is reduced from 5 per cent. to 2 per cent. and even when major conservation efforts reduce the delivered energy from 2 per cent. to 1 per cent. growth per year the United States requires a 70 per cent. increase in energy production by the end of the century if oil imports are eliminated. Even when the use of existing fuels is increased to the maximum extent practical there is still a requirement for a 50 per cent. increase in imported oil. The USA must reduce its end use demands. It must make major conservation efforts. It must increase its use of present fuels. But that is not enough. New technologies are needed".
Then he goes on to describe what those are. He concludes with an observation so often repeated that it falls with a dull thud—"Time is not on our side".
I think there are some general conclusions which can be briefly stated and one or other of which has emerged from the speeches this afternoon. We should realise that as oil supply falls off there will be a demand that a higher proportion of our energy should be supplied as electricity and this in spite of the fact that electricity, which is a secondary source of energy, is an extravagant user of primary energy. We should realise that coal will be needed not merely to generate electricity but also for conversion into those
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liquid fuels which must make up for the dwindling supply of oil.
We should realise that it is improbable that additional coal supply output can keep pace with the demand which will result and that much of the electricity must be generated in nuclear stations. We should realise that it is foolishly wasteful to burn only 6 per cent. of the available uranium, as is done in thermal reactors, and that the use of fast reactors, which make it possible to use not 6 per cent. but 60 per cent. of the energy in the uranium, ought to be pushed ahead immediately—at least to the extent of building one reactor of commercial size so that a fully proved design is available by the end of the century. Here I follow the noble Earl, Lord Halsbury, in thinking that the promised inquiry into the safety and other circumstances of the fast reactor should start soon and should be related to a specific site.
Further, we should realise that the so-called soft energy alternatives are not merely expensive, as the noble Viscount, Lord Thurso, pointed out, but also that they can make only a small contribution to our energy requirements in the critical early years of the next century. Above all, we should remember—here we are again—that we are running a race against time and that one certain thing which will give us hope in that race is conservation. Energy conservation can give quick results. Restrictions may have to be imposed which are unpopular, but I suggest that only sharp restrictions can produce quick results. And it is quick results which are needed, since one unit of energy which is saved today is worth several units of energy which are saved in 10 years' time. Some savings are made quite easily and lie near at home. More than one of the witnesses at the recent meetings of your Lordships' Sub-Committee on Energy has complained of the heat in the committee room.
My Lords, I should like to make one final point. I have drawn attention before in this House to the lack of an energy policy in the European Community, despite discussions in the Council which have now been going on for about five years. We are by far the largest producer of energy in the Community, but so far we have given little or no leadership. Should we not take this opportunity of the shock

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administered by Iran to adopt a constructive attitude and get a move on in Europe?
5.53 p.m.
Lord WYNNE-JONES: My Lords, like all other speakers, may I thank the noble Earl, Lord Halsbury, for having introduced this debate. I hope he will forgive me if I do not go into all the ramifications of the Iranian origin of the crisis; they have already been gone into very thoroughly by several speakers. I hope that instead I may be allowed to speak about the problems which will inevitably arise. They are foreseeable problems, not just chance problems like the Iranian one. In this connection, I should like to take the side of my noble friend Lord Lauderdale who, in his inimitable way, pointed out the advantages of a non-political approach to energy problems. He always does this singularly well.
When we speak about the long term—not about what we do immediately, because that may have certain very clear political implications—it seems to me to be perfectly clear that we must have an acceptable energy policy, one which will not be overturned by every change of Government. As the noble Lord, Lord Tedder, pointed out, it is not only discouraging but absolutely inimical to any form of research if one does not know whether one is going to be allowed to continue the work which one is profitably carrying out. Therefore, I hope that we shall try to get the major political Parties to agree that they should have a policy which is acceptable, at least in its broad outlines, for a long period.
During the debate on coal which we had nearly two months ago, the Sub-Committee of your Lordships' House which put forward its report on coal pointed out that it hoped that the Government would raise the target for the production of coal at the end of this century to beyond the 170 million tons per annum which has been put into the Green Paper. Everything that has happened since then has merely shown how important it is that we should try to raise this target to an appreciably higher figure and that we should treat it not just as a target but as something which must be achieved.
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When we are dealing with what happens at the end of the century, I believe that it is unwise for us to speak as though the year 2000 is a magical year and as though, if we have solved our problems by then, there will be no further problems. On the contrary; if there is to be any development in this country—and we can take this country as typical rather than as unique in the whole of the Western World—we know perfectly well that considerable demands for more energy will be made well beyond the year 2000. It is important to realise that the plans put forward in the Green Paper—good as I believe they are in general—really hold out no hope for the period beyond the year 2000.
If one looks at the figures and carries out any kind of projection which represents not a drop in consumption and production but any increase at all, one finds that inevitably the gap between the amount that we are planning for and the amount that we shall need will be increasing. The demand will not have levelled out by the year 2000.
Today I had the good fortune to meet somebody at ICI who has made a very serious survey. I was shown the whole survey. It took a period of three hours and I learned a great deal in the process. I found that after the year 2000 the demand for hydrocarbons for the chemical industry will increase enormously. I was amazed to learn that if one takes the rate at which petrochemicals are produced and used—the feedstock is drawn in and turned into petrochemicals and all the things like plastics which we have round about us—7 per cent. of our energy resources at the present time are used by the chemical industry. This percentage has been increasing steadily over the years. About 30 years ago it was only 2 per cent. If this increase continues, the projection is that 30 per cent. of our energy will be used by the chemical industry by the year 2000. They themselves say that the figure is impossible, but it shows the kind of problem with which we might be faced.
It is the kind of problem to which, in a way, my noble friend Lord Ritchie-Calder referred. We shall be faced with this enormous demand for feedstocks for the chemical industry as well as for other energy purposes just at the time when our petroleum resources are dwindling

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and when gas has virtually gone. We shall want to use coal. The conversion of coal into anything which is effectively usable in the chemical industry involves hydrogenation. That means that for every unit of coal there must be one unit of hydrogen. How do we get our hydrogen today? The cheapest source is from the gas methane, but by the end of the century where will be our methane? We shall have to get our hydrogen some other way. How do we get it? By electrolysis and electrolysis today is too costly to use, but it is the only way that shall be available. So it is clear that, when it comes to turning coal into anything that we want to use effectively, either as gasoline or as a feed stock in the chemical industry, we must have considerable supplies of hydrogen, which will be costly. We have to face the fact that our economy will be subjected to enormous stresses at the turn of the century, and from that point they will not decrease—they will probably increase.
The problems can be solved, of course. If one takes, for example, the making of petroleum from coal, this is already being done in South Africa. They are using a well-established process, and on top of a coal mine they have the plant for making the gasoline. According to the figures I was given today, they expect to be able to make more than one-third of their gasoline requirements in that way. It is vital for them because, with Iran refusing to supply them with petroleum, they will have to do this. Apparently, the coal never sees daylight at all. It is put straight into the processor and there they have the hydrogenation process—it is actually a Fischer-Tropsch process that they use—and the first time that the coal sees the light of day is when it is petroleum. It has been turned into a liquid as a result of this process. The process is not cheap.
It is in this way that we have to plan for the future. It is no good saying that it is too expensive or that the resources that we have to put in are too great. They are: they are enormous, but our alternative is to do without all the things that we have been accustomed to have, to deny ourselves all the development that has been going on. If we wish to do that, we can, of course, do it. There is no problem; it is quite simple. It is very cheap in money and very expensive in human life, in human pleasure, in human happiness and I should have thought that
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we really have only one answer. We must do this sort of thing. So we are looking forward now, stimulated by the Iranian incident, to doing all those things that we ought to do.
I agree with my noble friend Lord Zuckerman, who I think is not here at the moment, in his estimate that we should have nuclear power, that we shall need it; but I do not agree with those people who say that we should have nuclear power without paying any attention to the risks. I think that the risks still are not fully understood. I do not mean that we do not understand them in principle; of course we do, but we do not understand them in detail and in particular the disposal of waste is something which has not yet been satisfactorily solved. To me it is tragically irresponsible that the people who oppose the development of nuclear energy should also oppose the drilling of bore holes in order to try to find out how it can safely be contained. It is as though a person says, "This is too dangerous for you to do, but we will not allow you to take the safety risks that will make it safe". That is monstrous, and I think it is time that people, who for perfectly worthy reasons—and I do not blame them—are alarmed about this, do realise that at the same time they must not stop the investigation which would enable those risks to be curtailed. I believe that is the way in which we should go forward and I believe that the Government should do it as a matter of urgency. They ought to insist that these bore holes are made so that the proper containment of waste can be dealt with. There are of course many other problems, but this is not a general debate on energy: it is rather a debate on what we should be doing in consequence of what has happened in Iran.
6.5 p.m.
Viscount SIDMOUTH: My Lords, since, by the luck of the draw, I have to follow the noble Lord, Lord Wynne-Jones, today, who spoke first after my maiden speech, I should like to take the opportunity of returning the compliment, only I fear with much greater reason. The debate today, so ably introduced by the noble Earl, Lord Halsbury, has shown, as usual, the great depth of knowledge and experience available in your Lordships' House.

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So far as what has happened in Iran is concerned, this is obviously a clear reminder of the political factor in the energy situation to be taken into account along with the other technical considerations about which we have also heard. Whether or not its effects are long-term it is my belief that the time has already come for making major decisions about energy supply, even for the 1980s. In support of this view, my purpose is to draw attention to some of the problems which occur downstream, as it were, from the sources of energy; that is, from the point of view of the user. In doing this, I propose to refer briefly to two energy-consuming industries of which I have had experience, since in their contrasting ways they illustrate two aspects of the situation.
The glasshouse industry is made up almost exclusively of small-scale users. On the face of it, this multiplicity of small boiler plants should be readily convertible to whatever alternative fuel is ultimately established as being the most suitable. However there are many other small plants of similar type throughout the country—engineering works, and so on—which are in the same position and there would be great difficulty in effecting the change if they were all to make a move together. It would be far better to replace old plant over a period as it wears out. Unfortunately, however, the glasshouse industry has a problem, which is that a very high proportion of the total cost of its product is represented by fuel costs—30 per cent. or even more.
I believe that glass-making is one of the few other industries which has a percentage as high as that. No doubt for this reason—and in illustration of a point made by the noble Lord, Lord Robbins —glasshouse growers have had to concentrate much effort since 1973–74 on fuel saving, and only this week I saw a Ministry of Agriculture estimate that since that time the industry's fuel usage has been reduced by 24 per cent. This has been done by paying attention to detail, good housekeeping in the boilerhouse, attention to lagging, the installation of windbreaks, and so on. In bringing about this creditable result, much useful advice and encouragement has been received from Ministry advisers.
There are a few more shots left in the locker, but taking into account the pro-
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jected future price of fuel oil the industry might well be priced out of existence before oil supplies run out. It has in the past proved itself to be adaptable and well capable of looking after itself. Within recent years, for example, it has survived the transition from being a protected industry to one operating in the Common Market, which was already in structural surplus in most horticultural products before we joined. It has, I am glad to say, a particularly good record in the uptake of research and development, and is urgently in need now of an alternative fuel policy as soon as possible.
The transport industry presents a different picture—not so much road transport, where again there is a large number of small units amounting in total to a vast industry based on the internal combustion engine. In the road freight and passenger business the cost of fuel expressed as a percentage of working cost is not so high, at about 11 to 12 per cent., as the figure already quoted for glasshouse horticulture, but it has doubled since 1973–74. The viable alternative to the internal combustion engine does not seem yet to have emerged and road transport may well be tied to oil, or oil from coal, for many years yet.
For rail transport the time of decision must be far closer. The Railways Board has already put forward a policy document on the subject of further electrification of the system, which presumably is still under study by the Ministry of Transport. Although a good case emerges on many grounds, it does seem on present data to lack the kind of financial justification which is rightly demanded at a time of stringency. Possibly the reason is that those parts of the system for which the best case exists in isolation have already been electrified, so that the remainder make most sense only as parts of a completed whole. However, the effect on the economy of the energy situation which we have been considering today might well alter the case into one much more favourable to electrification.
When it comes to the situation, not so far ahead, when oil will have to shed some of its present energy load, then it seems to me that most of the alternative energy sources now being considered, and particularly nuclear, are geared to the

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generation of electricity in large static units. I should like to ask the noble Lord who is to reply whether this is a fair assessment, and, if so, whether it does not add a new dimension to the case for railway electrification. Electricity does not seem at present to have much future on the roads, and is also not a good prospect for space heating, as in glasshouses. All the more reason for gearing up rail transport, for which it is well suited, to make use of it in the foreseeable future, when it will not only have a cost advantage, at least in real terms, but also be available in increasing quantities. We are talking here of a costly scheme which will take many years, probably into the 1990s, to complete. A decisive approach to energy policy is needed to resolve it.
6.13 p.m.
Lord ENERGLYN: My Lords, I, too, would like to extend my thanks to the noble Earl for bringing this Motion before your Lordships' House for debate, especially at this time, and using such a dramatic occasion to emphasise the points that he and others have been making so eloquently over the years. Your Lordships may remember that the Persian story started on 28th May 1901 when William Knox Darcy, a Devon man who had made a fortune mining gold in Australia, signed a contract with the Shah to develop oil in Persia for 60 years. This was the foundation of one of the most famous oil companies in the world. With his normal acumen, the First Lord of the Admiralty in 1914, none other than Winston Churchill, injected £2 million of Government money into the Anglo-Persian venture. What we are witnessing today is the product of that far-sighted piece of work by Darcy and Winston Churchill.
I think it is important to remember it, as I should like to return to it towards the end of my speech, because it illustrates how often fanatical outbursts can so discolour and temporarily discredit a fundamental picture. In 1951 Mossadeq came along. He was as fanatical about nationalisation as some other people we know about. He did not last very long, because without the expertise of the British the Persian oilfields would not develop or progress, or exist even. Now we have another fanatical outburst. Are we going to see a repetition of the Mossadeq
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failure? I think we are. Therefore, I urge upon Her Majesty's Government not to put two big flat feet on the road along which they are trying to push the Shah at the moment. I think this is a time to hesitate, because while they may be able to use the oil that is pouring out of the wells at the moment, every oil well has a limited life.
The expertise of sinking new wells in Persia is peculiarly a product of British invention. We are too apt to forget the genius of the British in this world of oil. They have created the major advances in the discovery of oil. Originally when Darcy was developing oil in Persia he was developing the superficial oilfields. But after the war, as a consequence of the work done in Nottinghamshire, the British Petroleum Company had a set of scientists who solved two major problems, how to penetrate the flat lying cover which hides the anticlines which contain the oil and how to drill a hole absolutely vertical. They solved both these problems, and if they had not solved these the major developments of Iranian oil would not have happened.
Extrapolating that into the North Sea, had it not been for the sensible fiscal policy of this country in relation to the oil found in Nottinghamshire, we would never have been able to extrapolate the geological structures at great speed into the North Sea. The oil that was produced in Nottinghamshire was tax free and the tax was given for exploration. The noble Earl, Lord Lauderdale, has been pleading for exploration. The reason why we are not getting continuous exploration is that the money is not there to pay for it, because these academic economists who have got their fingers in the till are squeezing the profits out of the oil companies, who cannot now afford to go forward with wildcat holes to extrapolate out beyond the limits of the Continental shelves. And here we are talking about supplies of oil from Iran and other places when for all we know there is as big an oilfield lying off the west coast of Ireland as exists in the North Sea, but we have not got the money to go and find it.
Therefore, I urge this Government, or the next Government, to bring some common sense into this fiscal attitude to the exploration of oil. In other words,

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there is no room in the oil world for the political amateur. I would plead for the release of the shackles that are being put upon the oilmen searching for oil in the North Sea. I think I can say this, because I have been involved in finding oil, but never once did I ever persuade myself that I had the expertise to develop an oilfield. That is an entirely different expertise. I think we should in our own interests leave it to the oil men and leave politics out of it.
I would now like to turn to thermal power stations. We have solid fuel power stations, liquid fuel power stations, nuclear fuel power stations, but all they are doing really is boiling water. It is on the merits or efficiency that we think that a fast breeder reactor is better than an ordinary reactor or is better than an oil-fired boiler or a solid fuel boiler. That is what we are talking about. However, whichever type of thermal source we use, we only have to stand in any power station—nuclear or otherwise—to see the heat losses that are involved in the power station. As a round yardstick, I would say that power stations can never be more than 60 per cent. efficient. Therefore, we have this enormous heat loss with which to contend in the production of thermal energy.
However, in going too far with this concept of the future based upon nuclear energy, what is very important to remember is the strategic distribution of radioactive minerals. They are distributed in countries which can hold the world to ransom. We have seen what happened recently in Australia, and that can happen again. If one bases one's energy programme entirely upon nuclear energy, one can be held to ransom overnight by some event beyond one's control.
Therefore, I applaud the noble Lord, Lord Tedder, in his plea for diversification. We have not heard anything about the solar furnaces of the Pyrenees. We have not heard anyone say, "Why don't we use the spin-off from Concorde where they produce the beautiful aluminium mirror, which is perfect for solar radiation and solar furnaces?" Why not? I think that it is because we are too obsessed with the politics that surrounds this subject. So I should like to take a stand and deliberately say that my human energies will be put into the search for sources of
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energy with which no one can ever interfere. In other words, I am talking about hydroelectricity.
Lord STRATHCONA and MOUNT ROYAL: My Lords, perhaps I may interrupt the noble Lord. Before he leaves the question of nuclear energy, is it not a fact that there is already enough energy in this country to fuel our breeder reactors almost indefinitely once they have been developed? Although I completely agree with the noble Lord on the subject of uranium, is it not quite a different situation—and I defer to the greater experts in the House—once we get on to the fast breeder reactors?
Lord ENERGLYN: My Lords, that I would admit, but it is only one unit of energy; it will not supply enough energy for the whole country. No one in their wildest moments would make that suggestion. As the noble Lord has said, it is one facet of the energy picture. I am not decrying this at all. I simply point out that whatever type of fuel is used for a thermal power station, it is vulnerable and has a limited life. But when we come to hydroelectricity, we are talking about eternal energy. That is the plea which I should like to make. We have some perfect examples staring us in the face. I would remind noble Lords of the imagination of President Roosevelt who listened to geologists explaining to him how, on recession, the ice caps of Canada revealed a gap through which water poured and drained dry the whole of the coolees along the 49th parallel, an area of agricultural devastation; and that that area is covered by basalt which produces beautifully rich soil, but there is no water. President Roosevelt took this suggestion seriously and rebuilt a dam—the Coolee Dam—to take the place of the ice. As a consequence of the Coolee Dam, today we see the most fertile area of America, with three crops per annum. To my mind that is the use of energy. Both water and electric power is produced.
The noble Lord, Lord Wynne-Jones, spoke about electrolysis. That is the way to produce electric power for electrolysis—the hydrogen economy. I could go on and cite Kariba, where 800,000 horsepowers are produced by a dam which is only 400 feet high, although admittedly there are 3,000 square miles of water behind it. However,

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that is not the point. The point is that only 400 feet of dam is needed to produce 800,000 horsepowers. I have spoken about this before and I should like to draw the attention of noble Lords to the nonsense that is talked about marine barrages. History tells us that the Dutch reclaimed their land from the sea by making barrages, not out of concrete or stone—they did not have any (concrete was not invented)—but out of clay. Why clay? Because the only geological deposit that the sea will not erode is clay. Why will it not erode clay? Because clay is water repellent.
What can we use to replace clay? The answer is polythene bags. In the last couple of weeks we have seen good examples of the refuse that has been piled on the pavements. Noble Lords will have noticed how rigidly they stand and the height to which they can ascend simply by being dumped. That is a demonstration of a technique, which I have described many times here before, of making barrages with plastic bags filled with refuse. We have done all the desk work on this. Where will it be first employed? The probability is that it will be the technique used in putting the barrage across the Bay of Fundy. Why do we not use it in the Bristol Channel?—but not for a barrage across the Channel; that would be a piece of sheer nonsense. Hydrologically, the most stupid thing we could do would be to put an obstruction across the sedimentary effluent coming from the River Severn—it would silt up the whole river in a matter of years. No, we want to imitate the Rance experiment of a barrage of a loop type extending between Cardiff and Newport filling plastic bags—I am sure that many ribald remarks will be directed at me about this—with all the tip refuse within 30 miles of Cardiff and Newport. It would result in a dam which would contain the sort of turbines that they have at the Rance, Straflow and all the others. There electricity would be generated. In addition, we would produce a runway which would give an airport within two hours of Paddington. Also, we would create an industrial centre in South Wales which could be all-electric. Indeed, my plea is that this country ought to go all-electric and not be dependent upon solid, liquid and nuclear fuels.
Finally, I should like to make one other point. This country is really saturated with energy. It must be, or otherwise we
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would not have over one million units of human energy rotting and stagnating here. The Government should get off the backs of those of us who are planting little acorns from which we hope great oaks will grow to recreate the virility and stimulus of the kind of British industry we should like to see for the future. That is how I would use my energy.
6.28 p.m.
Lord THOMAS: My Lords, first, may I join those who paid tribute to the noble Earl, Lord Halsbury, for initiating this debate and getting it off to such a good start. It is a fascinating debate to listen to and I am sure will be to read in tomorrow's Hansard. I suppose that it was triggered off by the events in Iran. I shall not spend much time talking about Iran; I spent nearly a year there as a pilot. The population there is very volatile and I have little doubt that the events that followed Mossadeq's weeping performance some years go will happen again, and oil will begin to flow from Iran in reasonable quantities in the not too distant future. But that does not alter the fact that we are facing an energy crisis, and that we have to make up a policy that will be long-term and stable. I echo Lord Tedder's comments on the need for that policy to be evaluated.
My contribution to this debate will be simple. It is to support Lord Ritchie-Calder's plea for the development of oil from coal in vast quantities. We are all grateful to the National Coal Board for initiating research on this subject, although a great deal is known about it already. Our friends in South Africa have taken the bull by the horns and are making a great deal of petrol out of coal. I would take my plea a stage further. We have to have an economical fuel for transportation. Trains can be fed by electricity. They run on tracks. But trackless vehicles and ships, and so on, have to carry their own source of energy in their own tanks, and the problem is to get the lowest cost per seat mile, or per ton mile, out of the starting point, such as a ton of coal.
It seems to me that what is needed is the development of the diesel compression ignition engine in small bore units which are high speed and which will take the place of petrol consuming engines that are used in the bulk of motor-cars, family saloons and small vans, today. Diesel fuel

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is highly regarded on the Continent, and it is about time that its development was more widespread in this country.
The noble Lord, Lord Wynne-Jones, has said that to make a liquid fuel out of coal you have to have hydrolysis hydrogen, and where do you get your hydrogen from? The cycle seems fairly simple. You promote nuclear energy which can be used to produce the electricity that is required to hydrogenate the coal and make it into a liquid, and there you have a wholly indigenous supply. You have your nuclear energy, your coal, your liquid fuel, and you have the electricity to drive trains, heat houses, and for other purposes. All this is going to take a great deal of time.
It is important too in the development of fuel for internal combustion engines that diesel fuel is not taxed out of existence. There must be a tax concession or encouragement for the development of these processes. If we could have a better understanding of the benefits of a differential taxation rate on fuel for automobiles and aeroplanes it would be of great value. Let us go forward in developing British diesel fuel from British coal, made with British nuclear energy.
Lord RAGLAN: My Lords, before the noble Lord sits down, may I ask him whether he is aware that diesel fuel in fact already carries a kind of differential taxation in that motor vehicles propelled on diesel fuel do more miles to the gallon than those on petrol?
Lord THOMAS: Admittedly, my Lords, but if the taxation were reduced still further they would do even better, would they not?
Lord ENERGLYN: My Lords, would the noble Lord permit me to add a rider to his important point? As your Lordships know, Diesel originally invented the engine for small coal and not for oil. So really we are only turning back the pages of history.
6.35 p.m.
Viscount HANWORTH: My Lords, I was uncertain right to the last moment whether I would be here for this debate, and so I asked to be put down as the
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last speaker. I have not prepared a full speech, so it may in some respects be a little disjointed, and in any case will be confined largely to supporting what noble Lords have already said. I think that very often this is the function of the last speaker.
The first point I should like to make is that we really must look at all this on an international basis, not only because morally we ought to, but because it has now been shown clearly from what has happened in Iran that in regarding our own interests we cannot do otherwise. Taking the broader picture we really must remember that the developing countries are going to need more and more energy if they are to develop at all. Do not forget that nitrogen fertilisers require a great deal of energy to produce them. Unless the developing countries have that energy, or somebody is going to do it for them, we remain with the situation that perhaps one quarter of the world—I think the figure at present is something like that—will remain grossly undernourished. I make that plea for a worldwide look at this problem, and not just a parochial look, which we are far too apt to take.
The second point I pick up again, and it was made by the noble Lord, Lord Wynne-Jones. Coal should be preserved for the future, so far as possible for the petrochemical industry. Even leaving that aside, it is all very well talking about using it for this and that, and our reserves, but so far we have proved utterly incapable of getting it out of the ground in increasing quantities, and that problem remains with us in spite of research into more sophisticated ways of mining. It does not look as though coal is going to be the answer to the maiden's prayer during this period when we are going to be short of energy, whatever else we try to develop as alternative sources.
Lord WYNNE-JONES: My Lords, will the noble Viscount allow me to intervene for one moment? He referred to coal and said that we cannot get it out of the ground in sufficient quantities. Is the noble Viscount aware that there is no problem in getting it out of the ground except the capital expense? In other words, if the community is prepared to do it there is no problem in doing it.
Viscount HANWORTH: My Lords, I would not wholly agree with the noble Lord because if you are going to employ labour you have to increase the labour force, and that takes a period of time. I think he would agree that the efforts that have been made so far to try to get more sophisticated ways other than mining have not yet paid off. There is opencast mining, but whatever you do about that you will get a strong reaction from the environmentalists.
I would join with a large number of other noble Lords in saying quite firmly that a nuclear programme is essential in the short term. There is nothing else round the corner to meet this energy gap. I also believe the time has come, particularly in view of the latest developments, when we must grasp the nettle and at least go for a full-scale breeder reactor now, and that has been emphasised already by at least three noble Lords. Such reactors in their use of raw material are 50 to 60 times more efficient than the present one. I should have liked to have quoted statistics but I do not have confirmation for them, so I shall only say that what we already have in the shape of spent uranium fuel and plutonium made in the process represents an enormous energy store which can be used with the breeder reactor. The noble Viscount, Lord Thurso, mentioned this increasing to a point when it had more energy than the whole of our coal reserves, though I am not sure under what circumstances that would occur—whether by the end of the century with existing nuclear plant or assuming some increase—and I am anxious not to make any statement about which I am not sure.
The unfortunate thing about the whole nuclear programme is that it has raised, presumably because of the atomic bomb, emotionalism and people have tried to justify their emotional feelings with logical arguments, always a highly unfortunate thing to do. I take the view that with care, certainly even with the fast reactor, we can completely forget the safety aspect of these reactors. Lord Rothschild was of that view and I believe it is accepted by many. Indeed, there is a book which points out that the danger of mining coal in terms of deaths and injuries is far greater than it is ever likely to be with a comparable nuclear programme.
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I also differ from the noble Lord, Lord Wynne-Jones, about storage. Even taking the worst case, suppose we neutralised 100 square miles somewhere in the world to put it down so that that 100 square miles could not be used by future generations. That, judged against the way we are in many cases wantonly using up irreplaceable resources, such as tungsten and so on, would be a small price to ask future generations to pay. Thus, with the possibilities that now exist of producing a reasonably satisfactory solution for the disposal of waste, I write that off as unimportant.
What concerns me far more is the danger in the ultimate of nuclear blackmail. This will occur sooner or later, even with the situation as it exists now, so it is probably only slightly more likely if we continue with a nuclear programme. It is not the few who might try to make some sort of crude atom bomb who worry me so much as some of the more irresponsible nations of the world who might get their own atomic reactor and then have sufficient expertise to make a reasonable nuclear bomb. That is a real worry to me.
I suggest that possibly a good solution would be for the developed nations to use as much nuclear plant and generation as possible, leaving the oil much more to the smaller and developing countries. That would have many advantages. From the point of view of the threat of nuclear blackmail it would make life easier; it would be advantageous from the point of view of being able readily to use it; and it would make it easier for the developing countries, and we of course have the technical knowledge to do that. That is perhaps the only new thought I can produce today.
We should press on with alternative forms of energy, but I wish to stress that people often think that the more likely a certain project is to succeed, or perhaps to provide the answer, the more funds should be put into it. That view needs looking into carefully because if other countries—for example, America—are putting vast research into a given area, we might better employ our limited research in another area because, in this very vital consideration of getting more energy, I do not believe patents will be all that important. In that event, I would advise keeping a small team which could do their

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own bit of research and could easily be expanded if that was the way we wanted to go. If noble Lords do not like that idea, then the other answer is to see that we get reasonable arrangements with our partners in the EEC so that, say, Germany does one thing and we do another, if necessary on a swapping basis.
The point has been made, but I wish to emphasise the need for inter-party agreement. This is not a political issue and some noble Lords may remember that not long ago I had a Wednesday short debate on the need for inter-party agreement. I said that though there were many issues on which in the long term I thought it unlikely that inter-party agreement could be obtained, it was even more unlikely they would be solved without it. This question of energy is not potentially, as I see it, a political subject.
My Lords, I fear that for the first time for perhaps two years I have exceeded my allocation of 10 minutes, the reason being of course that I did not prepare my speech beforehand.
6.48 p.m.
Lord STRABOLGI: My Lords, I listened with great interest to the speech of the noble Viscount, Lord Hanworth, who volunteered unselfishly to speak last and who, if I may say so, made one of the best speeches in the whole debate. I agree with him and with the noble Earl, Lord Lauderdale, that this is a matter which should be approached on nonparty lines, and what has particularly impressed me has been the strictly nonparty approach in this debate, and we are indebted to the noble Earl, Lord Halsbury, for initiating it.
This subject is of course extremely important; energy is vital to our economy and indeed to our way of life, as has been said. A great many matters have been raised and some of the problems ahead have been posed, and posed most eloquently, by noble Lords, and I will do my best to answer them. I wish that we could know all the answers in advance, but the truth is that in many areas we cannot be sure of all the questions. One cannot have an energy policy in the form of a blueprint saying that, for example, in the year 2000 electricity will meet X per cent. of energy demand and coal Y per cent. and that so much of the
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electricity will come from nuclear power. The uncertainties are too great. We cannot predict precisely what the demand for energy will be, or what will be the most economical way of meeting it. Indeed, the recent events in Iran, which have been referred to today in almost every speech, and with which I shall deal later, serve only too well to highlight both the uncertainties with which we are faced and how rapidly circumstances can change. The noble Earl, Lord Halsbury, mentioned this point, and I agreed with him. He asked—quite properly—where the next crisis would blow up.
What we are trying to do is to develop a strategy that will move us in the right direction over a broad range of possible futures—and not one that will be perfect in one set of circumstances, but disastrous or very costly if things should not turn out as we expect. However, we are not completely in the dark about the future. To start with, there is very wide agreement that oil will get increasingly scarce and more expensive during the rest of the century and beyond, as has been said today. The Department of Energy's forecast is that oil prices will go on rising until, by the end of the century, they are double their present levels or more in real terms. We can therefore expect to see oil gradually withdrawn from its non-premium markets, where another fuel would do as well, and become concentrated once again in uses such as transport and petrochemicals, where there is no ready substitute. Nuclear power may provide the answer, but it will not provide a quick or easy answer to the world's energy problems. In such a high technology area you must learn to walk before you can run.
We must also bear in mind the need to reconcile energy policy with other objectives, such as environmental policy. We have recently set up the Commission on Energy and the Environment to advise on the relationship between these two important policy areas. As I think has been recognised today, by comparison with most other industrial countries, the United Kingdom is well endowed with energy supplies for the next couple of decades. We have substantial reserves of oil and gas, and very large reserves of coal—enough for 300 years at present rates of extraction. We can expect to be at least

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self-sufficient, and possibly net exporters of energy, for some years from 1980 onwards. But we should never forget that this will not cut us off from the long-term difficulties of energy supply which the world as a whole can expect increasingly to face. We therefore attach great importance to active participation in international discussions on energy, whether at summit meetings, the United Nations, the International Energy Agency, or in the EEC.
The Government give great importance to energy conservation, and the demand estimates on which our strategy rests imply an overall reduction in final energy consumption of about 20 per cent. by the end of the century. The Government will have to keep on stepping up their continuing conservation programme if these savings are to be achieved. We have made a good start by implementing since December 1977 a comprehensive 10-year package of measures.
Even after allowing for ambitious levels of conservation, our use of energy is likely to go on rising, including a large and growing demand for fuel as a chemical feedstock. As in the past, the main influence is likely still to be the rate of economic growth, as I think was implied by the noble Lord, Lord Robbins. The recent study by the International Institute for Environment and Development suggests a possible low energy strategy for the United Kingdom. The low energy futures advocated by a number of such groups are currently being assessed for the Government by the Energy Technology Support Unit at Harwell, in conjunction with the Department of Political Economy at Aberdeen University. We do not know of course what our rate of growth will be, and we are working on a range of possibilities, which were examined in detail in the Green Paper.
We have identified supply options which might give us a total of home-produced energy equivalent to between 475 million and 515 million tons of coal a year to 2000, if all were successfully developed. The figures included for coal and nuclear power are upper limits of what we can reasonably expect in the time available, and will not be achieved without very great efforts. We recognise that we cannot yet define the precise combination of home-produced suppliers, of conservation, and of imports which
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would provide the best way of meeting our energy needs at the turn of the century. We have therefore proposed a strategy based on developing conservation and a broad range of supply options, while maintaining what flexibility we can to make adjustments in the light of results and changing circumstances.
Lord STRATHCONA and MOUNT ROYAL: My Lords, may I interrupt the noble Lord on a point of clarification? I thought I heard him say that he was hoping that energy conservation would improve, or increase, by 20 per cent., and later he went on to say that our consumption of energy would go on increasing. If so, what is it that we are conserving—20 per cent. of what? The only true measure of conservation success would be if the demand for energy was actually going down by 20 per cent. Alternatively, is the noble Lord saying that we arrest what would normally be an upward trend by 20 per cent. less than otherwise would have been expected?
Lord STRABOLGI: I have been trying to paint a rather large canvas, my Lords, and I was making the general point that as our consumption went up so would our need for conservation grow. I was not going any further than that. What I was also saying is that in general we are aiming to be well placed to adopt whichever course turns out in the event to be cheapest and most acceptable.
Turning now to the supply options open to us, our most plentiful source of fossil fuel is coal. Through Plan for Coal we are showing our determination to maintain and modernise the industry at a cost of over £4 billion, and the National Coal Board considers that output could reach 170 million tons by the end of the century. But coal may also be required for uses other than those at present associated with it. Work is therefore also taking place on the technology of coal use and its conversion to substitute natural gas and synthetic crude oil. Nuclear power could also provide a substantial part of our energy needs—perhaps the equivalent of 95 million tons of coal in 2000. We may need therefore to be able to expand our nuclear capacity rapidly in the late 1980s and early 1990s, if that proved economically desirable and acceptable in other respects; and some of these

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various options have been referred to today.
By the year 2000, home-produced oil could still be contributing the equivalent of 150 million tons of coal—more than our current oil demand. The Government's first priority has been to get self-sufficiency as quickly as possible, so that the country benefits from the balance of payments improvement, greater security of supply and the tax revenues. We must make sure, though, that there is neither too sharp a peak in production in the 1980s, nor too rapid a rundown thereafter. Development of natural gas reserves should be managed, I suggest, with an eye to maintaining supplies to the markets, including petrochemicals, which can make the best use of its special qualities, and so to postpone the need to turn to expensive alternatives. The equivalent of 50 to 90 million tons of coal a year of our energy requirements might come from natural gas at the end of the century.
By the year 2000, however, oil and gas supplies worldwide, as well as in Britain, will have reached or be close to their peak. Their decline will have begun, or be just about to start. The major significance of oil and gas, then, is in the medium term, during the next two decades, rather than in the longer term of the end of the century and into the next. I am sure all noble Lords will agree that we must use wisely the breathing space they offer to prepare for the period when they will be in short supply, as the noble Viscount, Lord Thurso, said. The renewable sources are still at an early stage of development, and their contribution to energy supply in the period we are dealing with is expected to be small, although it could grow substantially in the next century. In answer to the noble Lord, Lord Tedder, to whose speech I listened with particular interest—and I shall have a little more to say about alternative sources later on—I would say that we are giving high priority to the necessary research and development work. Indeed, total Government spending on energy R & D in 1977–78 was in the nature of £254 million.
My Lords, we do not know what society will expect in the next century, but we might expect energy demand to continue to grow. We must be able to meet
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it in a period when our own production of oil is declining perhaps quickly, and when our production of gas is declining, or is about to decline. As we move into the next century, the world's available oil will need increasingly to be reserved for uses in which other fuels cannot easily be substituted, particularly in transport and in petro-chemicals. Coal may be able to fill some of the gap caused by withdrawing oil from heating purposes, but coal itself may increasingly be needed as a raw material for producing substitute natural gas, transport fuels and petro-chemicals, and the amount available for generating electricity may decline.
We cannot be certain at this stage when fusion power will prove practicable. At present, the only assured source in the longer term, apart from coal, is nuclear power, as I think has been rightly said by the noble Viscount, Lord Thurso, and by the noble Lord, Lord Zuckerman. Because of the limited availability of uranium, worldwide dependence on nuclear power almost certainly involves using fast reactors eventually. In the end, society as a whole will have to make the choice whether to accept fast reactors or whether, if there is no suitable alternative, to accept lower national living standards as a result either of diverting resources into very high-cost forms of energy or of energy shortages. While there can be no certainty at this stage that fast reactors will be needed, we need to keep the option open, as I think was recognised today, while continuing with the development of fusion power and renewable sources of energy. The Government's strategy therefore involves developing all the options I have mentioned, while maintaining what flexibility we can to make adjustments in the light of results and changing circumstances.
My Lords, I think it would be right if I said a few words about Iran, as this has been mentioned in every speech. From the point of view of this debate, of course, this has been the most serious recent development. The cutting of exports of crude oil from Iran since Christmas has meant that the only production has been up to about 600,000 barrels a day to meet domestic needs. The only exports have been of fuel oil produced in refining that production, which is not required in Iran and which was clogging up the

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storage tanks. Happily, with a somewhat more settled political climate, Iranian exports are now beginning again. It is still much too early, however, to be certain of a substantial, uninterrupted resumption, and we must wait to see whether the Iranians will wish to push exports to their previous levels; and, if so, whether the technical problems can be overcome. There is also still much uncertainty about the price they will charge and the method of sale they will choose. There must be some doubt, to say the least, as to whether the consortium which previously lifted most of the oil will resume its former position.
My Lords, the effect of the Iranian situation on oil prices has been worrying, as I readily admit. Some spot prices have reached almost double the official OPEC price, and this has led to a more modest but general and still worrying increase in many contract prices of around 1 dollar to 1.50 dollars a barrel. We hope that when OPEC meets shortly to discuss developments it will take a responsible view of the effects of excessive price rises across the board. These could be very damaging to world growth prospects, and particularly to the economies of the less developed countries. In the meantime, it is important that the consumer nations should do their bit towards meeting the shortfall in supplies, which will affect us not only now but in stocking up for next winter. At its meeting in Paris at the end of last week, the governing board of the IEA agreed on a 5 per cent. saving on oil consumption by its members. The United Kingdon will be playing its full part in implementing this decision; and, in answer to the noble Lord, Lord Strathcona, I can say that a Statement about this will be made in another place in the near future by my right honourable friend the Secretary of State, and I am sure it will be repeated in your Lordships' House. I am hopeful that these measures, coupled with a resumption of exports from Iran, will serve to stabilise the world situation.
The noble Lord, Lord Strathcona, also asked about oil stocks. The latest figures for oil stocks for the United Kingdom show that we are holding 191 days on the IEA basis and 88 days on the EEC basis. This is equal to 72 days of expected consumption. The noble Earl, Lord Halsbury, referred to a depletion
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policy. The Government's initial priority in the development of our offshore resources has been, of course, to build up production as rapidly as possible, so that we can benefit from the balance of payments improvements, the greater security of supply and the tax revenues. We are now approaching the point of net self-sufficiency in energy, and during the 1980s we have some choice between early oil production at higher levels, with associated early additional benefits to the economy, and reserving supplies for the 1990s and beyond to assist the economy and the energy sectors in achieving a smooth transition to reliance on imported oil (which is likely to be scarcer and more expensive) or alternative indigenous fuels.
We must avoid, I suggest, both too sharp a peak in production and too rapid a decline thereafter if we are to ensure that when production runs down it does not do so at such a rate as to cause unmanageable problems in switching to alternative indigenous supplies or paying for increased imports. This, of course, is one of the factors which made us decide to control the production of our North Sea oil—a point which I thought was not sufficiently appreciated by my noble friend Lord Energlyn; but I do not want to trespass today into these fields, which we pursue frequently in other debates.
Turning to the current Iranian situation, I understand that BNOC has been able to respond by offering previously uncommitted supplies to two oil companies in the United Kingdom who have been experiencing difficulties in obtaining crude. However, BNOC cannot at short notice dramatically increase the amount of oil supplied into the United Kingdom. It must honour its other commitments if it is to build its reputation as a responsible oil trader. BNOC's disposal policy is, in the first instance, a matter for the corporation's commercial judgment although we expect it to take Government policy fully into account. The noble Earl, Lord Halsbury, referred to gas. So far as the use of gas is concerned, the Government's policy is that our resources should be depleted in a controlled manner, with supplies going so far as possible to those markets where the special qualities of gas make it an especially valuable fuel.
The noble Lord, Lord Tedder, and my noble friend Lord Energlyn referred to

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alternative sources of energy. In this connection, I am, of course, referring particularly to wave energy, tidal energy, wind energy, solar energy, crops and organic wastes providing fuel materials and geothermal energy. These alternative energy sources are still at an early stage of development, and their contribution to meeting the country's energy needs by the end of the century is expected to be small, although it could build up substantially in the first quarter of the next century. I can say that the Government are giving high priority to the necessary research and development work on these sources and in June last year an increase in the funding available for this work was announced, taking the total amount of money available to £16 million. It is not, however, the level of funding which is the limitation to making faster progress on these sources but rather the state of the new technologies involved. I am sure both noble Lords, with their great technical knowledge, will appreciate that.
With regard to nuclear, or atomic, energy, Government policy has been to maintain the capability rapidly to expand nuclear power if that course proves to be economically desirable and acceptable in other respects. To do this, we need a proven reactor system or systems and a manufacturing industry able to produce them. We also need to ensure that fast reactor technology will be available to us if we need it. With regard to fast reactor policy, the prototype fast reactor has been operating at Dounreay since 1974 and the Government are currently reviewing policy towards the next stage of the system's development, including the possible construction of a full-scale commercial demonstration plant. The Government have given an undertaking that any decision to build a plant would be subject to a public inquiry. The precise procedure has not yet been settled but the inquiry would not be limited to local matters and would enable wider relevant issues to be considered.
Lastly, the noble Lord, Lord Tedder, asked about the EEC energy research and development programme. The United Kingdom has fully supported the current four-year energy R & D programme in the Community and many United Kingdom organisations are participating in this. In considering the Commission's proposals
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for a second four-year programme to run from 1979 to 1983, however, we have noted that these proposalswould call for some £80 million from the Community budget and have insisted that such a sum should be agreed only after the most careful scrutiny of the proposals. What we are questioning is the size and scope of the new programmes and the balance between topics. I should emphasise that we fully recognise the importance of this research. It is precisely because of this that we are anxious that scarce resources of manpower and money should be used to the best advantage.
The noble Earl, Lord Lauderdale, asked about coal from under the sea. The National Coal Board are considering the possibility of exploiting coal reserves under the sea, and the techniques of underground gasification currently being studied by the Board might find an application in this area. There are, however, considerable technical problems involved and it is unlikely that a contribution to meeting the country's energy needs can be attained from this source for a considerable period of time. But I am sure that one day we shall be able to get at it.
My Lords, I hope that I have answered most of the points raised by noble Lords. Remembering what the noble Earl, Lord Halsbury, has said, I do not want to speak for too long. I am afraid that I have spoken longer than I should have done, but if there are any other points I will write to noble Lords.
7.15 p.m.
The Earl of HALSBURY: My Lords, in rising to bid au revoir to this subject and not adieu because I am sure that it will be in front of us at least once per Session for an indefinite time to come, I should like to thank all those noble Lords who responded to my invitation to take part in the debate and to comment on the fact, which is obvious to you all, that you have, not for the first time, put on a performance unmatchable by any other legislative assembly in the world. It started with oil; then the geology of oil from Lord Energlyn; then oil substitutes by hydrogenation of coal by the noble Lord, Lord Ritchie-Calder, and then hydrogenation for chemical feed-stocks from the noble Lord, Lord Wynne-Jones,

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to the noble Lord, Lord Tedder, who has come all the way from St. Andrews to tell us about his preoccupation with the photolysis of water which, in my view, is the best bet for the utilisation of solar energy one day in the future.
In thanking those who have come a long distance I look at the noble Viscount, Lord Thurso, who has come farther than anybody else and thank him for the support he has given me in his remarks on atomic power. The noble Lord, Lord Zuckerman, gave us his characteristic blend of wide-ranging knowledge and experience and blunt common sense; and I was grateful for his comments on some of the environmental problems. The noble Earl, Lord Lauderdale, speaks with authority based on many years of service to this House in Committees and constant attention to our energy affairs on a day-to-day basis. He is a master of detail; he has put it at our service this afternoon, and I am grateful correspondingly.
I was glad at having avoided a demarcation dispute with my noble friend Lord Robbins on the subject of economics and that I managed to get away with it without him finding anything on which he was in disagreement with me. I say I am glad because, although I never had the privilege of attending his lectures, I regard myself as an honorary pupil of his through close study of his very interesting writings. The noble Lord, Lord Sherfield, combines dual qualifications in the diplomatic field and in the nuclear power field and I am sure that he would be ideal adviser to monitor what is going on in the mind of President Carter.
The noble Viscount, Lord Sidmouth, does not speak very often in this House and I wish that he spoke more. He gave an example of what careful housekeeping can do. Finally, the noble Lord, Lord Thomas, was kind enough to refer to the importance of the diesel. This is a great British achievement. It is not generally known that this country used to (and for all I know still does) export more diesels than the USA makes. That was the gift of differential taxation at one time. The noble Viscount, Lord Hanworth, enunciated a principle with which I am in agreement; namely, that we ought never to use gas where we can use oil; we ought never to use oil where we can use coal; and we ought never to use coal where we
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can use nuclear power or anything wherever we can use revenue resources, provided we can manage to do it.
I am grateful to the noble Lord, Lord Strathcona and Mount Royal, for tackling the price structure problem, which is not the most glamorous part of one's homework but it is fundamental. Clearly the present price structure is unstable and can only lead to rises. Finally, I thank the noble Lord, Lord Strabolgi, for his attention to the debate and for his careful answers to as many of the points as he could cope with in the time available. I hope that he will report to his right honourable friend and will assure him of the high quality of the debate which was entirely non-partisan in quality and of the singular unanimity on the question of priorities demonstrated by everybody who took part in it. I beg leave to withdraw the Motion standing in my name.
Motion for Papers, by leave, withdrawn.

HONG KONG: ARREST OF PETITIONERS
7.20 p.m.
Lord BROCKWAY Lord BROCKWAY rose to ask Her Majesty's Government whether they will inquire into the circumstances under which 76 persons travelling in coaches to present a petition to the Governor were arrested in Hong Kong on 7th January, 1979, and into the conditions of the boatmen and their families who for seven years have been denied houses at Yaumoti. The noble Lord said: My Lords, I am raising this issue in an Unstarred Question because I felt that on 12th February, when I put a Starred Question, the exchanges between a questioner and the Front Bench were inadequate to clarify these issues at depth. The only other Back-Bencher who intervened paid a tribute to the Governor of Hong Kong. I want wholeheartedly to endorse that tribute. In the unique circumstances of Hong Kong the endeavours which he has made for the rehousing of the people and his activities in public work construction should receive the recognition of all Members of the House. About that there is no difference at all.
These boatmen used to be fishermen from the mainland of Hong Kong.

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However, when the trawlers came they were no longer able to carry out their activities. For more than seven years now they and their families have lived in boats under shelters on the shores of the mainland. They have had to live there because, despite the fact that they have asked for housing accommodation, it has not been provided. With their wives and their children—and children are being born continually—the number of them now reaches 5,000. More than a half of them work on the mainland. Their children go to schools on the mainland; but they are still limited to living on their boats. The housing department of the Government of Hong Kong has stated that many of them are immigrants, illegal immigrants, living in these conditions because they wish to claim houses.
There was a survey by Social Action which interviewed the residents of 474 of the boats accommodating over 4,000 people. That survey showed that 70 per cent. of the residents of these boats had been there for seven years. That is a sufficient answer to the Housing Department so far as at least 60 per cent. of the residents are concerned. The conditions under which they live are appalling. Boats are becoming old and rotten. If they moved they would sink. There is no fresh water supply or artificial light. There is no sanitation. The water round the boats is filthy and stinks. In the past year alone 12 children from these boats have drowned. Over the years the boatmen have sent many petitions to Government departments. They recently decided that they would petition the Governor himself. I should remark that in Hong Kong petitions are the accepted method of bringing pressure from the population to the legislature and the Governor. There is no elected member of the legislature; all are appointees or nominees of the Government. It is the only method by which the people can express their differences.
I want to recognise at once that the first action of the boatmen was provocative. They held a Press conference and announced that 1,000 of them would march to the Governor's residence. Such a march without seven days' notice and without a licence from the Government would have been illegal. I think it very likely indeed that it was the announcement of that
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march which provoked the police—no doubt justifiably with the authority of the Governor—to take action. However, this project was cancelled. Undoubtedly there were consultations between the leaders of the community and with representatives of the boatmen. A decision was taken to cancel the proposed march and that instead there should be a deputation which would present a petition to the Governor. As a result of the discussions, the deputation was to represent community leaders and to present the human problems of the families living on these boats by representation of the women and children there. A deputation was selected of 76 persons including a Catholic priest, a doctor, two social workers, 48 women and 10 children.
When one considers whether that deputation was illegal or not one has to recognise this. Undoubtedly they were accompanied by a number of people to the pier where they entered two coaches. However, the significant fact in the issue which I am raising tonight is this. No charge was made against any illegal procession on the mainland before the deputation of 76 entered their coaches. They had to travel, as those who know Hong Kong will realise, by a tunnel which joins the mainland to the main island of Hong Kong and its harbour. When they reached the entrance to the island, they were arrested—the deputation of 76 travelling in these two coaches. They were arrested because they were said to have taken part in an illegal procession and an illegal assembly. I wonder how two coaches with occupants can be held to be "a procession". I wonder how 76 people in those two coaches can be held to be "an assembly".
When I raised this question in this House on 12th February 1979, the noble Lord, Lord Goronwy-Roberts, said at col. 971 of Hansard:
"No charges were made against the ten juveniles, and the adults were released on bail pending trial".
A word about bail: it was 200 dollars and the men arc earning 150 dollars. I think that is unreasonably high; but I want to draw particular attention to the statement that no charges were made against the 10 juveniles. I want to make it perfectly clear that I am making no suggestion that the Minister sought to mislead the House on this matter. There is no one in this House that I more regularly believe than

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the noble Lord, Lord Goronwy-Roberts. He always takes the utmost care in stating facts and explaining them to this House; but I do not think there is any doubt that he was misinformed on this matter. I have in my hand a letter from Councillor Elsie Elliott, and she says this:
"I personally bailed out 30 persons from the Central Police Station. I examined and signed the bail papers for three of the children, aged 7, 8 and 12. On the papers I signed it stated clearly in English that they were being charged with 'unlawful assembly', and each one bore the thumbprint of the child whose name appeared on it, indicating that the charge had been read to the child. I heard the police inform each child individually to attend the adult court at Causeway Bay next morning (8th January). When the 12-year-old boy said he could not go as he had to go to school, he was told he must attend court.
At the time, I protested against such small children being charged with offences they did not understand, and against putting small children in an adult court. Mr. Holliday, who seemed to be in charge of the operation, said that children are responsible in law from the age of 7 and that the charges must stand.
I think it was the Magistrate who objected to the charges next day; no credit is due to the police or the Government for having arrested children who did not even know what was going on".
My Lords, I do not think anyone will dispute that statement from Councillor Elliott—missionary, educationalist, the voice of the people, given a distinguished award in 1976 for her achievements in social welfare and awarded the CBE last year by Her Majesty the Queen. She is a responsible person, and no one who knows her can doubt that on this matter she has told the truth. The children were charged, and it was only through the intervention of the magistrate the following day that those charges were withdrawn. I pause to ask: Is it really tenable that in Hong Kong a child of seven should be held responsible in law?
It is often suggested that this is just an agitation by the boatmen concerned and a few others. I have had a letter from the Ecumenical Community Development Project, with members of the Anglican, Lutheran, Methodist and Roman Catholic Churches, of the Salvation Army and the Church of Christ in China, thanking me for having raised this matter in the House. They say:
"The issue is not only of great importance to the boat people themselves in their quest for resettlement but has grave implications for the civic rights of residents in this city".
I believe this event, distressing as it has been, will be important and will have three results. First, greater care in the future will be taken in the application of the law against processions and assemblies. Secondly, there must be a reconsideration of the age when a child becomes responsible in law, now seven years. Thirdly, because of the publicity which has been obtained, there will be a resettlement of the boat people by the provision of housing for them. I ask for an inquiry to be made into the circumstances of the arrest of the 76—and not only that but, more importantly, into the conditions under which the boatmen and their families live, in order to facilitate the three results I have mentioned.
7.39 p.m.
Lord ELTON: My Lords, I always approach the solution of distant problems with more diffidence than I do those close at hand. It is more difficult to come at the facts. However, I know Hong Kong and I have apprised myself of some of the facts. I always admire the motivation of the noble Lord, Lord Brockway. I am not entirely certain that I follow him through the whole of this argument this evening, but I would endorse his view of the work of the present Governor, as a preliminary to what I say.
It seems that we are looking at three questions. We are looking at the particular incident which resulted in the arrest to which the noble Lord has drawn the attention of the House; we are looking at the conditions which gave rise to it, not only in that flotilla of boats but in Hong Kong as a whole, and we are looking at a specific question of the responsibility of 7-year-old children in law. If I may take them in that order, as touches the arrest itself, as I understand it, the assembly, which was quite a large one, which preceded the setting off of 76 people in two buses, was illegal. It was in fact the latest in a series of such assemblies which, in a crowded and cramped community such as Hong Kong, which is much more like a rabbit warren than a city in the sense in which we mean it in this House, looking at London and Paris, is a serious matter in itself.
I understand that the first time any objection was made formally by the authorities, in the shape of the police,

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was on 24th December last year, and that that was merely a request to disperse which I do not think was fully met, and what happened on 7th January continued despite police requests. Then, the parties having been warned, I imagine, that if they went through the tunnel they would then have gone beyond the bounds of official patience; they proceeded to do so. The noble Lord suggested that it was important that large numbers of people had dispersed unarrested, and yet they had committed the offence of which the 76 were said to be guilty. I do not think that that crowd was made up of lawyers, and I think any normal group ofpeople would see that this was a gradation of response, which was not in any way extreme or brutal.
As to what happened after that, the noble Lord, Lord Goronwy-Roberts, will doubtless be in a position to enlighten us. As I understood it, charges were preferred against the adults. Convictions resulted, but the people who had been charged and convicted were bound over and thus incurred no penalty at all, although they were, I understand, members of an organisation which, quite properly, is trying to draw attention to the hardships of a particular group of people in Hong Kong. The causes of the demonstration arc the circumstances of the boatmen (who are not to be confused with the boat people, which is an emotive term relating to refugees from Vietnam). These people are living in the vessels in which they used to live, or in vessels similar to them, when they were working at their trade as fishermen.
The objects of the demonstration were to get them rehoused on dry land and, presumably, to have this done in advance of the long queue of others who are waiting to be rehoused. I would just draw the noble Lord's attention to the very large number of people living in shanties on geologically unstable slopes, in which the danger is that with the torrential rains in Hong Kong you get a mud slide which results in instant burial and asphyxiation. If your boat starts to go down, on the other hand, you can step on to another one next door. I think that that is an important consideration, and I wonder whether the people in the shanties have a greater claim than the people in the boats.
Lord BROCKWAY: My Lords, may I ask the noble Lord whether it is not the case that those on the waiting list have to wait seven or eight years before they get any hope of a house, and that this is the condition of these boatmen?
Lord ELTON: My Lords, I think that if the noble Lord were to extend his attention to the other people on the list, he might find that this was the case elsewhere. He has to look no further than Islington to find people waiting interminable years. I understand that the council there cannot say how long people will have to wait in order to be housed. This is a universal problem. It is increased in Hong Kong by the fact that in the 12 months up to 31st December, 1978 over 100,000 new residents came over the border from China. What authority of a conurbation in the United Kingdom could cope with that and still shorten the list? There were 70,000 who came illegally and 30,000 who came as fugitives, without papers. Therefore, if it is at the back of the minds of those reading the columns of Hansard after this debate that somehow Hong Kong has a repressive régime, I think that the figures speak for themselves. People do not fling themselves so willingly and in such large numbers into prison. That, I think, is, in itself, an endorsement of what Hong Kong is achieving.
I have, as it happens, been around many of the housing projects in Hong Kong. I have seen the emergency housing and the various grades, as well as the latest schemes that they have. It is difficult not to be fulsome in one's admiration of the organisation, energy and sheer achievement of what has been done. I do not wish to state the case in too flowery terms, because it will sound like propaganda and this is not a propagandist occasion. I merely think that, in extremely difficult circumstances, the local authorities there have done rather better than local authorities in this country have done with far more resources at their disposal. That is an important element in looking at what is going on in Hong Kong. Let us have a yardstick, and let us find what area in this country, with an equivalent population, could produce an equivalent solution.
I come now to the question of the responsibility of 7 year-old children.

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That is a matter which I would happily leave to lawyers. It is a matter of which I was not aware until the noble Lord raised it. My view is that I would need to know a very great deal more than the noble Lord has vouchsafed to us, before I knew what I was talking about. It seems to me that, with legal responsibility, there may go other considerations. I do not wish to draw illustrations out of my imagination. I agree that, on the face of it, it is a surprising provision, but it is possible that responsibility brings with it privilege. I simply do not know. I shall be fascinated to hear what the noble Lord, Lord Gorowny-Roberts, has to say in comment on the letter of Councillor Elsie Elliott who, I know, is profoundly interested in housing. It is impossible to look at this problem out there without being aware of the fact.
In conclusion, I would just say this. What I have said is simply a gloss on the discussion. The intention is to make it clear that, having looked fairly closely at what is going on in Hong Kong, in person, on the ground, twice in the last three or four years, I am convinced that a great deal of good is going on there, and that with the extraordinary, indeed the unique, stresses under which that Crown Colony exists, with the enormous neighbour with a titular right to resume ownership before the end of the century, with very considerable numbers of immigrants coming in from that neighbour, and others, I might say—after all, it is not only the 100,000 whom they have to house; I think that at the latest count there were 9,000 refugees from Vietnam who have been added to the list—one might expect riots, one might expect destitution, one might expect deprivation and one might expect epidemics. When we consider that the question at the moment is whether 76 people were wrongly required to appear before a magistrate and to be bound over, that puts the question in perspective. As to the other question of the responsibility of juveniles, I feel that one of my noble and learned friends on this Bench would be better equipped to comment on that than I am.
7.50 p.m.
Lord HALE: My Lords, the process of dying slowly interests and in many ways fascinates me. One problem more than
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any other, perhaps, which has been worrying me is that once in my somewhat impertinent youth I asked a very distinguished Labour Minister of the highest repute whether or not, when he spoke about lessons of experience, he was speaking about the hardening of the arteries. That is perfectly true today. Having listened to a talk at about three o'clock in the morning on the new technology of the silicon chip and the marvels and miracles as well as the problems that are to come, and having had the privilege of listening to most of the very brilliant debate which took place this afternoon, I wondered whether there was a certain lack of perspective. I am quite sure that I was wrong.
I have listened to my very old, respected and valued friend putting his case with studied moderation. Indeed, the noble Lord, Lord Boyd-Carpenter, is an old and beloved friend, but the interjection, "I know the Governor and we can rely upon him" is to be deplored. First, it is not very kind to the Governor, who is known all over Asia and who has had tributes paid to him in almost every debate which has been held on Hong Kong. He has received the highest honours from Her Majesty. When I listen to my noble friend Lord Goronwy-Roberts speaking about the Governor, it is obvious that he holds a special place in the heart of my noble friend. That is a great distinction on its own. I shall not pursue the matter, but I do feel that, "One must trust the Governor" is the precise antithesis and the precise problem of democratic politics. If one must trust the Governor, there is no room for debate and argument. Tonight, nobody has said a word against the Governor.
We had a debate on Hong Kong in 1976, and many of the same points were made then. Tributes were paid to the Governor. I said then that Hong Kong had never had a better Governor. Nobody raised any criticisms because the Governor was facing problems of quite exceptional difficulty. He has obviously been facing such problems quite recently. What is one to do if refugees come, by purchase, over the seas from the devastated territories of Vietnam, which have borne more bombardment and more destruction and which have had more poison poured upon them than any other country? If those refugees

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jump the queue, what does one do about it? Whether they are rich or whether they are poor, in the end the answer is that they are refugees and that they have children. I do not quarrel with anything that has been done. The spectacle of things which are done by force, by good sense and with my complete approval is naturally likely to excite perturbation among people who have suffered very considerably because of their living conditions. When people read justifiably glowing accounts of the many achievements in Hong Kong, they must wonder whether they are the victims of discrimination.
We have heard a great deal about the housing programme. I have not seen it, but my information is that this excellent housing is being built on ground that is too costly to be used by the poorer inhabitants. Many other things are going on which are likely at least to exacerbate people's minds. The noble Lord, Lord Elton, said that if you are on a boat there is the advantage that you can step off it. There is, if you are awake and active at the time and know what is happening. I understand that the water there is so dirty and filthy that it is not easy for a boat to sink. What it does is to rot and fall to pieces. I understand that, as a perfectly proper safety precaution, inspectors go round month after month to examine these boats and see how long they will last. For all these years they have had no water or artificial light, and virtually no sanitation. And families are growing up on these boats.
I believe that it was the noble Lord, Lord Elton, who said that there are housing problems in England. Indeed there are. There are problems in Oldham. Oldham has seen its major industry pass to Hong Kong. I spent the best part of 30 years pointing out the problems of the cotton industry in England and the competition which it had to face from Hong Kong because of the subsidies that were paid from time to time to Hong Kong. The fact that Oldham machines were being exported second-hand to Hong Kong and also to Shanghai—a great deal more to Shanghai, let us be frank about it—and refurbished there also affected our home industry. This island community —partly a mainland community, it is true—with a somewhat uneasy tenure and with certain difficulties, was at one time costing our national Exchequer a very considerable sum of money.
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In the year of that debate, I was privileged to receive a handsome book on Hong Kong which recounted its achievements. Frankly, I do not think that Texas could do it so well, or possibly so inexpensively. It may be that cheap labour helps. It is a remarkable book and a remarkable achievement; it is something of which they can be proud. The book is magnificently illustrated. It contains a picture of the Queen's visit and also a picture of the other Queen Elizabeth II departing from the harbour on another world tour. Illustrations are given of the immense advances which Hong Kong has made. It was the pioneer of the transistor industry, which brings it a little nearer to silicon chips. In a very fine harbour it has been carrying on a considerable amount of shipbuilding. It is also building—I call it hand-made to contrast it with the major form of shipbuilding—junks of considerable beauty, which are made with quite exceptional skill. If all that labour is being devoted to shipbuilding, it ought to be possible to provide houses on the riverside which contain adequate sanitation and so on. I suggest therefore that it is an unfortunate step to take, to say that you must not come to present a petition. I do not doubt for a moment that there have been faults on both sides in this matter. It is possible to get like that after seven or eight years of privation, particularly if people are reading about the new race course and all the other amenities that are being constructed for Hong Kong.
One gets to the point of protest; one reaches the point when pent-up indignation gets out of control. That is one of the difficulties in our world today, where there is so much violence, so much crime and so much demonstration. It is a wise law which permits the maximum possibility of ventilation of grievance. All my noble friend said was that there was a calling of attention to some rather regrettable points in procedures. In these circumstances, one wonders whether there should have been a conviction at all. The noble Lord, Lord Elton, said—and I am not suggesting that he is wrong—that in effect there was no punishment, but of course a conviction is a punishment and binding over is a conviction. It is a finding of guilt, it can remain on the record all the time and if fingerprints were being taken that adds a little more point of regret to what transpired.

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I have spoken for too long and I shall not pursue the matter. I have tried to be completely fair and I earnestly congratulate my noble friend on not thinking such a matter too insignificant for the attention of your Lordships' House and on having presented his case in full detail and with his customary fairness and force.
Lord HYLTON: My Lords, I apologise for speaking without having put down my name but I should like to ask your Lordships' indulgence to put one question concerning the rehousing of the boatmen whose present conditions the noble Lord, Lord Brockway, has so clearly described. One understands the intense pressures on available housing which affect Hong Kong; some of them have been mentioned already. There is the natural increase of the existing population, there are refugees from China and more recently still there have been refugees from Vietnam. Taking all these things into consideration, the pressures on the housing authority are obviously very great indeed. My question is this: if the Government of Hong Kong were able to provide building sites and building materials on the mainland is it not possible that the boatmen would then be able to rehouse themselves in a co-operative way and by methods which one might describe as community self-help?
8.4 p.m.
Lord GORONWY-ROBERTS: My Lords, I should like first to thank my noble friend Lord Brockway for the way in which he has introduced this debate which, as my noble friend Lord Hale has reminded us, is indeed on a very important subject. I appreciate also the balanced way in which the official spokesman for the Conservative Party put forward his own views.
There is no question of anybody in need of housing in Hong Kong being denied a fair opportunity of achieving that. It is the policy of the Hong Kong Government to provide subsidised public housing for all who need it. The problem is to provide it fast enough to meet the demands of a population that has increased more than sevenfold in the past 35 years, and a population which is continuing to increase at a rate of over 150,000 a year. In such a situation and despite a housing pro-
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gramme of which the Hong Kong Government have every right to be proud, it is of course inevitable that there should have to be a waiting list, which in turn means that there have to be priorities. It was this situation which led indirectly to the incident referred to by my noble friend in his Question.
The aim of the Hong Kong Government is to rehouse everybody who lives in substandard accommodation. This includes not only boat dwellers but also large numbers of people living in unsatisfactory conditions on land. Within this general policy, priority is given to people made homeless as a result of fire or natural disaster, or whose homes become dangerous. Some people, too, have to be moved from land that is needed for development, usually for new industry and new housing, and when this happens they, too, are rehoused immediately. Otherwise, everybody takes his turn, as is the case in this country. At present, there is a waiting list of some six to seven years in Hong Kong—almost as bad as in some parts of our own country. If this sounds a long time, I would ask your Lordships to bear in mind both the scale of the problem, as shown by the population figures I have just quoted, and the very great efforts that are being made to cope with it. I should like to give a few details of those in a moment.
That is the general picture with regard to priorities for public housing in Hong Kong. The boat dwellers had recently claimed that they should be allowed to jump the queue. Who are the boat dwellers? Those of us who are fairly familiar with Hong Kong and its history will know that Hong Kong has always had a large floating population, most of whom are fishermen but including also a great many involved in other marine trades, such as cargo handling. They are part of a wider tradition extending all around the coast of China. For centuries people have lived their whole lives afloat, hardly ever going ashore. In Hong Kong the numbers have in fact declined steadily over recent years as people whose families have worked afloat for generations have taken jobs ashore. Ten years ago there were some 100,000 boat dwellers in Hong Kong; today the reckoning is about 60,000. New industry on land, and obviously new re-housing on land, has made an impact on these and other

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figures. Many of these people still make their living from fishing, but there are also a large number of squatters—that is, people who, unable to find accommodation ashore, live on boats moored in various typhoon shelters and anchorages around Hong Kong. They fall into three categories.
First, there are the traditional Hong Kong people who, although they have now taken jobs ashore, continue to live on their boats for want of other accommodation. Secondly, there are Hong Kong land dwellers who have resorted to boats as a cheaper form of accommodation. Thirdly, there are recent illegal immigrants from China who arrive in their own boats and continue to live on them until they can be resettled. I shall have a word to say about refugees and the causes for the mass exodus into Hong Kong in recent weeks.
The policy of the Hong Kong Government towards boat squatters is exactly the same as towards land squatters—to allow them to remain where they are until they can be moved into suitable subsidised public housing. However, the boats on which they live are examined from time to time and if they are found to be in a dangerous condition the occupants are moved to temporary housing ashore. Since 1977 922 people from 111 boats which have been found to be dangerous have been rehoused for that reason. Apart from this, the Hong Kong Government believe there is no justification for giving the boat people priority over other applicants for government housing, and they must apply in the normal way; many of them do so, and over 80,000 boat dwellers have been rehoused by the Government since 1960.
I now turn to the incident on 7th January. We have received a full report from the Governor of Hong Kong. Since September last year there has been a series of demonstrations and petitions by a particular group of boat dwellers, those from the Yau Ma Tei typhoon shelter, who are seeking priority in the allocation of public housing. Although some of these demonstrations were not authorised—and I shall describe the arrangements for obtaining permits later—no action was taken against the organisers or those involved until 24th December. On that day 150 boat dwellers, with 50
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other supporters, assembled to march to the Government's Central Offices. As no permit had been obtained for the march, the police warned the demonstrators that their action was unlawful and advised them to disperse. Most of them did so, but a few remained, to hold, as they said, a Press conference. The police took no further action on that occasion.
On 7th January, which is the occasion to which my noble friend has referred, a group of boat dwellers and sympathisers assembled to go to the Governor's residence to present a petition. They had not applied for a permit and were warned that their action was unlawful. This time they declined to disperse and instead set out in two coaches to present their petition. Along the way the coaches were stopped by the police and the occupants were again warned that their demonstration was illegal. They were told that, while two representatives could in fact proceed to present their petition, the rest of them should disperse. When they refused to do so, the police escorted the coaches to a police station and charged the occupants with unlawful assembly.
Lord BROCKWAY: My Lords, if my noble friend will allow me to intervene, is it not the case that when they were asked to disperse they themselves suggested that the coaches should be allowed to go to the not distant Botanical Gardens and they they would disperse there; and they would be satisfied with three going in a deputation to the Governor?
Lord GORONWY-ROBERTS: My Lords, that may be so. I have no information of quite that nature. I am not for a moment doubting my noble friend's words. All I know is that after the first time there was this attempt to demonstrate, to process, without fulfilling the requirements of the ordinance which everybody else accepts; namely, applying for a permit. From that flows the incident we are discussing. If it were a momentary lack of attention to the needs of the ordinance in not applying for a permit for this particular purpose at that time, 7th January, I think we would take a rather dim view of this action concerning these people with whom we sympathise so much. But this was not the first time; they had been warned before and they persisted.

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The police, as I said, escorted the coaches to the police station and charged the occupants with unlawful assembly. The 76 people concerned appeared in court on 8th January. As regards the 10 children involved, I said in reply to the Question asked by my noble friend Lord Brockway on 12th February that no charges were made against the 10 children. What I should have said was that they were charged—my noble friend was quite right —on 7th January, but that no evidence was offered against them when they appeared in court on the following day. I apologise if unwittingly I misled him or the House or others in Hong Kong on this point. As to the legal and other reasons for putting the age of prosecution at whatever point it may be, I join with my noble friend in thinking that this is a matter we would need to go into separately and on what I would call a legal basis. Otherwise I would prolong my statement beyond the endurance of this crowded House!
The 66 adults were released on bail of about £21 each until their trial on 12th February, when they were all found guilty as charged. Of that 66, the 56 boat people among them were given absolute discharges with no conviction recorded. The others, including a priest, two social workers and four students, were hound over in the sum of about £32 each to be of good behaviour for a period of 18 months. I do not think that all in all the magistracy took an unduly harsh line in this case. This is a matter of opinion. As to the amount of the bail, and indeed the sums in which they were bound over to be of good behaviour, that again is a matter of opinion; one could go into the relativity of the sums involved and the average monthly income of Hong-Kongese.
I have described these events in some detail in order to make it clear that the authorities did not act hastily. The people involved were given clear warning that they were breaking the law and had ample opportunity to change their minds. There can be no doubt that the organisers of the demonstration on 7th January knew that their action was illegal. Well established arrangements exist in Hong Kong for obtaining permits to hold public demonstrations. The police require one week's notice, but normally issue permits provided they are satisfied that the demonstration is not to be held for illegal
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or immoral purposes and will not represent a threat to public order. We are dealing with Hong Kong, a crowded city colony, where the population is growing at an alarming rate, for external reasons which the local government is doing its utmost to control, often without success. The strain on public services, including housing, should be apparent to us all, and so equally should the great success of the Hong Kong Government in coping with that strain to the extent it has. Also it must he absolutely clear to us that it would be an ill service to a crowded city State of this kind if there were not provision for the orderly organisation and supervision of demonstrations.
There is no reason to suppose that if a permit had been asked for on this occasion it would not have been granted. It is not necessary to obtain permission to present a petition to the Governor, provided it is not done as part of a public demonstration. All residents of Hong Kong have an unqualified right to make petitions to the Governor on any matters of public or private concern. In this instance, the Governor could only have acceded to the petitioners' request at the expense of other equally deserving people.
I mentioned earlier that the Hong Kong Government have an outstanding housing programme. Under this programme, over two million people—no fewer than 46 per cent. of the population—have already been provided with subsidised public housing. I would repeat that that total includes 80,000 former boat people. New houses are now being added at a rate which will reach 35,000 houses a year in 1979. By 1985 it is the intention to provide accommodation for 65 per cent. of the population. Here is a country where two-thirds of the people will be housed in accommodation none of which is older than 35 years, and that subsidised. This programme is impressive by any standard, and it is the more impressive when one considers that it is being carried out in an overcrowded territory which suffers from an acute land shortage. I note the constructive suggestion made by the noble Lord, and I am quite sure that the Governor and the Government of Hong Kong, if they have not considered such a possibility, will most certainly give their attention to it. Many of the new houses are being built on land created by flattening hills and filling in the sea.

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I should like to stress the added dimension that is brought to this problem by the relentless rise in immigration into Hong Kong, from both China and Vietnam. We have heard descriptions of the circumstances and the conditions of life in Hong Kong which, as my noble friend said, are indeed in too many cases appalling. But people are fleeing something even worse in order to get into Hong Kong, and the proportions of the problem of illegal immigration into Hong Kong despite those conditions is something that is commanding international concern and attention.
Last year, some 70,000 people entered Hong Kong legally from China. Another 30,000 entered illegally. The impact of immigration on such a scale must be clear to all of us, particularly when it is borne in mind that the equivalent for a country the size of the United Kingdom would be an influx of about one and a quarter million immigrants in one year, and going on at that rate year by year. The Government have made repeated representations to the Chinese Government about this. We believe that the Chinese Government understand the difficulties which the arrival of people from China in such large numbers is creating for Hong Kong, and are making genuine efforts to reduce the numbers.
I wish that I could say the same about the Vietnamese Government and the flood of refugees from Vietnam. Noble Lords will be well aware of the much publicised cases involving the "Huey Fong" and
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the "Sky Luck", which between them brought nearly 6,000 refugees from Vietnam and dumped them on Hong Kong with its limited resources. What they may not realise is that since the beginning of this year almost as many refugees have arrived in Hong Kong in their own boats —the two figures together approximate to those which we heard from the noble Lord, Lord Elton—and they keep on coming.
I am sorry to say that there is every reason to believe that most of these people leave Vietnam with the connivance—indeed, the active connivance and assistance—of Vietnamese officials. The British Government have made their views on this despicable trade in human misery very clear to the Vietnamese Government and will continue to do so until the traffic is stopped.
Of course, there is a problem in Hong Kong. There is also a problem of the influx into Hong Kong, both illegally from China and inhumanly from Vietnam. In addressing ourselves to whatever is happening in Hong Kong and to what has happened in Hong Kong in regard to this incident and its causes, let us not forget the appalling problem which faces Hong Kong and the rest of South-East Asia as a result of the actions, not of individuals but of governments, which are driving whole communities out of their own countries into leaking boats, and creating conditions in Vietnam which impel thousands of people to take every possible means of escaping and to fetch up even among the boat dwellers of Hong Kong.