Lords Sitting of 27 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 Bradford.

VIENNA CONFERENCE: EAST-WEST CO-OPERATION
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made at the Vienna conference on East-West co-operation in trade, energy, science and technology.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, discussions were held at the Vienna conference on all the topics to which my noble friend has referred and on the environment. No decisions of substance were taken on East-West co-operation in any of these individual areas, but the conference agreed that a permanent body should be established in Vienna to co-ordinate future activities within the existing framework.
Lord BROCKWAY: My Lords, I welcome the last part of that Answer. However, has any agreement been reached regarding the linking of electrical power stations across the borders and the pooling of energy reserves? Would not that go far to realise the core of the Helsinki Act which saw economic co-operation as the basis for disarmament and peace?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I do not have the detailed knowledge for which my noble friend has asked, but I absolutely agree with him that the Helsinki Final Act acknowledges that the Economic Commission for Europe is the proper place for these discussions to take place. We all know how deeply important it is that we should get a world consensus on our energy problems.

FISH FARMING: POLICY REVIEW
2.38 p.m.
Baroness EMMET of AMBERLEY: 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 plans they have to redress the disabilities from which fish farmers suffer, as set out in the report issued last summer.
Lord STRABOLGI: My Lords, the Government's review of their policy towards fish farming is continuing, and full account is being taken in that review of the report by the National Farmers' Unions of England and Wales and Scotland.
Baroness EMMET of AMBERLEY: My Lords, I am glad to hear that discussions are continuing. However, as I said yesterday, what we really need is action of some kind, especially regarding co-operation between the Waterways Authority and fish farming which at present are in a certain amount of disagreement. Fish farming is one of our first lines of defence in the sense of producing food, and it really is important that the Waterways Authority and fish farmers get on together.
Lord STRABOLGI: My Lords, this is one of the issues which are being discussed. The issues are complex. It took the National Farmers' Union some 18 months to reach its conclusion. However, good progress has been made in considering the report. The National Farmers' Union—unlike the noble Baroness—accepts that it takes time.
Baroness EMMET of AMBERLEY: My Lords, may we know what progress has been made?
Lord STRABOLGI: My Lords, I must ask the noble Baroness to await the Government's Statement.
Lord BALERNO: My Lords, can the noble Lord give us more precise reasons as to why the Government have not proceeded with a fish farming Bill in the current Session? Is he aware that in this

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House it has already been demonstrated that throughout all the parties there is a desire to see such a Bill put through, that it would be received with acclamation and that in another place all parties are in general agreement about such a Bill?
Lord STRABOLGI: My Lords, I cannot prejudge the outcome of our consideration. However, we are doubtful whether a single measure would be appropriate for all the various proposals; for example, taxation matters would be more appropriate for a Finance Bill.

BRITISH ROAD SERVICES AND THE TACHOGRAPH
2.41 p.m.
Lord REIGATE: 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 British Road Services were among the employers referred to by Baroness Stedman as being "against both the installation and use of the tachograph" (Official Report, 8th March, col. 297).
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman): My Lords, the words which the noble Lord quotes represent the position in recent years of the main employers' organisations, rather than the attitude of individual employers. The National Freight Corporation, of which British Road Services is a subsidiary, said in their evidence to the Foster Committee on road haulage operators' licensing that they, as a responsible employer, would welcome the introduction of the tachograph, as a contribution to effective enforcement of the operators' licensing system.
Lord REIGATE: My Lords, while I, for once in a way, sincerely thank the noble Baroness for that Answer, can she say how many tachographs BRS have themselves installed and what percentage are actually operating?
Baroness STEDMAN: My Lords, no, I cannot say how many have been installed
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or how many are operating. My understanding is that the new lorries, which are being supplied to all the operators, have the tachograph as part of their normal equipment. It is only taken out at the request of the person who is buying the lorry, if he does not want it. Any lorries which carry out trade on the Continent must have a tachograph because they have to abide by the rules and regulations of other European countries. In some cases the tachograph is being used voluntarily in this country.

OIL POLLUTION OF NORTH SEA
2.43 p.m.
Lord CAMPBELL of CROY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further actions they have taken since the debate on 19th March, in concert with local authorities and industry, to put a stop to pollution of the North Sea by the deliberate release of tankers' ballast.
Lord STRABOLGI: My Lords, as I informed your Lordships in the debate on 19th March, we have asked for a report by the end of the month on the efficacy of the measures already introduced to deter the unnecessary and unlawful discharge of oily ballast water by some tankers coming to load crude oil at the Sullom Voe terminal. We have additionally asked the Nature Conservancy Council to monitor, and report on, oil pollution damage in the area to wildlife and the beaches. We shall consider whether there is a need for any further action in the light of those reports.
Lord CAMPBELL of CROY: My Lords, I thank the noble Lord for that reply. Are the Government using aircraft, including the RAF, for monitoring and policing? In particular, are the Government using, or considering the possibility of using, infra-red equipment installed on aircraft which can detect rogue tankers at night when perpetrating ballast offences? I understand that that has been successfully used by the United States Coastguard, and acts as a deterrent.
Lord STRABOLGI: My Lords, yes. As I said in the debate, tankers en route to Sullom Voe are now being required to advise the terminal of their exact position and route when north of latitude 58° 20' North. Aerial surveillance over the route is being maintained, and the Warren Springs Laboratory is developing an all-weather 24-hour per day airborne capability to detect oil on the sea using a combination of infra-red sensors and radar.
Lord SHINWELL: My Lords, although recognising what a nuisance this pollution can be, is my noble friend not aware that these ships—whether they be tankers or some other vessels—must release their ballast somewhere? If they release their ballast a long way from their destination, it could create very awkward consequences, because it may affect the navigation of the vessel. Is my noble friend aware of that? Ought not this matter to be taken up with the General Council of Shipping and its international counterpart in order to see whether or not some arrangement can be reached? There are technical difficulties which must be understood.
Lord STRABOLGI: My Lords, this, of course, is what we have been working on for several months; in fact, for several years. The problems, to which my noble friend has drawn attention, are covered by international law. At Sullom Voe we are awaiting a water-reception facility, which will be in use by the summer. However, the absence of those facilities does not justify discharging oily ballast at sea. It is perfectly possible to avoid that by proper operating procedures.
As I said in the debate last week, the international oil companies and BNOC are considering invoking sanctions against individual ships' masters who will not co-operate. I would point out that the penalties are very high and the Government will not hesitate to prosecute. There is a penalty of £50,000 on the owner or the master on summary conviction, and an unlimited fine when convicted on indictment.
The Earl of LAUDERDALE: My Lords, can the noble Lord add to the previous information which he gave the House and tell us when the studies at the Warren Springs Laboratory will be com-
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pleted? In the meantime would it not be useful if we borrowed some of the equipment being used by the United States Coastguard while waiting for our own to be made ready?
Lord STRABOLGI: My Lords, very full contingency plans for operation at Sullom Voe exist, and this is not the occasion to go into them. I would remind the House that the pollution at the end of December was the result of an accident to the "Esso Bernicia" and not a result of discharging oil at sea.
The Earl of LAUDERDALE: My Lords, can the noble Lord say when the equipment, of which he spoke earlier, will be available?
Lord STRABOLGI: My Lords, not without notice.
Lord BROCKWAY: My Lords, can the Minister say whether or not this matter is being urgently considered by the Law of the Sea Conference, which is now in session?
Lord STRABOLGI: Yes, my Lords, it is. As I said in the debate, we are considering with that Conference an Informal Composite Negotiating Text which would authorise any State to prosecute foreign ships for discharges in contravention of applicable international discharge standards on the high seas. Furthermore, the question of a 12-mile limit is one of the factors being weighed by Ministers in their current consideration of the problem. In answer to both my noble friends, I would say that the Government take this very seriously.
Lord NORTHFIELD: My Lords, is it not the case that we do not have to go quite as far as the United States for experience? Are not the French using aircraft surveillance with infra-red equipment? Are we co-operating with the French in using this equipment, particularly in the English Channel?
Lord STRABOLGI: My Lords, I think that that is a different question, but there is very close international co-operation over all these matters, and there is an improved routeing scheme which is at present being formulated to ensure that

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tankers are kept as far away from the shore as possible.
Lord CAMPBELL of CROY: My Lords, in relation to the question raised by the noble Lord, Lord Shinwell, did it not emerge from our debate last week, first, that it is important that the oil should continue to flow through Sullom Voe?—because about half the oil from the British sector is likely to pass through that terminal within a year or two. Secondly, if the amount of pollution around the shores of the North of Scotland, Orkney and Shetland becomes much worse than it is now, there will be a public outcry for the closure of that terminal.
Lord STRABOLGI: My Lords, I agree. We are doing our utmost to ensure that there will be no pollution in future so that the terminal does not have to close.
Lord PARGITER: My Lords, may I ask my noble friend whether or not equipment exists which ships could fit which will effectively separate the oil from the water, and then the water can be freely discharged?
Lord STRABOLGI: My Lords, that will be done at the terminal when the installation is ready.
Viscount ST. DAVIDS: My Lords, is not the main trouble that discharging oily water ballast at sea is extremely cheap, whereas getting rid of it by pumping it into barges or shore facilities is comparatively expensive? Would not the easiest way to get rid of this nuisance be to make it cheaper and easier to discharge it on shore, possibly by subsidy, and possibly by taking some standard sum from oil tanker owners to balance up the expense?
Lord STRABOLGI: My Lords, I am sure that that is something that will be considered. As I said earlier, the international oil companies are considering invoking sanctions against tanker owners who go in for this disgusting practice.

EEC COUNCIL OF MINISTERS: APRIL BUSINESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, a Statement is
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being made in another place today about business to be taken in the EEC Council of Ministers during April. I shall, as usual with the leave of the House, arrange for this to be made available in the Official Report.
Following is the Statement referred to:
"With your permission, Mr. Speaker, I will make a Statement about the main business to be taken by Ministers of the European Community during April. The more detailed written forecast was deposited yesterday. At present five meetings of the Council of Ministers are proposed for April.
"A oint Foreign Affairs and Finance Council will meet on the 2nd and will consider two Commission discussion papers, first Financing the Community Budget—The Way Ahead and secondly A Global Appraisal of the Budgetary Problems of the Community.
"The Foreign Affairs Council will meet on the 2nd and 3rd and will discuss the relaunching of the EEC/Turkey Association Agreement; relations with Yugoslavia; and preparations for UNCTAD V. Ministers will also review the position reached in the GATT Multilateral Trade Negotiations and will discuss negotiations with China for an agreement over trade in textiles. The Council will prepare for the next and possibly final meeting at ministerial level of the Greek accession negotiations, which will take place immediately after the Council, and will again consider revised Commission proposals concerning specific aids given by member States to the Steel Industry.
"The Environment Council will meet on the 9th for a general exchange of views on environment policy which is expected to include discussion of Commission papers on waste management, clean technologies, guidelines for the assessment of the possible impact on the environment of any proposed building or construction work, and European Conventions on the quality of life.
"The Agriculture Council will meet on the 9th and 10th to continue discussion of the 1979/80 CAP price proposals.
"A Finance (or special Fiscal) Council may meet on the 23rd to resume discussion of interest rate subsidies to be paid to the less prosperous members of the EMS exchange rate mechanism, and may also consider the harmonisation of excise duty on alcoholic beverages and the three draft Directives concerned with VAT."

ANCIENT MONUMENTS AND ARCHAEOLOGICAL AREAS BILL [H.L.]
2.52 p.m.
Bill read 3a with the Amendments.
Clause 42 [Restrictions on use of metal detectors]:
Baroness STEDMAN Baroness STEDMAN moved Amendment No. 1:

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Page 39, line 23, leave out from ("is") to ("situated") in line 24 and insert ("either—
(a) the site of a scheduled monument or of any monument under the ownership or guardianship of the Secretary of State or a local authority by virtue of this Act; or
(b)")
The noble Baroness said: My Lords, with the leave of the House I shall speak to Amendments Nos. 1 to 8 together. The purpose of this group of Amendments is quite simply to remove an unnecessary distinction. As at present drafted the basic offence of using a metal detector without consent applies equally to "protected monuments" (that is to say, scheduled monuments and monuments under the ownership or guardianship of the Secretary of State or a local authority by virtue of the Bill) and to designated areas of archaeological importance; but the secondary offence of removing an object of archaeological or historic interest discovered by using a metal detector applies only to those protected monuments. This apparent anomaly arose from a reluctance on our part to create new offences without clear justification. During the drafting of this Bill we have had increasing evidence that an irresponsible element among metal detector users deliberately ignore their own code of conduct and its instruction not to interfere with archaeological sites.
Just as the scheduling of a monument has attracted treasure hunters in the past so, I fear, will the designation of areas of archaeological importance act as a beacon in the future. These areas are designed to allow archaeological excavation before development and there is a real danger that treasure hunters will descend upon such sites in mid-excavation when finds may be easily located. Indeed this is already a growing hazard in archaeological excavations. My Lords, it is the Government's duty to do what they can to prevent such vandalism and to ensure that archaeological areas do not become a treasure-hunter's paradise. Designation of an area is not, of course, designed primarily to prohibit the hobby of metal-detecting; it is designed to enable the archaeology of important areas to be professionally investigated and recorded. Amateur metal-detecting works directly against this end. The Government have therefore decided that the offence of
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removal of objects by this means should apply in these areas as it will on the sites of protected monuments. I beg to move.
Lord MOWBRAY and STOURTON: My Lords, I should like to thank the Government for having introduced these Amendments. They go a certain way to ameliorating the situation about which we were all rather afraid. We all know that there are dangers, as the noble Baroness has said. I should have liked—possibly she might also, but I cannot speak for her —to see it go further in giving protection from these metal detectors in irresponsible hands. Putting these metal detectors into the hands of some people is like putting a dodgem in the hands of a child on a motorway. I have heard from the noble Baroness at very full length—and I am grateful—as to why the Government feel that it is hard to go further than they have gone. I understand that it is fraught with difficulty of a legal kind. So far as they have gone, I am most grateful.
On Question, Amendment agreed to.
Baroness STEDMAN Baroness STEDMAN moved Amendments Nos. 2 to 8:
Page 39, line 29, leave out from beginning to ("he") and insert ("in a protected place")
Page 39, line 41, leave out from ("detector") to ("in") in line 42 and insert ("in a protected place")
Page 40, line 7, leave out ("either")
Page 40, line 10, leave out from ("interest") to end of line 13.
Page 40, line 14, after ("subsection") insert ("(1) or")
Page 40, line 17, leave out ("the site of a protected monument") and insert ("a protected place")
Page 40, line 19, leave out subsection (8).
The noble Baroness said: My Lords, I beg to move Amendments Nos. 2 to 8 en bloc.
On Question, Amendments agreed to.
An Amendment (privilege) made.
2.57 p.m.
Baroness STEDMAN: My Lords, I beg to move that the Bill do now pass. In doing so, I should like briefly to thank noble Lords for their informed and constructive comments, not only in this House but also in correspondence. I trust that my replies here and my letters have not only clarified much of the thinking behind the provisions but have

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also given reassurance where necessary. I am also gratified by the warm welcome which the House has given to this long-awaited measure.
Past experience indicates that the opportunity for such major legislation about our archaeological heritage comes only about once in a generation. It is therefore probable that this Bill will have to serve as the legislative framework at least until the end of this century. I believe we have produced a measure that will serve that purpose well because it makes adequate provision for preservation or recording in the face of inevitably increasing threats for our heritage without imposing impossible and unreasonable burdens on developers and others. I am very grateful to noble Lords for their help in improving the Bill and in getting it through. I hope it may have an equally safe and speedy passage in another place. I beg to move.
Moved, That the Bill do now pass.— (Baroness Stedman.)
Lord MOWBRAY and STOURTON: My Lords, we have been very lucky in the Government having a Minister in the form of the noble Baroness, Lady Stedman, to move this Bill. She has done it with great tact and ability. There have been many fears from the mineral operators and people in cities, developers, about the effects of this Bill. We are at one with the Government in their intent to preserve what is best of the past for future generations' information. Archaeology is this. We want to preserve ancient monuments intact.
This Bill has consolidated a lot of previous small Bills which have never been effective because they have been so disjointed and people did not know the law sufficiently about any one point. The way the Government have gone about the archaeology areas Bill has been very satisfactory, certainly from the archaeological areas' point of view. I think that the mineral operators ought to be satisfied with the protections and, above all, the assurances that the Minister has given from that Dispatch Box.
There are one or two small matters that have come to my notice since. One or two county councils have expressed worry lest, with the increasing enthusiasm
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for archaeology, small splinter amateur archaeology groups can spring up in areas where there are already well established archaeological groups. Sometimes these small groups are able to go to the noble Baroness's Department of the Environment and collect grants, although not of enormous sums, I agree. One county mentioned that a small splinter group had received a sum of some £30,000 and was being slightly a pain in the neck of the established archaeological group. The one county I am thinking of, in particular, suggested that it might be better if the Department were able to consider with the council concerned and possibly disburse their charity to these bodies, their benevolence, through the local authorities. The latter would have advance information of motor planning or town planning and therefore would be able to channel the funds to areas where they would be more useful to the community because the matter would not have to be dealt with in such a hurry. That is not a big point, but I wish to mention it at this stage so as to bring it to the notice of the Government.
We have been particularly lucky with the Bill, in that all the complainants—be they the farming community, the landowning community, the CBI, mineral owners or mineral workers—have at the end of the day, so far as I am aware, all expressed themselves as satisfied with the way the Government have expressed their intention to proceed and operate the Bill, and to that extent the Government are to be congratulated. The noble Baroness has been the catalyst of the Bill for the Government and I congratulate her sincerely. So far as we can see from these Benches, it should prove a useful measure. If experience shows otherwise, whatever Government may be in power, it can be altered, but I agree with the Minister that this will be the definitive measure for some time to come.
Baroness STEDMAN: My Lords, the noble Lord, Lord Mowbray and Stourton, gave me notice that he would be raising the particular point he has asked about. I have had a short time to make some inquiries about it and I hope I may be able to satisfy him on that point. The body he referred to is the rescue unit which has for many years carried out rescue investigations in Kent. It has its own

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archaeological trust, and it is known as the Kent Archaeological Rescue Unit. The noble Lord is right in saying that the Department provides the bulk of its funds, and £30,000 has been allocated for 1979–80. That covers four projects of which three are in the post-excavation stage.
We certainly do not support splinter groups, and the Kent Archaeological Society is anything but a splinter group. Fortunately, many county councils are taking an increasingly active interest in archaeology. The Department and, I am sure, noble Lords, welcome that. Kent County Council are, we understand, considering the appointment of an archaeological officer, and that too is to be welcomed. We cannot understand why the continued support by the Department of a long-established rescue unit should be a matter of difficulty for the county council at this time. We understand that the unit has applied to Kent County Council for help and we understand too that it has perhaps not disclosed the amount it has received from the Department. If so, the unit has been remiss and we deplore that action on its part. However, there is no secret about our grants. We shall be happy to supply to Kent County Council any details of grants we have given to this organisation or others in their county if they care to approach us.
If the noble Lord has other particular points in mind and will write to me, I will go into them at greater detail. It is clear that this is a matter of administration, not something arising directly from the provisions of the Bill, which I hope may now pass.
On Question, Bill passed, and sent to the Commons.

NURSES, MIDWIVES AND HEALTH VISITORS BILL
3.4 p.m.
Report received.
Clause 1 [Constitution of Central Council]:
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of HEALTH and SOCIAL SECURITY (Lord Wells-Pestell)The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of HEALTH and SOCIAL
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SECURITY (Lord Wells-Pestell) moved Amendment No. 1:
Page 2, line 4, leave out from ("midwives") to end of line 5 and insert ("health visitors or registered medical practitioners, or have such qualification and experience in education").
The noble Lord said: My Lords, with permission, I shall speak at the same time to Amendments Nos. 6 and 7. These Amendments have been brought forward to meet points raised in Committee by the noble Lord, Lord Smith, when he was supported by the noble Baroness, Lady Young. Lord Smith sought to clarify the position of doctors on the new bodies and he wished it to be put beyond doubt that persons with "qualifications and experience in medicine" would be called "registered medical practitioners"; he thought that that would be better phraseology. Lord Smith made the point that there had always been a special relationship between members of the medical profession and nurses, and that doctors had for a long time been referred to as registered medical practitioners. Having looked at the matter, the Government have come to the conclusion that this would be reasonable and as a result the Amendment is introduced. It will necessitate a change in two other places in the Bill, as represented by Amendments Nos. 6 and 7. I believe this will serve to make the position absolutely clear and remove any doubt. I beg to move.
Baroness YOUNG: My Lords, subject to anything the noble Lord, Lord Smith, may say, I wish to point out from these Benches that we are glad the Government have seen fit to bring forward these Amendments. They meet what I felt to be a weakness in the Bill, in that what was meant by "medically qualified" was never either defined in a definition clause or set out in detail in Clause 1. It seemed necessary that the intention behind the Bill—that the council should include such persons as were clearly meant to be registered medical practitioners—should be clearly stated. I do not know whether what is proposed will meet Lord Smith's complete point, because there is still no guarantee that such a person would be put on the council, but at least it shows that where someone is representing the medical profession, that person will be a registered medical practitioner. I feel this is a major

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advance on the Bill as we saw it in Committee and we should be happy to accept the Amendment.
Lord SMITH: I am glad to support the Amendment, my Lords. Until today I had some major anxieties about the Bill and it was apparent when the Bill was discussed in Committee that a number of noble Lords were unhappy too and shared my opinion that there was a flaw, that it should be corrected before the measure was finally passed and that the Bill should give some guidance in relation to what the noble Lord, Lord Briggs, earlier referred to as the key relationship between the medical profession and the nursing profession. In its original form, the Bill did not do so.
In relation to the Central Council, to take an example, the unique help which the medical profession has always given to the nursing profession—it does now and must surely continue to do so in the future—should not be left to the imagination by referring merely to those who,
"have such qualifications and experience in education, medicine or other fields as … will be of value".
That was felt by many to be a somewhat perfunctory reference to medicine, lumping it together, as it were, with anything that might come in handy.
It was not merely that the medical profession was taking umbrage over the fact that its willingness to continue helping the nursing profession should be dismissed in a somewhat cavalier fashion. The medical profession certainly should not seek—and I believe does not seek—any privileged position. As I said to your Lordships on an earlier occasion, to me the only group deserving of privilege is the patients. As the Bill left the position it was possible to comply with the letter of the Bill; to set up, for instance, the Central Council with the Secretary of State's appointments filled by educationalists and those experienced in other fields, without having any doctors at all on the committees. If anyone quarrelled with that, I suppose that under the wording it would have been possible to appoint a couple of vets and to say, "This is veterinary medicine, which is a branch of medicine." Surely it is better that there should be no ambiguity here, and if registered medical practitioners is what is meant, surely the Bill should say so.
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Since the Committee stage I have spoken several times with the noble Lord, Lord Wells-Pestell, and he has been good enough to write to me two long and detailed letters on the matter. I wish to thank him warmly for those letters and to say how much I have appreciated throughout this matter his courtesy, consideration and understanding in relation to the point that I was trying to make. I now believe that any difference between us has disappeared. The suggested change in the wording is not merely a change in description. I believe that it will achieve precisely what I have been trying to achieve. It provides guidance, not dictation. It makes clear that the help that the medical profession should give to the nursing profession is distinct from the links between the nursing profession and other disciplines, and it makes it plain by implication that the preservation of this is important if the changes in the education of the various branches of the nursing profession are to succeed.
Personally I experience no pain whatsoever in withdrawing an earlier suggestion that the way to solve the matter would be for the Bill to lay down in advance the precise number of doctors to serve on the various committees: four here, three there, and so on. After all, it is the quality of the advice, not the volume, that matters. I believe that the co-operative approach and the new suggested Amendment make my own Amendment to Clause 1 unnecessary, and so in supporting the Amendment I wish to point out that if the House decides to pass it, I shall not take up time by moving my own Amendment.
Lord SEGAL: My Lords, it ought to be acknowledged that the Amendment is a great improvement to the original Bill, and I hope that all sides of the House will feel that it is the result of most careful and sympathetic consideration on the part of the Government; and as such we all ought to welcome it. The new wording is so wide that where it refers to having:
"such qualification and experience in education"
it might also be extended to cover even unregistered practitioners, such as osteopaths, chiropractors, and other so-called practitioners. This is a matter on which many of us would have rather severe reservations, and I take it from my noble

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friend that such people as I have mentioned are not totally excluded from the Bill.
Lord WELLS-PESTELL: My Lords, with the leave of the House I wish to point out that at the Committee stage I made it perfectly clear that my right honourable friend the Secretary of State, who will be responsible for nominating people for membership of the Central Council and the boards, has always had every intention of appointing people from the medical profession, now to be referred to in the Bill as "registered medical practitioners". We ought to bear in mind that when the time comes to make the appointments, the Secretary of State (whoever he or she may be) is unlikely to appoint to a body of this kind, people who may not be acceptable to the nurses, midwives, health visitors, and medical profession generally.
On Question, Amendment agreed to.
[Amendment No. 2 not moved.]
Clause 3 [Standing committees of Council]:
3.16 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 4:
Page 3, leave out line 10.
The noble Lord said: My Lords, in moving Amendment No. 4 I wish, with your Lordships' permission, to speak at the same time to Amendment No. 8. As your Lordships will see, the first Amendment is a paving Amendment. The Amendments are intended to meet the commitment I gave during Committee to bring forward Government Amendments, after consultation with the draftsman, to clarify the position of any district nursing committee. Your Lordships will recall that the noble Baroness, Lady Young, introduced Amendments for this purpose in Committee, and I was able to accept them in principle, though I could not accept them as they then stood.
The effect of the present Amendments is to put beyond doubt the problem of district nursing by making it clear that any committee established for district nursing—and Ministers have already promised that there will be such a com-
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mittee—will be a joint committee; that is, one serving both the new Central Council and the national boards. I hope that the noble Baroness, Lady Young, will feel that we have honoured the commitment and that she will accept the Amendments. I beg to move.
Baroness YOUNG: My Lords, once again I am most grateful to the noble Lord, Lord Wells-Pestell—this time for bringing forward the two Amendments. As the noble Lord rightly said, we debated this matter at the Committee stage, when he undertook that if I withdrew my Amendments he would bring forward Amendments on Report. This matter has been of very great concern to district nurses, and I believe that the two Amendments now before us entirely meet their point; and we are most grateful to the noble Lord.
On Question, Amendment agreed to.
Clause 4 [The Midwifery Committee]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 5:
Page 3, line 28, leave out subsection (3) and insert—
("(3) The Council shall assign to the Committee all matters relating to midwifery practice; and the Committee shall—

(a) consider any matter so assigned and report on it to the Council;

(b) where it thinks fit, include in the report recommendations for the making or amendment of rules concerning midwifery practice; and

(c) before reporting to the Council, consult the Midwifery Committee of each of the National Boards.").

The noble Baroness said: My Lords, we are concerned here with yet another matter which we discussed at length at the Committee stage, when the noble Lord, Lord Wells-Pestell, assured me that this was a question about which he felt concerned. I should like to remind your Lordships briefly of the history of the matter. When the Bill was originally published the position of the Midwifery Committee had not been considered, and a provision which came to be known as Clause 4 was inserted in the Bill during the Committee stage in another place. On Report the Government moved an Amendment to delete a subsection of the clause. This has caused great concern to the midwives because they now

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feel that their position under the Bill is weaker than that afforded to the health visitors and, subsequently, to the district nurses. The midwives feel that there should be a sense of parity between the three groups.
I wish to refer your Lordships to the point at issue. We are concerned that under Clause 4(3) the Midwifery Committee has power only either to amend or to revoke the rules referred to in Clause 15, while Clause 8 provides for the health visitors to be consulted on a whole range of other matters. When I raised this matter in Committee the noble Lord, Lord Wells-Pestell, said—and I refer to column 534 of the Official Report of 13th March:
"This is an argument which I think it is on the face of it difficult to resist. I do not think there is need for me to say anything more, and I hope I have given a satisfactory answer …".
Subsequently, the noble Lord has written me a very long letter on this point, for which, I may say, I am very grateful, but, on reading the letter very carefully, I am not at all sure that it meets the point of the midwives. The letter does not discuss their point, which is that they believe their committee is weaker than that of the district nurses. It merely says that it is a constitutional distinction, and that the committee on the midwives is the only one to be consulted, whereas the district nurses and the health visitors, in their turn, have to consult a number of boards before they can make a report to the full council. It seems to me, therefore, that the letter, although making a perfectly valid point, does not really meet the objective of the Amendment that, with my noble friends, I have put down, nor indeed the very real fears of the midwives.
I believe that we ought not to let this Bill go until we have had an opportunity to hear further from the Government on this matter, because I think it would be unfortunate if at this late stage one party to this Bill felt aggrieved that it was being singled out for treatment somewhat inferior to that meted out to the other sections, the nurses and the health visitors. So it is really on the point of principle, rather than on the constitutional point, that I have put this Amendment down again on Report. I beg to move.
Lord WELLS-PESTELL: My Lords, as the noble Baroness, Lady Young, has made perfectly clear, we in Government have given a great deal of consideration to this. As she quite rightly points out, I wrote her a very long letter—longer than I wanted it to be, quite honestly—because I felt it was essential that one covered the situation almost word for word. Since then I have been able to have further discussions with my advisers, and at the same time we have consulted legal draftsmen on this, and what I want to say to your Lordships is this. I am advised, and am almost convinced—not having any great legal knowledge at all, I say "almost convinced"—that the wording in the Bill itself is preferable. Two crucial issues are at stake here: the definition of midwifery practice and the lines of communication between the various midwifery committees. It is important to look very carefully at these two points in order to understand why the original wording of this subsection was modified at a later stage during the Bill's passage through another place; because this clause was first introduced in Committee in another place (where, I think the noble Baroness will agree, they gave it a good deal of consideration) and it was felt that any other wording was much more likely to lead to confusion than the wording in the present Bill.
When one comes to think of midwifery practice, this phrase has quite a distinct meaning. It relates to the definition of those tasks and clinical procedures which a midwife can undertake. It does not—and it is important to realise this—mean midwifery training or education, nor the regulation of the profession. It is, in fact, a fairly narrow field, but one vital to the protection of the public. So the midwifery committee which is going to consider midwifery practice will be considering something which is in itself very clearly defined and very limited. As I say, it is important to realise that it does not mean midwifery training or education, nor the regulation of the profession.
If one looks at what functions the Central Council will have in relation to practice, it becomes clear that these are limited to the making of rules on practice under Clause 15, which sets it out very clearly. Supervision of practice is a matter for the council supervising authorities under Clause 16, and the responsi-

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bility for giving guidance to supervising authorities rests with national boards, as stated in Clause 16(4). Thus, the Central Council's remit in this narrow field is itself narrow. It was therefore thought desirable, in order to avoid any potential misunderstanding and confusion of the remit of the council and boards, to redefine in more accurate terms what it is that the council can assign to its midwifery committee in relation to midwifery practice. As I have already stated, all it can assign are matters relating to making rules. Thus, the wording of the Bill is in substance identical with that of the Amendment as far as the preamble to Clause 4(3) is concerned, with this important difference: that the wording of the Bill is clearer, and eliminates—I say this with great respect—the possibility of confusion. I think everyone, including the noble Baroness, would feel that this is of supreme importance in a Bill.
May I say just a word or two about the lines of communication. I am sorry to take so much time, but I accept what the noble Baroness says: this is an important matter, and we must get it right. This was a point which was discussed in Committee, when it was explained that the present wording of the Bill again represents a clarification of what was originally introduced. It would be quite wrong for a subordinate committee of one body, which is precisely what the council's midwifery committee is, to have a formal relationship with a subordinate committee of another body; namely, the midwifery committees of the national boards, because the Central Council is going to have a widwifery committee and each of the four boards is going to have a midwifery committee. The parent bodies carry the ultimate responsibility for what is done, and must therefore have a general oversight of what their committees are doing; otherwise, there is a danger that their authority will be undermined and that they will not be carrying out their statutory duties responsibly when it comes to formal consultation. It must, therefore, as a matter of good constitutional practice, be conducted between one parent body and another; that is, between the council and the boards.
As I have said, each of the four boards and the council has a midwifery committee; the midwifery committee of each of the boards will report to its respective
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board, and the midwifery committee of the Central Council will report to the Central Council. It is that kind of communication which I think is likely to be considerably upset if your Lordships adopt the Amendment which is before the House. But, as I said to your Lordships in Committee, this does not preclude informal links, and one must look, not only at what is in Clause 4 but also at what is in Clause 7(4), which requires national boards to seek the views of their midwifery committees when consulted on matters relating to the rules of midwifery practice. Thus, there is a channel for the national boards' committees to voice their views; but it is one of more constitutional propriety than that first incorporated into the Bill.
I feel, therefore, that to accept the Amendment would be a retrograde step leading to potential misunderstanding. I am sure that that is something we all want to avoid. I know that some midwifery bodies prefer the earlier wording —but not all of them. I want to suggest to the noble Baroness that she really is not speaking for midwives as a whole. She is certainly not speaking for the midwives in Scotland. I have personally received a letter from them saying that they want the Bill left as it is. That is the view of the midwives in Northern Ireland. The midwives of Wales have not found it necessary to express a view one way or the other.
If this provision is to be changed, then we ought to be absolutely certain that what is being done is being done at the request of the midwives as a whole. I ask the noble Baroness to think about this. I know that she has done so and will do so again, but really she is not speaking for the midwives as a whole. I do not think your Lordships should accept an Amendment unless you could be given that assurance.
3.32 p.m.
Lord HARMAR-NICHOLLS: My Lords, the noble Lord has given what I call a purist, almost legalistic, answer to my noble friend; and I suppose one ought to be purist and legalistic when one is putting legislation on the Statute Book, in order that there shall be no misunderstanding. Nowadays, however, particularly in this field, I do not think that the

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Government ought to ignore the general atmosphere surrounding this matter, the general social conditions and the maintaining of the co-operation of all sections of this great service. I could not help feeling in his very persuasive speech that the noble Lord went a long way towards agreeing with my noble friend. I think there is no question of challenging what it is. He used the word "challenge". I think that what my noble friend would ask him to consider—and it could be done on Third Reading because we can move Amendments in this House at that time —is this. Is there no way of finding words which do not go so far as this Amendment but which reflect the concern that my noble friend has said exists in an important quarter and which the noble Lord himself admitted is there?
The fact of his admitting it was demonstrated by his persuasive suggestion that there will, in any case, be informal contact to do what this Amendment is designed to do. He is recognising the need to have informal contacts, the need for some sort of contact. I should have thought that, if there were some way of introducing into the Bill words which reflect the advance that the noble Lord has made towards my noble friend's Amendment, it would be helpful. I admire his legalistic and purist approach. There is nothing wrong with that; but the wider atmosphere ought to be taken into account. I would ask him, even at this late stage, whether he could not give my noble friend some assurance that he will look at the point again to discover whether some words can be found to be written into the clause which will meet the halfway agreement that seems to have been reached—rather than standing rigidly and using words like "ought not to be challenged".
Lord WYNNE-JONES: My Lords, the noble Lord, Lord Harmar-Nicholls, has just put forward a plea for what seems to me to be the formalisation of the informal. He has suggested that the informal discussions described by my noble friend Lord Wells-Pestell would take place and therefore he asks: "Why not put it, in a formal way, into the Bill?" But it would appear that this really strikes at the heart of all informal discussions. If you have informal dis-
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cussions, then they are much easier and freer than formal discussions. I should have thought, after listening to my noble friend Lord Wells-Pestell, that the argument was rather strong for not having a further step of formal consultation.
The new structure which is proposed here does mean that there will be proper discussion all the way through. It means that when, in the end, the committee makes its proposal to the council, the council is bound to take into account the views of the national boards on which are represented the various midwives' associations. Consequently, one has all the channels of proper consultation. But I should have thought that it was the experience of most of us that the more formal channels we introduce, the more delay occurs and the more difficulties arise—because, somewhere or other, someone who has had already his or her opportunity to make a case will cone up through this new channel and re-make the case and will perhaps be able to delay proceedings still further.
My Lords, after reading the Bill—and I do not claim to be in the slightest degree an expert; but I have taken the trouble to look at the Bill—it seems to me that the Bill provides all methods of sensible communication. In fact, I should have thought that the risk may be that it has already too many channels of communication. To bring in one more channel would merely tend to make the whole proposed machinery very cumbersome—not unworkable; no machinery is ever unworkable unless people refuse to make it work. But the machinery can be troublesome and the introduction of any fresh stage into what is already a fairly complicated procedure would be undesirable.
Baroness YOUNG: My Lords, with the leave of the House, if I may reply to noble Lords who have spoken and, in particular, the noble Lord, Lord Wells-Pestell, I am grateful for that lengthy explanation on this Amendment. On this constitutional point he has made it much clearer that if Clause 4 (which deals with the midwifery committee) is concerned only with midwifery practice, then one can see that the way Clause 4 has been drafted is much clearer than was the original drafting of this clause and which

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my Amendment would put back into the Bill. That I absolutely accept. But what he said to me that is extremely important—and which I accept that I had not fully understood before—was that this clause is concerned only with midwifery practice. I had thought that the midwifery committee was a committee designed to look after midwives and, in particular, their education and their training. But the noble Lord has made it clear that they are not to be consulted about education or training—which, I would remind the House, is, in fact, the purpose of the Bill. It seems to me that we have clarified a point which has not come out before.
On the point about who is satisfied, I accept that some of the midwives are satisfied; and I am very pleased that that should be the case. I am not, at this particular moment, speaking on behalf of all midwives, but I can say that I have had about 30 letters on the subject all of which are from groups of midwives who are dissatisfied with the Bill as it now stands. In view of the fact that there seems to have been certainly a basic misunderstanding about this point, which I believe is a matter of principle, I would be prepared to withdraw my Amendment and to consult further, with the idea of bringing forward (if I thought it necessary and in consultation with my noble friends) a further Amendment at Third Reading. I think it is very important to get this right. What I should like to say to the Government, because I think it is important, is that the real fear of midwives that they are not going to be consulted about their education and training should be met. We ought to have an appropriate way to do this or an assurance that this is going to take place. In those circumstances, I would withdraw this Amendment, seek further consultations and possibly come back with an Amendment at Third Reading.
Amendment, by leave, withdrawn.
3.40 p.m.
Clause 5 [Constitution of National Boards]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 6:
Page 4, line 33, leave out ("or health visitors") and insert ("health visitors or registered medical practitioners").
The noble Lord said: My Lords, I spoke to this Amendment when moving Amendment No. 1. I beg to move.
On Question, Amendment agreed to.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 7:
Page 4, line 35, leave out ("medicine").
The noble Lord said: My Lords, I spoke to this Amendment when moving Amendment No. 1. I beg to move.
On Question, Amendment agreed to.
Clause 8 [Joint committees of Council and Boards]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 8:
Page 7, line 3, at end insert—
("( ) There may in particular be constituted under subsection (4) a joint committee to be concerned with district nursing.").
The noble Lord said: My Lord, Is spoke to this Amendment when moving Amendment No. 4. I beg to move.
On Question, Amendment agreed to.
Clause 10 [The professional register]:
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 9:
Page 8, line 35, leave out subsection (8) and insert—
("(8) Orders under subsection (2) may, by reference to the part or parts in which a person is registered, prescribe the more advanced qualifications which he must have in order to be treated as a qualified nurse for the purposes of any particular enactment or instrument.").
The noble Lord said: My Lords, in moving Amendment No. 9, with your Lordships' permission I should like to speak also to Amendments Nos. 12, 13, 14, 15, 16 and 17. The effect of these Amendments is to remove from the Bill the expression "fully qualified nurse" which gave rise to considerable debate in another place, and to replace it by "qualified nurse", the term which, after full consideration of many alternatives, was adjudged to be the most suitable, and which I gather will not give offence to the nursing profession.
Perhaps I could explain briefly what the problem is, why we need an expression of

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this kind at all, and why the one selected for the Bill as drafted met with such opposition. For certain purposes, for example, the Medicines Act 1968, there are certain functions—in that case the custody of drugs—which can only be carried out by a registered nurse; that is, SRN or equivalent. But once the present Bill becomes law, all nurses, regardless of the type of training that they have had and for what purposes they had that training, will be registered nurses because they will go on a register. We have to find another term which will describe the nurse with the more advanced level of qualification. Under the Bill, as your Lordships know, all nurses, whether they are mental nurses or state registered nurses, all with different types of training at different levels, will become registered. So we can no longer use the term "state registered nurse". It is questionable whether we should have ever have used the word "state", but that is another matter.
The term selected, "fully qualified nurse", was disliked by the nursing profession because the word "fully" carried with it the implication that all other nurses were not fully qualified at their appropriate level. My right honourable friend the Minister of State, anxious to meet the desires of the nursing profession, went to great lengths to find a suitable alternative. It was not easy. Advice was taken and a number of people were consulted. The combined efforts of all concerned have resulted in this alternative being devised, and the references in the Medicines Act and other legislation mentioned in Schedule 7 will be amended from "registered nurses" to "registered and qualified nurse", it being understood that the requisite qualifications will be spelt out in orders to be made under Clause 10(8) of the Bill before your Lordships. I trust that this explanation, although a brief one, will have helped your Lordships to understand the purpose of these Amendments and that the solution will be welcomed, not only in your Lordships' House but also elsewhere. I beg to move.
Baroness YOUNG: My Lords, there was considerable discussion about this particular point in the Committee stage
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in another place and we on this side of the House welcome these Amendments brought forward by the noble Lord, Lord Wells-Pestell. I agree with him, the use of the term "fully" applied before some kind of a qualification is open to doubt; it suggests that some nurses are not properly qualified. The word "fully" is much too loose a term when applied to a qualification. It should not be written into a Bill. Therefore these Amendments make the intention of the Bill much clearer and we are glad to support them.
Lord LEATHERLAND: My Lords, during the Committee stage of this Bill, I raised a point which seems to be germane to this Amendment. I asked what was going to happen first to the description, "state registered nurse" and, secondly, to "state enrolled nurse". It seems to me that the position of the state registered nurse will be fully covered under the new orders that are to be drafted; but what will be the position of the state enrolled nurse? Probably the difference between the two is the same as the difference between a second lieutenant and a company sergeant major. We should like to know whether anything derogatory of the state enrolled nurse is to be applied to her under the new terminology that is to be introduced. What will the state enrolled nurse be known as? She will be known as a registered nurse, as the SRN is known as a registered nurse; but what other qualifications either in brackets or subordinate to the term "registered nurse" will be used?
Lord WELLS-PESTELL: My Lords, one of the main purposes of this Bill is to keep a register of all nurses. Those of your Lordships who are familiar with the Briggs Report will know that it is suggested that all nurses should undergo a basic training, and that should last for 18 months. At the end of 18 months they will have been given sufficient training and competence to enable them to do a certain degree of nursing. "Certain degree" is my phrase, and is not from the Briggs Report. They will then be enabled to register as nurses. Those nurses who want to go on and take further training with a view to getting added skills will be able to do so for up to a further 18 months. Some will want to specialise perhaps in mental nursing; others in different forms of nursing.

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They will then be enabled to be known as a registered mental nurse or something of that kind depending upon which branch of nursing they are in. The basic training will enable persons to become nurses, but whether at the end of the 18 months' period they will be entitled to be known and registered as nurses with these added skills is doubtful. I think I am right in saying that the present state registered nurse, because she is a state registered nurse has undergone training for three years, can handle drugs and administer them under supervision. The state enrolled nurse, who has a training period of only two years, is not permitted to do that. The effect of the recommendations from the Briggs Report is that all nurses will have the basic training and then if they want to specialise in other fields they will be able to do so.
On Question, Amendment agreed to.
Clause 19 [Finances of Council and Boards]:
3.50 p.m.
Baroness ELLIOT of HARWOOD Baroness ELLIOT of HARWOOD moved Amendment No. 10:
Page 13, line 10, at end insert—
("(6) Where duties or functions under this Bill are carried out by a Joint Committee, finances shall be made available by the Central Council and National Board for these purposes.").
The noble Baroness said: My Lords, the purpose of this Amendment is to make clear within the Bill that if duties and functions are to be allocated to a joint committee by the Central Council and national board, these bodies receiving the monies, finance shall be made available to such a committee to enable these functions and duties to be carried out. To illustrate the point, I should like to quote from the Minister of State, Mr. Roland Moyle, speaking in Standing Committee B in the House of Commons on 14th December 1978 about the work of the education and training of health visitors. He said this:
"I endorse every word of my honourable friend the Member for Brent South (Mr. Pavitt) about the work which the Council for the Education and Training of Health Visitors has carried out since it was created in 1962. It has been excellent work and, in fact, when I last met the health visitors I was so impressed by the work done by the staff of the Council that I said I was sure that arrangements could be made to ensure that the staff would move over in a body to the
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health visitors joint standing committee to carry on their good work based on their experience.
"Therefore, I yield to no one in the admiration that I express for the work of the Council for the Education and Training of Health Visitors and in my support for the continued expansion of health visiting. I believe I have done enough to show that it has a very important role to play in the future Health Service".
Those are words of very high praise concerning the training and education of health visitors. Obviously, it will mean a certain amount of expenditure and finance in order to carry on the new system of training of health visitors and indeed the other training work which is required. Without the funds to do that, a joint committee would be virtually unable to function and the National Council for the Education and Training of Health Visitors is rather afraid that this Bill might result in a lowering of standards in the education and training of health visitors, unless it is possible to see that the standards of training are maintained and indeed improved.
It is therefore necessary that there should be some provision to make sure that there can be a continuance of this training, and also of training in other spheres, and that it should be provided by the Central Council and the national board. I hope very much that the noble Lord, Lord Wells-Pestell, will consider this as simply dotting the i's and crossing the t's of what really ought to happen. I hope very much he will feel he can accept this Amendment, which is purely intended to make it quite clear that the training and education of health visitors will be carried out in the best possible way under the Bill. I beg to move.
Baroness VICKERS: My Lords, I should like to support what has been said by the noble Baroness, Lady Elliot, because this is going to entail a great deal more work for the nurses concerned. We are going to have all these committees, which I gather add up to about 80 meetings a year, and a possible attendance could be 563. I gather the average attendance is about 17·29. This is probably going to entail considerable expense to many nurses to get to these meetings. They are very independent people who have always financed themselves up to date, but with all this extra work being added they are rather nervous that they may not be able to carry on

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as they have done in the past, because included in the number of meetings are of course the advisory committees for Northern Ireland, Scotland and Wales.
Furthermore, I gather that many nurses may have to attend the Finance and General Purposes Committee and also the Joint Staff Consultative Committee. As I understand it, the average attendances at these meetings, for health visitors alone, on the figures that I have, is about 15·8 attendances a year. Even if these bodies meet only four times a year, this would increase the demand by 24 and that would give a minimum requirement of 39·8 meetings each year. This is speaking of attendances relating to only 26 members, speaking for health visitors. Therefore, I think it would be very advantageous if we could have some reassurance that if the expenses are very large there would be a possibility of assistance under this Bill. I am not suggesting that we should decide exactly on what they should get on this occasion, but I suggest that there should be some financial aid so that these nurses in various sections could carry out their duties as well as they wish to and as well as has been done in the past. I should like to support this Amendment.
Lord WELLS-PESTELL: My Lords, what is wanted by both noble Baronesses who have just spoken is clearly set out in Clause 19. Where a joint committee carries out a function of either the board or the council, finances for those activities would be given to the committee in question by the council or the board. This is exactly, as I say, what appears in the clause itself. If your Lordships would turn to Clause 19, you will see that it deals with the finances of the council and the boards and sees that they have the resources to carry out their responsibilities. In Clause 19(4) it says this:
The Council shall reimburse the Boards in respect of expenditure incurred by them with the former's approval in so far as that expenditure is not defrayed by fees received by the Boards or funded by the Secretary of State with grants under subsection (3)".
It then goes on to say in subsection (5):
"Any sums required by the Secretary of State for making grants under subsection (3) shall be paid out of money provided by Parliament".
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The fact that the council or a national board decides to assign specific duties to a joint committee, or for that matter to one of their own committees, does not vitiate their ultimate responsibility for seeing that that duty is carried out. They are therefore responsible for ensuring that the committee to which they have assigned a duty has the necessary means to fulfil its obligations; otherwise they would be open to the challenge of not complying with the duties placed on them by statute.
To take a specific example, if a national board assigned to the Health Visiting Joint Committees responsibilities under Clause 6(1)(b) of ensuring that health visiting courses within that country met the standards laid down by the Central Council as to the kind and content of training—something which one would indeed expect to be assigned to a specialist committee—that national board would then have to make sure that the committee had the financial means to carry out its assignment.
One cannot put in any Bill, if I may say so with the greatest respect, words and sentences to cover every kind of expenditure. One would have then to put in about rates, rent, lighting and heating. All this is covered by the responsibility given to the boards in this case to assign certain responsibilities to their sub-committees because each board has a finance committee. The Central Council has a finance committee, and it is their job, when they assign things to other committees, to see that they have the means to carry out what is assigned to them.
I hope this serves to reassure both the noble Baronesses who have put down this Amendment that this is really covered. No mention of joint committees is needed because the processes they have in mind are implicit in the way the Bill is constructed. The parent bodies must finance their own joint committees and, equally, they must finance their share of joint committes. Once the Amendment was put down, I took advice on it, and I am advised by Parliamentary draftsmen that the provisions in the Bill do meet the situation. To add what both noble Baronesses have in mind would be rather superfluous, if I may say so.
Lord LLOYD: My Lords, might I ask one brief question? I am not sure whether it is strictly relevant to this

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Amendment, but I should like to know whether the accounts of this particular QUANGO are open to inspection by the Public Accounts Committee of the House of Commons.
Lord WELLS-PESTELL: My Lords, this is not a QUANGO, and I am sure that the nurses, the midwives and the health visitors would take a very poor view if it went out from your Lordships' House that this was a QUANGO. This is a body which is responsible for registering some of the most important people in the community, and for seeing that they get training and so on. Its accounts will certainly be available to members of the public and, as it will receive money from the Government—I do not know how much, at this stage—it will certainly be accountable for the way it spends that money.
Lord HARMAR-NICHOLLS: My Lords, I was rather interested in the noble Lord's reaction to the word. Is there something disreputable about being a member of a QUANGO? If the midwives would find it objectionable to come under that umbrella term, what about all those eminent people who have been put on the various QUANGOS? We thought that their job was to be applauded. T think that the reaction showed some kind of conscience, such as I should like to see the Government show on other occasions.
Lord WELLS-PESTELL: My Lords, with the leave of your Lordships, I do not think that the noble Lord is in a position to make any comment about my conscience. I reacted as I did, as a result of the way in which his noble friend mentioned the word "QUANGO". I know that it is open to a certain amount of criticism, but it would not be fair to apply it to this Bill.
Baroness YOUNG: My Lords, as I have taken a certain amount of interest in the subject of QUANGOS, may I say that, had I thought that we were establishing a series of them, I am not so sure that I should have been prepared to vote for the Second Reading of this Bill, let alone its continuation. But I should just like to press the noble Lord a little on the Amendment of my noble friends
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Lady Elliot and Lady Vickers. As I understand it, he has argued that it is implicit in Clause 19 that money will be available for the expenses incurred by joint committees set up under this Bill, although Clause 19 does not in any of its subsections refer at all to a joint committee. It is very important that this should be understood, because it does not seem to me that the expenses of a joint committee can be bracketed with things like rents, rates and lights which are administrative matters.
As I understand it, we are referring to the kind of expenses that would, as a rule, be covered by fees—for example, examination expenses and expenses incurred over qualifications, which would include committee meetings—and not the other kind of expenses. It is essential that we should be assured that members of the joint committees will be treated in exactly the same way as members of either the Central Council or the national boards.
Lord WELLS-PESTELL: My Lords, with your Lordships' permission, may I say that I think the noble Baroness is being unduly difficult about this. She knows, as well as I do, that this is a joint committee of the council and the boards. It is set up by both of those bodies with a very definite responsibility, which is laid down. If it is assigned anything by the boards or the Central Council, it has to do what is required of it, and it is obvious that it must have the financial means to do it if money is involved, as it will be.
Baroness ELLIOT of HARWOOD: My Lords, I should like to thank the noble Lord very much for the clear, concise and satisfactory reply which he has given to the Amendment which I put forward. It is important to get down in our report what the noble Lord has said, so that it reassures the many different organisations of the nurses and the professions that they will be covered, because, naturally, it would be very frustrating if they found that they could not meet the expenses. But the noble Lord has given us this assurance. I share his view that this is one of the most important and valuable Bills that we have had before the House for quite a long time, and I am delighted to hear what he has had to say.

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I shall not press the Amendment and I intend to withdraw it, but I am sure that the health visitors and others who read the report of our debate will feel satisfied that their anxieties will be met. I am sure that we all want to thank the noble Lord for the fact that during the passage of this Bill he has been so co-operative, so helpful and so anxious to make this Bill into something not of a political nature, but something which will help the whole nursing profession. My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 24 [Citation, etc.]:
4.6 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL moved Amendment No. 11:
Page 16, line 7, after ("section 21(2)") insert ("and this section").
The noble Lord said: My Lords, this is a technical Amendment which rectifies an earlier omission. It ensures that this clause, which specifies how the various parts of the Act are to be brought into force, is itself operative from the moment when the Bill passes into law. Without it, it would not be possible to implement the different provisions within the Bill. My Lords, I beg to move.
On Question, Amendment agreed to.
In the Schedules:
Schedule 7 [Amendments of enactments]:
Lord WELLS-PESTELL: moved Amendments Nos. 12 to 17 en bloc:
Page 27, line 6, leave out (""fully") and insert (""registered and")
Page 27, line 8, leave out (""fully") and insert (""registered and")
Page 27, line 19, leave out (""fully") and insert (""registered and")
Page 27, line 21, leave out (""fully") and insert (""registered and")
Page 27, line 40, leave out (""fully") and insert (""registered and")
Page 28, line 34, leave out (""fully") and insert (""registered and").
The noble Lord said: My Lords, I spoke to Amendments Nos. 12 to 17 inclusive when I moved Amendment No. 9. With your Lordships' permission, I should like to move Amendments Nos. 12 to 17 en bloc. My Lords, I beg to move.
On Question, Amendments agreed to.
Lord WELLS-PESTELL Lord WELLS-PESTELL: moved Amendment No. 18:
Page 29, line 36, at end insert—
("Interpretation Act 1978 (c. 30)
29A. In Schedule 1 to the Interpretation Act 1978 (words and expressions defined) at the appropriate place in alphabetical order insert—
"Registered" in relation to nurses, midwives and health visitors, means registered in the register maintained by the United Kingdom Central Council for Nursing, Midwifery and Health Visiting by virtue of qualifications in nursing, midwifery or health visiting as the case may be.").
The noble Lord said: My Lords, this is a technical Amendment, which is designed to rectify a previous omission by incorporating into the Interpretation Act 1978 a definition of "registered", in relation to nurses, midwives and health visitors. My Lords, I beg to move.
On Question, Amendment agreed to.

DIRECT LABOUR (MAJOR CONSTRUCTION WORKS) ACCOUNTING BILL [H.L.]
4.8 p.m.
The Earl of KINNOULL: My Lords, I beg to move that this Bill be now read a second time. This Bill has a somewhat formidable title, but it simply concerns the direct labour organisations of local authorities, and is of acute interest to all local councillors and, indeed, ratepayers. It has one prime purpose and aim, which is to meet what is now to many people an urgent need for a more effective control of DLOs, with particular reference to control of their costings, their productivity and their efficiency, and to put on to DLOs, and those who run them, a duty to be competitive and in no way to waste ratepayers' money. I know that that is an opening which the Government will support.
The need for greater control and for legislation has grown more acute, because of what has become almost continual exposure. Although the cases that district auditors bring forward and the number of reports which they make are not numerous, nevertheless there is a continual drip of worrying reports from district auditors about wastages, overspending and a general lack of cost control over the

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DLOs. But, also—and here one speaks personally, as well as for many other people—there is the continual worry of ratepayers. Ratepayers are becoming more and more militant, as indeed I am, about the massive, swingeing rates increases facing us for 1979, and the seemingly powerless control of our elected council members over the financial affairs of councils.
The House will recall that the origin of the direct labour organisations goes back a long way in local government history. I believe that the first direct labour organisation was set up in West Ham in 1893. Today there are approximately 487 direct labour organisations, which operate on an internal funding basis of something like £1,200 million of construction work per year.
These organisations differ enormously in their size and capacity. Some of them undertake major works, such as housing, schools and roads as well as the required maintenance, while others concentrate only on the very important emergency services which are carried out by the direct labour organisations. I was going to cite as an emergency service the gritting of roads, but perhaps that is an unfortunate example. Many direct labour organisations are very efficient units which give an extremely good service to ratepayers and represent very good value for money. There are, however, some direct labour organisations, which the Government and Members of your Lordships' House know about, which cause considerable concern when one reads what the district auditors have said about the way that they run their contracts.
Astonishment is sometimes expressed by councillors, who are the elected members and who are supposed to control the direct labour organisations, about what the district auditors have reported. If one looks at the Greater London Council in 1978 the district auditor reported that no final contracts would ever be produced for 163 contracts, that there was overspending on 36 projects costing £1¼ million and that the present cost of the direct labour organisation department to the Greater London Council was exceeding the value of work by £¼ million per month.
There was a very large housing programme in Glasgow some years ago. I
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do not know what was the original price of the contract, but after £2 million had been spent upon that contract it was abandoned when it was discovered that by the time the contract would have finished—and by that time the contract was already delayed by five years—the cost of a flat would have reached £36,000. In South Tyneside, the district auditor reported that cost control was quite inadequate, that £1 million had been overspent on 21 projects and that labour charges were 2¼ times more than the average. The district auditor could find no trace of some of the bonuses paid for extra works.
In Liverpool, it was discovered in 1977—again, I think, by the district auditor—that the cost of a new house built by the direct labour organisation was about £7,500, whereas a similar competitive estimate from an outside contractor came to £5,300. I hope that those few examples —I am sure that those who are taking part in this debate will have others—illustrate and demonstrate the need for far tighter control of district labour organisations.
May I remind your Lordships that this point was picked up by the Layfield Committee when it reported, that it was highlighted in the CIPFA report—the Chartered Institute of Public Finance and Accountancy—of 1975 and accepted by the present Government as long ago as 1976, at the time of the CIPFA report.
What is the root cause of the lack of control in direct labour organisations, and does it require legislation? I believe that the root cause—I am making no sterile, political point here—is that where direct labour organisations undertake major new works or large maintenance contracts they do not operate or, indeed, think like a trading undertaking. I do not blame them; they are not asked to do so under the present system of accountancy. There is no direct comparison on overhead charges and on capital employed, and there is no vital spur of competition or fear that the department could go bankrupt and be closed down and become non-existent if it continued to show losses. These are not my arguments. They are judgments to be inferred from many of the reports of district auditors, from the CIPFA report and even, indeed, from the Government's working party's report which was published in September 1978.

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Can the direct labour organisations be more effectively controlled within existing statutes, or is there a necessity for legislation? The answer, I believe, is that there can be improvements within the existing statutes but that they would be only marginal. There is an urgent need for legislation. It is now a matter of some priority, particularly for ratepayers. The House will recall that the present guidelines to local authorities on direct labour organisations go back as far as 1969. The Government's circular dealt with competition, trading undertakings, profitability and separate accountancy practice.
Turning to competition, the circular stated that direct labour organisations should be encouraged to tender a proportion of work as a test of efficiency. No recommendations were made regarding trading organisations. On separate accounts, the recommendation was that all costs should be recorded separately, but only in the case of new work.
Perhaps the most important and informed document since that time has been the CIPFA report of 1975. It is upon that report that this Bill is entirely based. On competition, the CIPFA report recommended that tendering should be adopted for the great majority of works and that the definition of what is the minimum that they should put out to tender should be £5,000 on any contract. The report was very firm about trading undertakings: that the direct labour organisations should be treated as trading services and should therefore be able to show a surplus or a deficiency. Indeed, this would give a financial discipline to the direct labour organisations and be of help to the councils, councillors and, indeed, the ratepayers.
What have the Government done since CIPFA? In 1976, the Government promised a Bill, but this was never hatched; anyway, it was never published. The Government then appointed a working party which took 2¾ years to produce what many people believe to be a watered down version of acceptance of the CIPFA report. The Government then announced that as soon as possible they would publish a consultative document, and in 1977 they announced that they would send what was termed, "further advice by circular to local authorities, stressing the
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need within the existing Statutes for careful and accurate accounting, for fair procedures and for a clear comparison with the private sector." I am quoting from col. 1183 of Hansard during the passage of the Local Authorities (Restoration of Works Powers) Bill 1977. The Government also indicated at that time what were their views. Their views were quite clear.
The Government's policy—here I quote from col. 492 of 7th July 1977 when the noble Baroness, Lady Birk, was the Government spokesman—was stated as follows:
"The Government's policy is to encourage efficient direct labour organisations. In this context the Government would have implemented in essence the recommendations in the report of June 1975 by the Chartered Institute of Public Finance and Accountancy. Separate accounts of DLO activities would then have been required. Charges would not have been limited to actual costs as at present, but could be based on original tenders, so that the extent of profits and losses would be known. All appropriate overheads would have had to be taken into account, including a return on capital employed. A local authority would have been under a duty to avoid making a loss, and powers would have been taken to close down activities where an organisation failed consistently to meet the financial objective".
That was the policy of the Government in 1977; but we see now, after four years of the CIPFA report, despite the need, despite the evidence and despite the concern, the Government have still not come forward with a Bill. I hope that the Government will be able to accept the general principles of this Bill this afternoon and will encourage its Second Reading; so perhaps now I may turn briefly to the Bill itself.
The Bill has three prime purposes: first, to organise separate accounts for DLOs, to demonstrate to local authorities, to councils and to ratepayers the true costs and competitive positions of the DLOs. Secondly, to establish that the DLOs could be a trading undertaking with certain limited purposes; and, thirdly, to impose a duty that they should compete for 80 per cent. of the value of new or other works as set out under Clause 10, which clause refers to any contract over £10,000.
Clauses 1 and 2 provide for the establishment of new accountancy systems suitable for a trading undertaking. Clause 3 provides, together with Clause 10, a form of tendering with a duty to tender

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for 80 per cent. of the work. Clause 4 limits the operations of the DLOs as under existing legislation; in other words, we are not trying to widen the powers of the DLOs. Clause 5 and Schedule 1 set out the additional financial requirements to ensure the true cost position for fair competition. Clause 6 and Schedule 2 deal with the tendering procedure, again to ensure the fair comparison with outside tenders. Clauses 7 and 8 and Schedule 3 set out the accountancy procedures. Clause 9 imposes a duty on the Secretary of State within two years of making an order to bring the Schedules to the Act into force and Clause 10 defines what constitutes a major construction work, as I have already said.
I wish to add two things about the Bill. First, it will be seen that under Clause 11 it excludes Scotland and Northern Ireland. In fact this was a mistake on my part and I hope it may be corrected in Committee. There are a number of other possible faults with the Bill as at present drafted. There is no provision as yet for the Secretary of State to require the closure of a Department which consistently makes a loss, and I hope that this may be put into the Bill. Also, in the Explanatory Memorandum to the Bill, under paragraph (c) "the value of new construction work "should read" the value of major construction work", as defined in Clause 10.
I hope that short explanation gives the bones and purposes of the Bill. This is not a political Bill, on a subject which attracts fierce comment from the extremes of many parties. It is a Bill designed to minimise wastage and loss of ratepayers' money, and to encourage greater control and direction of the DLOs. The need has been recognised and it is a Bill which, I would submit to the House, the Government should have introduced many years ago. I hope that the House will give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.— (The Earl of Kinnoull.)
4.25 p.m.
Lord SANDYS: My Lords, we welcome this Bill most warmly and we believe that my noble friend Lord Kinnoull has performed a major public service in bringing this matter to your Lordships' attention. All of us as ratepayers share
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an interest in the Bill. In the first place, I congratulate my noble friend on being so persistent over this important subject. We shared that same interest in a Bill with a long name—and I will quote it: Local Authority (Restoration of Works Powers) Bill 1977. At that time it revealed a situation which was, to say the least, disquieting. Since then it has become much more disquieting and my noble friend has suggested that some of us may make other quotations, so I think it would be appropriate if I were to accept his invitation and mention what has been taking place in Liverpool over the past nine or 10 years.
My first quotation is from the Liverpool Daily Post of 1st May 1969, nearly 10 years ago. At that time the Department was expected to lose £1½ million on work worth about £6½ million. That was the first point which the Liverpool Daily Post brought out. Going on a number of years, to the 20th September 1978–last autumn—the same newspaper, the Liverpool Daily Post, advised its readers that the city architect of Liverpool reported that the Department's—and that of course is the Direct Labour Department—last four major schemes for housing rehabilitation were 19 per cent. above what he regarded as a reasonable price.
Let us take these two facts together. In the first case, the much earlier date of nearly 10 years ago when the Department was losing £1½ million on a £6½ million project, did it not then suggest to that Department that it would be very well worthwhile looking further into the means of accountancy? My Lords, apparently not, because last autumn the city architect considered that the figures were nearly 20 per cent. above a reasonable price. I think that points more than anything else to the need for the elimination of the waste of resources. On this side of the House our party has taken a special interest in this factor, and for that reason alone I believe that my noble friend should be commended for bringing forward this Bill.
One of the principal factors is that the manual drawn up by the Ministry of Housing and Local Government in its working party of July 1969, and recommended in the departmental circular 587/69, is over 10 years old, and of course there are very definite weaknesses in the

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present situation. First, the direct labour departments should win a significant proportion of their work in competition, and for that purpose the Bill quotes 80 per cent. At the present moment there is no compulsion, and I will refer to that again later in my speech: there is no compulsion on direct works departments to tender competitively. The second weakness is that the basis of charging works carried out should be on costs incurred and not on the original tender.
The Comptroller and Auditor General has an interest in this, but he has effectively handed over his interest to the Chartered Institute of Public Finance and Accounting, referred to as CIPFA, and my noble friend has referred to the CIPFA report at some length. So, at the present moment there is no accurate way of assessing whether the ratepayer and the local authority as a whole is getting value for money. The CIPFA working party on direct works undertaking accounting reported on this subject, as my noble friend has said, in 1975, and it said this—and I quote the exact words:
"Competition is the only real means of ensuring that an authority gets genuine value for money from its direct works undertaking".
That comes from Part I, paragraph 7(12). A little further down in the same paragraph they say:
"There is no compulsion on direct works undertakings to tender competitively".
So the basic information which we can adduce from the present situation is that the most effective systems of control should be these. First, all costs attributable to their operations must be recorded in completely separate accounts and the DLOs should be established as separate trading organisations; secondly, effective competition must take place for at least 80 per cent. of the work; thirdly, the value of the work must be certified by independent supervision and inspection; fourthly, it is essential that repairs and maintenance should be the subject of separate accounts.
The Bill's Title refers to major construction works, and this is very important. It does not say "major construction works and maintenance" accounting. So we are to assume that the terms of reference exclude at the present moment the maintenance situation. I think it is
1504
very important indeed to consider Schedules 3 and 4 to the Bill. I think we should turn to these two Schedules, which set out the code of accountancy practice. I hope that in setting forward these two Schedules a form of contract and financial control will be established which will be both workable and practical. It will meet the terms of the CIPFA Report, and it will also mean that local authorities will be able to bring accounts forward in a manner they would find satisfactory.
To sum up, I think one of the most important things of all is that a direct works department at the moment is working under a system which does not place any limits on its operation. I suppose the most discredited argument is that direct labour departments must save money, that councils do not have to pay builders' profit. It is impossible in this present situation for there to be any profit. In fact, the losses are so enormous that they are something of a public scandal in those authorities where they have been mentioned. I have mentioned only one local authority. I could quote many. I suppose it is rather invidious to quote one, because I understand that there are no fewer than 89 local authorities up and down this country employing over 500 on their staff. This must mean a very large number of local authorities who employ less than 500 people. I think it is axiomatic that the Bill when it comes forward will have a substantial number of Amendments, and I wish my noble friend every success in the later stages of the Bill.
4.34 p.m.
Lord HARMAR-NICHOLLS: My Lords, on the basis that silence means consent, I think that the principle behind this Bill is obviously going to be completely acceptable to the House; there is no doubt my noble friend reflects the point of view on these Benches, while the absence of noble friends of the noble Baroness, Lady Stedman, to put criticisms means, I hope, that the general principle behind the Bill is one that we all want. It ought to be like that, because while it has always been important to ensure that value for money is obtained from local authority spending, it has never been more important than it is at this minute when rate increases are going on at an alarming rate and new increases are announced almost every day. It is quite clear that

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councils of all political complexions who have to announce these increases reflect a certain conscience about it.
The work done by councils' own direct labour departments is one area in which local authorities have not been getting value for money, not having the disciplines of having to compete fairly with the free enterprise firms in order to arrive at the best price. There is a terrific amount of evidence to show that because of this lack of discipline costs have been soaring, which is reflected in the extra imposts put on every ratepayer and taxpayer. This wastefulness —because that is what it amounts to—is costing millions of pounds to ratepayers and taxpayers throughout the country, and it is for that reason that I hope that the House will accept the principle behind the Bill, as it looks from the list of speakers as though it will. I am certain that the local authorities themselves will welcome it and will support the initiative taken by my noble friend in presenting this Bill to the House.
My noble friend has explained that the Bill seeks to ensure, among other things, that council building departments keep accounts in a prescribed form so that true costs and competitiveness are demonstrated. I do not see how anybody could object to that. Anybody spending money which is not his own should keep proper accounts that can be easily identified and easily and properly checked. People are rather stupid if they do not do the same thing with their own money, but it is really vital when you are spending taxpayers' and ratepayers' money at a time when there are so many charges.
The second thing that my noble friend includes in his Bill is that the trading undertakings should be for limited purposes. I think that is right. I do not think it right to give an open-ended power to build anything and to maintain. I think the powers given, because of the amount of money involved, should be easily recognisable and prescribed and laid down. Thirdly—and I think this is the most important because at the end of the day it is the most effective check—the Bill seeks to ensure that the DLOs compete for at least 80 per cent. of the value of new construction work they undertake. That is the only way they can test the market. With people all over the country having to dig even deeper into
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their pockets to meet steeply rising rate demands, and with many wondering where the money is to come from to meet these demands, I am happy to note that this Bill is going to go right across political lines. I think that is overdue.
The Bill seeks to provide that at last we do have a comprehensive framework for accounting. Council building in this direct way dates back more than 80 years. Yet there has never been any real attempt to provide a comprehensive system of accounting. We have had several half-hearted efforts to guide local authorities, but we have never had a requirement that they shall fit into a system which would satisfy even the most compliant accountant, to enable him to give a report that he knows where the money has come from, and what has happened to it and whether it has been efficiently looked after. In the last few years the House of Commons Public Accounts Committee—and they are a very good watchdog in these matters — have become increasingly anxious over the accounts of direct labour departments. So I believe my noble friend is right in trying to face up in a proper way to these anxieties which come from such an important and authoritative body as the Public Accounts Committee in the other place.
At present, the accounts which they examine do not enable a local authority to assess the efficiency of the work of its direct labour department. Under the present loose system an authority cannot tell whether it would be better to use direct labour or to ask free enterprise contractors to tender. The reason for that is that the accounts do not produce the right figures at the right time to enable a proper judgment to be made.
Some reference was made to the difficulties which councils encounter. Councillors have no way of knowing at the end of the day as regards a direct labour estimate—although originally it may seem to be lower than a free enterprise contractor's tender—what the real cost has been to the ratepayers, because the figures presented are not comparable. If the work goes to direct labour, councillors will not be in a position, until a long time after the project has been completed, to know the financial outcome, and they will not know whether a better alternative could have been obtained had the project been put out to tender.

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As my noble friend has already said, this is not a matter where we, as individuals, are merely putting forward our point of view or even reflecting a personal prejudice. These are not the views of any individual, or the views of the private building sector alone. Nearly four years ago, a working party of the Chartered Institute of Public Finance and Accountancy which—and I stress this—represents the public sector treasurers (and there is nobody in a better position than they to form a view) declared that the present system of direct labour accounting does not work at all well. The chairman of that working party, Mr. Hopkins, who was Director of Finance at Newham at the time, said:
"from the present form of accounts we cannot discover how the undertaking is performing".
Indeed, I do not think that we need speeches to emphasise that point.
In order to justify the Bill we can find many examples of failure—several have been given—which affect this lack of discipline in the direct labour departments. The most recent one concerned the Newcastle-upon-Tyne direct labour department which on 21st March—only six days ago—announced that a modernisation scheme for 123 houses which had been given to the direct labour department without any competition, was to be taken away from that department. An approach has now been made to five building firms to tender for the project. That is a welcome return to competiton, and I have no doubt that they were stimulated to make that decision because they had found evidence of the concern that we are trying to express today—concern which, to some extent, if not completely, can be overcome if the terms of the Bill of my noble friend are taken into account.
I turn next to the report of the Layfield Committee. I think that one or two views of that committee's wider investigation ought to be on record. On page 7 of its report it said:
"the complaint most forcefully made to us was of a lack of control over expenditure … it was said that local authorities decided first what they intended to spend. Only thereafter did they consider what rates they must levy to meet the bill. This process was not considered to be budgeting in the sense that individuals understood it".
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That is what the Layfield Committee said, and I think that it is almost stating the obvious —once they had recognised the need to be disturbed. The committee went on to say:
"Moreover, it was alleged that once a budget and spending programme had been settled little attempt was made to exercise a continuing financial discipline through the year. The operations of direct labour organisations were singled out as particularly bad examples of a failure to control costs".
Then, on page 95 it said that the problem most relevant to the complaints made to it was:
"how to provide safeguards against inefficiency when an authority is acting within its legal powers".
It was not a question of the authority acting outside its legal powers, but just that the framework within which it had to work—because of the looseness of it all—meant that these wasteful expenditures took place at the cost we know. The Layfield Committee came down very much in favour of a much strengthened central audit system. As the Bill of my noble friend goes some way towards that, I believe that we should accept it.
It is absolutely clear that local authorities, left to their own devices, have not been able to develop effective economic controls for direct labour. The Bill would help them to do that. The basic requirements are that all costs should be accurately and clearly ascertained and recorded that they should be clearly separated from other local authority activities —both the new construction and for maintenance—and that work should be allocated by effective competition for at least 80 per cent. of direct labour work; and that the value of all direct labour work should be established and certified by independent supervision and inspection. That is what everyone does who runs his own business. If he does not do it he will run the risk of becoming bankrupt, or at any rate being put in considerable financial difficulties.
If those requirements are observed in full, with the supporting provisions that exist in the Bill, there would be much less chance of the many failures of direct labour recurring, such as we have seen. I wish to make the point that by tightening up and carrying it out more efficiently it does not necessarily mean that there

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would be a reduction in direct labour. We do not approach this matter—at least I do not—from any ideological standpoint. I am saying that by the very nature of things, the looseness of the direct labour system means that it will be very wasteful. If it can be made efficient and if, at the end of the day, it can be shown that it can compete more effectively with private enterprise contractors, then that is what we want. We want efficiency and good results.
I emphasise the point about it not necessarily meaning that there would be less direct labour. That matter was brought to my attention only the other day by a local councillor who had been canvassing for the local elections. Apparently the situation arose as regards a family which was employed in a direct labour organisation. People had gone to that family and said, "If you support the Tory candidates, they will cut out direct labour and your people will be out of work". That is the type of incident which introduces the prejudice against wanting real efficiency, and it is something that we should try to avoid. Therefore, I emphasise that this tightening up is not designed to end this form of business by local authorities. All we are saying is that if it is to be done, it must be done efficiently and without waste. Clearly the national interest demands that these departments should operate only where, and at a size at which they can demonstrate that they are competitive and efficient. If they do that—and that is the purpose of the Bill—the kind of thing that is happening throughout the country should not happen.
I shall give some examples. In the large City of Manchester the direct labour department would not be able to vest the ownership of all the plant in its maintenance section; it would then recover its overheads for new construction by a charge based only on the actual hours the plant is used at work. That is covering up the real costs. That system can lead to a serious under-recovery of overheads. So, new construction costs are likely to be underestimated, creating a false impression of the department's efficiency. If the department is efficient, if everything is taken into account, if all the council's expenses are being properly recouped, instead of someone shouldering part of the burden to cover up for another, it would
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give a wrong impression. Although it may seem clever to whoever tries to operate that system, at the end of the day it is not right, nor, where it is done, is it in the best interests of the local authorities.
The district auditor was able to pinpoint some shortcomings in maintenance at Manchester. For example, he said that abuses of the bonus system were:
"firmly established and have existed for some years".
Men were able to claim bonus payments for work not done and for hours not worked. If we had the inspection and the supervision laid down in the Bill, those failures would be much less likely. The statement about people claiming bonus payments for hours not worked is rather sad. We know that it applies only in a minority of cases; we know that overall an honest day's work is given. It is not fair to those people that the looseness of the system allows one or two to get through the net and, as a consequence, that sort of charge to be directed against all of them.
I should like to give another example. With this Bill operating it is unlikely that Newcastle-upon-Tyne would have expanded its direct labour department rapidly to 400 men, lost nearly £1 million and then run the department down to a target figure of 70 men. Under a system such as is envisaged in the Bill, that could have been prevented. Wigan would not have been able to award nearly two years' work to its department using overhead rates that did not cover its full costs.
Direct labour addicts are inclined to argue—I hope that the noble Baroness, Lady Stedman, is not one, because she has vast experience in local government, perhaps more experience than most of your Lordships in this Chamber—that they need much less supervision than building firms and that, therefore, they save costs. Experience has shown that in almost every department of every industry supervision is needed in order to make certain that results are achieved. Supervision reduces the cost; it does not increase them.
Those are just a few of the inefficiencies that can be prevented by a proper system of accounting and control, such as is envisaged by the Bill. The points that I

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have made, and which my noble friends have made so far, are what I would call the businessman's points, supported by the accountants. I do not think anyone could say that the terms of the Bill could be more businesslike or sounder in terms of accountancy.
However, we should not be coy. What of the politicians' points? In recent weeks we have suffered from snow and ice and we must recognise that centralised organisations, such as the direct labour organisation, can hold, and have held, the public to ransom. Therefore, on social grounds, we should look at whether it is a good idea to build up the centralised organisations which can have that sort of power. In recent weeks private enterprise has had to be called in; the dustmen have gone on strike, the gritting men have not been working and volunteers have been necessary in the hospitals. However, I think that we are learning a lesson and that lesson is taken very much into account by the Bill.
Therefore, in recommending the Bill to the House—and it will obviously be accepted with acclamation on all sides—on economic, accounting and social grounds it is a must. When it is on the Statute Book we must recognise that in terms of obtaining real efficiency it is only a beginning.
4.55 p.m.
Lord HEWLETT: My Lords, we have heard from my three noble friends that the Bill seeks to establish value for money, fair trading, honest accounting and fair and prompt reporting of direct labour to the council and ratepayers. I believe—as indeed my noble friend Lord Sandys suggested that this House, the country and in particular the tax and ratepayers owe a real debt of gratitude to the noble Earl, Lord Kinnoull, for introducing the Bill.
For far too long many direct works departments have been run as a rather inefficient social service and not at all in a businesslike manner. It is essential—it is long past time—that proper financial disciplines are introduced and enforced. That is precisely the aim of the Bill. I entirely agree with my noble friend Lord Harmar-Nicholls, that this is not a Bill made out of prejudice; it is a Bill desiring
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the best value for money and the best possible establishment of the true facts in fair competition, particularly in local building—whether it be done by free enterprise or by direct labour.
Local authorities carry out a very considerable volume of building work—about three-quarters of all public building organisations' work and nearly 10 per cent. of all construction work. Without the provisions of the Bill being enacted and enforced, I believe that further wastage of money and resources will continue almost unchecked. My noble friend Lord Harmar-Nicholls referred to Manchester. I know that city pretty well. Perhaps I should declare an interest in that my company does not pay rates in it. Until the reorganisation of local government, Manchester's direct works organisation was not subject to district audit. The first district auditor's report in 1976 revealed a terrible situation. As my noble friend said, the bonus system had been abused for a good number of years, so that men were paid for work that had not been done. Excessive issues of stores were made and in many instances the use to which those stores had been put could not be established. Client committees of the council had been severely overcharged. Only internal audits were made in Manchester up to 1974. There is a suggestion that a period of seven years elapsed without a proper audit of this department's work being carried out. Now we are talking in present-day terms of a force of 4,300 manual workers and 1,000 staff presently engaged in £65 million-worth of building work. However, no major capital works were put out to free enterprise tender, not even last year. Therefore, no one can confirm that proper value is being had for all this money being spent.
In 1977–78 the work obtained in competition was probably as little as 2½ per cent. of the total turnover of the department. That just does not bear any sensible reference to what was said earlier about the guidelines given in response to the report made in 1969 in regard to direct works. It was not what was intended when these rules were produced. Department of the Environment Circular No. 57/69 recommended that the DLO should obtain in competition with contractors:

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"a considerable and representative proportion of their work by value".
Frankly, 2½ per cent. this year is trivial. Do noble Lords realise that before these rules were established Manchester's DLO actually went six years without facing any competition whatever for any housing project? The whole thing was handed out on a plate without reference to what the cost to the public might eventually be. That is scandalous. Even recently it obtained work worth £4 million by a margin of less than 1 per cent. on tender. As some of my noble friends have said, the DLO does not have to make a surplus to meet tax, to finance future work or to pay interest on working capital—what we call servicing the money—so clearly it is not truly competitive. It must be using more resources than a contractor would if it can only show a saving of 1 per cent. on the overall cost.
Let me make it clear that I am making no reference of an adverse nature whatever to the new manager of Manchester's direct labour department. Mr. Munday has had a comparatively short time with the department and I hear that his services are very highly thought of. I am talking essentially about the past. We have to talk about the past to establish the case for the need for the Bill, and from what has been said already by all my noble friends this really has been established.
If you think I am just particularising on Manchester, let me refer to Glasgow. A good reason for extending this Bill to Scotland, as the mover has suggested, can be illustrated, not by the report of some Tory body but by the Scottish Development Department's decision in February to decline to approve the award of three projects to Glasgow's direct works department, because the development department decided that the estimated costs were "in excess of relative costs and also well above the general level of prices likely to obtain in the Glasgow area". That is a fair indictment.
These projects, worth some £1¼ million, were said to be necessary for the department's survival. There we strike the nub of the matter. Many a time we are given the reason that the work has to be put out otherwise the department will fold, and that is one of the worst reasons imaginable for putting work out through this channel. I ask your Lordships:
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should a wholly uncompetitive price be paid to keep a DLO in business? Until the next project comes up. This is as long as it lasts, mind you, and then the same story is told all over again. There are far less expensive ways of providing employment even in so high an unemployment area as Glasgow. I share the noble Earl's view and my other noble friend's view that both Scotland and Northern Ireland should be included in the Bill at a later stage.
Support for the grossly inefficient just brings delay and higher tax burdens until the inevitable has to be faced, which I regret to say does sometimes mean the closure of the department. Despite what my noble friend Lord Kinnoull reported in regard to Tyneside, that on one project alone the wage cost was two and a half times the expected level, still that department was given work without any challenge of competition after that disclosure was made. This seems to be perhaps wilful behaviour of an unwelcome type.
Indeed, I have evidence of houses built in South Tyneside by the DLO being one-third higher in cost compared with the free enterprise tenders for that particular area in similar conditions. So surely the case for a Bill to bring proper financial disciplines to DLOs is made by the speeches so far in this debate. What we have said from this side of the House is that we seek to ensure that direct labour organisations of local government keep separate and effective accounts in some common form so that genuine competition can take place with outside contractors. Direct labour organisations really will have to set up their own separate trading undertakings to compete for 80 per cent. of the work carried out. In fact, putting it bluntly they will have to commence fair trading.
The Chartered Institute of Public Finance and Accountancy has pointed out that the present rules do not ensure that there is genuine fair competition. We cannot afford such inefficiencies to continue nor such a growth in the wastage of our resources when, but for North Sea Oil, we should ourselves be in desperate straits on the economic front. I realise that presently DLOs cannot be bound by contracts. They cannot because they are servicing individual departments, client departments, as their own local authority in most instances. Therefore, the liability

1515
for the taxpayer and the ratepayer is quite limitless. If they really do a thoroughly bad job on the financial front, bad luck, we pick up the bill and there is no answerability whatever in contract terms.
There is, to say the least—and other Members of this House have said so—a resentment against the terrifying increase in local government rates. If better protection for the ratepayer is not given we shall be facing the equivalent of a rates revolution. You cannot push our reasonable and generally unexcitable people too far. The lesson of California and taxation should not be lost on us. With this Bill we shall alter for the better one of the unacceptable faces of Socialism. I suggest that long before there is any further talk of extending nationalisation to the building industry, we put right the present frightening situation with respect to direct labour organisations in local government. It is past high time that we did so.
5.7 p.m.
Lord ROCHESTER: My Lords, I ask the House to forgive me if I rise for just a few moments conscious, as I am, of the inconvenience which it occasions the House if too many people who have not put down their names on the speakers' list do just that. Yesterday, as the noble Lord, Lord Jacques, will know, in discussion on another Bill in which we both took part, no fewer than four noble Lords sought to do this, one of them even after Lord Jacques had wound up on behalf of the Government. At least I am not doing that.
I rise because I am conscious that there have been no contributions to the debate from these Benches and in response to something that the noble Lord, Lord Harmar-Nicholls, said when he supposed that the absence of any speaker—save for the noble Baroness—from Benches other than the Conservative Benches meant that this Bill would command general assent. I thought that for my part I should just say, having read the Bill, having heard the explanation from the noble Earl, Lord Kinnoull, as to its general principles and purposes —namely, that direct labour organisations should be required to submit to competition and to conform to certain basic costings and
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accounting procedures in order to operate on a reasonably commercial basis —that those principles do commend themselves to me. I should like, therefore, to offer my general support to this Bill.
5.9 p.m.
Baroness STEDMAN: My Lords, I am grateful to the noble Earl, Lord Kinnoull, for the way in which he has presented his Bill to the House this afternoon. He has identified a subject where there is genuine concern, and where there is a real need for early legislation. It is an area where the Government are already committed to act as soon as circumstances allow, and I therefore welcome this opportunity to discuss the Bill, and to give some indication of our thinking on the important matter of local authority direct labour.
First, let me say right away that there is fundamental agreement between the Government and the noble Lord whose Bill we are discussing so far as its objectives are concerned. The controversy which all too often surrounds the subject of direct labour is and and inconclusive. It is futile to attempt to weigh against each other the charges and countercharges which each side levels against the other alleging alternatively gains and losses to the public purse in particular cases in particular areas, because no one can ever be sure whether the performances of direct labour and of private contractors are being compared on a consistent basis. So this afternoon I propose to concentrate on elements of the problem on which there is agreement; and I believe I can demonstrate that these elements heavily outweigh—both in number and in importance—those few areas where there remain some differences. Moreover, it is all too easy to forget the solid advantages which direct labour organisations can bring to their parent councils, advantages that are solid enough to persuade 456 out of 457 local authorities in England and Wales to set up their own direct labour organisations. The benefits of having a construction capability on hand at all times, of having a workforce skilled and experienced in meeting the special requirements of their statutory functions, and of being able to integrate the provision and maintenance of physical facilities with the planning and development of services for their electorate

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are accompanied by wider benefits to the community at large.
In an industry where conditions of work and employment are often far from satisfactory, and where the hazardous nature of construction operations can demonstrate itself in site accidents, direct labour organisations set an outstanding example of good practice. Many firms in the private sector would do well to examine their own record and compare them with the achievements of the DLOs in giving their workers reasonable terms of employment, in protecting them at work through good safety practices, in looking after them in retirement through good pension schemes and in contributing to the well-being of the industry as a whole through the training they give to their force. Even though the present Bill is not specifically concerned with these wider questions, it is essential in our consideration of it to bear in mind the fundamental nature of the organisations we are discussing.
We have, of course, at the same time to look at the DLOs as a provider of construction services and to ensure that they give value for money. We want to be sure that those local authorities who use their own direct labour get the best possible job done in the most efficient way, and they must be able to demonstrate, to their own ratepayers no less than to central Government, that they are doing so. This means that the performance of every DLO must be kept under continuous scrutiny. Their effectiveness must be regularly and frequently checked by careful comparison with the results that might have been expected from private contractors brought in to do the same work. And their accounting and tendering procedures must be designed and presented to make these checks and comparisons as easy as possible.
The noble Lord's Bill is directed to this objective, and it is an objective we share. He takes as his starting point the report of the Chartered Institute of Public Finance and Accountancy on Direct Labour Accounting, which was published in June 1975, and we agree that that is a useful document to base oneself on. The Government have declared publicly that they accept the broad lines of the recommendations in that document, and our own departmental working party,
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whose report was published in August last year, founded a great deal of their work on it. So we start from the same place, and we are trying to reach the same destination.
Let us look in a little more detail at the Bill: I shall take the Explanatory Memorandum and comment on the intentions outlined there. I have already said we agree with the overall purpose of the Bill to implement the CIPFA Report. However, in some respects we feel the measure before us does not go far enough. The Explanatory Memorandum speaks of "major construction works", which are elsewhere described as "new" works. We believe that more comprehensive proposals are necessary to impose the requirement for more stringent accounting and tendering procedures on, for example, maintenance work as well as new works. Of the three principal means which the memorandum lists as ways of achieving the objectives of CIPFA, we can accept entirely the first—that local authorities must keep proper accounts which show up true costs and enable fair comparisons to be made.
We are also happy to accept in principle the notion underlying the second point—that direct labour organisations should become trading undertakings—though there are certain difficulties here in reconciling the degree of independence a trading body must have with the need to keep the organisation under the firm control of the parent authority. This is a matter on which the Government are committed to consult the interested parties before they present legislation.
The requirement that direct labour organisations should compete for an appropriate proportion of their work embodied in the next point is also entirely acceptable to us in principle. We do, however, have serious doubts about the wisdom of fixing the proportion rigidly at so high a figure as 80 per cent. We think the aim should be to put DLOs as far as possible on an absolutely equal basis with private contractors, and it seems to us most unlikely that any contractor ever finds himself having to compete for so high a proportion of his work. We should like to hear the arguments about this, but we feel it would be best to allow a degree of flexibility so that the proportion of work to be won in

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competition can be adjusted to take account of the great variety of DLOs, of the work they do, and of the extent to which they are able to demonstrate a proven record of efficiency.
It will come as no surprise, at least to the noble Lord, Lord Harmer-Nicholls, that we find ourselves able in principle to accept the intention behind virtually every clause of the Bill. Yet we have a serious quarrel with it. Our objection is not that it goes too far in trying to sharpen up the operations of direct labour organisations and improve their efficiency, but rather that it does not go far enough. It addresses itself, like the excellent CIPFA Report from which it springs, only to the technical accounting and book-keeping arrangements of direct labour organisations. Yet, there are other factors which have a critical impact on efficiency. I refer in particular to the limits on the scope of their operations—that is, the clients they are allowed to work for and the geographical area in which they can work.
Because direct labour has grown up gradually in response to local needs, and has never had a coherent statutory framework for its operations, the limits on its working are haphazard, and without any underlying logic. As a general rule, for example, the direct labour department of one local council cannot do work for another, and cannot in most circumstances work outside the boundaries of its own authority. This means, therefore, to take the most obvious instance, that where a road crosses and recrosses the boundary between two councils, the job of repairing and maintaining it cannot be given to one DLO, as common sense might suppose was the most efficient solution; the two must have a go at it.
There are no such restrictions on the operations of private contractors, who can accept work anywhere in the country or indeed overseas. This freedom enables them to make the most efficient use of their resources and to avoid so far as possible unproductive idleness. Since we are agreed that the objective of this legislation is to ensure that DLOs and private contractors are put as far as possible on an equal footing, it seems to the Government essential that these other factors which unbalance the comparison between
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the two ways of doing things should be looked at closely, and adjusted as necessary.
We do not believe that all restrictions on DLO operations should be lifted at this stage. We think they should still be tied to working only in the public sector, save perhaps in certain exceptional circumstances, such as for example where a private owner in a housing action area wishes to employ local authority workmen to do repairs to his property or where a person has bought a municipally-owned dwelling. We also consider that DLOs should not be allowed to extend the area of their operations beyond fairly tightly defined geographical zones. However, we are satisfied that some relaxations will have to be made simply to allow management to take sensible decisions about the economic use of resources.
Beyond this, I have to say that, admirable though the intention is behind the clauses in the Bill, our lawyers advise that if it were enacted it would fail to achieve its purpose. They have detected what they believe to be a fundamental flaw whose correction would take us beyond amending the language of the Bill into its complete restructing. The flaw is, in essence, that the Bill is based on the assumption that a direct labour organisation has its own legal existence and that its existence is separate from that of the parent local authority. This is not the case.
Many noble Lords have referred to various items relating to particular authorities and to the district auditor's powers. The district auditor is an independent person whose reports are made to the elected members of local authorities. The Department is sent copies of those reports, but they are sent to us for information only. It is the responsibility of the council concerned to take whatever action is necessary if an adverse report is made. We find that the unfavourable publicity that such a report invariably attracts is usually enough to ensure that something is done. In the extremely rare event of an audit uncovering unlawful expenditure or revealing a wilful failure to account for money spent, it is the auditor who would take the council to court; it has nothing to do with the Department.
Lord HARMAR-NICHOLLS: My Lords, may I ask the noble Baroness a

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question. I do not understand the legal advice that the direct labour department is not an entity within itself. If, as is usual, the committee concerned is given executive powers by the council, the department would be an entity within itself, and if there is any wrongdoing, the members of the committee can be surcharged. Thus the department is a separate entity from the local authority. If that is the noble Baroness's only reason for not wanting to base improvements on the Bill, I should like to hear a little more about the matter before I accept entirely what has been said.
Baroness STEDMAN: My Lords, we have to accept what our legal advisers say, and they advise us that complete restructuring of the Bill would be needed. That is not beyond us; we did that to a minor Bill a few weeks ago, when we were discussing wild creatures and wild plants. We virtually re-wrote that Bill on the Floor of the House. However, that is not a task that I should like to suggest to any noble Lord, but we are advised that that is what would be needed for this Bill if it is to have the necessary legal backing.
So far as the district auditor is concerned, the number of adverse reports on the DLOs has consistently been very low in relation to the number of authorities involved. The most common subject of criticism from the district auditor has been the control of the operatives' bonus schemes, and we know of no recent case where an authority has been taken to court for irregularity in the running of its DLO.
The noble Lord, Lord Sandys, suggested that this was a field in which the Comptroller and Auditor General might appear. However, that official has no locus whatsoever in relation to local authorities. He acts on behalf of Parliament in respect of Government expenditure, while the district auditor acts in the way I have already outlined, in relation to local authorities.
The noble Lord, Lord Hewlett, referred to the amount of work done by the direct labour organisations. I have before me figures showing DLO work as a proportion of all the construction output, including new work, improvement, and repair and maintenance. In 1975, the DLOs undertook 11.3 per cent. of the work. In
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1976 the proportion was 11.8 per cent., in 1977 it was 12.1 per cent., and in 1978, 11.6 per cent. So the figure varies between 11 and 12 per cent. With regard to the total in the public sector, the figures for 1978 are not yet available, but in 1975 the DLOs undertook 21.2 per cent. of the work; in 1976 it was 20.8 per cent. and in 1977 21.1 per cent. There is some degree of consistency in those figures, too. In 1975 17 per cent. of DLO work was new work; in 1976 it was 19 per cent.; and in 1977 17 per cent. In the public sector the DLOs account for only 6 per cent. of all the new work and approximately 50 per cent. of the repair and maintenance work, and this includes the improvement work now going on in housing action areas and so on.
The noble Lord, Lord Sandys, and the noble Earl, Lord Kinnoull, referred to the comments in the CIPFA report which made obvious the difficulty of making general judgments about over-spending and under-spending of estimates. Paragraph 7.4 of the report points out that in a typical sample of a dozen contracts the results may range from an under-spending of 10 per cent. to an over-spending of 10 per cent. This wide diversity in out-turn seems to be inseparable from building operations and is affected by the philosophy commonly held in the building industry; namely, that in any half-dozen contracts, one contract can be expected to show a useful profit, one will probably show a loss, and the remainder will show small profits, or will just about break even. The report also states in the following paragraph (paragraph 7.5) that because of the tendency towards unevenness in results, it is important that the performance of the undertaking should be judged on the results not of a single contract, but of a number sufficient to give a fair picture, and that ordinarily this will entail a review over a long period of five, seven, or even 10 years. So it is not a matter that we are able to judge on only one year's performance.
The noble Lord, Lord Harmar-Nicholls, and other noble Lords asked what would be the possible effect upon the rates, and wondered why we cannot tell exactly what the effect is. It is not possible to trace any direct connection between rate levels and the use of direct labour. The

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rate demands contain very many variables, as the noble Lord knows very well, but the CIPFA Report, in paragraph 7.14, suggests that because DLO prices do not include any allowance for profit, they should normally be between 2 and 6 per cent. lower than those of contractors. The working party report, which started on the basis of the CIPFA Report, gives details of an exercise which was carried out by the GLC's treasurer on contracts in force with its authority in 1975 and 1976. That shows that if housing maintenance work done by the DLO was given to contractors at the lowest tender rate, the GLC would have to find an extra £8 million a year, and these savings can be expected ultimately to show up in the lower rate bills. So there are some consequences of a better nature.
It would be a very difficult and hazardous step to provide that a direct labour organisation should have its own legal existence. Therefore it follows that all the main clauses of the Bill, which presuppose a contractual relationship between the DLOs and the local authorities, are ineffective. I am afraid that you cannot make a contract with yourself. For example, Clause 6 of the Bill speaks of an authority "employing" a DLO. Schedule 2, paragraph 1, says that the DLOs
"shall observe all … contractual obligations applicable to other contractors".
There are many other pieces' of defective drafting in the Bill, apart from the underlying legal ruling which we have had. For example, I am advised that the expression in Clause 4
"permitted to operate as a trading undertaking"
has no meaning in law. There is no getting over the basic flaw without starting again from scratch.
Therefore, on behalf of those of us on the Government Benches I have to advise the House that the present Bill should not be proceeded with at this time, though I know that the noble Earl, Lord Kinnoull, is anxious that we should proceed to the Committee stage. However, I am able to give noble Lords the firmest assurances that the Government intend to introduce as soon as they can their own legislation on the subject. It will include provisions identical in intention and similar in spirit to virtually
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all those contained in the Bill now before us. We shall ensure that local authorities run their direct labour departments as efficiently as possible. We shall require authorities to keep, and to publish regularly, accounts in a form which brings out clearly the true costs involved. We shall require councils to test their direct labour departments by exposing them to competition from private contractors, and we shall ensure that when they do so the competition is on a basis of fairness and equality.
We are confident that a measure of the kind that I have outlined will mean that local authorities will get value for money on their building operations and that the elected members, the ratepayers, the construction industry, and indeed central Government, will be able to satisfy themselves easily that this is so. We agree with the principles behind the present Bill, but as I have said, it contains considerable defective drafting, and we believe that in the circumstances it does not go far enough.
5.30 p.m.
The Earl of KINNOULL: My Lords, I should like briefly to thank all my noble friends for their support of the principles of this Bill; and, indeed, the noble Lord from the Liberal Benches. I must say I am a little disappointed with the noble Baroness's final remarks because, having listened to every speech which has been made, each of which was in support of the Bill, she then proceeded to give us a Government view which was encouraging right up to the very last moment. I should like to recommend to the House that we proceed with this Bill on the grounds that when we get to the Committee stage—and I hope we shall, although I recognise that time is short and that the Sword of Damocles is hanging over the Government, with that fragile thread between their existence or otherwise—we can look at the defective clauses and can usefully examine the principles which the noble Baroness has just set out. I would therefore ask your Lordships to give this Bill its Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SHOPS (SUNDAY TRADING) BILL [H.L.]
5.31 p.m.
Lord PONSONBY of SHULBREDE: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Ponsonby of Shulbrede.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord Alport in the Chair.]
Clause 1 [General exception from Sunday closing]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord SAINSBURY: I beg to move the first starred Amendment standing in the names of the noble Viscount, Lord Ingleby, the noble Lords, Lord Blease and Lord Robertson of Oakridge, and myself; and, with the permission of your Lordships, I should like to speak to a number of related Amendments. At the Second Reading of this Bill the House was very sparsely attended, and only 32 noble Lords went into the Division Lobbies.
Lord PONSONBY of SHULBREDE: Thirty-three.
Lord SAINSBURY: I will not argue about one. It was therefore not a great success for its promoters nor a disaster for its opponents. The series of Amendments which we propose seeks a compromise solution. There are, in addition to the first starred Amendment, Amendment No. 1, the second starred Amendment and Amendments Nos. 5, 7, 8, 9, 10 and 11. The first Amendment is the unnumbered one on the Marshalled List, which should be considered with the unnumbered starred Amendment on the second page and Amendment No. 11. These Amendments seek to remove Clause 1, and therefore Schedule 1 to the Bill, and thus restore the status quo in so far as Sunday trading in items listed in Schedule 5 to the Shops Act 1950 is concerned. Thus, shops may continue
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to sell those items—such as milk, fresh vegetables, medicines, tobacco and the others listed in Schedule 5—which it is lawful to sell at the moment.
However, Amendment No. 7 would widen the range of additional items which local authorities may by order permit to be sold on Sundays. In this way, the general restrictions on Sunday trading will remain, with the exceptions listed in Schedule 5, but it will be possible, by local action, to extend Sunday trading for particular ranges of items. The new Schedule 2 to the Bill as amended would be much more extensive than Schedules 6 and 7 to the principal Act, which it would replace. Deletion of subsections (2) and (3) of Clause 2 of the Bill by Amendment No. 1 on the Marshalled List means that Section 52 of the principal Act will remain unchanged; and, therefore, a local authority would make an order only after ascertaining by poll that a two-thirds majority of the shops or classes of shops to be affected by the order approve the order being made. We think it is important to retain the status quo in this respect in view of the very great number of additional types of goods for which exemption orders may be made.
Amendments Nos. 8 to 10 would leave Section 22(5) and Sections 60 to 65 in the principal Act. This would retain the exclusion of butchers' meat—"butchers' meat" means fresh, chilled, frozen or salted beef, mutton, veal, lamb or pork, and their offals—from the list of foods to be permitted to be sold under local authority order. This is not only because of the hostile attitude of the trade to Sunday opening, but also in relation to the number of people who could possibly be employed; and, thirdly, because it is hard to believe that any but a very small minority of people would want to buy their Sunday joint on a Sunday morning. The sale of kosher meat, under the provision of Section 62 of the principal Act, will of course continue to be permitted. This would also leave Section 56(1)(c) of the Act, which is a quaint provision relating to the cooking of customers' food. We believe these Amendments continue to protect the majority of shop employees from Sunday working, but do not totally obstruct the way to extending Sunday trading in areas where there is sufficient demand. We therefore commend them to your Lordships.
Viscount INGLEBY: In supporting these Amendments I should like to stress again—it seemed rather complicated, although I thought the noble Lord, Lord Sainsbury, explained it most clearly—that the effect would be that the extensions to Sunday trading proposed by the noble Lord, Lord Ponsonby, would be subject to the control of the local authority, which, in turn, before it could make an order, would have to have a two-thirds majority vote of the local shopkeepers. This is a very sensitive area, and we feel that local feelings should be consulted.
Indeed, I, myself, would like to see a referendum conducted among the people who would have to work on Sundays if this Bill was passed. This Amendment would not propose a total ban, as the noble Lord has said, on extensions to Sunday trading but it would limit it to areas where there is strong local support. We hope, as he said, that this Amendment would continue to protect the majority of shop employees from Sunday working.
Lord BLEASE: I welcome the opportunity to join with my noble friend Lord Sainsbury and other noble Lords who support the Amendment standing in our names. Since it is the first time I have spoken in connection with this Bill, I should like to make it known that I am a member of the Union of Shop, Distributive and Allied Workers. I have no pecuniary interest other than as simply a paying member of that union. I have been employed in the shop trade and in the retail business for a number of years, and here I am putting forward personal viewpoints, of course, with the interest of shop workers very much in mind. In my view, the principal Act, the Shops Act 1950, is in need of review. The present legislation is unsatisfactory, complicated and gives rise to many anomalies. The Bill does little to remedy or rectify the position. In my view, as it stands, the Bill would create further complications and greater problems and would take away an important aspect of the quality of life of many citizens of the United Kingdom. I realise that this Bill is largely designed to meet the situation in England and Wales, but it does exclude Northern Ireland and Scotland; although I still have doubts about the reference to Scotland and perhaps we could deal with that matter later.
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However, my participation is really because, from my experience, legislation of this kind has a tendency to start off in England and Wales and then goes on to apply to other places in the United Kingdom at a later stage. I want to say that Part IV of the 1950 Shops Act dealing with Sunday trading is the most important part of that Act. It has 20 sections, more than any other Part of the Act, and is designed to make general provisions for Sunday trading. The measures were intended to keep under review by local government and parliamentary control the excesses and abuses of Sunday trading.
I think that this Bill seeks to undermine and take away the spirit of that main Part IV of the Shops Act 1950. It opens wide the door to major extensions in Sunday trading. In my view, the Amendments tabled by the noble Lord, Lord Sainsbury, redress and help to bring under some sort of rational control the social and economic problems that the Bill as it stands gives rise to and would impose. I support the Amendment in this general way. It tackles the Bill at the outset. At a later stage we can deal with the consequences and implications on the Schedules and other parts of the Bill caused by the deletion of Clause 1. I support this Amendment.
Lord LYELL: I have listened carefully to the Amendments proposed by the noble Lord, Lord Sainsbury, the noble Viscount, Lord Ingleby, and the noble Lord, Lord Blease. But I would admit to a great deal of confusion and I would also say that, having looked at these Amendments, I am not much further on than I was when I first looked at the Bill when we discussed it at Second Reading. I listened to what the noble Lord, Lord Sainsbury, said, and many of us take his point. But I believe—and I think it is the view of many of us on these Benches—that we do not want to force any persons in any particular sector of trade to work on Sundays where there is an overwhelming desire to have that day free. One of my noble colleagues listened carefully to the noble Lord, Lord Sainsbury, defining butchers' meat. My colleague asked: "What about poultry meat?" I have not heard poultry meat discussed or defined at this or the earlier stage.
A noble Lord: It is not butchers' meat.
Lord LYELL: I heard a noble Lord say it is not butchers' meat; but whenever I buy poultry I buy it in the butcher's shop if not in a supermarket or elsewhere. But I am interested and I have not had any explanation from any of the three noble Lords who have put their names to the Amendment why they wish to remove Schedule 1 from the Bill. When I look at Schedule 1, under head (f)I find:
"newspapers, periodicals, magazines, books …"
The noble Lord, Lord Blease, pointed out that this particular Bill does not extend to Scotland or to Northern Ireland. Noble Lords may know I come from Scotland; yet in all my lifetime we have never had any bother about getting newspapers and periodicals et cetera as described at head (f).
I think we might consider the reality of Sunday trading from the consumer viewpoint. I do not speak as a member of any consumers' association. It certainly makes no sense at all in my mind; and I would suggest that it would not make a lot of sense in the minds of the public or, least of all, to the assistants in such establishments, shops or other places or localities where trading in the items mentioned in Schedule 1(1)(f) to the Bill is carried on. A person serving and selling such Sunday newspapers may be in a garage filling station; and, in many cases, certainly in Scotland (and, so far as I can discover, in England and Wales) such newspapers may be sold on a street corner but very often in a shop, a tobacconist's or newsagent's shop or a general shop. When I spend a weekend in London, the shop where I buy my newspapers sells not just newspapers, but is able to sell everything else which is on the shelves. Would I be right in thinking that the movers of this Amendment are of the opinion that shop staff should be able to sell only newspapers or one or two things which are in that shop, and not others, and that they should have to go round on Friday night putting up brown paper so that we cannot see the items they cannot sell on Sundays, or if we can see them, they would have to say, "No, you cannot buy that. It is against the law"?
I suggest that such anomalies have brought the Shops Act 1950 into disrepute and I believe they bring the law in general into disrepute. At the Second Reading debate we discussed how the 1950 Act
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goes back to 1677. Having listened to the Amendments proposed, I am not much further on from 1677. I will give way to the noble Lord, Lord Sainsbury.
Lord SAINSBURY: I think the noble Lord should read the last three lines in Amendment No. 7:
"*…in so far as such sales or transactions are not included amongst the sales or transactions mentioned in the Fifth Schedule to the principal Act.".
I say this without discourtesy: Unless one studies the main Bill, the Amendments are very hard to understand. The point is that anything—newspapers or anything that is permitted under the main Act—remains, as now, permitted to be sold.
Lord LYELL: I accept what the noble Lord says regarding the last three lines; but, first, can he tell me what points in my argument fall foul of Schedule 5 to the principal Act? Secondly, if what he says is true, why did he and his fellow movers of the Amendment need to remove Schedule 1 to Schedule 2, which, so far as I understand it, allows sales to take place, but only with the approval of the local authority?
Lord MONSON: I hope that the noble Lord, Lord Ponsonby of Shulbrede, will resist this series of Amendments. The noble Lord, Lord Sainsbury, claimed that the Second Reading was not a great success for those of us who approve and support the principles of this Bill. May I remind him that the Division took place late in the evening and that the majority in favour of the Bill was two to one. I do not believe that anybody nowadays can be compelled to work on Sundays if they do not wish to do so. I would guess that the majority of those who find themselves working in shops on Sundays, if this Bill becomes law, will be part-timers and will be paid Sunday rates. If not part-timers, they might well be Asians or others who come from societies where Sunday is not the traditional day of worship or rest. I hope that the noble Lord, Lord Ponsonby, will stick to his guns on this issue.
Lord LLOYD of KILGERRAN: May I briefly support the Amendment so ably and lucidly put forward by the noble Lord, Lord Sainsbury. Obviously this

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is a very sensitive area. So far as I understand the noble Lord, in a particular area local opinion would be obtained about the sale of specific items. It is a very sensitive area, and I agree with the noble Lord who has just sat down that no employee should be forced to work on Sunday. There are a wide variety of people who would welcome this kind of reasonable Amendment to this Bill to enable a certain amount of trading on Sundays.
We from Wales have had a wealth of experience of trading on Sundays or regulated trading on Sundays so far as specific goods are concerned. Alcohol of all kinds was not allowed to be sold in an orthodox way on Sundays, but the local communities in the various areas were consulted, and although some areas differ in their views, there is local trading now regulated in so far as alcohol is concerned. Provided that the noble Lord can give me the assurance that there will be adequate consultation in the local areas, I support the Amendments that he has put forward.
Baroness PHILLIPS: The noble Lord made the point about consulting in local areas. He will recall—and he is probably talking about whether these districts should be "dry" —it was a slight difference to these Amendments because the whole of the population were consulted. In these Amendments, it would merely be the shopkeepers who would be consulted and presumably not the customers. I have listened to my noble friend Lord Ingleby, and I understand the reservations that my noble friend Lord Sainsbury has from the point of view of the workers, and other Peers may have these views.
However, I suspect that my noble friend speaks from the religious angle. What concerns me is that so far as I can recall no one in either House of Parliament has ever raised their voice about the fact that many shops are now open on Good Friday. To me as a Catholic from the religious standpoint that is a far greater affront than that any shop should be permitted to be opened on a Sunday. There is an element of hypocrisy, that we are now asked to believe that Sunday is put in a different category; but that always was a holy day and we are still a Christian community. One can buy any-
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thing now on Good Friday including this very wicked butcher's meat. I am not quite clear why that is so much worse than buying a newspaper. Perhaps a noble Lord who is moving these Amendments can explain it to me. I am sorry to say that there is an element of what I can only call dichotomy of thinking about this which I should like explained more fully.
5.54 p.m.
Lord PONSONBY of SHULBREDE: This series of Amendments to which Lord Sainsbury has spoken are ingenious and are trying to get over a particular problem. Noble Lords who looked at earlier Amendments submitted by the noble Lord, Lord Sainsbury, and the noble Lord, Lord Blease, would have seen that the Amendments were differently framed and everything was automatically transferred to the category of local authority order, whereas the Amendment, as now phrased, effectively only transfers to local authority order those items which are not covered under the existing Act; that is, the proposals now are that there should be local authority orders and consultations in so far as additional items are to be sold on a Sunday which were not previously allowed under the Act. For example, take the case which the noble Lord, Lord Lyell, mentioned: under the present Act, the sale of paperback books in a newsagent's shop on a Sunday is prohibited. The Schedule now includes that matter and, presumably, under Lord Sainsbury's Amendment there would have to be a referendum of newsagents to see whether they wish to sell paperback books on a Sunday. That, as I see it, is the effect of this new Amendment which has been tabled by the noble Lord, Lord Sainsbury. In speaking to Clause 1, he has covered the whole field of his Amendment. I do not intend to deal with some of the aspects that he raised, such as the question of the percentages of shops to be polled, because that can be more concisely debated under the particular Amendment concerned.
My worry about these Amendments is whether they will result in even more confusion than there is at the present time. I want to build into the Bill a requirement on local authorities to take action in the form of canvassing local shopkeepers, or when they were asked by local shopkeepers to canvass, in order that a number

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of the matters raised in the Schedule could be resolved fairly quickly. Otherwise there would be very great confusion from area to area as to what could be done. On the whole, I think this is the most ingenious Amendment which has been tabled to the Bill. I am not an absolute authority on the procedure of this House, but I hope that the noble Lord does not press the Amendment because there are a number of different Amendments to Schedule 1 which could not be discussed by the House if this first Amendment is pressed. Therefore, I hope that if the noble Lord wishes to press the matter to a Division, he will do so under the Amendment to leave out the Schedule, so that we may at least get the feeling of the Committee concerning the question of the flowers, garden plants, caravans and accessories, which are other items covered by Amendments to be moved by noble Lords.
6 p.m.
Lord ROCHESTER: Like other Members of the Committee, I find myself in some difficulty in understanding where the pressure is coming from to alter the status quo. I see that there is an evident conflict of opinion within the Committee as to how far, if at all, the public—that is the general consumer—will benefit from any change. But it seems to me that the group of people whose views, perhaps more than any others, deserve to be considered are those employed in shops who stand most to be affected by the Bill. My understanding is gained more, I suppose, from reading the Official Report of the Second Reading debate on this Bill, which unfortunately I was not able to attend, and from the remarks of people such as the noble Lord, Lord Sainsbury, with all his experience of the retail trade, and the noble Lord, Lord Allen of Fallowfield—so many members of the union of which he is general secretary will be much affected. And my understanding is that that very important category of people do not want to see this change and, on the basis of the debate as it has proceeded so far in Committee, I feel inclined to support the Amendment proposed by the noble Lord, Lord Sainsbury.
The MINISTER of STATE, HOME OFFICE (Lord Boston of Faversham): The Amendment we have before us moved by my noble friend Lord Sainsbury
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on behalf of himself and others, has been presented in a fairly comprehensive fashion. Indeed, in moving it he referred to the series of interrelated Amendments, and so it might be helpful if I were, if only briefly, to summarise the arguments on each side, as the Government see them. The question that we have to consider here is whether the transactions which are set out in Amendment No. 7 should be permitted on Sundays throughout England and Wales or only in those areas where the local authority has made an order under Clause 2 of the Bill allowing such transactions. If the Amendments were carried, then the only transactions permitted on Sundays without an order made by the local authority would be those already permitted by the present law, that is, by Schedule 5 to the Shops Act 1950: for example, the sale of "meals or refreshments", sweets and other confectionery, tobacco, and newspapers. The sale of other commodities, such as toilet requisites and films, would remain unlawful, except in so far as any of them was specifically authorised in any particular area by an order made by the local authority with the approval of a specified proportion of the shopkeepers affected.
Since these Amendments deal solely with items which cannot now be lawfully sold on a Sunday, I am content to leave entirely to your Lordships' judgment the question whether such items should appear in Schedule 1 or in Schedule 2. If your Lordships decide in favour of the latter course—that is, in favour of making any change in the existing law entirely a matter of local option—then I should remind the Committee that you will be preserving Schedule 5 to the Shops Act 1950, with all its obscurities, as a statement of the commodities which may lawfully be sold on Sundays throughout England and Wales. My noble friend Lord Ponsonby of Shulbrede and I, and perhaps other noble Lords, drew your Lordships' attention on Second Reading to some of the anomalies and ambiguities which had arisen over the interpretation of that Schedule, particularly as regards what constitutes "meals or refreshments". I think it is also fair to say that these Amendments import a similar degree of obscurity into the Bill itself, in that Amendment No. 7 adds a long list of items to Schedule 2 but then, in the last few lines, subtracts those which are

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already covered by Schedule 5 to the 1950 Act. But we are concerned here with more than questions of drafting, and I would, if I may, leave it to your Lordships to decide whether there is a case for extending the list of articles which one can buy on Sunday anywhere in the country—broadly as the Crathorne Committee recommended—or whether any such extension must be a matter for the exercise of local discretion by local authorities.
Clause 1 agreed to.
[Amendment No. 1 not moved.]
Clause 2 agreed to.
Remaining clauses agreed to.
Schedule 1 [Transactions for which shops may be open on Sunday]:
6.7 p.m.
Lord ALLEN of FALLOWFIELD Lord ALLEN of FALLOWFIELD moved Amendment No. 2:
Page 4, leave out lines 5 and 6 and insert—
("(a) intoxicating liquors;
( ) meals or refreshments whether or not for consumption at the shop at which they are sold, but not including the sale of fried fish and chips at a fried fish and chip shop;
( ) newly cooked provisions and cooked or partly cooked tripe;
( ) table waters, sweets, chocolates, sugar confectionery and ice-cream (including wafers and edible containers);
( ) flowers, fruit and vegetables (including mushrooms) other than tinned or bottled fruit or vegetables;
( ) milk and cream, not including tinned or dried milk or cream, but including clotted cream whether sold in tins or otherwise;").
The noble Lord said: I beg to move the Amendment standing in my name. In doing so I would say that those who were in this Chamber during Second Reading will appreciate that I opposed the Bill root and branch, and gave what I believed to be considered views on economic, social and other grounds for doing so, in the sense that one felt justified on Second Reading to speak in total opposition to it. Certainly neither then nor since has there been any proven case for substantiation of the Bill. Therefore in moving this Amendment I do so with a
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desire to replace subsection (1)(a) of Schedule 1 to the Shops (Sunday Trading) Bill with the provisions relating to food in Schedule 5 to the Shops Act 1950.
I hope I shall not weary the Committee by reminding your Lordships of the present law. Under the present law, shops generally are required to close for the serving of customers except for the transactions listed in Schedule 5 to the Shops Act 1950. Broadly, these exceptions cover the sale of food and drinks for immediate consumption, confectionery, medicines, tobacco, aircraft, motor or cycle supplies and accessories, newspapers, periodicals and magazines, sundry items concerned with specific activities, Post Office business and the business carried on by a funeral undertaker. Provision is also made, as your Lordships know, for certain shops in holiday resorts to remain open on Sundays, if the local authority makes the necessary order, up to a maximum of 18 Sundays in any one year; and traders of the Jewish religion can also apply for a special exemption after 2 p.m. on Sundays, provided they close on Saturdays.
Against that background, is it to be argued, as the supporters of the Bill have argued and will continue to argue, that people will starve or go without medical supplies or be deprived of news, tobacco or confectionery on Sundays? I do not think it can be so argued. It is against that backcloth that I submit the Amendment in my name. Its effect will be to restore the provision relating to the sale of food on Sunday. I readily acknowledge that this Amendment does not iron out anomalies—for example, fish and chips shops—nor is there any intention of doing so, and it does not deal with other minor changes. However, one feels that it is logically defensible, and the aim is to restore the position in the major area where change is proposed; that is, food. It does not attempt to deal with anything else.
I believe that it can be defended, if for no other reason, on the grounds of shortness of time, and possibly, the complexity of parliamentary drafting. I said in the Second Reading debate that those of us who were looking at the problems of Sunday trading and the Shops Act ought to look long and hard. It is complex legislation and I do not believe, with the shortness of time available to us

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and the manner in which the change to Schedule 1 has been suggested, that this in any way represents an in-depth examination, in order to deal with some of the problems which were referred to on Second Reading and again today.
This is a piece of legislation which requires an exhaustive, in-depth examination. In the absence of that—I say this with the utmost respect to my noble friend Lord Ponsonby of Shulbrede—the only effect of what we are attempting to do will be to compound a number of the difficulties which one acknowledges exist. It is suggested that the United Kingdom as a whole is waiting for the moment when food shops in our country—in particular, butchers' shops, and this in the age of refrigeration—open on Sundays. But I hope that this Amendment, which is an attempt to maintain the status quo, will be accepted by those who looked sympathetically at the point during the Second Reading debate, and supported it. Having said that, I beg to move.
Lord SAINSBURY: In rising to support my noble friend Lord Allen, may I say that I was slow off the mark. I intended to rise, but was hardly given time to do so, in order to explain that I had no intention of pressing my Amendment at this stage. I prefer to wait and hear the views on other Amendments. But I have every intention of bringing it back, perhaps in a slightly revised form, at Report stage.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Alport): I should like to apologise to the noble Lord, if I foreclosed on him rather earlier than I should have done.
Lord LYELL: May I ask the noble Lord, Lord Allen, to decipher one aspect of his Amendment, which he moved so well? I take his point that it covers a fairly narrow field, but I should like to refer to the third sub-paragraph which reads "table waters, sweets, chocolates". I presume that this refers to confectionery and ice cream. One or two of my colleagues and I were very interested in the last item "edible containers". Am I right in thinking that "edible containers" are what I referred to in my youth, and what I refer to in my relative youth today, as cornets, into which one drops a blob of ice cream? I think that they are referred
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to as comets, pastries, or something like that. I see that in the same sub-paragraph the Amendment refers to "wafers".
Lord ALLEN of FALLOWFIELD: I am grateful to the noble Lord for reminding me of his youth. It reminds me of mine. If I answer his question by saying that the intention is to maintain the status quo, for the reason that I have given, then the answer is, Yes.
Lord PONSONBY of SHULBREDE: As my noble friend indicated, his Amendment reinserts into the Bill the words in Schedule 5 to the 1950 Act. In a sense, that Schedule is already out of date through legal decisions which have been taken since the passing of the 1950 Act. For example, the Amendment refers to "tinned or bottled fruit or vegetables", as being items which cannot be sold on a Sunday. But the courts have determined that "tinned or bottled fruit or vegetables" come within the category of "meals and refreshments". So that, in a sense, to go back entirely to the wording of Schedule 5 to the 1950 Act does not make any progress at all.
I am very much concerned that we should find a form of words for this Bill which will not invoke hostility from any section of the community. I have been most attracted by the ingenious suggestions put forward today by my noble friend Lord Sainsbury and his supporters, and it may be that we can find some means of making progress in that way. Therefore, I very much look forward to seeing my noble friend's Amendment, and I and my advisers will no doubt think about what amendments one can make in order to clarify the situation, and to introduce a legal option on a number of these matters. But this Amendment of my noble friend Lord Allen does not take us any further forward, and I suggest that it should be resisted.
Lord ALLEN of FALLOWFIELD: I can understand the good intention of my good friend, the noble Lord, Lord Ponsonby of Shulbrede, not to give offence to any section of the community by this legislation. But I have to remind him, as I did on Second Reading, that close on half a million men and women were offended when he suggested that this land of ours would be a much better

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place to live in if all food shops were open on Sunday; in particular, butchery shops. I am not sure to what court judgment my noble friend referred. I remind him that we are dealing with this Bill as we see it, and the Amendment, for which I make no apology, is to maintain the status quo. Again, I repeat that to proceed in the way that my noble friend Lord Ponsonby is attempting is really tinkering with a piece of legislation, and I hope that he will see the matter in that way. One hopes, too, that there may well come a time in this House, or in the other place, when there will be a very long and careful look at the Shops Act itself. They will have to make a judgment upon it at that time.
I think that it would be an ill judgment on the part of this House to support the proposals we are now discussing in Committee which have been made by my noble friend. I am sorry that the noble Baroness, Lady Phillips, is not here, because she referred to what she described as "some hyprocrisy" among certain sections of the community regarding working on Good Friday. I share her apprehension about that, but I think that the noble Baroness knows, as do many other people, that the whole of the retail distributive force has opposed working on Good Friday for many, many years. They see this as the thin end of the wedge.
6.20 p.m.
Lord BOSTON of FAVERSHAM: Again I intervene only briefly on this Amendment, to say that I drew your Lordships' attention during Second Reading to the fact that paragraph 1(a) of Schedule 1 to the Bill goes further than the Crathorne Committee recommended, in so far as it would allow the sale of food or drink of any kind for consumption off the premises as well as on the premises without any restriction. The Amendment which has been put down by my noble friend Lord Allen of Fallowfield would also depart from the Crathorne Committee's recommendation, but in the opposite direction, and would simply preserve the existing law, as the noble Lord himself told the Committee in moving the Amendment.
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In favour of the proposal contained in the Bill, it can be said that the existing law is vague and obscure and that it confronts the courts with questions about the precise status of raw kippers, cream buns and other delicacies. Some noble Lords might feel that this tends to make the law look rather ridiculous. Because of the difficulty which the courts have had in setting any logical limits to the meaning of the term "refreshments", a matter upon which your Lordships centred to some extent during the Second Reading debate, it seems that food shops can already sell a high proportion of their stocks without breaking the law. On the other hand, the more widespread opening of food shops, particularly supermarkets, on Sundays might not in all respects be a very welcome development, especially when one takes account of the effect on shop workers' conditions and the cost which might fall, as a result, on the consumer. I leave it to your Lordships to judge whether or not, in the light of the arguments which have been put forward, it is right to make any change to the existing law.
On Question, Amendment negatived.
6.23 p.m.
Baroness VICKERS Baroness VICKERS moved Amendment No. 3:
Page 4, line 19, at end insert—
("(d) parts of, or accessories to caravans or trailers.").
The noble Baroness said: I beg to move Amendment No. 3. This is a rather different subject. Under subparagraph (h) of Schedule 5 to the Shops Act 1950, premises may be open for the serving of customers on Sunday for the sale of aircraft, motor or cycle supplies or accessories. Under this provision, caravan dealers' premises, which include accessory shops, have been open on Sundays for such sales. The Bill which 'is now before your Lordships' House would prevent the application of this exemption. Any premises offering caravan parts or accessories for sale would require an order to be made by the local authority if they are to be open for business on Sundays. I suggest that this is rather unfortunate, because the position is likely to vary in different parts of the country.
May I suggest to the noble Lord, Lord Ponsonby of Shulbrede, that ideally the

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caravan industry would like to see the sale of caravans permitted on Sundays, because these are family leisure items. Frequently, it is only possible for the whole family to inspect caravans together on a Sunday when they, as a family, can make their choice. This is borne out in particular by the large attendances on Sundays at the caravan exhibitions organised by the National Caravan Council at Earl's Court in London and Kelvin Hall in Glasgow.
So far as the provisions of the Bill are concerned, a number of local authorities throughout the country have in recent years taken proceedings against caravan dealers for opening their premises on Sundays, on the ground that they were exceeding the exemption provided by Schedule 5 to the Shops Act 1950. Regrettably, this has led to a number of caravan traders having to close entirely on Sundays.
The application is piecemeal, and this can only result in unfair competition because premises on one side of an authority's boundary have to be closed while those on the other side of the boundary do not. I have no idea whether this happens, but if one tried to buy some of these accessories in Plymouth on Sundays and met with a refusal, one would cross the Tamar and get them on the other side of the river. Because of this, I feel that to make it a requirement of an order by a local authority to permit caravan parts and accessories to be sold on Sundays would result in fewer facilities being available to the public on Sundays when they are most likely to be travelling in their cars and caravans.
The proposed separation in the Bill of parts and accessories for caravans from the parts and accessories for cars would produce, I consider, the absurd situation that a motor garage which was open for the sale of parts and accessories under Schedule 1 to the Shops Act 1950 would be permitted to sell a caravan owner a new bulb for one of his car lamps but not if the bulb was to be used in the caravan that he was towing. Similarly, if a caravan owner had a tyre failure, he could buy a replacement tyre if it were for the motor car but not if it were for the caravan that he was towing.
If this Amendment is not accepted, it will produce a quite absurd situation.
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For this reason, I hope that the Bill can be altered so that if parts and accessories for caravans are to be specifically introduced into the shops legislation they are given equal status to that given to motor vehicle parts and accessories. The proposal in this Amendment is that caravan parts and accessories should be allowed to be sold on Sundays without a special order so as to retain the present status under the law. I beg to move.
Lord PONSONBY of SHULBREDE: The concern here relates to what could be included under the word "accessories". The whole purpose of the Bill is to try to define items more closely. Any furnishings required for the inside of a caravan might be claimed by some salesmen to be an accessory, and that would begin to open up the law as to the interpretation of the word "accessories". We feel that the needs of caravan owners are covered to a large extent by paragraph (c): that if something goes wrong with a caravan and the owner wishes to buy a tyre for it, it can be bought under this paragraph. It should be a question of local determination and control so that the whole situation does not become wide open for the sale of items which would otherwise be prohibited under Schedule 1. If the Amendment had not included the word "accessories", it would have been much more acceptable than it is.
Lord SOMERS: Would it not be possible to get over that difficulty by saying "mechanical accessories"?
Lord PONSONBY of SHULBREDE: Certainly that is a form of drafting which I should like to look at very closely.
Baroness VICKERS: May I thank the noble Lord for his reply. Perhaps he would give me the opportunity to withdraw the Amendment for the time being with the idea of accepting the suggestion, or a suggestion similar to the one which has just been made by the noble Lord, Lord Somers, which I think was very helpful. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
Lord NORRIE Lord NORRIE moved Amendment No. 4:

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Page 4, line 39, at end insert—
("(3) The sale of flowers, plants and gardening or garden leisure equipment supplies and accessories at any premises or place where the sale of these items represents the sole or principal activity of the business.").
The noble Lord said: In moving this Amendment I wish to explain some of the difficulties which face the horticultural trade. I should like to draw particular attention to nurseries and garden centres, in which I have previously declared an interest. The needs of the general public have changed since the Shops Act was passed in 1950. Quite new situations and conditions have arisen and it is a matter of chance as to whether they may be covered by the present Act. The entirely new existence of yacht marinas is a specific example, as these may sell a complete range of goods on Sundays, while nurseries and garden centres, which represent Britain's oldest and most popular leisure activity, may sell only a limited range of goods on that day. Over 78 per cent. of households in Britain have a private garden, which puts garden ownership in this country far above that of many other countries in Europe. It should come as no surprise that independent research shows that gardening is Britain's pre-eminent active leisure pursuit for both men and women. Even as long ago as 1970, 25 million people, including a significant proportion of those in retirement, were actively engaged in tending gardens or allotments. What these figures are today has not been estimated but we all know that there has been a huge increase in gardening during the intervening nine years.
Economically gardening is good for Britain and also it is a pursuit which tends to keep more and more families united and at home. The population recognises the need to aim at self-sufficiency and is now growing an increasing amount of the fruit and vegetables which it consumes. This was never borne out more clearly than during the recent transport difficulties when the price of vegetables, even if they could be obtained at all, reached heights which placed them out of reach of many. The majority of people pursue their leisure hobby at the weekends and Sunday is usually the day when their immediate needs become apparent. Consequently, a visit to a garden centre is often made a
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family outing where the gardening and leisure requirements may be satisfied on that day. It has been estimated that some 94.2 per cent. of nurseries and garden centres are open on Sundays. That day represents 30 to 40 per cent. of the total trade for the week and it has thus become regarded as the best trading day.
The Shops Act has always allowed some garden requisites to be sold and the present Bill constitutes a more modern and rational approach but still falls far short of what is now required. I should like to draw your Lordships' attention to a few of the trivial anomalies which will continue to affect my trade if this Amendment is not accepted. Trees may be sold but not the stake or tie which is essential for their support: shrubs may be sold, but not the peat or compost in which they are grown; roses may be sold, but not the pesticides or fungicides or fertilisers needed for healthy growth; bedding plants may be sold, but not the seeds from which you may grow your own; house plants may be sold, but not the bulbs or the tubers from which some originate, nor the decorative pots or containers in which they are usually displayed; tomato plants may be sold, but not the liquid fertiliser required for successful crops.
I am even informed that one garden centre visited by an inspector last year was actually told that its staff could not talk to a customer about a product which was prohibited from sale on a Sunday. These are but a few of the irritating instances which my noble friend Lord Lyell so aptly described as "trivia" during his speech on Second Reading. Large numbers of people visit garden centres every Sunday and find the restrictions on what they can buy to be arbitrary, perplexing and annoying and there is no doubt that many businesses break the law to placate the customer. If a buyer cannot get what he wants at one garden centre he will proceed a short distance to the next, where he will probably be more fortunate. Strict interpretation and rigid enforcement of the Shops Act in its present form will probably cause very many garden centres to close on Sundays, with a consequent loss of trade which in time will force them to close down altogether or severely restrict their activities. This will result in a considerable number of people losing their jobs and

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the public being deprived of a service which it both appreciates and requires.
I should like to point out that nurseries and garden centres are usually located away from shopping centres or high streets, so that allowing them to trade legally on a Sunday does not, in my view, create unfair competition for any business located in a traditional shopping environment. I firmly believe that the shop in the town is visited by the shopper as part of his or her weekday shopping routine, whereas the visit to a nursery or garden centre on a Saturday or Sunday more often than not involves family participation. The importance of offering this week-end service to the family is fully recognised by the staff working in this type of business. Equally they recognise that the maintenance and daily care in horticulture, as with livestock for farmers, must continue at weekends. Therefore, in their contract of work they accept a staggered five-day week with an option to earn overtime according to their circumstances.
Finally, there may be those of your Lordships who believe that our trade is "money for old rope", but I would remind you that horticulture is seasonal and very dependent upon the weather. The trade has just suffered the worst winter since 1963. Not only have sales been practically non-existent but a great deal of nursery stock has not survived the recent spells of intense cold. The removal of the anomalies which exist in Sunday trading is therefore of paramount importance to the horticultural trade.
With the increasing amount of leisure time available, here is an example of a trade that has already responded by offering the service that people require at the time they want it. To do so, however, nurseries and garden centres in many cases have had to break an unenforceable law. I am convinced that the time has now come for your Lordships to remove the difficulties that face my trade and by supporting my Amendment you will be giving it the assistance it deserves. To those noble Lords who do not wish to support my Amendment, I can only say that I hope the disappointment registered by 25 million gardeners will not bring about a permanent blight of greenfly and blackspot on the roses in their gardens. I beg to move.
Lord SOMERS: I do not wish to speak either for or against this Amendment, but I should like to point out to the Committee that if it is accepted it will mean that every nursery and garden centre in the country—and there are very many of them—will have to maintain a skeleton staff on Sundays, and although my noble friend Lord Monson pointed out that nobody is being forced to work on Sundays, in effect of course they are, purely from the point of view of competition. They will have to be there if there are other garden centres in the neighbourhood, and therefore I must leave the Committee to draw their own conclusions from that.
Lord LYELL: Has the noble Lord, Lord Somers, considered the views of farm workers and indeed everybody else who is running essential public services? I am a farmer when I am away from your Lordships' House and certainly when the weather is fine and the harvest is ripe I am afraid the noble Lord, Lord Somers, will find every combine harvester in my part of Scotland working on a Sunday, and the farm workers know, when they take employment as farm workers, that when the harvest is ready everything starts off and harvesting goes ahead. I suggest that the same argument might apply to workers in nurseries or similar establishments to those described by my noble friend Lord Norrie.
I was fascinated to listen to my noble friend Lord Norrie explaining the different requisites and supplies and accessories he spoke about. My mind is appalled at the thought of liquid manure being sold on a Sunday; apart from the nuisance of it, I am a little worried! I am also in some trepidation at the thought of motor mowers or other gardening and agricultural equipment, small diggers and tractors, being demonstrated! I would have thought that such things are demonstrated and are sold already on a Sunday. At the same time I do take Lord Somers' point of view that one should not force people to work. But I suggest that, in this industry, be it agriculture or horticulture, employees engaged in such activities know what is expected of them; that on certain occasions during the year, particularly on certain Sundays in the growing season or at harvest time, their work will have to go ahead, and they will not be left unrecompensed.
Lord SOMERS: I can assure the noble Lord that I have enough farming blood in my veins to realise that. But I still feel that the sale of flowers to the public is rather a different thing.
Earl GREY: In the Amendment the noble Lord, Lord Norrie, does not state whether paragraph 1(d) of Schedule 1 is to be included, or whether his Amendment is in addition to paragraph (d) which says the sale of
"flowers, plants, shrubs (other than artificial)".
Does his Amendment include artificial?
Lord NORRIE: If I may explain this, in fact because the noble Lord, Lord Sainsbury, introduced his own Amendment I had no alternative but to put my Amendment at the end of Schedule 1 as paragraph (3). It is my intention that my Amendment be substituted as a new paragraph 1(d) within Schedule 1. I hope that clarifies the situation.
Lord SKELMERSDALE: As a horticulturalist, I should like, first, to congratulate my noble friend Lord Norrie on his excellent exposition of Sunday trading as it affects the horticultural industry, and indeed the situation in this country of the horticultural industry as a whole, especially as appertaining to non-edible productions. However, while I am a supporter of the Amendment in its major tenor, I would point out to the Committee that it does bring up something which, potentially, has very wide ramifications. The end of the Amendment reads,
"…where the sale of these items represents the sole or principal activity of the business".
What you are going to do is to prevent one section of traders from having the same rights as other traders under this Schedule. I would have thought that the same words might with advantage be made general for all the trades and traders who are listed in this Schedule 1.
Lord PONSONBY of SHULBREDE: I think that the spirit behind Lord Norrie's Amendment is certainly a commendable one, in the sense that the suggestion is that, if one buys one's shrubs or roses, or whathave-you, on a Sunday, one should be able to buy the fertiliser and whatever is necessary for the cultivation of that article. However, the wording of the Amendment
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causes some considerable trouble because it refers to the sale of
"garden leisure equipment supplies and accessories at a place where the sale of these items represents the sole or principal activity of the business".
In other words, it could be interpreted, as it stands, that a place whose sole or principal business is the sale of garden leisure equipment supplies, without the sale of flowers, plants, shrubs et cetera, would come within the ambit of this clause. I think it would be far better if the paragraph referred to the sale of flowers, plants, shrubs and horticultural equipment and supplies at a place where horticultural products are produced—in other words, some wording which tied it in with horticultural products, as most of the people who work in garden centres are under the horticultural wages Acts and not other Acts. The Amendment, as it stands, does have anomalies. The noble Lord has indicated that in any case he intends to come forward with a reworded Amendment at Report stage. I would hope that we could deal with it then, but, if not, I myself would be prepared to come forward with an Amendment roughly along those lines.
Lord NORRIE: I thank the noble Lord for that. I think in that case I would rather have an opportunity to withdraw my Amendment and perhaps reword it in a way which your Lordships would approve. I feel that the general consensus of the Committee is that they would support an Amendment like this. I would, therefore, prefer to go away and think about it and produce an Amendment which would be acceptable. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Schedule 1 shall stand part of the Bill?
6.47 p.m.
Lord LYELL: May I seek some guidance from the noble Lord, Lord Ponsonby, before we leave Schedule 1. I note that, in Schedule 2, paragraph 1 describes,
"Articles required for the purposes of bathing or fishing".
My mind worked in a somewhat naughty frame. I looked at Schedule 1(1)(j). This sub-paragraph spells out,

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"… the sale at any premises or place where a game or sport is … carried on of requisites for that game or sport".
I have been given to understand that the sport of angling is one of the most widely-practised sports in England and Wales. I understand that more people practise the sport of angling, be it competitively, professionally or intensively, on any day of the week, and I would have thought especially on Saturday or Sunday, than go to either play or watch football, which fills the newspapers and media in the winter and autumn and part of the spring. That goes for angling.
What about swimming? I would suggest that bathing suits might be described as articles required for the purpose of bathing, except in certain delineated areas —I think they call themselves naturist parks. I wonder why paragraph 1 of Schedule 2 is necessary, since I understand that everything that might be required for bathing or fishing would be covered by sub-paragraph (j) of paragraph 1 in Schedule 1. I would suggest that most swimming and almost all angling is what might be described as a game or sport. For that reason, I wonder whether paragraph 1 of Schedule 2, which allows bathing suits and I suppose fishing rods, tackle, lines, bait and the rest, to be sold only with the concurrence of local authorities, is necessary. Yet if one took a slightly broader view of sub-paragraph (j), all these items would be sold, with or without the permission of local authorities, all over England and Wales. Could the noble Lord, Lord Ponsonby, set my mind at rest, if not tonight, at the next stage, or before the next stage?
Lord BLEASE: I should like to ask about a number of accoutrements; what about skin-diving and other aqua sports? There is no end to it. I think it indicates that we are tinkering with something in this particular Schedule and the other legislation proposed here that requires a complete review of the whole situation.
Lord PONSONBY of SHULBREDE: I shall certainly come back to the noble Lord, Lord Lyell. From briefly looking at the particular point which he mentioned, paragraph 1 (j) of Schedule 1 refers to the sale of specific items,
"at any premises or place where a game or sport is played or carried on".
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However paragraph 1 of Schedule 2 refers to the general sale of the items referred to. So, in the first case one can buy a bathing suit at swimming baths, but in the second case one can buy the bathing suit at a stall on the beach. Indeed, one might say that the beach was a swimming place in any event. I think that that is the distinction between the two paragraphs. However, I shall take advice on the matter and advise the noble Lord further.
Lord BOSTON of FAVERSHAM: I hesitate to intervene, but no doubt further advice can be given by my noble friend Lord Ponsonby of Shulbrede on another occasion—if there is one. However, I think that he would also recall, turning to Schedule 2, that the articles mentioned in paragraphs 1 and 2 are already included in Schedule 7 to the 1950 Act although "souvenirs", I understand, have not been defined previously. The items in paragraphs 3 to 5 accord, I understand, with the Crathorne recommendations.
Schedule 1 agreed to.
[Amendments Nos. 5, 6 and 7 not moved.]
Schedule 2 agreed to.
[Amendments Nos. 8, 9, 10 and 11 not moved.]
Schedule 3 agreed to.
House resumed: Bill reported without amendment.

AIRLINER DESIGN AND CONSTRUCTION
6.53 p.m.
The Earl of KIMBERLEY The Earl of KIMBERLEY rose to ask Her Majesty's Government why the United Kingdom does not take the lead under the auspices of Airbus Industrie in designing and building a series of European airliners in the 130–180 seater category for services starting in the middle 1980s. The noble Earl said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. Since the nationalisation of British Aerospace certainly some progress has been

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made, but there are quite a number of employees within the industry who feel that more could have been done. Nobody could disagree that a healthy competitive manufacturing industry—whether publicly or privately-owned—is an essential and vital necessity to the nation's wellbeing, whether it is for employment, domestic and export markets, help for our balance of payments, or lastly taxation revenue. Therefore, I ask: Do we have a national role in world industry?—to which the answer must surely be in the affirmative. I submit that one major role should be in a skilled and highly intensive industry, such as the manufacture of aircraft, computers and avionics.
It was gratifying last year to see that British Aerospace declined the American offer of our becoming a mere sub-contractor to their giant industry. One reason given two-and-a-half years ago for nationalising the aircraft industry of this country was that a decision had to be taken on building a family of aircraft in the 130 to 180-seater category. That decision had to be made rapidly as otherwise Britain would once again lose out to the United States.
My noble friend Lord Beswick—and like to call him my noble friend—who is chairman of British Aerospace said on 15th March at a lecture at Bristol that the real problem for British Aerospace was not short-term, but a long-term one of building a secure base on which to earn a living. Two-and-a-half years ago at Farnborough I was sitting at lunchtime next to Mr. Harding Lawrence, who is the President of Braniff Airways. He categorically stated to me that there was a world market for 3,000 aircraft in the 130 to 180-seater category in the coming 10 years. As an American he saw that there was no reason why, if Britain and Europe got together, we should not have, at the very least, 30 per cent. of that market.
I agree that it is perfectly true that at present all the major airlines are looking at wide-bodied aircraft and, for the time being, are temporarily content to top up their medium and short-haul fleets with present-day technology narrow-bodied aeroplanes. But they cannot continue to do that forever due to the very strict noise regulations which will come into
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force in the middle 1980s. Therefore, if there should be any noble Lord who might think that my figure of 3,000 is wrong, may I say that there will have to be 3,000 existing geriatric narrow-bodied short and medium-range jets replaced, as by the mid-1980s the majority of the world's major airports will refuse to let those aircraft operate not only for noise, but probably also for safety, reasons due to structural defects and metal fatigue.
I should like to ask the noble Lord, Lord Leonard, when he replies whether, in view of the Dan Air 707 crash in Lusaka when the tail fell off, the Government have any proposals for the next few years for not allowing these ancient aeroplanes to fly into airports which have a very heavy population around them? Also what agreements are there, if any, with other foreign civil aviation authorities?
Therefore, a new aeroplane must, if it is to be a winner, be launched now because the United States has the DC.9 Super 80 and the Boeing 757. McDonell-Douglas still has the possible advanced-technology medium-range aircraft sitting on the sidelines. New technology airliners are not just needed for less noise: they are also needed for economy and fuel saving reasons. As regards fuel economy there are three reasons which are particularly pertinent: first the price of it: secondly, there is only so much oil left in the world until we perfect the production of oil from coal—which seems quite a long way away—or we can produce a new power plant which may work on hydrogen; and finally the more economical the aircraft the lower will be the passenger seat mile cost.
To quote an example of an old/new aeroplane, British Aerospace tried very hard with the X-11 but the French and the Germans said—no, it was not a new aeroplane. Simultaneously British Airways and Lufthansa ordered the Boeing 737 as a stopgap. Air France tried to do so, but the French pilots refused it as it only needed a two-man crew. Therefore Air France went back to old Boeing 727s. However, Lufthansa is now thinking very seriously of phasing out its 737s because they are not large enough. They want a 140 and a 180 seater. In fact, they say that if this family of aircraft is launched now, it would be a certain winner and would

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also be an integral part of the family of Airbus Industrie. Therefore, I hope it is beginning to be obvious that unless we start in the very near future—in other words, now—we shall once again be too late and present the Americans with yet another monopoly of a large piece of the civil market.
While I am on this subject, out of interest, perhaps the Minister can tell us how much our balance of payments has been affected by British Airways buying 737s and 757s. Perhaps we shall be told that as the 757 will have Rolls-Royce engines, the bill will not be as large as it might otherwise be. However, even if that is so, I am not certain that it is a good enough answer. Perhaps it is of interest to note here that in his lecture the other day in Bristol the noble Lord, Lord Beswick, again said that he thought it would cost this country £1.5 billion. Perhaps the Government could confirm that figure.
What do potential customers of British Aerospace think when our nationalised carrier gives absolutely no encouragement by buying British or, as it is today, Anglo-European? The following European flag carriers have ordered or purchased A300s from Airbus Industrie: Air France, Lufthansa, SAS, Alitalia, Olympic, Iberia, and Swiss Air the A310. Can they possibly all be wrong?
I now come to Rolls-Royce and the Airbus Industries. Last year Sir Freddie Laker announced that he would buy A300s, but that he was not prepared to spend the £25 million to develop so that the Rolls-Royce engines could be fitted in his aeroplanes. To me £25 million seems to be a very small sum when compared with the potential market that the A300 and the A310 have. Do the Government realise that Pratt and Witney and General Electric from America are presently at each other's throats fighting to get their engines into these aircraft? Do any of your Lordships think that Pratt and Witney and General Electric are wrong as well? Why does not Rolls-Royce try to compete for the Airbus?
In November last year I wrote to the Prime Minister, President Giscard d'Estaing and Chancellor Schmidt, drawing their attention to the large market for an aircraft family of 130 to 180 seats. I
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appealed to the three Leaders that, in spite of the co-operation over the A300 and the A310, they should make a big effort to get this new aircraft family launched. I had three replies. The Prime Minister's Secretary said that he would show my letter to the Prime Minister but I have heard nothing; the French said "Thank you", and the Germans answered with a two-page letter stating that the market survey for a 130–180 seater was not sufficiently advanced, and that the A310 must therefore have preference, particularly as there was not the factory space available. That is completely understandable as production capacity at all Airbus plants will need to cope with much greater production rates when output rises from two aircraft a month at present possibly to eight a month by the end of this year.
It appears that the second stumbling block might be finance. However, that should not be a problem with the vast quantity of money which we successfully seem to pour down the throats of lame ducks in this country. Possibly a third argument that can be put up against it is that of the power plant. But that is not a problem, because we have the American engine, the CFM56, which already exists; the RB211–535 is under development; and on the sidelines, if some money was advanced to it, there is the RB432. There are two existing American engines, the Pratt and Witney JT1OD and the JT8D-209. Therefore, for the 130-seater there are three engines—two American and one English; for the 150-seater there are two American engines; and for the 180-seater there is one English and one American engine.
I should like to return to the problem of the lack of space in the factories, because if we cannot build the aircraft in France, we could certainly build it at Weybridge, Filton and Hurn. I am given to understand that at Weybridge and Filton the current workload is maintenance on United States Air Force F1–11s, certain parts for the British Aerospace 146, parts of the A310 wing, converting five Gulf Airways VC10s and four East African Super VC 10s to tankers and Universal Test Equipment orders. I agree that that work provides employment, but many British Aerospace employees are frustrated and their morale is low. Who can blame them if they leave for more

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salubrious climes where they can continue to design and build new aeroplanes as well as probably earn a lot more money? I am also given to understand that within the last 12 months about 165 designers have left British Aerospace.
I, for one, do not envy the task of the chairman of British Aerospace, the noble Lord, Lord Beswick. He appears to get far less co-operation from both Ministries and the Treasury. British Aerospace seems the poor relation, coming after British Airways and Rolls-Royce. Maybe one reason is because Rolls-Royce has the NEB behind it. However, we now have quite a long history of Anglo-French-German co-operation and we have the Airbus. So we have European co-operation producing jobs and income, which is co-operation in its most practical sense. Therefore, if we allow that this Airbus family of a 130–180 seater aircraft must be launched, we must establish the foundation and principles immediately. This would also restore morale on the civil side of British Aerospace as well as provide encouragement and incentive, while simultaneously we would be taking, and at the same time sharing, the lead—unlike when we became a partner in Airbus Industrie, which was only after many difficulties.
We now have a chance to help our European partners so that the project is produced in time. We have to agree all the criteria with Airbus Industrie but we, in this country, have the space and the workforce. It would be a great money-earner for this country at the same time as continuing the success of Airbus Industrie. We should very soon find the Americans knocking on our door and wooing us. Let us not forget that in 1966 Boeing raised several hundred million dollars on the New York Stock Exchange because there was confidence in their ability to design, build and sell aeroplanes. I think that we should make this a target for European Aerospace. We must find the money, and I do not accept the Treasury's criticism the other day of our 20 per cent. in the A310, saying that it would have a negative cash flow by 1983. To quote the noble Lord, Lord Beswick:
"To criticise profitability on a three or four-year outturn is ridiculous".
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Incidentally, I have heard no Treasury criticism of the £1·5 billion—if that is the correct figure—spent on American aircraft.
Therefore, when the noble Lord, Lord Leonard, replies to my Question, I ask him: first, does he not agree with my assessment of the market need for a family of aircraft in the 130–180 seater category? Should he by chance say that there is no need, I would ask the noble Lord to go back to British Aerospace, the Department of Industry and the Treasury and ask them to rethink the project. However, should the Minister agree with me, perhaps he would give your Lordships some encouragement and show some determination that we, with the French and the Germans, can win a major part of what will be an incredibly lucrative market. I also wait with great interest to hear from my noble friend Lord Trefgarne the official policy of the Opposition. May I reiterate that time is running out for us. Finally, will Her Majesty's Government make a prodigious effort to try to get our three nationalised aerospace companies to co-operate with each other on a considerably larger scale than they do at the present? If the Government will do this, the sky is the limit.
7.10 p.m.
Lord TREFGARNE: My Lords, it is customary on these occasions to extend thanks to the noble Lord who raises the matter, and I readily and gladly do that tonight. Having read the Question on the Order Paper I think at the outset I had better resist the temptation to try and answer it because that will be for the noble Lord, Lord Leonard, to do in a moment. Indeed, I sometimes wonder whether Parliamentary pressure on British Aerospace, or any nationalised concern, to produce this or that aeroplane, or to follow this or that policy in a matter of extreme technical complexity, is the right way to reach the answers we desire. Indeed, I have said in your Lordships' House on several occasions before tonight that the consideration of different aircraft types by British Airways, for example, is a difficult and technical matter, and it is not always wise for politicians, at least for Opposition politicians, to pronounce views too firmly, because for sure they do not have all the facts available to them.

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How much more difficult then is it to reach a decision as to which aircraft to develop or build, than it is to decide simply which aircraft to buy.
The difficulties can perhaps fall under three headings. First, the time-scale of an aircraft project is at least 20 years, sometimes 30 years. It follows, therefore, that decisions taken now will have effect at least until the end of the century. As we know, the sums of money involved in launching a new aircraft project are prodigious; so much so that nowadays we cannot afford, by and large, to launch major transport aircraft projects on our own, and we have to secure the co-operation and collaboration of our colleagues in Europe. It follows from these two points that the risks of failure are appalling, for, if we do fail, having committed vast sums of money and enormous resources of manpower and manufacturing facilities to these projects, the consequences really are grave indeed.
Having accepted the difficulty of reaching the correct decisions, perhaps I may indicate some of the considerations which British Aerospace must weigh in deciding upon their future programme. I do not pretend for a moment that the points that I want to talk about are exhaustive or complete, but they may help to indicate to your Lordships the difficulties of the problem. First of all, we have to decide what size of aeroplane the market requires. The noble Earl, in his Question, has suggested that we need a 130 to 180 seater. I fancy that that may be a bit on the small side, but that is simply a personal view. British Aerospace and their colleagues will conduct their researches and I trust arrive at the right conclusion.
We have to decide when replacements for existing aeroplanes will be required. The noble Earl touched on this when he was talking about the retirement of the so-called geriatric jets. Indeed, some people say that the existing generation of transport aircraft will have to be retired sooner rather than later because their structures are, in some cases, now suspect. There is the question of noise certification. I shall have more to say on that next Monday when we consider the Air Navigation Noise Certification Order. But sufficient for the moment to say, as the noble Earl reminded us, that by the mid-1980s most of the existing generation
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of so-called noisy aircraft will have to be compulsorily retired.
We need to decide how many of the new type of aircraft will be required. We shall need to consider in that context both the numbers of aircraft to be replaced and the growth of the industry generally so that we know how many additional planes over and above those we have at present will be needed. We have to decide and consider whether the new aircraft will have an adequate improvement over the operating costs of existing machines, with particular reference nowadays, of course, to fuel economy. We have to ensure that the new aircraft will meet all the future environmental considerations; not only the noise, to which I have referred already, but smoke and other emissions which are nowadays becoming less and less acceptable, and quite properly so.
I have referred to this before but I must mention it again. We shall have to decide how many seats the new aircraft has, precisely how many it needs, having regard not only to existing traffic but to the expected density growth in the future. We have to be sure that the new aircraft will be compatible with existing terminal facilities and ground equipment. If not, will it be possible for airlines and airport operators to afford any new facilities or equipment which will be required? We have to decide what sort of configuration we require for the new aircraft; whether we want all tourist seats to meet the boom in low fare traffic, or whether we want a mix of high density seating and first-class seating, and what sort of freight facilities we require. We have to decide—and this is most important—how the development of the aircraft will be financed. I have mentioned already that collaboration is inevitably essential, but how much money will British Aerospace be required to put into this project, and how much money will the British Government be required to put into the project? It will inevitably be a very substantial sum.
We have to decide also not only how to finance the development of the aircraft but how to finance the sales of the aircraft. I believe that this is one of the areas where the Concorde programme has fallen down. It has not proved possible on this side of the Atlantic to devise financing schemes of sufficient attraction, particularly to the smaller airlines, to enable them to acquire,

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or lease, or hire, the aircraft. This is in sharp distinction to the American industry, whose aircraft financing arrangements are way ahead of ours, and it is one of the reasons why they have been so successful in selling their aeroplanes to some of the smaller emergent nations.
I have covered just 10 points. I imagine that the noble Lord, Lord Beswick, and his colleagues in British Aerospace will be considering at least a thousand other points in reaching their decision, and quite right too. Are we therefore in a position to suggest, let alone dictate, to British Aerospace the details of their manufacturing problems? I should have thought, from this side of the House at least, that we are not. Of course the Government have to make judgments on these matters, but they are able to do so in possession of all the facts.
So your Lordships should I believe confine yourselves to consideration of the political, social, and strategic implications of these decisions. But the noble Earl has tabled his Question, and is entitled to hear my views at least on the specific points that he has raised, and I shall try to do that whatever the difficulties. I must confess that I am attracted to some extent to the noble Earl's arguments, and would agree that there may well be an important market for the sort of aircraft he describes. But, as I said earlier, I fancy that it ought to be a little bigger. As of this moment, I should think that British Aerospace would be better employed in applying its now considerable resources and energies to promoting its existing projects. One particular project which very nearly meets the requirements of the noble Earl is, of course, the A-310, in which British Aerospace is now a full partner. This is not a 180-seater, it is a 200-seater and thus meets my requirements, if not those of the noble Earl.
In that connection, I am unconvinced that British Airways were right to choose the 757, the American aircraft, instead of the A-310 which was offered to them. I have mentioned this matter before in your Lordships' House and I make no apology for raising it again: it was—indeed, still is—a matter of the greatest importance. British Airways were to be one of the two launch customers for the 757, and indeed they have ordered it.
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Unhappily, the other launch customer, Eastern Airlines, have not yet ordered it and there are rumours that they may not do so. Perhaps this is not the time to go into that matter in detail, but I was very concerned by that decision of British Airways and I remain so. The contract is now signed, at least so far as British Airways are concerned, and I hope it works out for British Airways, and we shall be watching carefully to see that it does. I wonder whether in future we should reassess the methods of launching new projects and endeavour somehow. if we can, to determine in advance the likelihood of major European orders before launching new collaborative or national projects.
Not for the first time we are in the noble Earl's debt for raising this subject. I wonder how far we should go in trying to influence what must be a commercial decision. Of course I lay myself open to the charge of inconsistency, in that I would seek to influence British Airways' so-called commercial decisions but not those of British Aerospace. However, I would answer that by saying that British Airways' record, even when left to their own devices in this matter, has not been uniformly successful. On the other hand, the aircraft manufacturers, once as individual companies and now jointly in British Aerospace, deserve at least to be given a chance. The technical skills are undoubted. Let us now watch their commercial skills with the closest attention.
7.22 p.m.
Lord THOMAS: My Lords, we are all grateful to the noble Earl, Lord Kimberley, for giving us the opportunity to express our views on the important subject of the future of British civil airliner building. Whether we do so as a whole project or whether we participate as partners with another manufacturer is a matter for very careful thought, but there is no doubt that in the 1980s there will be a consistent and continuing demand for the type of 150 to 200-seater airliner that the noble Earl quotes broadly in his Question.
I recently paid a visit to the West Coast of America and spent some time with one of the leading aeroplane manufacturers in that area. They are planning to produce large quantities of two-engined and three-engined aircraft. Their planned rate of

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production is of a very high order indeed, something like 30 a month of one aeroplane model alone that falls into this category. It is the disparity in the rates of production between the American and European manufacturers which raises a peculiarly difficult situation for the United Kingdom aerospace industry.
The American aeroplane producers are perfectly willing to buy parts from Britain, but they want absolutely cast-iron assurances that delivery quantities and dates of delivery will be met for whatever components they order. Already there is a fair business being done by at least a few of Britain's leading aircraft component manufacturers; for instance, every Boeing delivered from Seattle contains British-made parts in the shape of flap actuators, power control system, windscreens, parts of the braking gear and other comparatively minor, though very important and expensive, components.
However, when it comes to getting orders from large American aeroplane manufacturers from this side of the Atlantic for substantial items such as undercarriages, nose wheels and of course, engines, then the financial commitments are fantastic. When I say that the investment in the machine tools for a comparatively simple component like a retractable nose wheel at the rate of production that is needed on one of these quantity produced and internationally popular aeroplanes is of the order of £45 million, it makes one think of a particularly large investment egg in a comparatively medium-sized British basket.
What is more, to achieve the guaranteed rate of production which is required would mean the recruitment of something like 250 skilled machinists in this country; and it is a sad commentary on our present state of industry that although there is very high unemployment, there is not the pool of skilled machinists, men or women, capable of operating tape controlled machines and sophisticated automatic or semi-automatic machine tools of the type necessary to achieve the accuracy and high degree of precision entailed for these components at the going price.
Price is important. Britain is no longer a low cost producer nor, due to the malaise of strikes that affect our industrial corpus, are we a reliable source of supply. That
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is because over the past couple or so decades we have not shaped our overall engineering facilities to encourage men or women to do this kind of work. High taxation is one of the disincentives; the industrial climate that encourages or even allows engineering shipbuilders, for instance, to do five hours work on an eight hours shift is completely out of balance, and we all know what has happened to the British motor industry. Once upon a time, more years ago than I care to remember, 40 per cent. of the orders for all cars sold in this country went across my desk at Cowley, Oxford. That lead has been eroded in no uncertain way. Coming back to aircraft, that very lesson makes the question asked by the noble Earl so vitally important.
The success of Concorde in operation shows that our aerodynamicists, designers and technicians have the skill to produce highly sophisticated aircraft. Concorde was achieved by Anglo-French or, if you like, European collaborative effort, and has proved there is no language barrier in high technology. So let us be wholly realistic too and pay tribute to the aircraft produced by Airbus Industrie. Anyone who has seen the lift-off performance of one of their aeroplanes with its British-made main wing cannot fail but to be impressed by its potential and its aerodynamical excellence. What it would do with a couple of new advanced technology Rolls-Royce RB-211 aero engines can readily be extrapolated both in terms of fuel economy, which is becoming more and more important as the years go on, and in the matter of cost and range per seat mile.
I take this opportunity strongly to suggest that the question of over-water flight limitation planning for twin-engined jet aircraft be re-studied and new parameters evolved. The question of long-range over-water flight planning is topically emphasised for aircraft operating to the Spanish, Iberian and Mediterranean areas from Britain by the strange behaviour of the French air traffic controllers. These gentlemen seem determined as a long-term policy to make airspace facilities and monitoring of aircraft flying from Britain over French airspace difficult, forcing them to flight-plan longer routes far out over the Atlantic Ocean before turning east to Europe to reach their destinations.

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This deplorable practice last summer cost all British airlines much money and much valuable time, and it created much passenger ill-will because of unpunctuality. It looks like being more of a nuisance this coming summer than it was last summer, and so a future Anglo-European built airliner design would have to have this factor allowed for in its basic parameters, not in terms of near-sonic speed, but in economical long-range cruise, and of course radio facilities.
May I repeat that for all round economy, advanced technology twin jet-engined aircraft produce optimum figures. The fewer engines you have on an airplane, the lower the maintenance cost. There has been sufficient experience already built up with both European and American built jet engines to prove that the ratio of shutdowns in the air for jet engines is only a fraction of what used to be accepted in the case of the piston engine; and so longer twin jet engine over-water allowances should be made.
Therefore there seems to be a logical case for a positive answer to be given to the noble Earl's Question. The United Kingdom should take the lead, under the auspices of Airbus Industrie, in which we already have a strong commercial connection with some components, to develop a limited series of civil airliners, some of which could certainly be fitted with British made engines. American civil airplane makers give a choice of power units. One can buy a 747 Jumbo with a set of two different American made engines, or with British Rolls-Royce engines. I suppose that I should disclose an interest here as the chairman of an airline that uses 25 American built jets; but I can say that if a European built 150–200 seater aircraft, with an enhanced over-water flight planning capability, and two advanced technology RB-211 jet engines was planned to be available in the mid, or even the late, 1980s, it would be studied very carefully indeed by a large number of seriously minded customers.
7.33 p.m.
The Earl of KINNOULL: My Lords, I wish very briefly to support the noble Earl, Lord Kimberley, and to thank him for initiating this interesting debate on Airbus Industrie, with particular regard
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to the 130–180 seater project. The noble Earl's enthusiasm for aviation and aviation matters never wanes, even if the influence of Government and of our industry on their future share of work in world markets becomes increasingly bound up with the European Airbus Industrie. I am sure that the House looks forward to the reply of the noble Lord, Lord Leonard —I think that it will be his maiden speech in an aviation debate—and I hope that it will be a good reply.
The noble Earl, Lord Kimberley, raises the question of what I am sure we all feel is a very important market. I hope that the noble Lord will confirm the actual figure, but if the figure of 3,000 aircraft replacements within the next five, 10 or 15 years, is correct, it shows that this is a very important market. I hope that, despite the enormous cost of becoming a partner with the Airbus Industrie, despite the difficulties of resources and of finding resources among partner countries, and despite the capacity problem that all those within Airbus Industrie now face (with the hoped for production of the A.300B and the A.310, and the commitments that British Aerospace have on the 146) the noble Lord will be able to say that the Airbus Industrie is at least looking at this market, and is perhaps considering some joint project with an American company. I believe that that would be the answer. I do not believe that the British Government would be very keen at this stage to pour more resources into a new project. I do not even know what such a project would cost, and I hope that the noble Lord, Lord Leonard, will be able to tell us.
Discussing the Airbus Industrie gives a chance to learn, even at this stage, how much work is now flowing into British factories from our having joined the Airbus Industrie, or how much work is expected in the next year, or two or three years. Perhaps we can also learn where the orders stand for the A.300B, and where the project of the A.310 stands. Perhaps at the same time we can learn what is the current position regarding the British 1–11 production. How much longer is the production likely to be in operation? Where do we stand now regarding Concorde? Has that project now finally closed?
Perhaps the greatest value that I see in British Aerospace joining Airbus Industrie

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is that it possibly takes us away from a plague which has afflicted the British air industry for 20, 25 or 30 years. It is the plague of the fickleness of politicians and the Treasury for cancelling projects, often at the very last moment before they are due to go into production. We have seen with Concorde where the determination of the French to see the project through was a great example to British politicians and indeed to the British Treasury. Similar remarks could apply to the DC.10, and the 3–11 was another example. I hope that the noble Lord, Lord Leonard, will give us an encouraging reply to the noble Earl's question of whether the Airbus Industrie is examining this very large market.
7.37 p.m.
Lord GISBOROUGH: My Lords, a report says that 105 airliners are being considered for replacement by British Airways at the moment at a total cost of about £1,000 million. When one considers that the useful life of an airliner is reckoned to be about 14 years, one realises that the 707s and VC10s will be replaced, requiring at least a further 35 aircraft for British Airways and probably another 50 for Lufthansa and Air France, and more for the other airlines. According to one estimate by 1986 the number of people taking annual package holidays will have doubled, and, whereas at present about one in 18 people go abroad for the annual holiday, the ratio will change to about 1 in 9. In addition, whereas at the moment British Airways is carrying about 12 million passengers on short-haul passages, the figure will rise to about 27 million within 10 years. Furthermore, it is reported—I do not know whether it is correct—that IATA negotiated fares will be phased out. It has been said that the airlines,
"will be exposed to the icy blast of competition"
where the fares will be dictated by those airlines which are able to operate with the greatest efficiency—
Lord TREFGARNE: My Lords, can the noble Lord say where he obtained that information?
Lord GISBOROUGH: I got the information from one of a number of cuttings
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which I have, and I shall be delighted to show these to the noble Lord later.
OPEC has today put up the price of crude oil by 10 per cent; and fuel costs will be a growing proportion of airline costs in the future. It is estimated that the cost of fuel will have gone up by at least 20 per cent. by 1986. There will be an enormous number of replacements—not only replacement of aircraft which are becoming old, but also replacements to meet the very stringent noise regulations, as well as replacements for reasons of economy. The old technology aircraft which are used at the moment are having their engines up-dated and their bodies lengthened. New engines have been put on some types and are available now. The DC.9 has a new engine. I gather that it is very difficult to put a new engine, a quiet engine, on the 727 because of configuration of design; but, as has been mentioned, the 757 is on offer now, and so is the DC.9 with its new engine. But a very important fact is that fiddling about with old designs and putting new engines on them, and lengthening them, certainly achieves a lot, but the real answer, to get the greater effect, is to design a new airframe with the new engine all in one package. Therefore, there is an enormous opportunity for a new technology aircraft to be designed and built, and for there to be a large demand for it.
I was amused to read some interesting snippets about examples of computerised flight controls, whereby the speed could be held to within 1 knot through adjustments of height rather than throttle control. This alone, it was estimated, would save 2 to 3 per cent. of fuel on a flight to Bahrain from London, and return, and would save £200 on the trip. Also, improved technology would improve the maintenance and the speed of maintenance—even to the extent of such things as the galleys, which at the moment are often sited over electrical parts, so that fruit juice spilt from the galleys corrodes the electric wires, which are very difficult to get at. These sorts of things are all small things, but, obviously, there is scope for an enormous amount of new technology to improve the efficiency. There is a very large market, my Lords, and I believe that the United Kingdom should play a very large part in the production of this new generation of airliners.
7.42 p.m.
Lord LEONARD: My Lords, I should like to thank the noble Earl, Lord Kimberley, who has this evening provided us with a useful opportunity to look a little into the future. As regards the involvement of the United Kingdom in the civil aircraft industry, once again we are grateful to the noble Earl for drawing our attention to this industry. Other noble Lords who have taken part in this debate have posed some very interesting questions for the future. Only last July Lord Kimberley raised in this House the question of the future policy of the industry. At that time British Aerospace 146 had just been launched and important decisions regarding Airbus Industrie were still awaited. Then, almost as soon as the Airbus decisions had been announced in November, the noble Earl drew our attention to the truly international nature of the airline industry and the problems facing airline operators. Now this evening he has posed an important question on the JET type of aircraft. We have heard from the noble Earl, Lord Kimberley, the noble Lords, Lord Trefgarne and Lord Thomas, and the other speakers, some of the options that are open to us. I am not sure that the market for such an aircraft is altogether as clearly defined as has been suggested. However, the Government are of course well aware of the market slot which appears to await a new European civil airliner. Indeed, the noble Earl reminded us of it in his recent Questions for Written Answer.
Before I turn to the Government's attitude on the JET proposals, I should say that at this stage the two questions raised by the noble Earl ought really to be addressed to British Aerospace because a major decision such as the launch of new aircraft with all the industrial and financial consequences that are entailed must first be evaluated at the industrial level. It would not be very practical for the Government to determine their position without first hearing what the manufacturers have to say.
Looking at the Question before us, as I am sure your Lordships are aware, studies have indeed been under way for a number of years regarding aircraft in the 120 to 190 seater range. A number of tentative proposals—we have even heard a few of them this evening—have been looked at in
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some detail by the manufacturers, but in the light of all the work that has been done—I want to make this perfectly clear —no definite conclusions have been reached by British Aerospace or other partners in Airbus Industrie regarding the single-aisle type of aircraft generally referred to as JET. So this is something which must be borne in mind by noble Lords when they are pressing suggestions for this because we have not had them from British Aerospace or any of their partners, and they, we must agree, are the technocrats who should first be consulted on a matter of this nature.
The Earl of KIMBERLEY: My Lords, would the noble Lord give way for one moment? I think I said in my speech that if the noble Lord, Lord Leonard, could not give a satisfactory answer would he please go back to British Aerospace, the Department of Industry and the Treasury. So I am not putting the blame on his shoulders.
Lord LEONARD: My Lords, I see no reason why we should not go back to them—I would accept that—but I have a foreboding that if they were keen I would not have to go back to them; they would come to me or to the Government. But, as I said before, we have not heard from them as yet. Therefore, we must not rush the situation.
The Earl of KINNOULL: My Lords, may I ask the noble Lord a question? Can he say whether the Government would in fact have the funds available if the industry came to the Government? Because this is one of the questions of course that the noble Earl has been addressing to the Government.
Lord LEONARD: I would certainly have to have notice of a question like that, my Lords. I could not just stand here and say that the Government have funds to put into a colossal investment of this nature without its first being decided, not only by the financial end of our Government; the technical side and many other things would have to be taken into consideration. I think we should remember that the airliner market is, I accept, a little uncertain in this sector, as has been shown.

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Many airlines are still reviewing their forward procurement policy. For example, I have no doubt that they wish to examine more closely the effect of discount fares, which we have heard about tonight; and when you talk about discount fares structures on their operations this, I would agree, will have a significant impact in the 1980s and the aircraft that eventually come forward will have to be designed with this in mind, as well as increases in fuel prices and many other factors. So there is also the obvious and important trend towards these matters, especially the fuel prices, and increasingly there are various forms of de-regulation of the market leading to increased competition between airlines. This in turn will call for alterations in the technical approach to single-aisle aircraft.
However, I believe there is one conclusion that can be reached from the investigations that have already been made. It seems clear that in the single-aisle category for aircraft with around 130 to 180 seats, the airlines would be getting an aircraft with an extremely good operating cost. This will require in turn the manufacturers to offer high standards of technology on which we are all agreed, and standards which are better than those of existing aircraft; and, more important, better than those of any competitor.
British Aerospace and their partners in the Airbus Industrie have therefore retained a great interest in the JET type of aircraft. They are presently engaged in the process of refining the previous project work on this sector in the market. They are, I understand, all the time taking account of the latest market intelligence from around the world.
Of course, the continuing market studies will have to take into account the timing of the airlines' requirements for new aircraft and the competition from other manufacturers. As we are all aware, the giants of this industry are on the other side of the Atlantic and, certainly, they will not be slow to enter the market place if the prospects seem right. Indeed, McDonnell-Douglas has already launched the DC.9-80 aircraft which, no doubt, will corner a useful slice of the market for itself from 1980 onwards, particularly among American operators. Boeing, too, have a competitor underway with their Rolls-Royce-engined 757. While this aircraft
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has a seating capacity slightly above the JET range, we must expect it to eat into some of the potential market for JET type aeroplanes. These points are integral features of the market studies which have been referred to and are well appreciated by the manufacturers. I can assure your Lordships that British Aerospace are well aware of the potential that may exist in the smaller civil airline sector of the market from the consultations with other manufacturers and airline operators that have already taken place.
But there are other factors to be taken into account before British Aerospace launch another aircraft project. The aerospace manufacturers around Europe are already heavily committed on existing aircraft and other programmes. This applies equally to British Aerospace. The work on the British Aerospace 146 feeder liner launched last July is now well under way. Now that British Aerospace has entered the Airbus Industrie consortium as a full and equal partner, they have additional work on the new smaller A310 Airbus. The existing A300 Airbus is now selling well with over 20 airline customers involved and orders and options are now approaching the 200 mark.
As your Lordships will no doubt be aware, the work on the existing A300 Airbus is now building up and further increases in production rates have been suggested. With the A310 programme getting under way and other projects—such as Tornado, the new Jetstream 31 and HS125—there will be a considerable load on British Aerospace's resources to deal with the matters already in hand. Obviously, any new proposals to draw further on these resources will and must need very close scrutiny. While many would like to be able to look forward to new smaller additions to the Airbus family, I think we must recognise that some careful family planning is called for in this matter.
For their part, the Government have been keeping in touch with developments as regards the JET project and we accept that, at the present time, the manufacturers must be allowed to continue their outline work on the JET concept, liaising with the airline operators as necessary. The aircraft partners in Airbus Industrie, and British Aerospace in particular, will want

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to establish for themselves that JET is a commercially viable project and that the market wants it at prices it can afford. These are the necessary steps for the manufacturers to take before proposals can be put to Governments. I said, "Governments". I am sure that all those concerned for the future of the aircraft industry in Europe would wish any new project to be subject to such procedures, and it is the intention of the Government that this should be so.
My Lords, with regard to some of the questions I have listened to tonight, in so far as the question about how the balance of payments has been affected by British Airways' purchase of the American aircraft, I have not got the exact figures; but if the noble Earl would like me to write to him I shall give him those figures and we shall be able to see; but I could not produce them at a minute's notice. There are many questions to be answered and there are many technical problems to be solved. All in all, we have had a useful opportunity for airing some of the considerations which surround a possible new aircraft project. Some of the points that have been made are applicable to any aircraft project and not just to JET itself. Some interesting and relevant points have been made and your Lordships may be assured that these matters will be taken into account during the further appraisals by British Aerospace, in association with its partners in Airbus Industrie.
I am not going into specific details on the reference by the noble Lord, Lord Thomas, to productivity. I think it is only fair to say this.
Several noble Lords: He is not here!
Lord LEONARD: The engines that fly the Jumbos across the Atlantic, the Rolls-Royce engines—they were very pleased to get them and they were delivered on time—are very acceptable to the British and the American public. On that note, if I have not answered all the questions, I shall endeavour to do so either by meeting noble Lords and talking to them or by writing to them.

FORESTRY BILL [H.L.]
Returned from the Commons agreed to.