Lords Sitting of 29 April 1980

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

THE COMMISSION FOR RACIAL EQUALITY: MEMBERSHIP
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 on what grounds Mr. Pranlal Sheth, Mr. Bashir Maan, Mr. Courtney Laws, Mrs. Ann Jehan and Miss Gwen Rickus have not been reappointed to the Commission for Racial Equality.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, it is usual to make changes on a regular basis in the membership of statutory bodies such as the Commission for Racial Equality. My right honourable friend the Home Secretary considers that the commission's work should be guided by members with experience in many walks of life, and since there had been only two changes in the composition of the commission since it was first appointed in 1977, he decided that the time had come to introduce more new members.
We regret that this decision has been interpreted by some people as a criticism of the contribution made by the retiring members. The Government are grateful to them for the time and effort they have given to the work of the commission in the last three years. My right honourable friend hopes to be in a position to announce the names of new members of the commission in the near future.
Lord BROCKWAY: My Lords, is the Minister aware of the deep concern of many of us who pioneered the legislation against racial discrimination in this country at the scepticism which the ethnic
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communities now feel about the commission? Will not this be deepened by the dismissal of four African and Asian members and a white supporter of those members? And is not the issue really whether the commission should investigate immigration procedures in this country?
Lord BELSTEAD: My Lords, I am surprised that the noble Lord should talk about scepticism now as regards the commission. If I may say so, that reflects on members of the commission who have accepted the Secretary of State's invitation to serve for a further term. I am sure the noble Lord will not mind if I remind him that the chairman of the commission has made it clear publicly that, since it was established, the commission as a whole has been critical of Government policies—those of the previous as well as of the present Government—and that the commission will remain independent in the day-to-day conduct of its business. As for the second part of the noble Lord's supplementary question, about investigating immigration procedures, the Home Office were advised that the commission did not have power to undertake such an investigation. This question is now before the courts in friendly proceedings to establish the extent of the commission's powers.
Lord AVEBURY: My Lords, is the noble Lord aware that, while it is very welcome to hear him say that the members of the Commission for Racial Equality are free to make criticism of Government policy, it just so happens that the five commissioners who have been sacked were those who favoured a more active role and were most strongly critical of Government policy? Is the Minister further aware that these particular five commissioners were the ones who voted for the commission to undertake an investigation of immigration policies, whereas the other commissioners who have remained in office were those who voted for it not to undertake such an investigation? It therefore looks to many of us outside that this was the approximate reason for their sacking and that the general reason was that they favoured a more active role for the commission.
Lord BELSTEAD: My Lords, I must put it to the noble Lord that the chairman of the commission has himself categorically

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denied what the noble Lord just said, and has made it clear that the commission has taken its decisions and its line in the past as a whole, and I repeat that the commission will remain independent in the day-to-day conduct of its business.
Lord FERRIER: My Lords, does my noble friend agree that the noble Lord opposite is correct in using the word "dismissal" as applying to these officers, particularly in the light of the wise reply which my noble friend gave to the original Question?
Lord BELSTEAD: I am grateful to my noble friend for that comment, my Lords. The appointment of those members was not renewed and the reason why their appointment was not renewed was given in my original Answer.
Lord ELWYN-JONES: My Lords, will the national ethnic minority organisations be consulted before the successors to those who are no longer, to use a neutral phrase, members of the commission are replaced?
Lord BELSTEAD: My Lords, as the noble and learned Lord knows, the members of the commission are appointed in an individual capacity and not as representatives, but I give him an assurance that of course my right honourable friend is anxious to ensure that the commission has members drawn from the main ethnic minority groups.
Lord BROCKWAY: My Lords, does the Minister appreciate that any scepticism on the part of the non-white communities in this country is due not to the membership of the commission but to its limitations? Announcements are to be made today and I have seen only the short list of those who are to be nominated to the commission. Would the noble Lord confirm that they are all Conservative members of councils or blacks who have important positions utterly unrelated to the ethnic community as a whole? Will he bear in mind that Mr. Lane, the chairman of the commission, after paying warm tribute to those who have been removed, said, as reported in The Times on 4th April:
"The first essential is stronger political leadership, with the Government putting into practice their commitment to promoting equality of opportunity"?
Lord BELSTEAD: My Lords, I am a little surprised that the noble Lord would reach conclusions about a statement which my right honourable friend the Home Secretary has not made, and I think that the noble Lord would wish to wait for anything that my right honourable friend might say on this matter.

MINIMUM LENDING RATES
2.43 p.m.
Lord BESWICK: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government, in view of the damaging effect upon national economies generally of the increase by individual nations of minimum lending rates, what efforts they have made to secure international agreement to restrain competition in this matter.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, the increase in interest rates throughout the industrial world reflects the upsurge of inflation and the collective determination of Governments to tackle it by tight monetary policies. High interest rates will continue to be necessary so long as inflationary pressures remain.
Lord BESWICK: My Lords, I thank the noble Lord for that Answer. Nevertheless, is it not true that in both Japan and West Germany last month it was declared that the increase in interest rates was due to the staggering increase of the prime rate in New York? Would not the noble Lord agree that these grotesque interest rates penalise productive enterprises? May I further ask the noble Lord whether it is not worth while at any rate trying to get some international agreement, pooling international effort, to secure a more rational mechanism for controlling the rate of money growth?
Lord COCKFIELD: No, my Lords; the increase in interest rates in the two cases that the noble Lord mentioned was designed to prevent inflation being imported into those countries. Had that action

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not been taken, it would have been necessary to increase interest rates still further to hold down the resulting rate of inflation. Interest rates will come down only as and when we can reduce the rate of inflation. We recognise the burden that high interest rates imposes upon industry, but the results of allowing inflation to continue would be very much worse.
Lord KALDOR: My Lords, does not the noble Lord agree that interest costs of traders and manufacturers are passed on in higher prices in very much the same way as labour costs are, and to that extent they are inflationary? In view of that situation, does he not agree that our fight against inflation would be far more effective if this country returned to the system of quantitative credit controls which existed prior to the introduction of competition and credit control in 1971, particularly in the light of recent changes in that direction by the Federal Reserve system?
Lord COCKFIELD: No, my Lords; I would not agree that that is the best way to tackle this problem. In the very short run an increase in interest rates does tend to be passed on in prices, but the ultimate effect of such an increase is to reduce the rate of inflation, not to increase it.
Lord WIGG: My Lords, since in his reply the Minister links the MLR with inflation, and in view of the fact that inflation in this country is certain to rise in the coming months, can we look forward with confidence to an increase in the MLR?
Lord COCKFIELD: My Lords, the noble Lord's argument is entirely incorrect. The important factor is to control the level of the money supply. The rate of interest is an important weapon in this regard. There are heartening signs that the level of the money supply is coming down within the target range set by the Government.
Lord BALOGH: My Lords, has not the noble Lord seen the newspaper reports about his colleague's statement the other day in which he said that there is no mechanical relationship between the two factors, and that therefore one cannot hope to get to the desired point in a period
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of one to four years? Fortunately, we shall have an election before then.
Lord COCKFIELD: My Lords, no one has ever pretended that there is a mechanical relationship between the two, nor has it ever been maintained that the time lag is necessarily a fixed period of two years. However, all the evidence is absolutely clear. It is that accelerating inflation is accompanied by an increase in the total money supply; and if the money supply is brought back under control it will ultimately result in a reduction in the rate of inflation. The sooner these facts are recognised, in particular by people engaged in wage bargaining, the quicker will these measures have their effect in reducing the rate of inflation.
Lord BALOGH: My Lords, the unions' militancy is increased, not decreased, by the present policy. I think that the noble Minister might have benefited had he learnt some logic in his university days. Nevertheless—
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, it would be helpful if the noble Lord would put his observations in an interrogatory form.
Lord BROOKS of TREMORFA: My Lords, the noble Lord has said that one of the reasons for having high interest rates is to contain inflation. As a layman, and in a pure spirit of inquiry, I wonder whether he can tell us why the higher interest rates go, the higher and faster inflation seems to increase.
Lord COCKFIELD: No, my Lords; it does not go that way round at all. The effect of high interest rates is to curb the growth in the money supply and ultimately to bring down rates of inflation.
Lord MACKIE of BENSHIE: My Lords, the noble Minister is not pretending that there is no connection between the competition for money for balance of payments reasons and high interest rates. Surely many countries are forced to put up their interest rates because other countries have done so, in order to compete for the money moving about the world.
Lord COCKFIELD: No, my Lords, I have not said that there is never any connection between the desire on the part of some countries to strengthen their reserves and an increase in the rate of interest. This was in fact a common phenomenon under the old Bretton Woods system, when there were fixed exchange rates and where the rate of interest was a major weapon in ensuring that those fixed parities were maintained. But the Bretton Woods system broke down in the early 1970s, and since then rates of interest have been used primarily—not exclusively, but primarily—to control the rate of inflation, rather than to influence the exchange rate of any given currency.
Lord KALDOR: My Lords, does the noble Lord agree that movements in the money supply depend on the preferences of the public, to a large extent, between holding Government stock and holding bank deposits; that a period of falling interest rates is far more likely to induce institutional savers, particularly, to convert bank deposits into Government stock than a period of rising interest rates; and that therefore it would have a beneficial effect on the money supply and, if the noble Lord is to be believed, for that reason on inflation?
Lord COCKFIELD: My Lords, once people are convinced that the rate of inflation is likely to fall, interest rates also will fall. It is the expectation of a fall in rates of interest which makes people eager to subscribe for gilt-edged securities. We therefore look forward to the occurrence of this happy state of affairs in the future as a result of the policy followed by the Government.
Lord HALE: My Lords, the noble Lord specifically mentioned Government securities. Is he aware, first of all, that every issue of Government securities recently (or, indeed, for quite a long time) has been allocated in such a way that the modest saver has not been able to get any participation in it—and that is largely so—and, secondly, that the modest saver who has got some has been out of pocket within about six months because practically none of the Government securities has maintained its value for more than a few months at the most, and many of them have diminished so substantially as to
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nearly ruin those of us who have bought Government securities?
Lord COCKFIELD: My Lords, I am glad to hear that the noble Lord has a large and unsatisfied appetite for gilt-edged securities—a point which seems to be somewhat in conflict with that made earlier by his noble friend Lord Kaldor.

NATIONAL DEBT INTEREST AND OVERSEAS STOCKHOLDERS
2.53 p.m.
Lord BESWICK: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what proportion of the £8,350 million interest payable on the National Debt in the year 1979–80 went to overseas stockholders.
Lord COCKFIELD: My Lords, this information is not available as the amount of interest paid to overseas stockholders is not separately recorded. However, in the year ended 31st March 1979 the percentage of National Debt held by overseas holders, including international organisations and central monetary institutions, was estimated at rather more than 11 per cent.
Lord BESWICK: My Lords, while thanking the noble Lord for the words he offers in answer to this Question, may I ask him whether it is not something over which we ought to brood that the whole of the public sector borrowing this year—the whole of it—will be required to pay interest on money already borrowed? Is it not also a fact, if one takes percentages and works on them, that something like half the total deficit in foreign payments is accounted for by the interest paid to foreign stockholders?
Lord COCKFIELD: My Lords, I am aware of both these points but, so far as the first point made by the noble Lord is concerned—namely, that the payments of interest on the National Debt last year will be equal to the public sector borrowing requirement—I have to remind him that during the period of office of the Labour Government the total National Debt

1135
more than doubled, and the amount of interest paid on the National Debt increased nearly threefold. That is a remarkable achievement, but not one to be particularly proud of.
Lord BESWICK: My Lords, is the noble Lord aware that I am not interested in scoring party points, but that I am trying to put before the House some facts which I think ought to cause us all to think very deeply? Is it not also a fact that the method of curbing money supply by interest rates is not showing results? I am simply suggesting to the noble Lord (and would he not take it in that spirit?) that we might have another look at this.
Lord COCKFIELD: My Lords, I am well aware of the fact that the noble Lord was not endeavouring to score party points, and that is why I drew his attention to the facts as they exist. The other point I would make to him, which is relevant in this connection, is that the total of interest, profits and dividends flowing into the United Kingdom is greater than the amount flowing out. On the international balance, therefore, we are in credit, and not in deficit.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that it is not scoring a party point to say that the increase in the National Debt over the five years to which he refers was higher than the increase over the previous 300 years? It is not trying to score a party point to say that we ought to learn from that lesson, because unless we reduce public spending then we are not able to reduce public indebtedness, and it is only by reducing public indebtedness that we can reduce the interest that has to be paid upon it. That is a fact which ought to be brooded upon, to use the word of the noble Lord opposite.
Lord COCKFIELD: My Lords, these are very valid points made by my noble friend Lord Harmar-Nicholls. The reason why we place such emphasis on the need to reduce the public sector borrowing requirement is because we are so fully aware of the points made both by the noble Lord, Lord Beswick, and by my noble friend who has just spoken.

DOG LICENSING
2.57 p.m.
The Earl of LISTOWEL: 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 when they propose to amend the dog licensing system in Northern Ireland and when they hope to extend the new system to the rest of the United Kingdom.
Lord MOWBRAY and STOURTON: My Lords, amendment of the dog licensing system in Northern Ireland is the subject of an Order in Council at present being drafted. The Government are currently considering the question of dog licensing in the rest of the United Kingdom, along with the rest of the recommendations of the interdepartmental working party on dogs.
The Earl of LISTOWEL: My Lords, I thank the noble Lord for his reply, and particularly for the statement that an Order in Council relating to Northern Ireland is already in draft, but may I ask him why the proposals for Northern Ireland are not extended to England, Scotland and Wales, because the problem of sheep worrying is exactly the same in all the rural areas of the United Kingdom? May I further ask him why the Government are still considering a report which was made in favour of the recommendation of a dog warden system for the United Kingdom by a Government committee four years ago?
Lord MOWBRAY and STOURTON: My Lords, I accept what the noble Earl says to a certain extent. Actually, it is not the same in Great Britain as in Northern Ireland at the moment. For instance, in the case of stock being worried by dogs, at the moment farmers have no remedy in Northern Ireland. This is part of a package which was in the pipeline when this Government came to office. We have allowed what you might call the continuation of the pipeline, and let it see the light of day. The situation is not the same in Northern Ireland as it is in England or Wales at the moment and this is bringing it into line. We are

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continuing looking at some other amendments, like the licensing, as well.
On the point as to why we do not license in Britain, we are still considering the matter. It was August 1976 that the Government received this report. After some two years the late Government did not come to any conclusions about it. They announced that they would agree in principle that the problem of dogs should be handed over to local authorities rather than the police, but that was the only conclusion with which they said they were in agreement in principle. We have been in office for less than a year, and we are still working on the problem.
Lord WIGG: My Lords, as to the dog licensing system in Northern Ireland, would the noble Lord be good enough to talk to his right honourable friend and urge him to introduce dog race totalisators into Northern Ireland, which is the only country in the world in which dog racing takes place where it is not lawful to have a totalisator? It will require a simple amendment to the 1957 Northern Ireland Betting Act; and, although the Government have promised to do something, as usual nothing has been done.
Lord MOWBRAY and STOURTON: My Lords, it is an interesting proposition that the noble Lord has put to me, but my brief does not cover it.
Lord AVEBURY: My Lords, although the Government have been in office for only one year, does not the noble Lord the Minister recall taking part in a debate on the working party over two years ago in which he expressed some opinions, so that the Government did not come into office without having considered the problem? Why, therefore, were they unable to introduce legislation based on the sensible remarks that the noble Lord made when in Opposition?
Lord MOWBRAY and STOURTON: My Lords, I am what you might call the very amoeba of the Government, the one-celled animal. When we were in Opposition I was able to give thought to these matters. My right honourable friends and my noble friends who were in the Shadow Cabinet (and are now in the Cabinet) were concentrating on bigger
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matters than dogs. The subject of dogs is a very dangerous one to touch on. You very seldom please everyone and you get bitten at the end of the day.
Lord DE CLIFFORD: My Lords, would the noble Lord not agree that when he comes down to adjusting the law on dogs, as there are 27 to 30 Acts which affect them it would be better if he took some time to adjust them all and produced an answer which was enforceable, as opposed to the situation at the present time when none of the operating Acts is being enforced adequately?
Lord MOWBRAY and STOURTON: My Lords, I am grateful to my noble friend, whose interest in dogs is well known. When we get the answer, we want to get it right. It may interest noble Lords to know that this proposed legislation for Northern Ireland, which will be published in the form of a consultative document within the next eight weeks, will include such matters as compulsion for dogs on the highways to be kept on leads and so on. These matters are being considered carefully and we do not want a half-cocked Act when, with due consideration, we can get the proper thing.
Lord MACKIE of BENSHIE: My Lords, can the noble Lord say what will be the cost of the dog licence, taking into account inflation which his important friends are fighting so hard to beat?
Lord MOWBRAY and STOURTON: My Lords, it depends on the rate one considers and the starting date. The Northern Ireland proposed licence fee is £4—which we hope to have in effect by this time next year.
Lord IRVING of DARTFORD: My Lords, whatever the differences may be between Northern Ireland and the rest of the United Kingdom, will the noble Lord bear in mind that a dog warden scheme has the support of local authorities, police, farmers, Members in both Houses of Parliament, and support from everyone who has looked at this problem? As the noble Earl, Lord Listowel, has said, the report of the noble Lord, Lord Houghton, indicated that the problem of stray dogs is widespread in the whole of the United Kingdom. Will he seek early implementation of the scheme for the whole of the United Kingdom?
Lord MOWBRAY and STOURTON: My Lords, I can only repeat that the Government are looking at it. I cannot promise early implementation.
The Earl of SWINTON: My Lords, in view of what my noble friend has said about the differences between Northern Ireland and this country, may I ask under what category somebody falls who owns an Irish setter in this country?
Lord MOWBRAY and STOURTON: My Lords, it will depend upon the place of residence. If in Northern Ireland, it is there; and if in the rest of Great Britain, it will be as it is.

EEC: LUXEMBOURG COUNCIL MEETING
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m., my noble friend the Foreign Secretary will be repeating a Statement being made in another place on the European Council in Luxembourg.

IMPORT OF LIVE FISH (ENGLAND AND WALES) BILL
The Earl of KINNOULL: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(The Earl of Kinnoull.)
On Question, Motion agreed to.

INDUSTRY BILL
3.6 p.m.
Viscount LONG: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.—(Viscount Long.)
On Question, Motion agreed to.
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House in Committee accordingly.
[The Lord ABERDARE in the Chair.]
Clause 9 [Overseas aid]:
On Question, Whether Clause 9 shall stand part of the Bill?
Lord HATCH of LUSBY: I beg to move that Clause 9 be omitted from this Bill. It is a cause of some surprise to me that the Bill has reached this stage without, apparently, any comment as to the content of this clause. Indeed, the only explanation that I can think of is that, as it appears to have changed its number several times between the two Houses, it has passed the notice of those who have been dealing with it. I should like to put it to the Government that the normal deduction from reading this clause is that they have overlooked its content and would like it now to be removed. I say this in no party spirit. I put this suggestion to them on the testimony of their own leading members of the Cabinet. I want to quote first from the noble Lord the Foreign Secretary, who, in this House, on 20th February (at column 748 of the Official Report) had this to say:
"We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives".
Many of us would agree with that. Then he went on to say in a subsequent paragraph in his Statement on overseas aid:
"The greater part of our bilateral aid is tied to procurement in the United Kingdom and so provides valuable orders for British firms. I might add that our contributions to multilateral institutions also enable British firms to compete for very substantial business financed by them all over the world. We are examining means by which they might get a greater share of this business".
I would suggest that this is one of the means.
When the Labour Government introduced the Industry Act they deliberately included Clause 9, to which I am referring and which allows the Scottish Development Agency, the Welsh Development Agency and the National Enterprise Board to provide technical assistance overseas. Why? The simple reason is that aid of this kind provides employment in this

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country. I want to make this quite clear, and I hope that the Government spokesman will support this point. There is a considerable misunderstanding in this country that aid is charity and only charity. Of course, it has a charitable aspect to it, and we hope it always will have, because we believe that the British people are charitable people. But it has something more than that. It also has a very important investment element, and it is the investment element that I am stressing this afternoon.
At a rough estimate it has been calculated that the aid which we now supply provides approximately 40,000 jobs in this country. I hope again that the Government will support me in emphasising this aspect of overseas aid. It is for that reason—as the noble Lord, Lord Trefgarne, will remember—that I so bitterly regretted the Government's action in destroying the development education work that was being done by the Overseas Development Ministry.
Why then should we suggest in an Industry Bill that these three bodies should have the power to offer technical assistance to overseas countries? Both the Scottish Development Agency and the Welsh Development Agency have developed and are developing expertise in the building of industrial estates. Surely this expertise can be of use to other countries which in their turn can provide orders for the industry of our own country. We have seen certain of the nationalised industries participate in this kind of work. Developing countries need railways, power stations, coal and oil. All these commodities, these installations, are nationalised in this country and most European countries. This is one way in which the European countries are able, through their public sector, to assist in the development of developing countries.
But again I stress it is not just as charity but also because these activities provide the orders for the industries of the donor countries, not just for the nationalised industries but also for many private firms. This is a joint enterprise and this was the purpose of Clause 9 when it was introduced into the Industry Act. Even the chairmen of the nationalised industries in this country have set up their own committee in order to further this work,
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and further it again because they know that this is profitable for them, for the nationalised industries, and also because in its turn in its spin-off it leads to commercial orders for the private sector of this country. If the Scottish Development Agency and the Welsh Development Agency can assist in this way, what of the National Enterprise Board?
Yesterday we had several mentions of the INMOS organisation. I would give this again as an example. INMOS gives us in this country our first toehold into the new technology of electronics. It could be of immense value in the development of the industrial content of the developing world. In doing so, the National Enterprise Board can widen its scope and provide something which is not simply parochial to the British Isles but which enables us to have an influence in the building of industry overseas and also an influence in the development of British commerce and British industry as a spin-off.
I hope that the Government will accept the points that I have made as a matter of national interest, not of party interest. I hope that in doing so they will note just what we are talking about. Clause 9 deals with Section 4 of the Industry Act 1975, with Section 18 of the Scottish Development Agency Act 1975 and with Section 3 of the Welsh Development Act 1975.
I want to refer the Committee to the relevant parts of those sections because they coincide. Section 4 of the Industry Act 1975 has this to say:
"… furnish technical assistance in a country or territory outside the United Kingdom against reimbursement to them of the cost of furnishing that assistance".
Section 18 of the Scottish Development Agency Act 1975 has this to say:
"… furnish technical assistance in a country or territory outside the United Kingdom against reimbursement to them of the cost of furnishing that assistance".
Section 3 of the Welsh Development Agency Act 1975 repeats this:
"… furnish technical assistance in a country or territory outside the United Kingdom against reimbursement to them of the cost of furnishing that assistance".
I suggest that what we are talking about is the opportunity that these three Acts offer to provide technical assistance from

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the National Enterprise Board, from the two agencies, for payment. In other words, it cost us nothing, but it was an opportunity to invest in developing countries in a way which would enable the industry of this country to have wider and wider opportunities of offering its goods in the developing world. That is the reason that these sections were put into the three Acts that we are talking about. I cannot for the life of me understand why the Government should now wish to remove the power which these three agencies have to further the interest of British industry and to withdraw their assistance to the countries of the developing world.
3.20 p.m.
Lord RITCHIE-CALDER: I should like to support my noble friend in moving this amendment and in protest against this whole attitude of "stop the world and let us get off". This is what it is all about. We are contracting out of the real world. The clauses involved are enabling clauses; they enable the Scottish Development Agency, for example, to do the kind of things that some of us in Scotland want to promote. Again, I would repeat what was said. This is not charity: it is constructive development intended to promote Scottish interests—we are talking about the Scottish Development Agency—and also, as he pointed out very clearly, whatever the development agency or the National Enterprise Board or anybody else proposed to do, this meant that we were in fact consciously creating work for private enterprise in Scotland. Some of us have been very deeply concerned in this, because we have tried and have quite substantially succeeded in promoting the development which I want to see in the developing countries, done not as charity but as positive investment and encouragement to the industries involved.
How on earth can we be so shortsighted as to exclude the right to do these things when we have got surplus insights and we know what we are doing in terms of development? We would like to see that kind of insight transferred to developing countries so that they will not have to go through all the development problems that we have been through. Above all, it is the means by which private
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industry in all kinds of small companies and so on can be encouraged to go out into the developing world and produce not only the results I want to see produced, but worthwhile recompense in Scotland, or in Wales, or in national encouragement.
Lord HANKEY: Having at one time been a member of the Development Aid Committee of the OECD, I should like to say that it was apparent even about 15 years ago that the transfer of capital aid to overseas countries in the Third World was very seldom effective unless technical assistance went with it to make sure that it was intelligently and properly used. Anyhow, the transfer of know-how from the developed to the developing world is terribly important for their well being and their progress, on which I think our own prosperity is going to depend. When the Government reply, I hope they will explain to us how the transfer of technical assistance is going to continue. Obviously, it does not have to be done by the National Enterprise Board, but one would like to know that the process of giving technical aid will in fact not suffer.
Lord ROCHESTER: I am afraid that I cannot really get very excited about this clause. As I understand it, the Government now wish to remove from the National Enterprise Board the power to provide technical assistance to countries overseas and leave it to the Overseas Development Office to deal with the matter. When the power was given to the National Enterprise Board under the 1975 Industry Act, I think it was acknowledged by the spokesman for the Labour Government at the time that this power was in the nature of an experiment. I think also I am right in saying that it has not yet been used. I can therefore understand the Government's view that the power should be concentrated in the hands of a single agency and not of the NEB. On the other hand, just because it has proved to be of such little significance in practice and in order to minimise the area of disagreement between the political parties as to the powers of the board, I personally would not mind very much if the National Enterprise Board was left with this particular power.
What I should like to do is to take this opportunity to say that, not just for humanitarian reasons but for sound com-

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mercial ones, it seems to me greatly to be regretted that even in our present economic plight we are not providing more aid of this kind. The financing of fees for students from overseas in regard to technical subjects is perhaps an example of what could be done under this heading in our own long-term interest.
In comparison, anyway, with that major point, the question of what agency is actually to deal with this matter of providing technical assistance seems to me to be a relatively trivial one, and for my part I would counsel that this particular point is not pressed further now.
3.27 p.m.
Viscount LONG: I am grateful to the noble Lord, Lord Hatch, for raising this amendment but, as all of us know, he is dedicated to overseas trade and is a great expert on it, and at this moment I think we really must isolate overseas trade and the position of the NEB. When the subject first arose during the passing of the Industry Act 1975, we took an open-minded view of the possibility of its being incorporated in the activities of the NEB and the agencies. During the passage of the Bill we on this side of the Committee did not from the Conservative Benches oppose the Government clause for the very purpose that we are now discussing, but we are now taking into account the experience of the past four years and more of the NEB and the agencies. Since coming into office, we have been assessing the function of the NEB and the agencies as we think it should be carried out. In our view the power is no longer compatible with the role we envisaged for them.
I would also remind your Lordships that the Labour Government's spokesman, the noble Lord, Lord Melchett, indicated that the power was something of an experimental one. He also said that the provision of technical assistance overseas would be a very minor part of their activities. He was not exaggerating: it was not merely a minor part of their activities, but has not been part of those activities at all. We have considered the possibility of the NEB and the agencies undertaking such work overseas. They have not done that, and it seems to us that it would be quite wrong for them to do so. Had the demand arisen, we might have been considering a quite different proposition today.
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While the provision was made in order to see what might happen, we have now been able to prove that the demand for those services from the NEB and the agencies during the past four years and more is not there. There is no point in trying to keep things in the Bill on the off-chance that they may come in handy some day. That is no way to deal with legislation. We believe that it is much more important that the efforts of the NEB and the agencies should be directed and concentrated towards the proper targets, namely, to encourage private investment in selected parts of industry in England, Scotland and Wales.
Noble Lords will know that overseas aid is a matter for the Overseas Development Administration. It has the prime responsibility for work of that kind. It is therefore a job for that office to carry out and not for the NEB and the agencies. With all the good will in the world, it is right that we should try to organise ourselves in Government in such a way as to have specialist departments looking after specialist interests rather than spreading everything around and hoping that someone may pick up a bit of something here or there. It is with a view to encouraging that kind of specialisation and expertise within government that we believe this should remain a matter for the Overseas Development Administration and not for the agencies.
If I may come back to one or two points that arose when the noble Lord, Lord Hankey, asked questions in regard to the National Enterprise Board providing technology abroad, it has never been that way; it has always been that the ODA supplies that, so it does not arise in this case.
The noble Lord, Lord Hatch of Lusby, I thought was overlapping the NEB and overseas development into one. What we are trying to establish here is that, with other agencies, the NEB concentrates all its efforts in the United Kingdom, thereby providing the work, the employment and the expertise so that those people abroad who want to buy from us will get the best product and we shall get our unemployment down in that way.
I think it was also the noble Lord, Lord Hatch, who said that the overseas students or the overseas "manpower"

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visited this country. However, we must concentrate all of our efforts in the United Kingdom on the work here, and not spread them. I hope that the noble Lord will not divide the Committee on this amendment, because it is surely more important now to concentrate all of our efforts on industry in the United Kingdom.
3.32 p.m.
Lord LEE of NEWTON: I thought that the noble Viscount, Lord Long, gave us a very strange interpretation of what this Bill is about in saying how much he wanted the NEB to concentrate on work in this country, at the same time as emasculating the NEB, robbing it of the main part of its functions. To me the two things do not add up.
I thought my noble friend Lord Hatch covered the question in great detail and with great clarity. I happen to have had the job of closing down the Colonial Office in 1967. One went round the remains of the Dependencies having a look at the position in which they were going to find themselves. Many of them went independent; many took associated status, and so on. But it would be a great error to believe that, because it happened in the political sphere, they had become suddenly economically independent, or that they were in a position in the world, where we are seeing a great movement in industrial progress—the scientific revolution coming to bear—where they would hold their own in the rather elementary industry that they are trying to develop, without assistance in some of the Western techniques.
The noble Viscount is telling us that this is a power that has never been used. If the noble Viscount has a spare two or three years and would care to look at the statutes and find all those that have never been used, he would know that there are many thousands there yet. That is not a reason for refusing to allow this part of the Bill to be maintained. We are not asking for anything new to be put in; we are asking that it be maintained.
My noble friend mentioned the fact that this is not a charity. I do not know whether one can assess how much return one gets from these things. But I am quite certain of this, that in a world that is
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becoming extremely unsafe, one of the factors that will bear against safety will be if half of the world is living in poverty. I believe that there is no other nation in this world with the same knowledge of the developing nations as that possessed in this country. I doubt whether there is any other nation in the world that is so trusted by the developing nations. Therefore, in that unique position that we hold, I believe it would be very wrong to give the impression that in the Bill in which "Mr. Gradgrind" is at work in which we are trying to save the coppers, in which we are denuding agencies in Wales and in Scotland, areas of high unemployment, of the power to do much in those areas, we are saying we want the NEB and the agencies to concentrate on British industry. The fact is that we do not want anything of the sort, or we would not be denuding them of those powers now.
At a critical moment in world history, at a time when the technological gap between the West and the developing world is widening every day, it is not common sense to withdraw from people with whom we have lived, who are part of the British Commonwealth. It is not logical to say that we are very sorry about all this, but we are in a bit of a jam ourselves, and that they want to develop their industries and understand the new technologies; we cannot allow INMOS, for instance, to do it for them.
I do not want to delay the Committee for much longer. I thought that my noble friend covered the question admirably. However, I hope that the Government will think again on this matter. If they intend to try to keep this in at Committee stage, I hope that they will look at it again before we reach the Report stage. It has been deemed to be a minor issue. I do not believe that for a second. The attitude of the developing world may well be hardened by this kind of thing, as they will see it as robbing them of the opportunity to gain new techniques, to develop their new industries, and keeping them producing sugar and so on. I hope that the Government will think again. I think that this is a very important amendment, and I ask my noble friends to join me in the Lobby.
Lord TREFGARNE: I understand it would be convenient if we were to take the Statement now. Therefore, I beg to move that the House do now resume.

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Moved accordingly and, on Question, Motion agreed to: House resumed.

EEC: LUXEMBOURG COUNCIL MEETING
3.28 p.m.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, with permission, I will make a Statement on the meeting of the European Council in Luxembourg on 27th and 28th April.
This meeting took place against the background of a sombre international situation of which all of us in Luxembourg were acutely conscious. The first part of our discussion was therefore directed to the problems of Afghanistan and Iran. On both of these we were in total agreement. We reaffirmed the absolute necessity for every Government in the world, whatever its political attitude, to respect the Charter of the United Nations and the principles of international law. This requires in Afghanistan that Soviet forces should withdraw, and in Iran that the American hostages should be released, without further Belay. So long as these two illegal situations remain, the world will continue to live in the shadow of potentially grave developments.
I am sure it was right, therefore, for the European Council to repeat the earlier suggestion which the Nine had made for a political solution to the problem of Afghanistan, which would permit that country to resume its traditional neutrality and non-alignment. Equally it was right for the Council to reaffirm the decisions on Iran taken last week by the nine Foreign Ministers, while at the same time assuring the Secretary General of the United Nations of our full support for his efforts to find a political solution to that problem.
The second part of our meeting involved discussion of Britain's net contribution to the Community budget and a number of other Community questions which had been associated with it. For this reason my right honourable friend the Minister of Agriculture attended a meeting of the Council of Agriculture Ministers on Sunday. That meeting continued their previous discussions on the proposed agricultural prices for 1980–81 and other
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agricultural questions. They reported to us that, with some reservations, the other eight Member States were ready to approve an average increase in prices of about 5 per cent, including 4 per cent, on milk and sugar, an increase in the co-responsibility levy for milk and a range of other measures. There were also fresh proposals on a common organisation for sheepmeat which the others were ready to approve.
On our budget problem there was broad agreement on the methods by which the Community would both reduce our contribution and increase the benefits to us from Community expenditure. We were able to make considerable progress on amounts but less on the duration of the arrangements. A number of proposals were made including one which would have reduced our net contribution to £325 million, but for 1980 only. We were not able to agree on later years. In spite of intensive efforts to reach a satisfactory compromise it proved impossible in the time at our disposal to find an acceptable combination of both amount and duration.
We then discussed the other agricultural matters which our partners wanted to settle at the same time. These discussions revealed a number of difficulties for Britain. The Prime Minister made it clear that the proposals on Common Agricultural Policy prices would have budgetary and other consequences for us which we did not feel justified in accepting. Those on sheepmeat contained features which would have been seriously disadvantageous and which we would not accept.
We also reviewed the progress of discussions on a common fisheries policy. We all want to continue to make progress, but it is clear that more work needs to be done on this subject. The Prime Minister told her colleagues that to be acceptable to us any solution must safeguard the vital interests of our fishing industry.
We discussed the energy situation in the Community and the problems caused by the tenfold rise in international oil prices over the last eight years. We invited the Energy Council, first, to examine what new measures may be necessary on oil supplies and, second, to review the current policies of Member States on the replacement of oil by other fuels, on the development of nuclear power and on

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conservation. The Council intends to revert to these matters at its next meeting in Venice.
I regret that it proved impossible to make more progress on our internal problems. But, since our partners have brought these several issues together, I believe it is understood that they cannot be dealt with unless at the same time the budget problem is solved.
Meanwhile the President of the Council intends to be active in the next few weeks in seeking a satisfactory outcome. He will receive our full co-operation. We both believe that given goodwill such an outcome can be achieved.
3.43 p.m.
Lord GORONWY-ROBERTS: My Lords, we thank the noble Lord for making that Statement. On behalf of Her Majesty's Opposition, may I ask him whether he is aware that this is really a Statement on three distinct sets of discussions by the Council? First, there is the question of political co-operation, and may I ask him whether he is aware that we welcome the emphasis which the Council have placed on the absolute necessity for every Government in the world, whatever its political attitudes, to respect the Charter of the United Nations and to act in consonance with it, particularly in relation to Afghanistan and Iran?
We welcome equally the search for a political solution to the problem of Afghanistan, with a view to restoring the traditional neutrality of that country; and also the emphasis in the Statement on support for the attempt by the Secretary-General of the United Nations to find a political solution to the problem of the hostages in Iran. Is the noble Lord aware that we are glad that the Council have made that absolutely clear, while reaffirming their decisions in regard to Iran of last week?
On the budgetary and agricultural matters which were discussed, may I say that my right honourable friend the Leader of the Opposition will, of course, be putting forward a number of points. Therefore, will the House allow me to confine myself to just one question on the budgetary section of this Statement? May I ask the Foreign Secretary whether
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he can help us a little further in relation to the suggested abatement of the British contribution of £800 million in the first year? Can he say whether there were any suggestions which he can pass on to us about the amounts that would be involved in the second, third and, possibly, fourth years?
Is he aware that any critique of the proposal that there should be a reduction of £800 million would necessarily need to be related to the amounts that came out of the formula at the end of the second, third and, possibly, fourth years? The £800 million looks quite good standing on its own, but it might not look at all good in relation to what is proposed for subsequent years.
May I put two questions about the third category of matters which were discussed. First, is the noble Lord aware that we are pleased that the Government have maintained an attitude of caution in regard to the discussion on our fishing industry, and have once more made it clear that no solution to the fishing dispute, if I may call it that, which did not serve the vital interests of the British fishing industry would be acceptable to us?
Secondly, in regard to the energy situation, is the noble Lord aware that we are glad that the Energy Council will proceed, with, I assume, a sense of urgency between now and the Venice meeting, to examine and bring forward practical proposals covering the question of alternative oil supplies, the replacement of oil by other fuels, the development of nuclear power and, equally important, the question of conservation?
Finally, can the noble Lord assure the House that, if there is a special meeting related to questions of political cooperation convened in Luxembourg or Brussels, he will keep the House minutely informed, as he always does, about the progress of discussions on whatever action we may need to take in co-operation with our partners in the European Community in relation, first, to Afghanistan and, secondly, to Iran?
3.47 p.m.
Lord GLADWYN: My Lords, while we must thank the Foreign Secretary for repeating this important Statement, I fear

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that we on these Benches can only regard the line taken by the Prime Minister in regard to our contribution to the Community budget as wholly deplorable. Everybody admits that our present contribution is too high, but nobody abroad, and no person with any real knowledge of the facts in this country, believes that it should effectively be zero—that is, we should not put in any more than we take out—which is, after all, what she proposed in Dublin. Subsequently, she was persuaded to negotiate—a process which presumably entailed getting a compromise between what our partners were prepared to give and what we believed we ought to get.
As a result, it seems that Mrs. Thatcher got our partners down from their original proposal in Dublin that our contribution should be about £750 million a year to £325 million a year, which I must say was a very remarkable achievement. She herself at one stage, if the Press is correct, indicated that she would be prepared even now to accept a contribution of something in the nature of £200 million, although I may have got the figure wrong. So the gap, which has for the most part been filled, rather nobly, given his political difficulties, by Herr Schmidt was reduced to not much more than £100 million.
This the Prime Minister apparently refused to accept, because it related, I think, only to 1980, although I understand from the Press that the period was something over a year. Why she could not have accepted the offer gratefully and agreed to negotiate the rest next year or the year after that, we on these Benches fail to understand. By refusing, she has not only infuriated all our partners, but we shall presumably have to go on paying no less than £1,150 million a year—that is, some £300 million between now and Venice—unless, in accordance with the wishes of the Labour Party, she is to violate the Treaty by refusing to hand over the proceeds of our agreed proportion of the VAT, and thus risk breaking up the Community, which a good many members of the Labour Party welcome. The interests of the nation, therefore, have accordingly been badly served and there is a real risk of the Community becoming inoperative. Until this issue is settled, certainly it will not go forward.
In the circumstances it was surprising
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—or perhaps it was not so surprising—that on foreign policy the Ministers reached a very reasonable common policy, upon which I sincerely congratulate them, as regards Afghanistan and Iran. On Iran, I suppose the Ministers considered the possible effects of the action taken by President Carter in Iran, but I can understand why there is no mention of it in their communiqué. But there, most Liberals would have a certain sympathy with President Carter, in that they would have been delighted had his raid succeeded in releasing the hostages and believe that he can hardly be blamed for trying to release them by irregular means. Nevertheless, those who counselled the President against taking any forceful measures of this sort were clearly right in the event, since the failure of the raid has resulted in an obvious worsening of the lot of the hostages and in a lessening of the chances that they will be released following upon the diplomatic and economic sanctions which the European allies of the United States had already agreed to take. The conclusion must surely be that while we should still of course proceed with these sanctions, if any future action of a military nature is proposed, it should, in view of the possibility of far-reaching consequences, be taken only after the fullest discussion with our European allies.
3.52 p.m.
Lord CARRINGTON: My Lords, I am grateful to the noble Lord, Lord Goronwy-Roberts, for his remarks and, indeed, for the remarks that the noble Lord, Lord Gladwyn, made about the international aspects of this Statement. One of the most heartening things that has happened in the last 48 hours—it was not all heartening—was the identity of view about international affairs of all the nine countries. This was very marked and very striking, and I think it is something which we should find very satisfactory.
The noble Lord, Lord Goronwy-Roberts, asked me two questions, and in a way this may answer the point made by the noble Lord, Lord Gladwyn. I am talking in units of account because I know the figures in units of account. If noble Lords should wish to translate them into pounds, they will have to divide by five and multiply by three. Then they will get a moderately accurate estimate of what the answer might be.

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There were two alternatives on offer yesterday. One was the proposal that there should be a rebate to this country of a thousand million units of account for three years, and for the next two years something rather less. It would appear that this year our net contribution, after receipts, to the budget will be something between £1,700 million and £1,900 million, which would leave a gap of 700 to 900 million units of account. My right honourable friend the Prime Minister and I thought that this was too big a gap for us to accept, having regard to the economic position of the country and the net contributions made by other countries.
The other alternative on offer was a ceiling on our contribution in 1980 of 538 million units of account, which is the figure I gave in millions of pounds in my original Statement—£ 325 million for one year. For the next year, although it was not very specific, it was suggested that there should be a ceiling of 800, or thereabouts, million units of account on our net contribution, which is very nearly the figure that the Leader of the Opposition when he was Prime Minister found to be unacceptable in 1979 and which was the first figure that we brought to the attention of our colleagues in Europe on the problem which faced us. After that, there was no suggestion that there should be any other arrangement. That did not seem to us to be a very good idea, in that the whole business of the Community over this last year has very largely been taken up with this British budgetary contribution. To accept a settlement for one year, with something very unacceptable in the second year, would be to settle nothing but merely to postpone a decision for a few months before the whole issue came up again.
It is also true that it became clear that if we accepted either of those two alternatives we should be expected to agree to the CAP price increases and the sheepmeat re´gime. If I may say so with the greatest goodwill to the noble Lord, Lord Gladwyn, I think he had better examine those facts before he describes the Government's decision as deplorable. I hope that he is not accusing me of sabotaging the Common Market. I would remind him with the greatest goodwill that I was advocating membership of the Common Market before he joined the Liberal Party.
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The noble Lord opposite asked me about the statement on energy and laid great stress upon its importance. I agree with him. I think that this is an area in which the Community has a great part to play. I think we really should take a grip on the energy policy of Europe, and I am glad that yesterday the European Council gave a lead in that respect. The Statement also makes clear the policy on fish of Her Majesty's Government. With regard to his last question, if of course there were to be any unexpected meetings on political co-operation, of which none is planned at the moment, naturally I should keep the House informed—and, indeed, of any other meetings.
Lord PEART: My Lords, the noble Lord has put the position clearly to us. May I say to the noble Lord, Lord Gladwyn, that in no way do I wish to violate the Treaty. I hope he will withdraw that suggestion. When I was negotiating in Europe, I always played my part fairly and constructively within the limits of the Treaty, and my party does the same. So I reject what he said—a rather cheap remark.
On the question of farm prices, we had a discussion the other day about prices in Europe, and the noble Earl, Lord Ferrers, answered. We agree very much that there should be no attempt to prevent prices rising, but it is important that they should not rise too much. Therefore we believe that in the present circumstances it is right to have a freeze.
I think that the distinguished editor of the Guardian summarised succinctly the problems we face regarding the summit. He said that the offer open to the Prime Minister was a future net budget payment of about £500 million but that this was slowly improved upon, as the day wore on, to about £325 million, which implied a reduction of £800 million in what Britain would otherwise have had to pay. So I believe that the Prime Minister has the support of us all, certainly of those of us on this side of the House, in relation to the budget contribution. I know that my noble friend has today expressed the same sentiments.
Once more there is the question: where next on farm prices and where next on sheepmeat? I know that this problem is bedevilling our relations with France,

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and I hope that it will be taken up at Foreign Office level. I have confidence in the Minister of Agriculture—I think that he has done well in Europe—but I believe that it has gone beyond that now and that there should be some movement.
I should like also to know in which part of the fisheries industry we are going to be affected by this question. That is important to the fishermen in our ports. Otherwise, in the circumstances I think we must wait until the next Summit and again put further pressure on the people who would restrict us.
Lord CARRINGTON: My Lords, as to where we go from here, I hope the noble Lord, Lord Gladwyn, is not feeling bruised, but I wholeheartedly agree with him that we want to get a settlement on this matter. Indeed I think all of us want to get a settlement. What we must do is to get more movement. We got quite a lot of movement yesterday and the day before, and both the French and the Germans made a genuine effort to compromise. We compromised, too, and we must all make another effort to get this matter settled because it is bedevilling the whole problem of Europe. Nobody is more anxious than I am to get a settlement, but I hope that on reflection the noble Lord will agree that the Government are right not to accept this particular compromise.
I arrived back at about 3 o'clock this morning, so we have not had much chance to sit down and think about where we are to go from here; but I think perhaps the best course would be to send these matters back to the appropriate councils for the time being and then consider how best we may proceed. I think it would be much better if we could have a real effort to get the whole of this settled before the next European Council, which is in Venice in a little over six weeks' time, so there is not much time in which to do it.
Lord SHINWELL: My Lords, may I ask the Foreign Secretary whether or not he would agree that because of the momentous importance of the two issues to which he has referred, the situation in Iran and also the situation in Europe, they cannot be dealt with adequately by means of question and answer. Therefore would it not be desirable that in
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another place—it is not under our control; it is for them to decide—they should debate what they regard as the most important issues and then we can follow that?
Having put that question to the noble Lord, may I put a further question, which relates to one of the subjects, namely, the Iranian situation. Despite the importance of the European Common Market situation, in my judgment—and I would ask the noble Lord whether or not he would agree—the situation in Iran is of greater significance because we are not aware of what the United States means by the suggestion that further military action might follow what happened the other day. In those circumstances, would the Foreign Secretary take account of what happened in 1950–51 when a similar situation arose—not the hi-jacking of a number of people and incarcerating them, but when Mossadeq, who was Prime Minister, took possession of the Abadan refinery? Then there was talk by the Cabinet of the day of taking military action, but we decided that would be a mistaken policy because it might lead to further wide-ranging conflict—and the idea was abandoned in favour of dealing with the matter financially.
May I therefore ask the noble Lord this: Is it not possible for the United Kingdom, either in alliance with our European allies or with the United States in this matter, to deal with the matter financially? After all, fundamentally from the Iranian point of view, is it not a matter of finance? They want the Shah back. They may not get him back; but if they were to get the millions back they might find that a reasonable compromise. Therefore, would it not be advisable to abandon the concept of freezing the vast number of millions in the United Kingdom held on behalf of Iran? In other words, without asking anything further, would it not be desirable for the noble Lord the Foreign Secretary to consider whether the United Kingdom could not take unilateral action in its own fashion in order to effect a compromise and to avoid what might eventually happen, unless we are careful, namely, a military adventure which would put the whole world in chaos? I would ask him to consider that. It was done in 1950–51; it could be done now, in spite of all the difficulties that seem to be involved.

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As regards Europe, I want only to say one thing. From my point of view—not from the point of view of the majority of Members of your Lordships' House—I am delighted that Mrs. Thatcher is standing firm. I hope she will continue to stand firm, and I hope she will keep in mind that the primary interest is that of the United Kingdom and not Europe itself.
Lord CARRINGTON: My Lords, I do not think anybody in the House could possibly disagree with the noble Lord, Lord Shinwell, about the gravity of the situation. I do not confine it to Iran. I think that the situation in Afghanistan and in the Middle East generally, including the Arab/Israeli situation, is very serious indeed. So I would go further than the noble Lord, and of course he will understand that we are trying to do everything we can, and we are thinking of ways and means of helping. Certainly I will consider what he has said.
One thing we have already made clear is that Her Majesty's Government do not believe that the way to find a solution in Iran is by the use of force. I exclude the operation to rescue the hostages because I think that was a legitimate operation, but I myself would not think that the further use of force is likely to secure the release of the hostages. We must think of something else, and I can assure the noble Lord that that is what we are seeking to do, because all these problems interact one with the other, and in my view the situation is very serious.
Lord MACKIE of BENSHIE: My Lords, I should like to ask the Minister to clarify a point on agricultural prices. As I understand the Statement, the other members of the Community wanted the prices to be up by between 4 and 5 per cent., and this appeared to be unacceptable to the Government, although in fact with inflation this leads to a lowering in return to farmers in the Community and particularly in this country. May I ask the noble Lord whether this was the sticking point, or would the Government have accepted a rise of 4 or 5 per cent, if they could have got a reasonable reduction in our budgetary contribution? Finally, may I support my noble friend Lord Gladwyn and say that it is perfectly
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I true that in horse-trading you can turn your back and walk away once too often.
Lord CARRINGTON: I do not know much about that, my Lords. Yes, the agricultural prices that the other eight partners wanted represented an increase of 5 per cent.; and of course the noble Lord is perfectly right in saying that probably the Commission proposal was an increase of an average of 2·4 per cent., and it is obvious that if the farmers, because of inflation, receive no increase, they will come very badly out of it.
What particularly worries my right honourable friend the Minister of Agriculture, Fisheries and Food is the proposed increase in prices for those products in surplus. I think that is the most worrying feature of it. No doubt our attitude to all these matters would be coloured by what happens on each of all the problems with which we are faced.
Lord BRUCE of DONINGTON: My Lords, may I press the noble Lord on one aspect of the Statement he has made, when he said that on our budget problem there was broad agreement on the methods by which the Community would both reduce our contribution and increase the benefits to us. Would it be possible for the noble Lord to provide the House with some particulars of the methods which were in fact agreed?
I am sure the noble Lord will agree that many of us have applied our minds to this problem over many years and it would be nice to see just what the methods are. I think he will agree—at least I hope he will—that it is important, when discussing the net contribution of the United Kingdom, not to discuss it for one year only; we are not discussing from the United Kingdom standpoint a mere handback of money to us in one dollop, which may be a little less in the next year and a little less in the year after that. Would he agree that what we are really after is a radical change in the whole method of determining what the respective contributions shall be, so that these have a permanent and lasting effect and are seen to be fair to all the Community countries? Will he agree that it would be best to insist on coming to agreement on an arrangement of that kind, rather than adopting any ad hoc or temporary solution to the problem.
Lord CARRINGTON: My Lords, as the noble Lord knows as well as I do, the problem of our budget is basically that we do not get back in receipts anything comparable to the figure which other countries do, and this is very largely as a result of the preponderance on the Community budget of agriculture, which is now 75 per cent. When we joined the Community we had the expectation that the proportion of the budget spent on agriculture would be reduced, while in point of fact it has risen. This is basically the problem which faces us. It really will be necessary sooner or later, because the Community will come up against the 1 per cent. VAT ceiling, to obtain a restructuring of the budget. That really will be necessary quite regardless of the British problem; consequently that will have to be done and will take care of our problem in future years. In the meantime, we have to devise a system whereby we are treated fairly. The Community yesterday agreed on the two methods by which we should get reimbursed. One is by the financial mechanism agreed in Dublin in 1965 and the suspension of some of its provisions, which would probably give us in a year something like 500 million units of account. The rest would be in the form of Community projects, agreed by everybody, which we want in this country, under Article 235 of the Treaty of Rome.
Lord GODBER of WILLINGTON: My Lords, while congratulating my noble friend on the stand which he and the Prime Minister took, may I ask him to clarify a little more what he said on the agricultural side? I understood him to say in answer to a previous question that he suggested that the matter went back to the various councils. Does he mean that the Agriculture Council will be free now to come to some agreed determination, or has the matter got to wait until further discussion of the global picture in Venice? I ask that because some of the agricultural prices are due to change on 1st July, and time is slipping by.
Lord CARRINGTON: My Lords, the answer is the first alternative; the Agriculture Council can meet, and if they can agree they can come to a new set of proposals upon which all Nine could agree. But my noble friend has been a Minister of Agriculture and he knows what they are like.

INDUSTRY BILL
4.14 p.m.
House again in Committee.
Debate on Clause 9 resumed.
Lord HATCH of LUSBY: I have only two or three words to say in reply to the noble Lord opposite who spoke following my opening remarks. I think he has misunderstood the purpose of this clause. We are not talking here about an alternative between the Overseas Development Administration and the NEB. What we are talking about is whether the Overseas Development Administration shall have a power to turn to the NEB, to the Welsh Agency and the Scottish Agency, in order to get technical assistance from them to go overseas. This seems to me to be a perfectly reasonable supposition to make. Certainly from my knowledge of what used to be the Overseas Development Ministry they were very anxious to have the opportunity, perhaps not this year but in the future, to use these agencies for the purposes I have already pointed out. I would ask the noble Viscount whether the Department of Industry has been in touch with the Overseas Development Administration over this issue, because I believe that their interests are common. I would appeal to noble Lords, particularly many of the noble Lords who have a special interest in overseas development, and to the Government, not to oppose the removal of this clause, which will take away an opportunity for increasing our contribution, first, to the development of developing countries, and, secondly, and equally importantly, to the development of our own industries in their relationship with the developing world.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): I am afraid we do resist the removal of the clause for the reasons my noble friend has already outlined, principally that we do not want the NEB or the agencies to scatter their efforts widely. They have never used these powers. There is nothing to stop any other Government body or private body, which has an opportunity to sell know how of any kind overseas, approaching any body, including these agencies, in order to study any particular skills, products or what-have-

1163
you. I am quite sure there would not be a refusal in respect of the uplifting of a particular bit of knowhow that had a very good prospect for this country. But we do not want the power in the Bill for the NEB and the agencies to operate overseas. They have enough to do within

CONTENTS

Airedale, L.

Ellenborough, L.

Mowbray and Stourton, L.

Airey of Abingdon, B.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Alexander of Tunis, E.

Emmet of Amberley, B.

Newall, L.

Allerton, L.

Exeter, M.

Norfolk, D.

Alport, L.

Ferrers, E.

Northchurch, B.

Amherst, E.

Ferrier, L.

Nugent of Guildford, L.

Ampthill, L.

Fortescue, E.

O'Neill of the Maine, L.

Auckland, L.

Fraser of Kilmorack, L.

Orkney, E.

Avon, E.

Gage, V.

Piercy, L.

Balerno, L.

Gainford, L.

Rawlinson of Ewell, L.

Balfour of Inchrye, L.

Galloway, E.

Redmayne, L.

Banks, L.

Gisborough, L.

Reigate, L.

Barrington, V.

Gladwyn, L.

Renton, L.

Beaumont of Whitley, L.

Glenarthur, L.

Richardson, L.

Bellwin, L.

Godber of Willington, L.

Robson of Kiddington, B.

Belstead, L.

Gormanston, V.

Rochdale, V.

Berkeley, B.

Gowrie, E.

Rochester, L.

Bessborough, E.

Grantchester, L.

Romney, E.

Bridgeman, V.

Granville of Eye, L.

St. Aldwyn, E.

Byers, L.

Greenway, L.

St. Davids, V.

Caccia, L.

Gridley, L.

St. Just, L.

Carrington, L. (A Principal Secretary of State.)

Grimston of Westbury, L.

Sandford, L.

Haig, E.

Sandys, L. [Teller.]

Cathcart, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Seear, B.

Chelwood, L.

Selkirk, E.

Chesham, L.

Hampton, L.

Smith, L.

Chitnis, L.

Hankey, L.

Somers, L.

Clifford of Chudleigh, L.

Hanworth, V.

Spens, L.

Clwyd, L.

Harmar-Nicholls, L.

Strathspey, L.

Cockfield, L.

Hayter, L.

Swinton, E.

Cork and Orrery, E.

Henley, L.

Thorneycroft, L.

Cottesloe, L.

Hillingdon, L.

Thurso, V.

Craigavon, V.

Home of the Hirsel, L.

Torphichen, L.

Craigton, L.

Hooson, L.

Tranmire, L.

Crathorne, L.

Hylton-Foster, B.

Trefgarne, L.

Crawshaw, L.

Kilmarnock, L.

Trenchard, V.

Cullen of Ashbourne, L.

Kimberley, E.

Trumpington, B.

Daventry, V.

Kinloss, Ly.

Vaizey, L.

de Clifford, L.

Long, V.

Vaux of Harrowden, L.

De Freyne, L.

Loudoun, C.

Vernon, L.

De La Warr, E.

Lyell, L.

Vickers, B.

Denham, L. [Teller.]

Mackie of Benshie, L.

Vivian, L.

Drumalbyn, L.

Macleod of Borve, B.

Wigoder, L.

Ebbisham, L.

Mancroft, L.

Willoughby de Broke, L.

Eccles, V.

Marley, L.

Effingham, E.

Merrivale, L.

NOT-CONTENTS

Aylestone, L.

Crowther-Hunt, L.

Goronwy-Roberts, L.

Bacon, B.

Cudlipp, L.

Gregson, L.

Balogh, L.

David, B. [Teller.]

Hale, L.

Beswick, L.

Davies of Leek, L.

Hall, V.

Birk, B.

Davies of Penrhys, L.

Hatch of Lusby, L.

Blease, L.

Donaldson of Kingsbridge, L.

Henderson, L.

Blyton, L.

Elwyn-Jones, L.

Hunt, L.

Boston of Faversham, L.

Evans of Hungershall, L.

Jacques, L.

Brockway, L.

Fisher of Rednal, B.

Janner, L.

Brooks of Tremorfa, L.

Gaitskell, B.

Jeger, B.

Bruce of Donington, L.

Galpern, L.

Kaldor, L.

Cledwyn of Penrhos, L.

Gordon-Walker, L.

Kilbracken, L.

their terms of reference at home.
4.18 p.m.
On Question, Whether Clause 9 shall stand part of the Bill?
Their Lordships divided: Content, 134; Not-Content, 70.

Leatherland, L.

Peart, L.

Stone, L.

Lee of Newton, L.

Plant, L.

Strabolgi, L.

Llewelyn-Davies of Hastoe, B.

Ponsonby of Shulbrede, L. [Teller.]

Strauss, L.

Lloyd of Hampstead, L.

Taylor of Gryfe, L.

Lockwood, B.

Ritchie-Calder, L.

Taylor of Mansfield, L.

Lovell-Davis, L.

Ross of Marnock, L.

Underhill, L.

McCluskey, L.

Sainsbury, L.

Wedderburn of Charlton, L.

Maelor, L.

Sefton of Garston, L.

Wells-Pestell, L.

Milverton, L.

Stamp, L.

Whaddon, L.

Northfield, L.

Stedman, B.

Willis, L.

Oram, L.

Stewart of Alvechurch, B.

Wilson of Radcliffe, L.

Paget of Northampton, L.

Stewart of Fulham, L.

Resolved in the affirmative, and clause agreed to accordingly.
Clauses 10 to 12 agreed to.
4.28 p.m.
Viscount LONG Viscount LONG moved Amendment No. 11:
After Clause 12, insert the following new clause:
"Power for the Corporation to borrow
(.—(1) The English Industrial Estates Corporation may, in accordance with directions under section 10(3) of this Act given with the approval of the Treasury, borrow in any currency from the Commission of the European Communities or from the European Investment Bank, but subject to subsection (2) below.
(2) The aggregate amount outstanding in respect of the principal of sums borrowed under this section shall not exceed £30 million or such greater sum not exceeding £50 million as the Secretary of State may with the approval of the Treasury by order specify.
(3) The power to make orders under this section shall be exercisable by statutory instrument, and no such order shall be made unless a draft of it has been laid before and approved by resolution of the House of Commons.
(4) In section 11(8) of the Local Employment Act 1972 (receipts of Corporation, with certain exceptions, to be paid over to Secretary of State) after paragraph (a) there shall be inserted—
"(aa) receipts consisting of sums borrowed under section (Power for the Corporation to borrow) of the Industry Act 1980; and".")
The noble Viscount said: I beg to move Amendment No. 11 and, with the leave of the Committee, I should like to speak to Amendment No. 12 because the two amendments are connected. As I read it, this is the most exciting part of the Bill. The Government are now looking for new ways in which to build up morale in young people and in industry, and also for new ways to try to keep unemployment down. We are talking about the English Industrial Estates Corporation (EIEC) which, as many of your Lordships will know, was started in 1930 in order to buy or build unit factories
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to help the unemployment situation and industry as a whole. Probably many noble Lords on the other side and older Members on this side will well remember that the Government sponsored the EIEC, which has done enormously good work. In recent years industry has run down and the smaller factories and units have not been built. Moreover, young people who want to build factories find it extremely difficult to do so and it is here that this exciting part of the Bill, as I see it, comes into its own.
The amendments are technical and I hope that they need not take up much of your Lordships' time. As the Bill stands, the English Industrial Estates Corporation has no borrowing powers; nor has it ever had such powers, and nor have they ever been needed. As an instrument of the Government's regional policy, the corporation has been financed from the Vote of the Department of Industry, and it will continue to be so financed, except of course in so far as the private sector may provide funds for its activities.
However, it is not beyond the bounds of possibility that the Government might want the Corporation to borrow from the European Investment Bank, or from the European Coal and Steel Community. I do not say at this stage that this is probable or even likely, for much obviously depends on the individual circumstances of each loan or project; and in particular on the desirability of borrowing in foreign currencies, and so substituting the disadvantage of a long-term exchange risk for the disadvantage of temporarily higher domestic interest rates. That is a technical fiscal judgment which I do not think we can usefully debate here—because, as I said, each case will depend upon the individual circumstances. The purpose of this clause is, therefore, simply to allow the kind of borrowing I have described,

1167
should it be thought to be a good thing at any time. I may also add that it is identical in substance, if not in words, with comparable provisions in the Welsh and Scottish Development Agency Acts of 1975.
As we are now discussing this project and discussing finance from private enterprise into the EIEC, a year ago the Government felt that this should be broadcast to private enterprise, to those companies or associations, which would like to put up money to back a particular project in an industrial area which is seriously affected. It was soon after coming to power that this idea by my right honourable friend Sir Keith Joseph and my noble friend Lord Trenchard came about.
In February the Legal and General made a move offering the EIEC £5 million to be divided between certain areas to build unit factories to help young people and, therefore, try to alleviate some of the unemployment in certain areas. On 14th of this month the National Coal Board Pension Fund announced to the Government that it also would put up £15 million to back this scheme of building unit factories. This is a time to congratulate those two bodies for their foresight in trying to help the Government and others build factories in order to reduce unemployment and to help the young establish factories of their own.
Over the years money has not been easily forthcoming due to lack of inspiration in industry. In my view, and I am sure in the view of all your Lordships, the fact that both the Legal and General and the National Coal Board Pension Fund are offering help is a very great step forward. We must bear in mind that it was in 1930 that the EIEC originated, and until recently it has been entirely sponsored by Government or taxpayers' money. The idea now is that free enterprise, which is succeeding in its own particular world of industry or otherwise, can help and is being asked to help to build up confidence in the small industries. I beg to move.
Lord LEE of NEWTON: We have no objections in the least to this kind of development. We wish it well. I do not think that at this stage we would wish to commit ourselves on all the details. The noble Viscount said that it
1168
is an intricate scheme, but if it is to result in an increase in the number of small factories being built and if it assists in reducing unemployment, especially youth unemployment, it cannot be a bad scheme. I should like the opportunity to look in more detail at some of the things that the noble Viscount has said. If there is any further information that the Government would like to give us, we should be very happy to consider it. However, on the face of it, I wish the scheme well.
Lord ROCHESTER: Our first reaction from these Benches is also to support the idea underlying the amendment which has just been moved. I see no reason why we should not join with the noble Lord, Lord Lee of Newton, in supporting it.
Viscount BARRINGTON: I did not mean to say anything on this amendment, but I should like to join in supporting it heartily for two reasons. First, as a member of the Liberal Party, I believe in helping small businesses. Secondly, for a very long time my father was concerned with the Legal and General. For a number of years he was its Chairman, and when he retired he was made President. I believe that he would have approved very strongly of this scheme, and he was a man whose opinions I greatly respected. But, above all, if it helps small businesses, I should be entirely in favour of it.
Viscount LONG: I am most grateful to the noble Lords, Lord Lee of Newton and Lord Rochester, and to the noble Viscount, Lord Barrington, for what they have said. This scheme started this year. The Government are pressing ahead as hard as they can to obtain the confidence of other companies in it so that they can attract more money, build the unit factories, help the young and so reduce unemployment. It will take a little time, but the scheme has already started and the enthusiasm is a good start—especially that from the National Coal Board Pension Fund, which has given £15 million, and the Legal and General, which has given £5 million.
4.37 p.m.
Viscount LONG Viscount LONG moved Amendment No. 12:
After Clause 12, insert the following new clause:
"Treasury guarantees

(.—(1) The Treasury may guarantee, in such manner and on such conditions as they think fit, the repayment of the principal of, and the payment of interest on, any sums borrowed under section (Power for the Corporation to borrow) of this Act.

(2) Immediately after a guarantee is given under this section, the Treasury shall lay a statement of the guarantee before each House of Parliament; and where any sum is issued for fulfilling a guarantee so given the Treasury shall, as soon as possible after the end of each financial year (beginning with that in which the sum is issued and ending with that in which all liability in respect of the principal of the sum and in respect of interest thereon is finally discharged) lay before each House of Parliament a statement relating to that sum.

(3) Any sums required by the Treasury for fulfilling a guarantee under this section shall be charged on and issued out of the Consolidated Fund.

(4) If any sums are issued in fulfilment of a guarantee given under this section, the Corporation shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct, payments of such amounts as the Treasury may so direct in or towards repayment of the sums so issued and payments of interest at such rate as the Treasury may so direct on what is outstanding for the time being in respect of sums so issued.

(5) Any sums received under subsection (4) above by the Treasury shall be paid into the Consolidated Fund.").

On Question, Whether Clause 13 shall stand part of the Bill?
Lord BRUCE of DONINGTON: I have one technical query to ask of the noble Viscount. At the end of Clause 13, in line 36, on page 9 of the Bill, it says:
"There shall be inserted the words 'or under the Industry (No. 2) Act 1980'."
This is a purely technical point, but I have not yet seen—and nor have my noble friends—an Industry (No. 2) Act 1980. I wonder whether the noble Viscount can help the Committee on this point.
Viscount TRENCHARD: Perhaps I can confirm to the noble Lord that I am correct in saying that this is the Act about which we are speaking—it is this Bill. I see nodding from the Box, so I have hit it.
Lord LEE of NEWTON: Can the noble Viscount say which was the Industry (No. 1) Act?
Viscount TRENCHARD: May I confirm to the noble Lord for sure what the answer to his question is?
Clause 13 agreed to.
Clause 14 [Regional Development Grants.]:
On Question, Whether Clause 14 shall stand part of the Bill?
Lord BRUCE of DONINGTON: In accordance with the traditions of the Committee, it is necessary for me to make a statement of an indirect financial interest in some of the matters that may be touched upon by Clause 14 and, indeed, by earlier clauses. I shall be quite specific to the Committee about this. I am partner in a firm of chartered accountants called Halpern and Woolf and we are acting for a company overseas which, at the moment, is seeking to settle in this country. On their behalf I am already in correspondence with the Department of Industry. I express the hope that those who know my political views as often Expressed in this House will consider that my observations on the Bill are unlikely to be influenced by the interest I have just disclosed.
I beg to leave out Clause 14. This clause is ostensibly quite a harmless one in that, as the noble Viscount made clear in his Second Reading speech, all it really does is to consolidate in Act form Statutory Instruments Nos. 1642, 975 and 837 of 1979. But knowing the Government's attitude in relation to Bills and their meticulous care about what they leave out and put in, it occurs to me that the reason why the Government desire to formalise, or rather put into statutory form, those matters that have already been the subject of statutory instruments is that they regard them as very largely a closed chapter. We are now enshrining the effect of these statutory instruments in an Act of Parliament, and therefore the noble Viscount is taking his stand upon that, and the Government in future will take their stand upon the Act.
I had hoped that the noble Viscount and the Government would not put this clause in the Bill at all and would have left the matter as it was before, when, by laying instruments before the House under the provisions of the Industry Act 1972, they could have exhibited some

1171
flexibility. There can be no doubt as to what has happened over the last year since the Conservative Government took office. They have first regraded the whole series of areas for special assistance. There were special development areas, development areas, and intermediate areas, each of which carried certain grant benefits at various percentage degrees.
What the Government did last year was in one or two instances to upgrade certain areas—that is to say, from intermediate area to development area, or from development area to special development area—but, in the overwhelming mass of instances covering the whole of the country, practically every area was downgraded. The particulars of the regradings are set out in the Assisted Areas Order 1979, No. 837. This has had an enormous impact, as indeed the Government expected that it would, because the Government's principal object, which they were quite frank about, was to save money. So a whole series of assisted areas in the country were downgraded and the financial outlays, in terms of the percentage of development area grants granted in respect of each type of area, were also downgraded.
I should have thought that in current circumstances, as I said yesterday, the Government would be a little more pragmatic about this, instead of putting down Clause 14, which consolidates the orders to which I have referred, as being tablets of stone to which they can now return and say, "It is in the Act. In the light of the current economic situation, which we are reliably informed is going to worsen, we are not going to be able to vary the Act". I think that that is unwise. As I told the Committee yesterday, much water has gone under the bridge since the time that this Bill was first thought up—I should guess in June and July of last year.
As I sought to explain to the Committee yesterday, the effect on the regions of the growing crisis has been patchy. Therefore, it is not wise to freeze the existing form of regional aid as reflected in Clause 14; rather, it should by now have taken account of the changed circumstances. May I illustrate the kinds of considerations I have in mind, and particularly that of unemployment? Un-
1172
employment has already gone up to about 1½ million, and all confident predictions, to which there is no dissent, say that it is likely to go to 2 million within the foreseeable future.
The effect of growing unemployment has not been the same in every region. The new unemployment figures were published on 14th March last. If one relates these to the figures for a year ago, one finds—and I am now talking in terms of percentages—that the percentage of unemployed in the South-East area is exactly the same as it was last year, while in East Anglia the unemployment rate percentage has declined by about 6 per cent. Those are the most favourable areas. As regards the other areas in the country, in the South West the rate has gone up by 12 per cent.; in the West Midlands, by 13·6 per cent.; in the East Midlands, by 6·2 per cent.; in Yorkshire and Humberside, by 5·17 per cent.; in the North, by 8·6 per cent.; in Wales, by 3·7 per cent.; in Scotland, by 5 per cent.; and in Northern Ireland, by 4·78 per cent.
These are quite significant increases in the percentage of unemployment that has taken place within one year. As the figures I quoted illustrate, they are patchy. The South East and the eastern part of the country remain virtually immune in terms of the shift of percentages. It is the rest of the country which is really feeling the impact of increasing unemployment. It is exactly this situation that the assisted areas scheme was originally devised to try to ease. I hope that even at this late stage the Government may feel constrained to eliminate this clause altogether. It would leave them with some freedom of manoeuvre to exercise the same kind of powers as were exercised in 1979, except this time to exert them in an upward direction. An abundant case has already been made out by the developments of the last three or four months, particularly in the steel industry, to justify some upgrading of some areas that were downgraded by the Government in their July review.
I therefore hope the Government will not take a dogmatic attitude to this, because they may rest assured that we shall return to this question at quite frequent intervals as the grisly forecast and as the story—of which we had advance notice in the Budget Statement—unfolds itself with the ruthless pursuit of the dogmas

1173
to which the Government are committed. I hope the Government will not place themselves in a position from which eventually, under sheer force majeure, they find themselves having to say, "We really needed more powers than we have. We were a little inflexible. We now propose to do what we should have done a long time ago".
Lord ROCHESTER: We debated at some length last July what I understand has now become the content of this clause. I then spoke and we on these Benches voted against making cuts in regional aid of as much as £233 million out of £609 million over as short a period as the next three years. I suggested then that it might have been better to adopt a more gradual approach to the problem, not simply to limit the extent to which there was disagreement between the political parties on this sensitive subject but also to enable the Government to see what effect their policies were having on investment, profitability and so on.
The noble Viscount, Lord Trenchard, then made the point that the bulk of the savings to be achieved would not take effect until the years 1981–82 and 1982–83 and that it was the cash flow of industry in the regions then that would be the crucial factor. We are now within one year of the first of those two periods and I am no happier now than I was then. Since that time, as the noble Lord, Lord Bruce of Donington, reminded us, unemployment has risen to the point where today more than 1½ million people are out of work and it has also become clear, as he reminded us, that there will have to be much more restructuring, for example, of the steel industry, than appeared likely nine months ago.
Last July the Minister said that, with the limited amount of money available, it was better to concentrate on areas most in need of aid. I acknowledge the force of that argument, and indeed that in the recent Budget provision was made for the establishment of what are called enterprise zones in certain inner city areas, which are to receive specially favoured treatment, thus encouraging, we must hope, the establishment and development of small new enterprises and indirectly offsetting in those areas the raising of the minimum qualifying values, of which we were
1174
told last year, for plant and buildings to £500 and £5,000 respectively.
At that time the noble Viscount further said that under the arrangements of regional development grants inherited from the previous Government he had discovered much waste and that that was exemplified by the fact that there were many non-assisted areas with worse employment than applied in a great number of assisted areas. He repeated that view yesterday, and from these Benches I acknowledge that we approve of the elimination of such waste, and indeed inefficiency. But I am still very troubled about the whole subject of regional aid. Unemployment is increasing all the time, never mind the question of the distribution of such money as is presently available for regional development grant. Surely there is now an even stronger case than there was nine months ago for the provision of an overall increase in the amounts of regional grant, from the European Community, if that can be negotiated with our partners in Europe, but if not then from within our own resources.
In something the Minister said yesterday—unfortunately we do not yet have copies of the Official Report in a very readable form, so I cannot confirm the exact place—I thought I detected a feeling that we had been through all this before and so now we could pass over it all quite quickly; that Parliament had taken its decision and that was that. But as the noble Lord, Lord Bruce, indicated, the situation has changed. It has deteriorated quite a lot since then and the Government have shown no sign I can detect of feeling that their regional policy needs to be reviewed, and in a way which means that it will adapt to this changed situation. Unless, therefore, the noble Viscount has something to tell us which can reassure us, he must take it that we are not in a position to support the Government's regional policy as at present we understand it.
Lord BROOKS of TREMORFA: I get a little weary, and I am sure some of your Lordships are wearying, of my constantly referring to the fact that much of the economy of Wales relies on the fact that the public sector is predominant, and the main clause in the Bill is to allow the agencies to dispose of assets to promote

1175
private ownership. In effect, therefore, what the Bill will be doing in Wales and in other similar areas will be acting as a bludgeon—not promoting industrial growth but making the situation a great deal worse than it is. An article in the last Sunday Times by the political editor suggested that some people were putting a most sinister interpretation on many of the policies of the Government, and he wrote:
"Whereas unemployment in the North, the North-West, Wales and Scotland hovers around 9 per cent., in South-East England it is 4 per cent. By superimposing a map of unemployment on the map of political power, encouraging discoveries can be made. Recession hits Tory areas far less quickly than areas which the Tories can never hope to control".
The article also said:
"The Tories have become the party of the South and must act accordingly".
I am sure that that sinister view has no justification whatever. Nevertheless, I must constantly point out the effect that many of the policies of this Government are having on areas of high employment. They will make the situation much worse than it already is.
The importance of regional development grants cannot be over-emphasised when we look at the situation in our regions. I think it fair to say that potential developers look for other aspects in a particular area, if they are considering relocating. They want to know whether the right kind of labour is available. They also want to know whether communications—road, rail, sea, and air—are of a kind which will help their particular development.
But regional grants are also important to industries already in an area. I recall in a previous existence, when leading the South Glamorgan County Council, fighting to secure development area status for my county. In the end we succeeded and it had a marked effect. I can think of a couple of examples. There was a major manufacturer who for some time had been thinking of expanding, and the fact that we had secured development area status allowed that manufacturer to expand, since the grants became available. I must say that I was most disappointed in, I think, 1978 when the Government abolished the regional employment premium at a stroke, without consultation with anyone. That took £35 million
1176
from the Welsh economy; just over £5 million of it from my own county. That was an example of how the Treasury works when it has the power, and indeed it is given power in some of the clauses in the Bill.
I agreed with the noble Viscount, Lord Trenchard, when he said—I think this is what he said—that it might be time to look at the way in which we draw the boundaries of our assisted areas. I do not believe that anyone can be satisfied with the way we do this at present. It is a patchwork quilt. Most of the areas are drawn on the basis of the travel-to-work areas, and I wonder whether it might not be better for the Government to look at structure plan areas, perhaps, or even at regional assistance being given to entire sub-regions. That might well prove to be a much more efficient way to give assistance to areas. In South Wales, for example, many of the people who will be made redundant at Port Talbot and Llanwern live many miles outside the normal travel-to-work areas, and they certainly will not be assisted by some of the changes that the Government have made in the redrawing of the development areas. With those few remarks I support my noble friend, who suggests that we vote against the clause. I am pleased that the noble Lord, Lord Rochester, has said that, without some blinding flash of illumination coming from the Government, he and his colleagues also intend to oppose it.
5.3 p.m.
Viscount TRENCHARD: It might be for the convenience of the noble Lord Lord Bruce of Donington, and his colleagues if, rather than write to him, I now clear up the reason why the 1980 Industry (No. 2) Act is mentioned in Clause 13—a point which he raised a short while ago. The reason is not a particularly good one, and we think that we will get the matter right in the end. The reference in Clause 13 is in fact to the Bill currently under discussion, which was my guess at the time the matter was mentioned. As originally printed, the Bill referred in this clause to the Industry (No. 2) Act 1979 in order to distinguish it from the Act passed earlier in the year by the previous Government. With the turn of the year it was changed to 1980 but the printers omitted to drop "(No. 2)",

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and this will be corrected in the final print. That clears up that point.
The noble Lord, Lord Bruce of Donington, in his introductory remarks in relation to regional policy correctly stated that if the clause now under discussion were left out, it would make no difference to the current position, nor to the changes and policy announced in July. I realise that the purport of his remarks was: Should we not retain more flexibility, which we might attain in the way mentioned? I shall be explaining that in some areas of regional policy we retain very considerable flexibility—as much, I fear, as we are likely to be able to use in current circumstances and in the present economic necessities of the national Exchequer. It is also unsatisfactory in the long term that provisions of legislation should be out of line with circumstances in which grant is actually paid. Therefore, on those grounds, together with what I shall have to say about our regional policy and the degree of flexibility left in it, we must resist the proposal to leave out the clause.
Noble Lords opposite, when they referred to the problems of the regions, and in particular to Wales—which has been mentioned several times in the debate, though the point also applies to hard-pressed areas in the North of England and in Scotland—spoke as though the changes that we have made have been a serious move towards providing less help for the areas in greatest need; but this really is not borne out by our changes. We have kept the 22 per cent, grant in the special development areas, which are the hard core of areas which have not responded adequately to this same rate and to the policies of the previous Administration; we have not altered it at all. We plan to take other measures in addition, including the proposals for the enterprise zones, as well as extra support for factory building for small businesses, which now run into a whole host of areas; and I believe that these points enable me to say that in the special development areas we are doing more—and that we now have evidence that we are even obtaining some private money to help us to do more—than the previous Administration. We are certainly not doing less in the areas of greatest need.
Since noble Lords criticised us, I must
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once more repeat that we found that 43 per cent, of the population of Great Britain lived in assisted areas, as classified when we came into office. We found that the average unemployment in the entire intermediate areas—the most numerous—was to the decimal point exactly the same as the national unemployment figure, and when we looked below the surface we found large numbers, with unemployment well below the national average unemployment level. That was not a tenable situation.
Furthermore, it diluted the drawing power of the areas of greatest need for the maximum share of investment that can be influenced by grant; and not all investment can be influenced by grant. As the noble Lord, Lord Rochester, knows, there are many other reasons for developments being sited in certain places, and on the whole these are probably more important than those connected with grant. But so far as the grant drawable investments are concerned, we now have a situation where the remaining heavy rates of grant are concentrated solely on those areas of greatest need. This, for less money, is likely to move more investment to those areas than the widely-spread, "throw-your-money-around" scheme, which I am afraid I have to say we inherited. I do not agree, and in any previous remarks I made I certainly did not mean to give the impression which the noble Lord, Lord Brooks, suggested, that I think the TTWAs are on the wrong basis. I know of no other.
Both Administrations have looked at this time and time again. I have spoken at length to Ministers occupying the seat that I now occupy. I have spoken at great length to the noble Lord's right honourable friend Alan Williams on this subject; and I do not think there is any way round the TTWAs. The Department of Employment is being asked, as it was under the previous Administration, constantly to look at individual cases to see whether the TTWAs are drawn correctly; but I do not think we can depart from them.
This is the point at which I want to bring in the question of flexibility. We have flexibility here, and we have used it. We have upgraded Shotton and Corby, and we have undertaken to look at other

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areas currently very likely to be affected, and in Wales in particular. We shall act as soon as that likelihood becomes clear. So we retain the flexibility to change the grading of areas; and within the money available to this country against our economic situation and the economic situation which we inherited, I believe we are making the most sensible use of our resources. We have adequate flexibility, and we are bringing in other aids to try to start rebuilding sound growth in these areas.
I am glad that the noble Lord, Lord Brooks, said that he felt that the newspaper report which he quoted had no foundation. I wondered why he quoted it in that case; but I can assure him that politically, if anything, the changes we have made certainly do not help the party on this side of the Committee. We won large numbers of seats, which took us to power, in areas which will lose their grant, and many their assisted area status altogether; and I take this opportunity, because this is right in my own personal sphere, to assure noble Lords that absolutely no political considerations have come into this situation. Nor will they.
In resisting this Motion I must end by saying that noble Lords opposite seem to me to regard their record in office in relation to unemployment and in relation to the economic factors (which, I agree, are making unemployment worse at the current time) as though it had nothing to do with them. Your Lordships will remember what the noble Lord, Lord Brooks, has also mentioned: that at a stroke, when the International Monetary Fund said, "You are spending too much", the regional employment premium was stopped, not for the transition period of two parts ending in 1982, if I may say so to the noble Lord, Lord Rochester, but at a stroke—the words which the noble Lord, Lord Brooks, used—because of necessity.
My right honourable friend the Chancellor of the Exchequer, in addition to supporting the various measures to get factory building going, which we recommended, has in his Budget put any resources and room for manoeuvre he has to reduce the PSBR with a view to achieving the result of lower interest rates at the earliest possible opportunity.
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I do not think we should question his overall judgment of how much money and room for manoeuvre he has, but I should like to suggest that within the situation that we have inherited we have done a lot of new, constructive things which stand a good chance, if well supported, of rebuilding growth, particularly at the grass roots. The force of necessity to make economies has of course been a factor in our changed regional policy, but in doing it in the way in which it has in fact been done, which, if I may say so to the noble Lord, Lord Rochester, is in line with the views of the European Commission—namely, to concentrate the aid on the areas of greatest need—we have as strong and as effective a regional policy for those areas which we all want to see recover; and, in addition, we have many other factors which we hope will restore growth. I ask your Lordships to resist this Motion.
Lord ROSS of MARNOCK: I should like to think that I was persuaded that the Government have shown great imagination and have foreshadowed great changes in regional policies which were going to be effective, but I must confess myself deeply disappointed indeed by what the noble Viscount has said. I have been involved in regional policy for the greater part of my life in another place. That was a matter of 33 years, and for a quarter of that time I was Secretary of State for Scotland. I was deeply involved indeed. The noble Viscount says, "Look what you did; you took away REP at a stroke". We also increased, at the same time, the amount of money which was being spent on selective assistance; and, as the noble Viscount knows, REP was not unrelated to certain things which were said in Europe about what we could do and what we could not do—and I certainly had no responsibility for taking us into that mess, some of the repercussions of which we have heard about today.
I remember all the stories we were told about the regional policy of Europe; how it was going to help us. Now we have the noble Lord, Lord Thomson, confessing that after all his efforts the richer areas are richer and the poorer areas are poorer, and there is virtually no regional policy at all. I had to stand by and see a firm which was viable in Kilmarnock, in a

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special development area, being taken away and concentrated in a non-assisted area in France—and the Government could do nothing about it. I think we are in a very difficult position at the present time as a result of the Government's general policies; and if the noble Viscount thinks for one single minute that an enterprise area somewhere, be it Clydebank or somewhere else, of 200 square yards is somehow or other going to solve the problems of Scotland and the West of Scotland, he had better have another think. I took his words down—new, constructive things; progress. Where is the progress? It is getting worse every day.
I do not know whether the noble Viscount has seen the publications of his own department as to employment. The number of unemployed in Scotland is touching on 200,000. It is even worse in the North. It is 9 per cent. there. I think Scotland and Wales are 8·4 per cent. There is nothing here at all. At a time when we should be spending more money on these areas—other countries are doing it—we are spending less. The noble Viscount says, "Ah!, but we are spending more of it in particular areas". You only spend the money if you attract the industry. You only spend the money, the grant, if you get the investment.
Viscount TRENCHARD: May I interrupt? The vast majority of the regional programme, as the noble Lord knows, is the regional development grant. The noble Lord knows also that this is an automatic expenditure on virtually all capital investment of all the firms that are in the area already and that that is where the bulk of it goes.
Lord ROSS of MARNOCK: Yes, indeed, but we are giving the grant at 22 per cent, and the industry must find the rest of it, 78 per cent. The fact is that, with the present interest rates that stem from the Government's economic policy, we are not getting the investment which was supposed to be the basis of the Chancellor's first Budget last year. It is getting too late for alibis now. We are not getting the investment. When we left office, month by month unemployment was going down; now, month by month it is going up; and it has got to record figures as far as Scotland is concerned.
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The last time the figure was reached was under the same type of Government in 1974 when things were so bad that we did not even produce the January unemployment statistics. I can tell the noble Viscount that at the time the figure was over 200,000 in Scotland. This is not good enough. The enterprise zones will not solve any problem.
Another thing that he omitted to mention—and this is one of the differences of policy between the Labour Government and this Government—is that when we made cuts (and we made savage cuts, but not quite as savage as those being imposed now) we increased the amount of money that went into industrial policy, into the SDA, the Welsh Development Agency and NEB, and there was direct Government assistance and effort to keep ahead of the industrial position; and we were winning to a certain extent on that. Today the Government's whole attitude towards regional development so far as this Bill is concerned is purely negative. Look at the last amendment about overseas aid. The noble Lord, Lord Rochester, was quite right, it was not worth talking about. The Government wasted time on it unnecessarily, but it was not doing any harm. Now we get this—where we are reducing the amount of aid available.
Have the Government paid any attention to what is happening in the Republic of Ireland where one office is able to amass all the information, all the grants, all the aid, available and go out and get mobile industry coming in from abroad? Here we are cutting down on the money available for the Scottish Development Agency, cutting down on the right of the Secretary of State in respect of the agencies to give them powers in respect of selective assistance. Whether we like it or not, we are fragmenting our effort. There is the Department of Industry, there is the Scottish Development Agency and there is the Scottish Office—and by the time prospective investors get round them all they have lost heart and the Irish are in and have the development. This is happening time and again; and in respect of Europe, as well.
A noble Lord: And Wales!
Lord ROSS of MARNOCK: What the Government are doing is symptomatic of what they are doing elsewhere; it is symptomatic of inadequacy.

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The noble Viscount said, "We won a large number of seats in industrial areas". In Scotland? It is as well not to specify. There is somebody down in Southend who testifies to the failure in Scotland.
Viscount TRENCHARD: I did not say in Scotland. It is in the north of England, in the main, where there were major Conservative gains.
Lord ROSS of MARNOCK: The noble Viscount did not specify where. He said "A large number". I am pointing out that where he certainly did not win a great number of seats in the industrial areas was in Scotland. He lost his most important seat in industrial Glasgow. A haven has been found in Southend. The Labour Party won five seats in Scotland, higher than ever before. Of 44 seats, the Tories get 22. Can the noble Viscount understand the frustrations in Scotland with a situation like that? And when we find an enterprise zone, what is it?—200 acres, did I say? This is one of the great imaginative thoughts by which to solve the problems of Scotland! It does not begin to do so. The noble Lord should strengthen the position of the Scottish Development Agency, giving them more freedon to go out instead of hamstringing them in the way he is doing it.
I should apologise that I was not here yesterday to help my noble friends. I had an important engagement in Scotland. Noble Lords here can nip out and come back. Based in Scotland, one cannot do that. I am glad that they are taking this stand against this particular clause and I hope that we are joined by many others who feel concern about the position. There are parts of Scotland which are becoming derelict areas. We allow this to continue at grave risk. There is more than one way of defeating nationalism. A good regional policy is the best way.
Lord BRUCE of DONINGTON: I do not wish to deny the noble Viscount the pleasure of recording his party's victories at the polls. Magnanimity in victory is not seldom the truest wisdom, so we are told. Even in defeat we should not wish to grudge him his temporary moment of triumph. I should, however, like to deal with one or two of the observations that
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he has made. The noble Viscount seemed to express some surprise that the intermediate areas should have an unemployment rate approximating to that of the national average. If one reflects on it, the word "intermediate" itself lends currency to the use of averages.
Quite clearly, if some parts of the country (particularly in the prosperous South-East) have unemployment rates below the national average, and if in the special development areas they have rates of unemployment higher than the national average, it would surely follow that the intermediate areas are likely to have unemployment at around the national average. I do not think that that should have given the noble Viscount any particular cause for statistical surprise. However, to rest an argument on it is, I would suggest, rather an unsafe move on his part.
I should like to revert to the whole purpose of this amendment. It is true that we do not enshrine in a statute a photograph at a given moment of time showing the position that has been established by the various orders to which I have referred. I think it is unwise to do that on the basis of the Government's own expressed intentions of having things outside the Act that are not strictly relevant to it, with a rigidity that expresses the iron in their soul; so when they insist on something being put in, one is quite sure that they mean business. I prefer to have the flexibility.
One final point. The noble Viscount, together with some of his colleagues, is able to reproach us on this side with some of the measures we took when we were in office. Confession is good for the soul. I must say on reflection that in some of the restrictive steps we took in the last Administration which were based on public sector borrowing requirements by the Treasury that were at least £4,000 million out in the event—£ 4,000 million for one year and £3,000 million for the next succeeding year of 1977—we paid overmuch attention to those figures that were erroneously provided to the Government. We hope that the noble Viscount will have better luck with the advice that he or his noble friends get from the Treasury model—that is when they have the courage to publish exactly what figures the Treasury model reveals.

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If confession is good for the soul, perhaps he might communicate that to his noble friend Lord Cockfield who, it will be recalled, was financial adviser to the noble Lord, Lord Barber, at a time of the greatest expansion in the monetary supply that has taken place since World War I. I hope that when these matters are referred to in future there may be a becoming expression of humility which is, I must confess, much more natural to the noble Viscount than the political stance which he occasionally finds it necessary to take up. In the meantime, I must ask the Committee, if they will, to support the amendment.
Viscount TRENCHARD: I must not detain the Committee on this matter for long. We resist the amendment. I feel that, in the words of Lord Rutherford,
"We have not got much money, so we must think".
That is appropriate. Those words could have been appropriate to previous Governments—and I stress the word "Governments".
I want to say to the noble Lord, Lord Ross of Marnock, in furthering the interruption which I made in his contribution, that one discovered of course that a large part of the regional development grants were going to the replacement of capital of large companies—and my own old concern was typewriters. Replacements were receiving grants if they were in the right area, either SDA or DA. I cannot believe that that would have been classified by Lord Rutherford as a matter which had been given enough thought. As I have said before, I was pleasantly surprised at the degree to which one could make economies—leaving the statistics for further elaboration on another occasion—in intermediate areas that had unemployment rates very much lower than non-assisted areas—and we inherited a lot of that. There is a huge quantity of replacement expenditure in all these areas. We probably have not perfected it yet.
The selective aid which the noble Lord, Lord Ross, mentioned, was given on criteria under Section 7 which did not attempt to test the very difficult aspect of
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whether the project would go ahead without grant. I have recalled to the House before—I think last July—that I sat in for the better part of a day on the Northern Regional Advisory Board, where, in half the cases to which I listened, it was declared that the project would go ahead without grant but that it met the criteria for grant. Therefore, the grant was awarded. So I found it not too difficult to devise what I say again is a thoroughly effective regional policy at much lower cost.
Finally in resisting the amendment, I feel that the unemployment record of the previous Administration (under which unemployment doubled) has to be taken into account, together with the economic factors which we have discussed so often and so recently. The noble Lord, Lord Ross, correctly said that unemployment dropped to a degree in the months of last year. I certainly do not wish to suggest that only the last Administration has printed more money than it should have done. I doubt if my noble friend Lord Thorneycroft, the chairman of our party, who I see sitting on our Benches, would necessarily claim that either.
In so far as the unemployment rate has been going down until very recently, this was the direct result of the money "spurt" started in 1978, helped also by the catastrophic exchange rates of 1976 and 1977, which gave us a degree of temporary boost to orders. I know that noble Lords know those two reasons were the only reasons, but not in the assisted areas, for a define in national unemployment. We have to get the national economy growing on a sound basis. That will take some while to get under way. We admit that. Without a successful national economy, no regional policy on earth will be of help to the areas of the greatest need.
5.36 p.m.
On Question, Whether Clause 14 shall stand part of the Bill?
Their Lordships divided: Contents, 122; Not-Contents, 77.
Clause 15 [Assistance under section 8 of the Industry Act 1972]:
5.46 p.m.
Viscount LONG Viscount LONG moved Amendments Nos. 13 and 14:
Page 11, line 9, at beginning insert—
("(1) For subsection (4) of section 7 of the Industry Act 1972 there shall be substituted—
"(4) Financial assistance shall not be given under this section in the way described in subsection (3)(a) above unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State, in giving financial assistance in the way so described, shall not acquire any shares or stock in a company without the consent of that company."
(2) In section 8(1) of that Act, after paragraph (b) there shall be added—
"and
(c) the financial assistance cannot, or cannot appropriately, be so provided otherwise than by the Secretary of State".
(3) For subsection (3) of section 8 of that Act there shall be substituted—
"(3) Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State, in giving financial assistance in the way so described, shall not acquire any shares or stock in a company without the consent of that company".").
line 11, leave out ("the Industry Act 1972") and insert ("that Act").
The noble Viscount said: I should like, with the Committee's leave, to take Amendments Nos. 13 and 14 together. This might be quicker for your Lordships, since they are technical. I beg to move these amendments. The first amendment, No. 13, seeks to re-introduce into the 1972 Industry Act certain safeguards which were in the original Act and were repealed in 1975. The amendment will have two effects: first, it will require that assistance, either under Section 7 or Section 8 in the form of loan or share capital, shall only be given in that form if the Secretary of State is satisfied that it cannot, or cannot appropriately, be given in any other way. Secondly, it will require that assistance under Section 8 shall be given only when it cannot, or cannot appropriately, be provided other than by the Secretary of State. We feel it is right that both safeguards should be put back on the statute book.
So far as the first is concerned, it is important that the Secretary of State should be able to acquire a share in a
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company only where this is absolutely necessary. It goes without saying that this amendment will make no difference to the policies pursued by my right honourable friend the Secretary of State for Industry, but we believe it is right that this safeguard should be on the statute book and that any future Secretary of State who wished to use acquisition of share capital as a means of obtaining increased State control over industry should at least have to obtain the consent of Parliament for the relevant legislative power.
As for the second amendment, No. 14, I believe this more or less speaks for itself. As the Committee will be well aware, the Government are not generally speaking in favour of subsidising industry, and our policies are intended to provide a climate in which industry can generate sufficient profits to meet its own industrial needs. We accept that in the present circumstances there continues to be a need for Government support in some cases, but it is right that Government should intervene only when the private sector cannot meet the need, and that is what the amendment seeks to ensure. I would ask your Lordships to support these amendments. I beg to move.
Lord BRUCE of DONINGTON: We on this side of the Chamber are indebted to the noble Viscount for the explanation he has given of Amendments Nos. 13 and 14. I must admit I was a little curious when I was tracing through the effect of this amendment back to the Industry Act 1972, because I found that it provided that for subsection (4), Section 7, of that Act "there shall be substituted"—and then it quotes the rest of the amendment.
On turning up the Industry Act, I found that those words were already there. The noble Viscount did not indicate which Act had repealed those particular sections of the Industry Act since 1972; and so it goes on all the way through. Every time I endeavoured to trace this amendment to the Act which it purports to amend, I found the words already there, except for when he comes to Section 3:
"For subsection (3) of section 8 of that Act there shall be substituted—".
And then once again there is subsection (3), which starts:
"Financial assistance shall not be given …".

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It goes all the way down and tallies exactly with the Industry Act 1972, except for the following words:
"(b) shall not acquire more than half, by nominal value, of the equity share capital of any company".
Even though it has not been specifically altered by this series of amendments, it seems that the real effect of this long list of amendments is to eliminate from the Industry Act 1972 Section 8(3)(b).
I would have thought that if it had been the intention of the Government to amend Section 8(3)(b) of the Industry Act 1977, they could have put down a straight amendment to that effect. I do not understand the technique that the Government have apparently adopted here, of putting down an amendment which squares in every way with the section of the Act it is said to amend, with the exception of one particular subparagraph which is repealed without the amendment saying so. I would be the first person to acquit the noble Lord of any kind of subterfuge in the matter, and it may be that I have got it entirely wrong. However, I make it a habit when amendments come up for consideration to trace them right back to the Act. It may be that there is some quite simple explanation for it. If so, I would be very glad if the noble Lord would elucidate the matter.
5.53 p.m.
Lord RENTON: I too am grateful to my learned friend Lord Long for his explanation. Frankly, as has been said by the noble Lord, Lord Bruce of Donington, we have a very confused situation before us as a result of Amendment No. 13. Like him, I have no objection to the substance of the amendment, but I feel that it is leading us into an unsatisfactory structure so far as this legislation is concerned. If noble Lords will be so good as to turn to Clause 15 as it now stands without the amendment, we see that it says that the provisions of Schedule 1 to this Bill shall have effect. If we turn to Schedule 1, we see that it is headed, "Limits on Financial Assistance under Industry Act 1972 Section 8". It so happens that subsections (2) and (3) of this amendment, No. 13 also, in effect—however it has been done in relation to the previous legislation—limit the financial powers that may be used.
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Therefore, if the Amendment is passed in its present form we shall find ourselves limiting the financial powers which arise under Section 8 of the 1972 Act in two different places in this Bill. We shall be limiting them in the first schedule in detail and we shall be limiting them in Clause 15 also in detail, whereas it might be better to deal with the whole lot in the first schedule. I ask my noble friend to consider the advisability of asking the draftsman to look at this again, because it will not be found satisfactory by the users of the statute.
The story does not really end there. We find that in Clauses 5 and 8, as well as in Clause 15 and Schedule 1 to the Bill we are limiting the financial powers that are being granted or altered under this Bill, and we are doing so by referring back in the case of Clauses 5 and 8 to the 1975 Act and in the case of the first schedule to the 1972 Act. Surely we should be trying to make our legislation as simple as it can possibly be made. I should have thought that it might be better to have perhaps one clause to replace Clauses 5, 8 and 15, roughly in the terms of Clause 15, with one schedule to embody the whole of the detail. Then it would be possible for the users, if they wanted to find out what the limits on the financial powers were going to be, merely to read the one schedule.
It would not be reasonable to expect my noble friends to reply here and now to this argument which I suggest to your Lordships is one that should receive the further attention of the draftsman, but I hope that either my noble friends will not press the amendment now or, if they do so, they will ask the draftsman to have a good look at it and table the necessary revising amendments at the Report stage.
Viscount TRENCHARD: I am grateful to my noble friend Lord Renton for not expecting me to take in all the possible consequences of writing three clauses and the schedules that support them in a different way. May I say to my noble friend that at the Report stage I shall give a statement as to why Parliamentary Counsel have advised this as the most appropriate form for the amendment. All of these amendments will be consolidated into the Act, and that should alleviate the problem of understanding, which is a very important point raised by

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my noble friend. Therefore, if he would consider that, I undertake to come back at Report stage on the question whether his suggested way of achieving the same aim convinces the experts in the Government and Parliamentary Counsel.
Perhaps I may leave it there, with one other remark to the noble Lord, Lord Bruce of Donington, who again is not opposing the substance of the clause but is puzzled about the way in which we have done it. What we are trying to do as an aim—and I shall also make clearer to him at the same time, at Report stage, exactly why it is done in this way and not in other ways—is to reinstate some of the provisions of the 1972 Act, which were repealed in the 1975 Act. That is what my noble friend referred to. Therefore, we are changing the law in relation to some aspects which were repealed in 1975. But the reason why some parts of the 1972 Act which were removed in 1975 are not put back now, is that we are not seeking to re-install all parts of the 1972 Act which were repealed in 1975. That is the best I can do for now, from my knowledge of the Bill, and perhaps both noble Lords would accept my assurance that I will give them a detailed explanation before the Report stage, and publicly at the Report stage, if they ask me to do so.
Lord RENTON: I am deeply obliged to my noble friend Lord Trenchard. When he says that these will be embodied into the Act, he presumably means a consolidation Act in due course; and, if so, when is that consolidation Act likely to be put before us? My other point is this. With the deepest respect to him, may I remind my noble friend that the drafting of statutes is the responsibility not of Parliamentary Counsel but of Ministers?
Viscount TRENCHARD: I accept the latter point, and may I return to the former together with the other points?
On Question, amendments agreed to.
Clause 15, as amended, agreed to.
Clause 16 [Advice for businesses]:
The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guildford): Amendment No. 15?
Lord RENTON: On Clause 16, I have a very small point on which I think it would be—
The DEPUTY CHAIRMAN of COMMITTEES: The noble Lord is out of order. I have called Amendment No. 15.
6.2 p.m.
Lord GISBOROUGH Lord GISBOROUGH moved Amendment No. 15:
Page 11, line 14, after ("may") insert ("by order").
The noble Lord said: With your Lordships' leave, I should like to take Amendments Nos. 15 and 16 together, which I think are effectively similar. Clause 16 gives unfortunate blank cheque provisions to the Secretary of State and he, or a future Secretary of State, could create a large bureaucratic advisory machine which could, in effect, direct industry. The distinction between advice and direction can become somewhat blurred, as was seen during the days of blacklisting. There is, therefore, much scope for abuse with this provision, and I believe that the powers now sought in this clause should be circumscribed by a requirement to lay any scheme before Parliament for approval, and I hope that these amendments so provide.
The desirability of the Government's small firms information centres is highly debatable, and the chambers of commerce feel that they can do a very much better job, at much less cost. When the Conservative Party Leader was speaking before the election, she said that every activity should be scrutinised to be sure that it cannot be more effectively carried out by private enterprise, and there is a strong argument that these small firms information centres are high on the list of those things which could be done without. The axing of the SFICs would yield useful and lasting economies, and would substantially contribute to the reduction of bureaucracy.
The attraction of cutting back on this activity is that little or no hardship would result, since the chambers of commerce already provide a most comprehensive information service which meets virtually all the varied needs of small firms. In some respects, their service is far superior to anything offered by the SFICs. For

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example, the entire field of exporting is an area where the chambers have built up unrivalled expertise. Chambers expect to cover the cost of services from subscriptions and charges, but the SFICs are not free; their services are paid for by the taxpayer. Chambers have dealt with more requests for information and assistance with documentation than the SFICs, and the figures confirm this. I beg to move.
Lord MONSON: The noble Viscount, Lord Long, in speaking to Amendments Nos. 13 and 14, said, if I may paraphrase him, that this Government did not believe in subsidising industry unless that was absolutely essential. The amendment of the noble Lord, Lord Gisborough, seems to me to be very much in tune with that philosophy, and I hope therefore that the Government will give it serious consideration.
Lord BRUCE of DONINGTON: Far be it from me to wish to intervene in any way in the argument of principle that seems to have developed, between one section of the noble Viscount's party and the other. I must say that when I saw the clause I glowed with some pleasure to feel that the Government were so generously disposed, in spite of the financial stringency which they have imposed, to give advice; presumably on the basis that advice costs nothing.
But I can very well conceive of circumstances where entrepreneurs, on whom the incentives of recent Budgets do not seem to have made any very great impact, or who may not have been encouraged by the exhortations to direct their skill, enthusiasm, drive and initiative—which I believe are the popular terms—towards establishing their businesses independently of advice, might consider it necessary to take advice from the Secretary of State. My own sincere hope—which is to some extent endorsed by my fear—is that, when the Secretary of State in another place is asked for advice by the people whom this clause is designed to benefit, he will not give them a dusty answer.
Baroness SHARPLES: I should like to support my noble friend the Minister in regard to this amendment, because I feel that small businesses require assistance
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and I do not believe that the chambers of commerce can provide the assistance which they need.
Lord ROSS of MARNOCK: Far be it from me to defend the Government, but somebody has to do it. I do not know whether the noble Lord who moved the amendment appreciates that he would not achieve throughout the whole country what he wants to achieve. As I understand it—and I hope I shall not be told I am wrong—Section 2 of the Scottish Development Agency Act is still unrepealed. If the noble Lord looks at that, he will find in Subsection (4)(l) that the SDA may,
"provide or assist in the provision of advisory … services … for any person or any undertaking".
If that is available in Scotland, I am sufficiently generous to ensure that it should be available in England. So I think we should ensure, by support of the Government, that English persons and undertakings are given a similar kind of help.
Viscount TRENCHARD: I welcome the lighter note that has now come into the proceedings. Let me say to my noble friend who moved this amendment that there is nothing that we want to do more than to encourage chambers of commerce to perform the very important functions which they do perform up and down the country. But I have to say—and I do not think that chambers of commerce themselves would resist this statement—that they are stronger in some areas than in others, and that they have more members in some areas than in others. But our purpose will be to make our efforts complementary with theirs and not competitive, wherever we can possibly do that. I hope that that assurance will go a long way towards convincing my noble friend that it is unnecessary to press his amendment.
The small business start-up rate in Scotland, England and Wales has been deplorable for a very long time. From his studies, my right honourable friend the Parliamentary Secretary believes it to have been about half the rate of important Continental countries over the last decade. That is why we have introduced many measures to try to speed small and independent businesses and why my right honourable friend the Chancellor of the

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Exchequer has included a number of very important measures in the Budget. The associations representing independent and small businesses have welcomed those measures.
As far as I can see, the amendment would require the Secretary of State to seek Parliament's approval in each case of advice. At the moment the service handles about 8,000 cases per annum, so that would not be very practicable. The counsellors of the small business department are all retired and experienced businessmen. They are not, in that sense, pushing out bureaucracy; they are there to help would-be entrepreneurs with problems of business, particularly where chambers of commerce and other sources of advice are not available.
An amendment was introduced in the other place which requires the Secretary of State to give an account of the amount of advice and the progress of his advisory services once a year, and that your Lordships will find in Clause 16(3) of the Bill. I feel, therefore, that there must be considered to be adequate parliamentary control over what is not a large expenditure—and cannot be a large expenditure by the nature of the service and the demand. I hope that my noble friend will see fit to withdraw the amendment.
Lord LEATHERLAND: Before it gets to that stage, may I ask a question about Clause 16? May I ask the Minister how many extra civil servants will be needed to fulfil the functions set out in that clause? If no extra civil servants will be needed, do not the presence of this clause and the duties flowing from it indicate that the civil servants are not now fully employed?
Viscount TRENCHARD: As I have said, these counsellors are retired businessmen, introduced for the purpose of giving advice. The arrangements for their employment are local, regional, and we are feeling our way. This has been described to the House on a previous occasion—in the small business debate introduced by my noble friend Lady Sharples and also in announcements which we have made. If the noble Lord would like me to do so, I will give him more details of this; but one cannot compare these counsellors with the number of civil servants as such. We have stated that we shall report as we get more evidence of their effect, or
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otherwise. They have already been instrumental in the Post Office pension fund: being prepared to put up money to back small businesses in a scheme which I have also announced to the House.
Lord GISBOROUGH: I thank the noble Lord the Minister for that explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
On Question, Whether Clause 16 shall stand part of the Bill?
Lord RENTON: This is a short point but it might be of interest to your Lordships, and perhaps of importance. In subsection (3) of Clause 16 we find that
"the Secretary of State shall prepare and lay before Parliament a report on the exercise during the year of his powers under this section".
Perhaps one would not need to worry about the phrase "before Parliament" but for the fact that in Clause 3(4) we find that
"the Secretary of State shall prepare and lay before each House of Parliament a report on the exercise during that year of his powers under subsection (2)"
of that clause. And in subsection (5) on page 4 we find that under the Companies Acts he
"shall lay before each House of Parliament a copy of any accounts which … are laid before the company".
When different words or phrases are used in the same statute they are assumed, by a rule of interpretation, to have different meanings. Being ever jealous of the powers of your Lordships' House, I am just wondering whether the mere statement that this report shall be laid before Parliament ensures that a copy will be laid before your Lordships.
Viscount TRENCHARD: I undertake to ensure that a copy will be laid before your Lordships and I shall cover this technical point, along with my noble friend's other technical points, at the Report stage, as recently promised.
Clause 16 agreed to.
Remaining clauses agreed to.
Schedule 1 agreed to.

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Schedule 2 [Repeals]:
Viscount TRENCHARD Viscount TRENCHARD moved Amendment No. 17:
Page 16, line 42, column 3, at end insert—
("In section 22, the words from "and" to the end.")
On Question, amendment agreed to.
Viscount TRENCHARD moved Amendment No. 18:
Page 16, line 52, column 3, at end insert—
("In Schedule 4, paragraphs 1(a), 2(a), 2(b>)(i), 3 and 4, and Part II.").
On Question, amendment agreed to.
Schedule 2, as amended, agreed to.
House resumed: Bill reported with the amendments.

APPLE AND PEAR DEVELOPMENT COUNCIL ORDER 1980
6.19 p.m.
Earl FERRERS Earl FERRERS rose to move, That the draft order laid before the House on 19th March, be approved. The noble Earl said: My Lords, I beg to move that the draft Apple and Pear Development Council Order 1980, a copy of which was laid before the House on 19th March, be approved.
This order is presented for your Lordships' approval in accordance with the requirements of the Industrial Organisation and Development Act 1947. The I reason why it is rather more lengthy than normal for an order is that it is consolidating, with amendments, the Apple and Pear Development Council Order 1966, as it in turn has been amended. The 1966 order first established a development council for the apple and pear growing industry in England and Wales. In addition to consolidating the Apple and Pear Development Council Order of 1966, the draft order proposes three principal changes in the council's arrangements. These concern the number of members of the council, the annual charge which the council imposes on growers, and the functions of the council.
My Lords, the Act of 1947 requires that, three years after a development council I has been set up and then every five years
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thereafter, the Minister responsible shall consult the council and the organisations which are representative of people who are engaged in business and employment in the industry as to whether the council should continue in being and, if so, whether the development council order should be amended in any respect. My right honourable friend the Minister of Agriculture, Fisheries and Food has accordingly consulted the council itself and the National Farmers' Union as representative of employers. He has also consulted the National Union of Agricultural and Allied Workers and the Transport and General Workers Union, the two trade unions who represent workers in the industry.
Because it is some 13 years since the council was set up, in addition to the consultations which were required by statute, a survey was carried out at the suggestion of the National Farmers' Union which sought the views of individual growers who are paying the council's annual charge. The results, which were announced on 5th February, were a vote of confidence in the future of the council. A clear majority were in favour of the council continuing. There was a good turn out; 82 per cent, of growers voted. The 55 per cent, who wanted the council to continue comprised 65 per cent.—roughly two-thirds—of the area of apples and pears.
In the light of the views which were expressed during the consultations and of the results of the survey, my right honourable friend decided that the council should continue in being and that there should be further consultations about possible amendments to the Apple and Pear Development Council Order. That was in February, and about the same time the report of the Top Fruit Working Group under the chairmanship of my noble friend Lord Selborne, was published. This group had been set up by the apple and pear industry to consider its problems. Their excellent report contained, among many other matters, several important recommendations about the constitution and functions of the Apple and Pear Development Council. This was most timely, and these recommendations were taken into account in the further consultations about what the order might provide, and I should, if I may, like to add my own congratulations to my noble

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friend for having produced so quickly a report which was not only admirable but which has commanded widespread respect among all those who are involved—and that is not a very easy thing to achieve—and which has succeeded in concentrating the minds of all on the essentials.
My Lords, the first of the principal changes which the draft order seeks to invoke is to reduce the size of the council and therefore the quorum of the council. Although Lord Selborne's group recommended a council of only nine members, it was represented to us that this number would be too small to enable the various interests to be covered adequately. We, therefore, propose that the number of members should be reduced from the present maximum of 21 to 14, of whom eight will represent the interests of growers and two the interests of employees. The 1947 Act requires that these two interests together should be in a majority on the council and this condition will, of course, be met. But it seems to us only reasonable to maintain the growers' present overall majority since they provide the whole of the council's funds. The number of members with special knowledge of marketing and distribution, and the number of independent members, will be reduced from three to two for each group. The minimum quorum for the council has been reduced from the present 13 members to eight members. We think that this streamlined council will make for much greater efficiency in the conduct of the council's business and in decision making.
The second main change is that the maximum rate of the annual charge which the council may impose on growers will be increased from £14·50 to £29 per hectare. There are three points on this increase which I should like to stress. First, the draft order refers to the maximum permitted charge. The actual amount charged is decided annually by the council in the light of their programme of activities, and it is subject to the approval of my right honourable friend the Minister of Agriculture, Fisheries and Food. Secondly, the increase will do little more than restore, in real terms, the council's purchasing power to its 1975 levels. Advertising costs, which account for much of the council's expenditure,
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have been rising faster even than the general rate of inflation. Thirdly, competition from imported French apples has been getting fiercer and the council must have adequate funds if it is to play its part in helping to safeguard the English growers' home market.
The third change to be made by the draft order is to assign to the council four more of the functions which are permitted under Schedule 1 to the Industrial Organisation and Development Act 1947. These will, among other things, enable the council to promote scientific research, to inquire into matters such as production and the development of new varieties, to introduce a premium pack scheme for promoting Class I fruit of specified varieties such as Cox's Orange Pippin apples, and to promote cooperation or co-ordination in the supply of materials, production, marketing and distribution. In case your Lordships may feel that there may be a danger of the council trespassing into fields of other bodies which are engaged in research on production and marketing, and duplicating their work, I hasten to say that the council have indicated that they see the role of the reconstituted council as promoting and supporting but in no way taking over the work of these other bodies.
My Lords, I feel that I would be failing in my duty if I were not to draw your Lordships' attention to Schedule 3 to the order, where you will see listed no fewer than 150 varieties of apples and 101 varieties of pears which will not be covered by this order, because they are varieties which go only for cider making and for perry making, and they seem, in their delicious nomenclature, to cover a wide spectrum of our national life.
On the political side, one may be glad to see that the Green Norman, the Strawberry Norman and the Crummy Norman are not included in the order. Nor is the Bastard Longdon, nor is Iron Sides. Even the Stinking Bishop is not allowed in. The Bloody Bastard, like its colleague the Deadboy, is also excluded. On the financial side, the Old Pound, the Improved Pound and the Loyal Drain remain untouched. On the international field the Upright French (that, to some may seem a happy name) and the Bloody Turk are linked together in common cause as

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making no impression on the Apple and Pear Development Council.
Those with a rustic turn of mind will be glad to see that the Brown Snout, the Foxwhelp, the Snake Pole and even the Hagloe Crab are left, as it were, in the wilderness as far as the council is concerned. And those with a more racey imagination will be glad to see that the Painted Lady, Merrylegs and even Slack My Girdle are all quite properly left as they are, where they are, in the schedule, uncovered by the order. I do not propose to say any more about this order, other than to recommend it to your Lordships as being a great improvement for the apple and pear industry. I beg to move.
Moved, That the draft order laid before the House on 19th March, be approved—(Earl Ferrers.)
6.28 p.m.
Lord PEART: My Lords, I congratulate the noble Earl on the way in which he has introduced this order. He has been brief, he has introduced some humour, he knows the industry and I would only say as an ex-Minister that I think I had something to do with the setting up of this body. I am glad that the Government have agreed to allow it to continue, because there seems to be a fashion to seek out quangos, and I suppose technically this could be called a quango, although some people might object.
The names which the noble Earl read out I was going to say, but I hope noble Lords on both sides of the House—and indeed others—who are interested will obtain this draft order. I think that the people who have been responsible for it ought to be complimented and indeed the staff in MAFF must have had a lot of say in this. It is an important order because it enables us to try to improve this section of horticulture, and, after all, as the noble Earl has said, we have considerable competition from Europe and especially in the apple industry from the Golden Delicious coming from France. I do not want people to be xenophobic about Golden Delicious, as indeed we should not be about any produce which we import through normal commercial channels. This draft order also
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means the continuation of the development council, and I should like to congratulate all those who have sat on that council through the years. They have done a remarkable job; they do not get high salaries, or anything like that, but they like their work and they do it very well.
The noble Earl mentioned some of the functions. Perhaps I may quote:
"Schedule 1. Functions of the Apple and Pear Development Council, 1. Promoting or undertaking scientific research".
The schedule continues:
"Promoting or undertaking inquiry as to materials and equipment and as to methods of production, management and labour utilisation, including the discovery and development of new materials, equipment and methods and of improvements in those already in use …
"Promoting the production and marketing of standard products".
I am glad the noble Earl brought in a reference to the trade unions concerned, particularly the Transport and General Workers and the Agricultural Workers and others. This is a very important schedule and I know it will be well used. Going down the list—I do not want to repeat what has been said by the noble Earl—I see also,
"Promoting the development of export trade, including promoting or undertaking arrangements for publicity overseas".
I think it is important that we should have an export industry, just as other countries export to us. So I congratulate the noble Earl on introducing this, and I know, looking at another Agriculture Minister, that he certainly will give it his blessing, as I do; I think it is for the good of our country.
6.32 p.m.
Lord MACKIE of BENSHIE: My Lords, I, too, should like to welcome the order, which goes some way towards allowing the industry to solve its problems. Certainly they needed the extra powers, and I congratulate the Government on acting so swiftly on the Selborne Report. I do not want to appear ungracious, but really the industry is facing a great many problems and I think the Government must not rely solely on this order and the setting up of the authority for apples and pears; they have got to do a great deal more, I think, to alleviate the unfair competition from the Golden Delicious apple from France. There are a whole

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lot of things, starting with the grading of the Cox's Orange Pippin at 60 per cent, of the value of the Golden Delicious, which must surely be wrong and grossly unfair. It means that if any fruit goes into intervention it is paid for at 60 per cent, and not 100 per cent. That starts the ball rolling.
Then there is the fact that the French lend money to the tune of £170 per hectare per annum to their growers at a very low rate of interest. It is a very unfair subsidy which we in this country compete against, although we do have the horticultural payments. The French also, I understand, are paying out heavy subsidies for planting and they are also paying out disaster premiums for hail, frost and other natural disasters, all of which puts our growers at great disadvantage. I think the biggest disadvantage probably is the scale of French promotion, which is at the rate of over £2 million per annum. This is a lot of money. As far as I can work it out, the total income of the new body will be £700,000, which is of course a tremendous improvement, but set against the French Government paying a total of over £2 million for promotion in this country it does not appear to be quite adequate. I wonder whether as time goes on the Government will consider lifting the level of levy per hectare on which the new body can apply. I think it is necessary to get on the record the difficulties under which the industry is labouring. I welcome this order, but I urge the Government to try to put right the other iniquities that exist in the Common Market so that the industry may have a chance to compete on a fair basis.
Lord ELWYN-JONES: My Lords, I hope that my noble friend Lord Peart will not think me xenophobic in supporting what the noble Lord, Lord Mackie, has said about the apple industry and in particular about the fate of Cox's Pippins. I once lived in a house next to where the Cox's Pippins were first grown, in Cranford, in the 18th century. I have got a feeling about Cox's Pippins; they are the best apples in the world, of course—and that I know is being xenophobic. I have friends who are in the industry who are deeply worried. I should like to ask the noble Earl, Lord Ferrers, if he can tell us what acreage of apple orchards are being ploughed in, and what steps are
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being taken to protect our industry from, in particular, the Golden Delicious, which receives, as the noble Lord, Lord Mackie, has said, the preferential support and treatment which is denied to our own growers.
I think there is something really significant about maintaining this glorious English growth, the Cox's Pippin. I would feel quite lyrical about it if I were capable of lyricism. It really is part of England and has been part of England for a couple of hundred years, and it is quite shaming that it is being slowly driven into the ground, literally. So I should like to know what steps the Government are taking to protect the position, because it would indeed be a sad day if we were no longer able to enjoy the luxury of a Cox's Orange Pippin.
Viscount AMORY: My Lords, if the noble and learned Lord had gone on a little longer I am sure he would have persuaded us that Cox was a Welshman. I quite agree with him that, Welsh or not, the Cox's Pippin is a delightful apple. The noble Lord, Lord Peart, in a gesture in my direction at one moment said that I would quite agree with what he said. I do remember more than a quarter of a century ago when I was at the Ministry of Agriculture, Fisheries and Food; we were at that time somewhat concerned at the not too good presentation for sale of so many of our apples and pears. I should only like to put on the record my personal opinion that a good deal of progress has been made since then in this matter; my visits to greengrocers and so on lead me to believe that, on the whole, our apples and pears are much better presented than they were 25 years ago. That is very important when it comes to competition.
6.38 p.m.
Earl FERRERS: My Lords, I am very grateful to your Lordships for having welcomed this order. I would assure the noble Lord, Lord Peart, first of all, that the Apple and Pear Development Council is not a Quango as such, because of course it is not financed by the Government. It is financed wholly by the growers, and it does do an excellent job of work.
I am bound to say that when the noble and learned Lord, Lord Elwyn-Jones, got up I thought he was going to ask me some

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frantic legal question, and I trembled as I always do when the noble and learned Lord rises. Doubtless my noble friends beside me felt the Bench shaking. He was worried about the Cox's, and I agree with him they are the best apple you can get. If he looks at the prices he will see that they regularly command a higher price than do the Golden Delicious, and that is because the quality is such that they command this additional premium.
The difficulty with our marketing is that so often the good quality stuff on the market can be fouled up by a lot of poorer quality stuff. That is one thing the industry will have to address itself to. Part of the reason is that over the years we have not replaced our orchards in the way we should have done, for a variety of reasons; people have not got the money, and sometimes they do not think the future is bright enough. So very often apples are coming from orchards which are not of the best quality and those orchards are producing apples which are not of the best quality.
I should like to give him what assurance one can that it is certainly this Government's intention to do all that they can to see that the Cox's Orange Pippin, as a variety, does have a future and succeeds. But it will mean reorganising, and it will possibly mean that some people who grow Cox's Orange Pippins at the moment may well find that they will not be able to do so. I would only qualify that by saying that this is part of the reorganisation to which the industry itself must address its mind in order that what goes on the market is well packed, well presented and commands a premium.
I agree with my noble friend Lord Amory that the method of packaging is better than it was, but frankly I think that it ought to be even better still. So often one finds that in these markets the foreign produce which comes in is well packed and well presented and in some cases ours is not the same. The horticultural industry went through this problem some years ago when lettuces and so forth were under attack from foreign countries. They reorganised themselves and now one can find British horticultural produce competing on fair, equal and better terms with foreign imports, and that is the state that the apple and pear industry must get itself into as well.
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The noble Lord, Lord Mackie of Benshie, said that the Government would have to do something about the imports of Golden Delicious. That is a common cry and it is an understandable cry.
Lord MACKIE of BENSHIE: My Lords, with respect, what I said was that the Government would have to see, or try to see, that we competed on fair terms. I was not asking for a restriction.
Earl FERRERS: My Lords, I was about to say—if the noble Lord had not been quite so sharp on his feet—that many people say that we must do something about Golden Delicious imports—whether that is restricting them or whether it is ensuring fair competition. All I would say to the noble Lord is that in all that we have discovered and looked into—and we have done a great deal about this—there is no unfair competition between imported Golden Delicious and our own, in so far as we can find no evidence that the French Government are doing anything contrary to the Community rules as such.
I mention this matter because it is a common form of complaint. When the noble Lord says that their apple producers have benefits which ours do not have, and that that is unfair—and he cited the low interest rates that are available—I would only remind him that each country in the Community has its own method of supporting its agriculture and horticulture. We have chosen the method of grant—farm capital grant schemes, horticultural capital grant schemes and the farm and horticulture development schemes. That is the way in which we help and support our industry. It so happens that the French support and help their industries by cheap interest rates.
A common cry among many people is, "How nice it would be if we had cheap interest rates too". However, when one actually looks into the problems and the difficulties, I think one will find that it is not quite as easy as it seems. I believe that the system which we have for supporting our agricultural and horticultural producers is as good for our purposes as would be the system to which the noble Lord, Lord Mackie, referred.
Lord MACKIE of BENSHIE: My Lords, I am sorry to interrupt the Minister,

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but this is a very important point. Is he satisfied that he has a complete list of the support systems for apple growing in France? There is a strong suspicion on the part of our apple growers that there are a lot of hidden subsidies. The noble Earl says that if we were to compare the two, the comparison would be quite fair—grants as against planting subsidies and low interest rates. If I put down a Question, can he give me a complete list of the supports there are in France?
Earl FERRERS: My Lords, I think the answer is that if the noble Lord puts down a Question I shall answer it. But whether I could give him the answer which he requires is another matter because, of course, all that I can do is to say what the British Government do. I am not in a position to answer for what the French Government, the Dutch Government, or any other Government do; nor would I be in a position necessarily to ferret out (if one may use that word) the kind of points which the noble Lord suggests, which I think are an indication that the French Government are doing something which is not really quite right. We have no indication at all that they are doing anything which is not fair, just or permitted under the EEC rules. They may give various subsidies, but they are perfectly entitled to do that and it would be unreasonable, I think, for the noble Lord to say that because the French, the Dutch or the Germans give a certain subsidy, therefore we should have to match that subsidy pound for pound ourselves. We try to support our industry in the best way that we can and we think that the way in which we do that is the best way for our purposes.
So the answer to the noble Lord is that if he puts down a Question, I cannot guarantee that I can give him the total list of all the subsidies which the French Government produce, because that is not within the competence of our Government. But if he wishes to do that I can only do the best I can.
I am grateful to your Lordships for having welcomed this order and I hope that we shall find, much to the delight of the noble and learned Lord, Lord Elwyn-Jones, that, when the Apple and Pear Development Council becomes reorganised and gets what I can only describe as a
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sharper cutting edge determined to market and to make the best for British apples, in a few years' time the Cox's will be not only as prolific as they are now but even more frequently seen on the market stalls.
On Question, Motion agreed to.

THE BBC SCOTTISH SYMPHONY ORCHESTRA
6.47 p.m.
Lord ROSS of MARNOCK Lord ROSS of MARNOCK rose to ask Her Majesty's Government what action they propose to take to prevent the destruction of the BBC Scottish Symphony Orchestra. The noble Lord said: My Lords, I welcome the opportunity—though I am saddened by the need—to raise the question of the brutal proposal of the BBC to kill off the BBC Scottish Symphony Orchestra. I am the first to declare and praise the efforts of the BBC over its long lifetime as a patron of music. I think that anything I know about music came from the old Reithian days of listening on a Sunday to Bach, and Handel and to what they appreciated as the appropriate kind of programme for a Sunday.
However, when we consider what is now happening and this particular proposal—and remember that it concerns only one of five orchestras that are to be axed; in fact, I think it is a cut of about 34 per cent.—we can understand how appalled informed opinion in Scotland and elsewhere has been at the decision of the BBC.
There has been little or no consultation even with the BBC's own advisory committees on music—the Scottish Advisory Committee or the central one. I was fascinated by the reason given by an official of the BBC, who said that they did not consult them because they knew what the answer would be. So, evidently they only consult when they get the kind of answer they like. People may appear cynical now, people who are wholehearted supporters of the BBC—and I think that a petition with 70,000 signatures has gone to the BBC—as to whether the BBC, with its proud record, is departing from its traditional position of being a patron of serious art and is being tilted away to pop, most of whose listeners, by

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the way, never pay for a licence. All the young people running around with these little sets do not pay for a licence.
I have the feeling that the BBC must change its decision in respect of this matter. There is confusion in the letters which we receive from them. My noble friend will remember a letter that he received saying that there must be across-the-board cuts. He will remember that that was continued with an annex giving the apologia of the BBC, saying that they rejected across-the-board cuts. Indeed, when we look at what they have done, we see that there is unfairness in respect of certain aspects. They talk about a modest cut of 10 per cent, on educational programmes; this is after a cut in London of 3 per cent, as regards television. Radio main networks are to have a cut of 5 per cent.; news, 3 per cent.; but the national regions, in which Scotland is included, are to have cuts of between 7 per cent, and 9 per cent.
However, undoubtedly, the biggest cut in Scotland is the proposed disbandment of the Scottish Symphony Orchestra, although why they put it in the Scottish Region I do not know, because 70 per cent, of the output of the BBC Scottish Symphony Orchestra is networked; only 30 per cent, is purely for Scottish ears. So this is something very different, and concerns the whole question of fairness, with which the Government are involved.
Let us remember the BBC's reasons for making the cuts at all. They are, first, inflation—for which the Government have responsibility; secondly, high interest rates—for which the Government have responsibility; and, thirdly, competition, although I always thought that that led to improvement in standards and a reduction in costs. Evidently, it is conducted in such a way in the broadcasting sphere that I cannot say whether or not it leads to an increase in quality. I can remember all the debates we had when we set up ITV. But, certainly, if there is competition and leap-frogging in respect of wages and the showbiz costs involved, it is very serious for the country.
But there has been a complete misunderstanding and misappreciation by the BBC, although I hope not by the Government, of the fundamental importance of
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this orchestra. It is more than just another orchestra. It has an international reputation for excellence, for innovation, for adventure and for programming. It was Sir Thomas Beecham himself who said that he would hire anyone who had spent two years in the BBC Scottish Symphony Orchestra. Therefore, let us not be put off by any suggestion that it has somehow or other been declining. There is to be a gala concert in Glasgow on Sunday night, 4th May. Four distinguished conductors will be present, racing in, trying to do their bit to save the orchestra: Sir Alexander Gibson, James Lughran, Simon Rattle, who has written a very interesting letter to The Times today, and Christopher Seaman. There are other such men as these who had their first chance in this orchestra. There are soloists who would not have had a chance except for the BBC Scottish Symphony Orchestra. There are composers who were first heard here. When that is taken away, the effect it has on the whole musical life and future of Scotland is very serious indeed.
I hope noble Lords appreciate that 17 members of this orchestra are part-time teachers at the Royal Scottish Academy of Music in Glasgow. They also do work in schools. They cannot stay there if there is no orchestra; as usual, they will gravitate to the South. The loss in training and in recruitment to that college and the long-term effect of that is very grave indeed for Scotland. No wonder there has been an outpouring of protests. They come from the Philharmonic Orchestras of Vienna, Los Angeles and Berlin. They cannot understand what we are doing.
What are the reasons? Inflation—but that is to be ended; high interest rates—that is only temporary; and competition—that will be helpful. Therefore, for temporary reasons we are going to make a permanent impoverishment of the culture of Scotland. That is very serious indeed. It was the Minister for the Arts who said that cuts should not discriminate against particular sections. I think that I have proved that the discrimination is against music, and certainly in Scotland. I do not know why. I do not know who advised it. Was it the Scottish Broadcasting Council? It never consulted anyone—musicians or organisations. I have a feeling that it felt that its share of the

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cut could be met simply by cutting out the BBC Scottish Symphony Orchestra. That is an easy way out, but a very dangerous way out from the point of view of the real wealth of the community.
I have a long memory. Some people in the BBC have a 10-year itch as regards the Scottish Symphony Orchestra. They tried to disband it in 1960 and in 1970; they must not be allowed to succeed in 1980. The effect upon festivals of music and choral societies is very important indeed. There has been a flourishing musical development in Scotland over the last two decades and this orchestra has played its very considerable part. It has taken 45 years to reach the international reputation which it has, but it is to be killed by just one decision. The BBC have made the suggestion that they consider this the best way forward in the interests of the listening public and the musical profession. They never asked the listening public or the musical profession. They say that they will open up the possibility of enhancing orchestras when resources become less scarce. When the resources are available there will be no orchestra, By this decision we shall kill this orchestra, and we must not allow that to happen.
There are other options. I have heard what the BBC is paying for certain films; £2 million in the case of one film and £500,000 for another. But they are old films which everyone has seen before they have appeared on the BBC. Of course, they are imports. The Government could be very much more flexible in relation to the financing of the BBC. This arises because they say that there is to be no increase in the licence fee for two years, and no change in relation to the monies made available to the BBC.
There is very considerable duplication, not just on radio but in the BBC's output, both within the BBC and between the BBC and ITV. We have all seen the duplications in respect of sporting facilities, and very expensive sporting facilities. Money could be saved there. Despite all the BBC says, I am convinced that there are administrative savings to be made. The bureaucracy of the BBC is probably tied with more red, blue, white or any other coloured tape than one can think of. One has only to go to a party conference to see how many vans are there representing the BBC and how many are represen-
1214
ting the other side. One finds that in many cases there is far too lush a representation where money could be saved.
If the Government want to save some money, do we need a fourth channel, and do we need it just now? There are times when I think that we suffer from too much bad television. It has been bad enough with "Death of a Princess", but this is not the time to discuss that. I am more concerned about the death of an orchestra. I have been heartened by the response in Scotland to efforts to save the orchestra. Money has come in from private sources. But the future of the orchestra and the importance of it lies as a broadcasting orchestra.
I am more than slightly worried because there has been private generosity in respect of the Scottish National Orchestra. One of the great stories of Scottish generosity and quick response was that of the building up of the Scottish Opera. The other side of television and communications have played their part in that as well. This is a distinctive orchestra with a special role and special importance, and the Government must intervene in this case at the last minute to try to save this splendid orchestra.
7.1 p.m.
Lord MACKIE of BENSHIE: My Lords, the noble Lord, Lord Ross of Marnock, has really said practically all there is to say about this subject. He is certainly voicing the feelings of the people of Scotland. I would lean rather more heavily on the Government, because I can understand very well the BBC's problem. They do not get a special subvention to be patron of the arts. They are rather miserably treated. It will not do any harm, although no doubt everyone here knows them, to get on the record their place in the licence fees charged in various countries. As at present on colour television, for example, the United Kingdom licence fee is £25; Switzerland, £34; Sweden, £53; Denmark, £68; Belgium, £53; Austria, £49. These figures are repeated in other licence figures.
Surely in Britain, with the service we are meant to provide, the BBC cannot really be expected to be a major patron of the arts on this sort of money if they can in fact, as we all know, pay fees for the broadcasting of records much more

1215
cheaply than they can produce with the excellent orchestras they support in various parts of the country. The Scottish Orchestra is a special case, because in the whole of Scotland we have only two major orchestras. As the noble Lord, Lord Ross, said, there has been a major development of music in Scotland; the Scottish Opera and the Scottish ballet are examples which are internationally acclaimed. It has a great deal to do, first, with the Scottish National Orchestra which performs prodigious feats of peripatetic music, if that is the right expression, and has done a terrific amount all over Scotland to promote interest in serious music. But it is backed, and backed ably, by the BBC Scottish Symphony Orchestra.
I do not think that the Government can stand back. They must do something about it. There are all sorts of schemes afoot. I have heard of committees being set up to fund the Scottish Orchestra from industry. The BBC have said that they will support, and they have contacted the STV and the independent television companies. But this is not enough. The Scottish National Orchestra is funded in this way, and it might be that you would pare the support by general industry and the public from the Scottish National Orchestra if you set up two entirely similarly financed bodies.
For this reason, it is up to the Government to find a solution, or back a solution. They clearly cannot say, "It has nothing to do with us". The Government are doing too much of this, saying, "We provide the money. We make the cuts, and do what you like". You cannot do that in this case because the BBC have a sound financial case for saying, "We are not put there to act as a patron of the arts if it is not essential to our broadcasting function". They can demonstrate this. For this reason, I have enormous pleasure in backing the noble Lord, Lord Ross, in his Question, and asking the Government to take a much more positive attitude.
7.5 p.m.
Lord BROADBRIDGE: My Lords, any consideration of the problems which face the BBC today soon reveals a complex situation. On the one hand there is
1216
the historical principle that central Government decide the BBC's total cash resources, through exercise of their ultimate statutory power to fix the level of the annual TV licence fee, after which the BBC have to make the best disposition of the resources they can afford from this to meet their objectives. This method of funding well pleases the governors, who say in their 1980 Handbook:
"It is well understood on all sides that the editorial independence which distinguishes the BBC's work from that of most other broadcasters round the world is intimately related to the financial strength conferred by a healthy licence fee system, and that editorial independence and programme quality are also inseparable".
Interestingly, they also are moved to add:
"… there seems to be a strong desire among both Ministers and their officials to put the BBC's finances on a secure footing again."
If by "a secure footing", they simply mean that the books balance and the accounting is done correctly, then well I enough; but if, as I would believe most of us would expect, there is a strong implication of "a secure footing" being an adequate footing, the observation would seem to be idiosyncratic, especially as the comment comes in the same paragraph as one stating that, on 25th November 1978, they had got a colour licence fee of £25 after asking for £30, and also bearing in mind the reasons why we are here this evening.
I would not wish to argue with the licence fee system of funding, however. Canada and Australia gave up licences and regretted it. But while I believe this method to be the most equitable, and the most likely to produce politically free radio, it does not of course follow that Governments get their sums right. I should like to return to this later.
As an alternative to simply distributing the licence fee, there is the degree to which the BBC may be expected to be also an entrepreneurial fund-raising body, rather on the basis of the BBC being expected to use imagination and skill to "top-up" the product of the licence fee. Perhaps somewhere between these two positions is a final resolution of affordable activities mix which pays some heed to the strength of public reaction to initial proposals, a testing of the temperature of the water rather analogous to the system of temporary withdrawal of a licence to export a work of art from this country, whereby,

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as this applies to the BBC by analogy, initiatives which would not otherwise be taken might result from enthusiasms expressed by the public.
These initiatives might come, for example, from leading industrial and commercial organisations who, seeing an identified popular demand, would be encouraged to come in with support. The present public outcry—for it is no less—stems from the fixing of the colour licence fee of £34 in the teeth of a request for £40 made clearly known in plenty of time by the BBC. As the writer of an article, "Face the Music", in the Economist said last month:
"A penurious patron is an absurdity".
In January last year the same journal compared the annual colour TV licence fees of nine of our principal neighbours. They were, in descending order: Denmark, £70; Austria, £63; Italy, £47; Sweden, £46; Ireland, £38; France, £36; West Germany, £33; Holland, £29; and Britain, £25. Relative incomes, exchange rates and costs of living complicate comparisons, but it is surely interesting to note that the Italian Government, whose people are probably the least prosperous among Western European countries, asked for nearly twice as much money from their viewers as their British counterpart.
In Britain, the black and white licence fee represented over 3 per cent, of the old age pension until 1960, while by the late 1970s the colour licence fee had fallen to only 2·5 per cent. The difference, 0·5 per cent., may not sound much expressed as a decimal percentage, but, when multiplied by the annual value of the old age pension, it would more than meet the figure of £40 per year asked for by the BBC for 1980 and 1981, and the poorest sector of the community would still be paying a smaller proportion of their pensions for colour TV now than for black and white in the 1960s.
Other interpretations of the licence fee may be made. The difference between £40 and £34 per year is 2p per household per day, about one-fifth of the cost of the Sun or Daily Mirror newspapers. Taking 1970 as a base, over the last 10 years a retail price index increase multiple would indicate £40, not £34, now, and an average earnings index increase multiple gives £46 now as the figure. The ability and willingness of old age pensioners to pay for colour
1218
television is reflected in the fact that the proportion of all black and white TV licence holders in Britain who are old age pensioners, is less, at one-fifth, than that represented by the AB socio-economic group. To enrich our lives, can we really not afford 11p a day rather than the 9p decided on?
In summary, when we shall be paying the least in Western Europe, a lower proportion of the old age pension than 20 years ago, and much less than parities with increases in the retail price and average earnings indices would justify, I fear I cannot agree with the noble Viscount, Lord Eccles, who in this House on 12th March on a Starred Question observed that he thought the sum of £34 for a licence was high enough for the time being. I have tried to collect factual arguments to show the factual position.
The BBC does, however, seem to have been using its revenues in recent years to support too many orchestras—11 house orchestras including four of symphony scale, amounting, at 551, to one-third of all salaried orchestra jobs in Britain—and I can only conclude that the BBC has tried to hold on to too many orchestras for too long. These 11 orchestras are almost never used on television, as has been said, and the light orchestras are said to sound out of date, even to the conservative Radio 2 public; and Radio 3 would gain by the amalgamation perhaps of three regional orchestras into one chamber ensemble.
The nub of the proposed cuts is quality. The four orchestras the BBC proposes to cut are of variable quality. It has been said that in trying to conserve funds by disbanding all regional orchestras, the Corporation deliberately sought to avoid the odium of having to make a choice. The Scottish Symphony Orchestra has a unique record among the four of promoting new works, new conductors and new soloists—for example, Colin Davis, Alexander Gibson and Simon Rattle, now its chief guest conductor—and of travelling outside its region, together with a wider repertoire than its other Scottish counterpart, the Scottish National Orchestra. Last year it gave 40 public concerts in Scotland, and 70 of its last 95 concerts were nationally networked. In the last five years it has played 168 works by living British

1219
composers or, on average, one every 10 days.
Its great misfortune is that it is only now, in its moment of crisis, receiving from many the credit due to it, and this is because in order to do its work it has performed largely in the studio or, as a writer in The Times aptly put it last month, in the public ear, not in the public eye. The advice of the Advisory Music Committee of the Broadcasting Council of Scotland was apparently not taken in instituting the cuts, and it is therefore quite possible that the purpose and special achievements of the Scottish Symphony Orchestra were not then fully appreciated by the council.
Indeed, instead of disbanding the BBC Scottish Symphony Orchestra, the contrary belief is held by many who feel that its tours of Britain should be extended after strengthening its present membership of 69 so that it may take on the new character, if not name, of the BBC's extra-metropolitan symphony orchestra. Since these concerts could also be broadcast, this would be consistent with the view that, since its foundation in the 1920s, a main reason for the existence of the BBC has been accepted as the provision of live broadcasts of music, particularly classical music. All this is neatly summarised in timely fashion in the 1980 BBC Handbook in which, on page 186, it is stated:
"Most of the BBC's 'serious' music is broadcast on Radio 3. This category of output represents a huge cumulative investment over the years of the BBC's existence, having from the start been one of its principal commitments as a public service broadcasting system. The BBC's policy has remained constant and it is based upon the aims of excellence of performance, enterprise in presentation, and variety of content".
Today we are discussing the projected demise of one of the principal instruments of that worthy policy.
I mentioned earlier the possibility that the BBC is expected to make some entrepreneurial effort to top up the funds allocated to it by the licence. Overall, it seems that there will soon be a second ITV channel in competition with BBC TV and that BBC radio is bearing a larger share of the cuts than TV, with the orchestras in the forefront. This may have clinched the appropriate action at the right time for some of the orchestras,
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but not for the Scottish Symphony Orchestra.
So what can the BBC do to top up its revenue from the licence fee? First, it might itself take advertising, starting with its own pop music Radio 1. This might be extended to BBC TV, as is the practice in Austria, Italy, France, Ireland, West Germany and Holland, but—and I speak for myself—on a selective and restricted basis only, please.
Secondly, commercial radio sources must devote to live music an increasing sum from their growing revenues—£ 43 million in 1979—and this could be used for the Scottish Symphony Orchestra in particular.
Thirdly, the Government, through the Arts Council, might make a second subsidy, additional to the £450,000 its Scottish Council gives the Scottish National Orchestra, although it does not seem clear how that could be done while the Scottish Symphony Orchestra is part of the BBC. Neither, incidentally, would amalgamation of the two orchestras appear to be the key, since this would save only about 25 Scottish Symphony Orchestra jobs, and change the character of the orchestra and probably expand it to a size where it could play only in the Usher Hall in Edinburgh and not in Glasgow, its present home.
Fourthly, the commercial potential of the orchestra might be increased by, for example, sponsorship of musical events by commercial organisations, as is the case with cricket, where the BBC make the programmes, retaining editorial control over which matches to broadcast, with what commentators, and for how long.
I referred earlier to the consequences of restrictive financial measures being used to test the level of public esteem and emotion and the fact that, from this, alternative action might result. In this case public esteem for the Scottish Symphony Orchestra has been incontrovertibly proved to be at least national, perhaps beyond the wildest imaginations of its Scottish supporters, and also international, earning high tributes from internationally renowned foreign conductors, such as Eugen Jochum and Carlo Maria Giulini, who have no financial dependence on the orchestra.
Perhaps this is the moment to float the orchestra as an independent entity. There

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is already great competition for funds. Would the Government give a lead in the form of an outright grant, annual and perhaps decreasing subsidies, or a loan at beneficial rates? You cannot easily apply cost-effectiveness to artistic patronage, but such a lead and show of confidence might well persuade others to follow, even to scramble. After all, the Scottish Symphony Orchestra has been up for auction for such a short period that the true depth of public feeling—and its pocket—is still emerging. That, after all, is why we are here this evening.
The Government are firm in their view of the level of licence fee for 1980-81 and right in giving freedom to the BBC to decide how to use the money it produces. But as an analogy, while we here are all free to do as we choose with the contents of our bank account, we would, in stringent times, be not unmindful of constructive and friendly advice from our bank manager. And it is surely in this capacity that the Government uniquely can talk to the BBC.
Although this is an Unstarred Question, I hope that in the reply that the Government traditionally make we may hear something practical at this time of last resort. After all, we were directed to this mode of questioning by the noble Lord, Lord Sandys, in his reply to the noble Lord, Lord Donaldson of Kingsbridge, on 12th of March, when he said, as reported at column 1072 of the Official Report,
"… but, as a former Minister of the Arts, I hope he will not think it impertinent if I tell him that these very detailed matters are much better raised in the form of an Unstarred Question."
In the Government reply I look for the sound of sweet music, and not the note of the broken reed.
7.23 p.m.
Lord BOOTHBY: My Lords, my only excuse for intervening in the debate is that I suppose that I have had a longer experience of broadcasting, on radio and television, than anyone else in your Lordships' House. It seems to me that the issue raised by the Question of my noble friend Lord Ross of Marnock is a perfectly simple one: should there, or should there not, be some Government control over broadcasting on radio and television? That is the simple issue.
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At present the Government have no control at all. So it is no use asking the noble Lord on the Treasury Bench what the Government can do, or will do, to prevent this or that. They cannot do anything. They have no power of any kind. So tonight I should like, if I may, to confine myself to this issue. With all respect to the noble Lord, Lord Broad-bridge, it has nothing at all to do with licence fees. It is a question of should there, or should there not, be Government control. At present there is none. In the light of what the broadcasting companies have done, should we now have some; or will perhaps—and here the noble Lord might be able to exercise some influence—the broadcasting companies reform themselves?
I think that I can claim to be impartial because I was once at the receiving end from the politicians. Many years ago, before most of your Lordships were born, the BBC launched a weekly programme called "In the News". I was a regular member of a team which discussed current events. We had an occasional guest. I remember that Lady Astor was one of them, and that she threw a glass of wine over me at dinner before the programme one night when I said that I loved alcohol.
The programme was a great success. Then both the major political parties stepped in. Emissaries from the Conservative Central Office and Transport House, then under the direction of Lord Woolton and Herbert Morrison, advanced on Broadcasting House.
"These chaps"—
they said—
"say exactly what they think."
"That "—
replied Sir William Haley—
is the whole object of the exercise."
But the political pressure continued, and eventually the BBC succumbed. They agreed to have two members of the team from the Conservative and Labour parties, briefed by their respective central offices, to put the official party point of view on every topic. My Lords, that killed the programme stone dead in three weeks.
With great courage Mr. Norman Collins revived it for ITV. It was then called "Free Speech", and, with the joint, became part of the Sunday lunch in many

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homes in this country. Then the political pressure was resumed, and in the end we went down. But we had a good run for our money—10 years; I make no complaint. The only point that I am trying to make is that for those 10 years I was fighting hard for the freedom of the television authorities from any kind of political interference; and I thought that I was fighting on the right side. Well, they got it—they got clear of political intervention—and on the whole with very satisfactory results.
But recently there have been at least two very disquieting events, and the similarity between them is so great that I believe the comparison must be drawn, and I propose to draw it. My noble friend Lord Ross of Marnock said he was not going to mention "Death of a Princess" because it was not relevant to the debate; but in my submission it is totally relevant. The comparison here is so exact that one can say that there is only one difference: on the whole "Death of a Princess" was worse.
The death of an orchestra at the hands of the BBC and the "Death of a Princess" at the hands of ITV raise questions of very great importance to this country and for the future. I do not name any company, because those decisions were approved, in one case by the BBC, and in the other by the Independent Television Authority. What have they in common? First—destruction. Secondly, I think, irresponsibility. Thirdly, they have outraged, in the first place, the musical world—and I really mean the musical world—and, secondly, the Islamic World. Why?—because of money; in the first case to save it, and in the second case to make it, whatever the cost in human values.
There is little that I need to add to what my noble friend Lord Ross and the noble Lord, Lord Broadbridge, have said about the Scottish Symphony Orchestra. However, I should like to say that Scotland is still a nation and I think—I have always thought—a remarkable one. I believe that it will remain a very remarkable nation. Therefore, with all due respect to Birmingham, I do not think that one can put the BBC Scottish Symphony Orchestra on a par with, say, the Birmingham Symphony Orchestra. That is not to say
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that one or the other is the better; although I believe that in the musical world it is generally admitted that the BBC Scottish Symphony Orchestra has a very rare quality, and is acknowledged to be one of the great orchestras of the world, capable of holding its own with any others.
Furthermore, it is, and has been for years, a training ground, not only for musicians but for conductors. It is almost inconceivable that the BBC should go out to smash all this up. It has evoked a chorus of disapproval, as I have said, from the entire musical world. Giulini, writing from Los Angeles; Menuhin, writing from abroad. I could name many more; those letters appeared in The Times. Not the faintest attention was paid to them by the BBC.
When I first entered public life over 50 years ago the musical life for the vast majority of the Scottish people consisted very largely of folk-lore and Harry Lauder. That is about what it added up to. Today, Scotland is an intensely musical nation, and everybody, all over the world, knows it. For this the BBC is largely responsible. Why should they undo their handiwork at this juncture? The Edinburgh Festival, which my mother helped to bring into being—she was on the original committee—is now established internationally as one of the great musical festivals of the year; and, in my old constituency of Aberdeenshire, there is a musical centre, under the inspired direction of Lady Aberdeen at Haddo House, which has had a profound effect, not only upon the North of Scotland but upon the whole of Scotland. My Lords, gramophone records have helped, but they are not, in the end, a substitute for live performances, and never can be.
I turn now—not for long, but for a moment—to the other death, "Death of a Princess". I say—and I think this ought to be said—that this is an affront to the ruling family of Saudi Arabia; and it was perpetrated by the ITV, not the BBC. We sometimes forget, I think, that when we were the head of a great British Empire we helped to put Ibn Saud in power in Saudi Arabia; and we certainly should not forget the fact, of which Mr. Nixon reminded us last night on television, that today, at this moment, the West depends on Saudi Arabia for its existence—no less; that is true. This was

1225
not rapportage: it was fictional drama. I think this ought to be said in Parliament, and I am going to say it without any equivocation. The action of the ITV in showing this film at this time of crisis was recklessly irresponsible, and should have been stopped. They diced with death for money, and there is no excuse for that. The next day I read in one of the evening papers the headline:
"Carrington under Fire". I read on, and when I had finished reading I said to myself, "The headline should have been, not 'Carrington' but 'Grade under under fire'". Why was he under fire? It was because he had expressed regret on behalf of the British Government for what I think was a monstrous thing to do. My Lords, this is no time for the West to attack Islam, and the sooner our Israeli friends realise this the better. I believe they will.
In conclusion, I want to say just this. For the BBC to murder their Scottish Symphony Orchestra without consulting the Minister for the Arts was intolerable. For the ITV to show "Death of a Princess" without consulting the Foreign Secretary, and indeed in defiance of his known views, was equally intolerable. For my part, I owe a great deal to the BBC and ITV. For much of my life I have earned my living from them, very happily, and I am the last to belittle their achievements. Their coverage of news, often at great risk to the camera crews—programmes which ought to be seen and are seen all over the world—is almost certainly the best in the world, and is acknowledged to be. Programmes such as "Weekend World", "The World About Us", the "World at One", "Panorama" and "Parkinson" remain without parallel anywhere else; and we can look back with pride on John Freeman's "Face to Face" and Lord Clark's "Civilisation", which have never since been paralleled.
The history and record of the BBC is no less good in music. Only the other day they bought and produced a production of Manon Lescaut from the Metropolitan Orchestra in New York, which is the best opera performance I have ever seen on television, and which must have come as a revelation to millions of people in this country. They deserve enormous credit for a great deal that they have done.
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Why are they showing signs of wrecking it all at this moment? My Lords, the late Lord Reith was a Scotsman. He was also a Presbyterian, like my noble friend Lord Ferrier, who I see in his place. Their views do not command very much support in the modern world, but I would say that they do command great respect. The standard set by Lord Reith for the BBC was perhaps too high, but it was once the envy of the world. I do not say that it could have been maintained. I do say that the deterioration which we now see in certain instances need not be so great.
I have given two glaring examples. Let me add a third. There is surely enough violence and bloodshed in the world, which has to be reported, and should be, without adding to it another nightly fictional dose of horror, which is what we now get on both channels. The other night I watched two men fighting. It was not a boxing match. Two men were bashing each other's head against the wall and against the floor, for no apparent reason, covered with blood. What was the object of this? It was, I suppose, just to titillate the savage, primaeval instincts which we all know exist in all of us but which, if we do not curb them, will bring about the self-destruction of the human race. There is far too much gratuitous violence and bloodshed, which breeds violence and bloodshed, on television today, and I think it is a grave reflection on them.
De Gaulle imposed a control over French television, which still exists. I remember having an argument with his Minister of Culture, M. Malraux, about this, and saying how wicked I thought it was. Nobody, by the wildest stretch of the imagination, can ever say that M. Malraux was an uncultured or an uncivilised man. Among other things, he restored Paris, and gave us the beautiful city that we know today. But he maintained that de Gaulle was quite right. He said:
"Television is potentially so powerful a medium that some form of Government control is absolutely essential."
Sometimes, especially when I see things being done like the destruction of the Scottish Symphony Orchestra or "Death of a Princess", I begin to think that de Gaulle and Malraux were right.

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I would end by saying this. If the BBC and ITV do not now mend their ways, and say that they are going to mend their ways, they are asking for Government control of some kind. They will get it, and they will deserve it.
7.40 p.m.
Lord RITCHIE-CALDER: My Lords, I shall not follow my good friend Lord Boothby into the question of Government control. I am going to follow on Government example. What we are talking about now, as has been pointed out by my noble friend Lord Ross, is the result of the general practices and precepts now being adopted by the Government. This is a cut across the board, the sort of thing which is utterly and totally meaningless. This is something which has been forced upon the BBC—or, they say it has been forced upon the BBC—by the necessity for economy. As has been said, the economies are imposed on the Corporation (and here I am defending the Corporation) by the fact that inflation has made the scale and costs of their productions more expensive.
With deference to the noble Lord, Lord Boothby, the Government have a method of control. They control not by control of taste but by controlling the capacity of the BBC to be culturally instructive and artistically imaginative. They do it by and through the licence. Tf the BBC cannot get an adequate licence fee—and they have not got an adequate licence fee—it is obvious that there will be an impairment of what we have all come to expect and, like the noble Lord, Lord Ferrier, and myself, have been wanting to improve and advance in the way of television and broadcasting. But we cannot do it if the Corporation have not got the means.
It has been pointed out that what we pay in this country for colour television is absurd. As Sir Michael Swann has pointed out, we are getting something which has a great range of options and opportunities and includes the very expensive programmes to which Lord Boothby referred; and we have been getting that for 10p a day. Ten pence a day is the price of the Sun newspaper. I do not think anyone wants to swap the BBC for the Sun; but, as has been pointed out, for another 2p we should still have the Scottish Orchestra and would be able
1228
to go on having the Scottish Orchestra. Two pence is half the price of a cigarette.
My Lords, we must get this in proportion. I am going to be critical—and everyone is entitled to be, and should be, critical—of the way this is being done. All that I am saying in defence of the BBC is that, if we are going to get, and insist upon, quality and proper standards then the BBC must have the resources; and that, in the end, becomes a question of Government. I am not asking (as has been asked) for a subsidy from the Government, or for a special option for the Scottish Symphony Orchestra. What I am asking for is, first, to have in Scotland the means and resources to find the expression which, I assure you is real, genuine and complete in Scotland. The noble Lord, Lord Boothby, pointed out that at one time we were regarded as people who played the pipes and the fiddle and produced Harry Lauder. Today, there is an enormous, genuine, complete resurgence of culture in Scotland, in the arts and particularly in music. I would say that this evening one would find it extremely difficult to find any hall in Scotland which is not being used. Most of this use is for performance with active participation.
Where are we to derive inspiration for this kind of thing? For one thing, it comes, I assure you, from institutions like the BBC Scottish Orchestra, which has set and established standards over long years. What we are doing now is to ape the blind Samson pulling down the temple about his ears. It is absurd. We have acquired standards which are recognised throughout the world. Look at all the protests from every direction from great musicians and others who say "This must not happen". The BBC Scottish Orchestra is not merely what one hears; it is what it is; it is what it consists of. It consists of musicians who are, in fact, the teachers, the people who are able to pass on culture to the younger generation because they have as a base, as a starting position, the prestige of the Scottish Symphony Orchestra. They are, too, the support for the choral societies and everything else. And they go outside the country to demonstrate their quality. Also, they have produced great conductors and have given us the range of performances which has been mentioned here tonight.

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My Lords, what is this nonsense? How can we do a thing like this? It is not just a matter of so many musicians out of work. First of all, I would say without any Scottish nationalist inflection that it is an insult to Scotland, a deliberate and serious insult to Scotland, which has been condoned by the Scottish Council of the BBC. This is something we should not tolerate. Something must be done and done very quickly, because the collapse of the orchestra would be irreparable. When I said that I was going to criticise the Government and criticise the example that they set, this is what we have seen in everything-like the threatened disbandment of the World Service of the BBC, the curtailment of the work of the British Council and the withdrawal of options for overseas students. This is not pruning. This is cutting the roots. How are we ever going to recover our self-respect?
7.49 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I should like to make a short intervention. I apologise for not having put my name on the list of speakers until this morning. I should like to support every word that the noble Lord, Lord Ross, has said. He made a first-class speech; he said exactly what we all feel in Scotland about this issue. I hope that the Government will realise that this is something which transcends all party political views; it is something about which we feel deeply. Above all, in not intervening to stop the BBC from doing this they are going to do irreparable damage to music not only in Scotland but in the United Kingdom and all over the world. The noble Lord, Lord Ross, spoke of the great influence of the Scottish Symphony Orchestra and pointed out the enormous ramifications of this great orchestra. I will not add to that, except to say that I agree with everything he has said about it. He put it better than anybody else could have done.
I am a great radio listener—far more than I am a television viewer. There are many programmes on radio which, in my opinion, are very much inferior to the great musical programmes presented by the Scottish Symphony Orchestra and the other great orchestras. Why must we economise on the excellent in order to pay
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for the much less good and sometimes second-rate? That seems entirely wrong.
Regarding the increase of the licence fees, I had not realised until the noble Lord, Lord Broadbridge, mentioned the list how much lower our licence fees are than in any other country in Europe. Yet we have the finest broadcasting company in Europe—in the world, in fact. Everybody acknowledges it. We pay very, very little for it. Do not let us exaggerate; do not let us say it would make an enormous difference to the listening public if they paid another £5 per year. Look at the way the price of petrol has gone up! Are there any fewer motor cars on the road? On the contrary. I wish there were, but it has not made the slightest difference to those people who drive motor cars that they have to pay three times the amount for petrol that they did five or six years ago. I am perfectly certain nobody would give up a television licence if they had to pay another £3 or £4 a year. If, as Lord Broadbridge told us, our television licences are so much cheaper than anywhere in Europe, that is something the Government could look at because of the enormous importance of this service to the whole country.
I have a vivid recollection of the beginning of the war when the great orchestras were endangered because of not being able to give so many concerts. The London Philharmonic, the Liverpool, the Manchester—all the great orchestras—were in difficulties. It takes years and years to build up a great orchestra and they were afraid that they would have to close down when the war came. They appealed to the trusts such as the Pilgrim Trust and the Carnegie Trust. I can remember giving money in order to enable these great orchestras to continue. We knew perfectly well that if they collapsed it would be years and years before they could build up again. Orchestras are not made in a night; they are not made in a week. They are built up over many, many years. It would be the greatest tragedy if the BBC were allowed to cut all these orchestras, but particularly the one with which we are concerned today.
I agree with everyone who has said how much the BBC has done for music in this country. I can remember many

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years ago when there was only the Covent Garden Opera Company and the D'Oyly Carte. Today we have the magnificent opera companies; but that has been achieved largely by subsidies which we have all willingly paid. I would much rather pay for music than for a lot of other things that we pay for in our taxation. These companies have been built up over the years. We have the Scottish opera company, the Welsh opera company, the English opera company and of course Covent Garden. These are unique, and people come from all over the world to listen to our operas and orchestras. Also, we send our orchestras all over the world.
The destruction of the orchestra would be a tragedy and I pray that the Government realise what it will mean if this happens. It will be destroying one of the great assets of this country, an asset which can go on for ever if we can keep up the standards. We cannot keep up the standards if we allow the players to disperse. It is hopeless. The noble Lord, Lord Ross of Marnock, said that the Scottish Symphony Orchestra is a great training ground. The conductors who come from the orchestra are famous all the world over. Their value is far greater than just a few pounds of taxation every year.
I beg the Government—and I am speaking with terrific feeling—to look at this orchestra as something of a great national asset. It is something which we want at this time when we are all rather depressed and the world is in a very bad state. Here is something that everybody agrees we need. As the noble Lord, Lord Ross, has said, people have signed petitions. I and thousands of others have done so. It represents something. If the petition had been put to people in the whole of the United Kingdom, they would have signed it too. The Scottish Symphony Orchestra really represents something. I beg the Government to look at this matter and see whether something so foolish as has been suggested cannot be stopped before it is too late.
7.56 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, as the noble Baroness has just said, my noble friend put his case superbly. I am not going to attempt to
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add to it. It has all been said and said very well. I want to make a few comments of a very disagreeable kind, I hope, about the Government at whose feet this ill-kicked home goal honestly lies. It is a grievous example of this Government's most disagreeable failing—by which I mean their readiness to ignore completely the consequences of their action.
The licensing system is a very good system of raising money, providing both sides play ball. I had to do this when I was in office in a number of places. This is always done by the spending body putting forward its needs, by the department that has to grant the money discussing these issues very carefully, looking at them with a fine tooth comb, getting the costs down as low as it can and then supporting the figure which is finally agreed upon to the Treasury. In my day—having Treasury Ministers a good deal less philistine than my poor opposite number has—we usually achieved within reason what we asked for because we had looked carefully into the needs.
One has something which is in many ways the glory of this country. We curse it often enough, but the BBC is probably the most individual, independent and uncommercial concern that one could have anywhere and has done for music something which is almost unbelievable. I was interested tonight to hear from so many people from North of the Border who said exactly what has happened in Scotland, which is not my personal experience. My grandfather went to Australia in 1850 and so my right to call myself a Scot is rather reduced. My knowledge is of this country and there is no question whatever but that the BBC has made music here—and not only in London but Manchester, Liverpool, Bristol and Norwich. All over the place in the England that I know, as opposed to North of the Border, music is flourishing, very largely as a result of the BBC. The Annan Report said:
"The BBC has been a great patron of the Arts. More than any other single influence the BBC has transformed Britain from a 'Land without Music' to a great centre of music-making; and the orchestras which the BBC supports have improved the quality of music in the regions."
London is unquestionably the musical capital of the world and much of the credit for that goes to the BBC. When the noble Lord, Lord Grade, said he thought

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that there ought to be an Unstarred Question on this because it is very complicated, what he had in mind, I think, was the possibility that there are more orchestras about the country—North, South, East and West—than the country can really support. That may be so. It is something which needs the most careful consideration, and when I was a Minister I got, through the Arts Council, a very careful examination done of the London orchestras. The advice was, "Leave it alone." That may or may not have been right, but that was the advice we took. There was a feeling in the Arts Council that if one could suppress one London orchestra one could get a better one elsewhere. I think that was probably wrong; but certainly this is a difficult question. It is not a question which any Government have the right to put on to the organisation concerned to make it their duty to solve by not giving them enough money to keep up their standards. This is the disgraceful thing.
I know that my own Government were not beyond criticism. We did not give enough, but our shortfall was nothing like the shortfall we have here, which is £34 to £41, which I make about 30 per cent, although my mathematics are not absolutely certain. Anyway, it is a big shortfall. When you add to that a continuing 20 per cent, inflation—and before the noble Lord writes down a correction, the result of the decrease in licence fee and inflation means a shortfall of 30 per cent.—this is to force the BBC to do something which they might have done over the next five years in a gentle way; that is, to make some changes. They had 11 orchestras. It may well be that they had more than was absolutely necessary. I do not think anyone has ever suggested until this moment that the Scottish Symphony Orchestra was one of them. I think that if the thing had been properly done there could have been some changes made.
I blame the Government totally for this. For if you have a gem in your escutcheon, which the BBC undoubtedly is musically—one speaker tonight (I think, the noble Lord, Lord Boothby) said that the record of the BBC in music is no less good than it is in political reporting, but it is twice as good and not "no less good"; let there be no mistake, it has been brilliant—and it tells you what money it wants to
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maintain its standards and you give it something which with inflation means a shortfall of 30 per cent., you are deliberately half-killing it. It then has to see where it can most conveniently find the money. I know a bit about this, because I have had to deal with other non-musical things which some of your Lordships may remember—though I will not remind you—where cuts are imposed on bodies which can only be made in a way that suits the body best and suits the nation least.
That is what the BBC have done and they can be criticised for it, I think, in that they have chosen an easy way to abolish an orchestra here, an orchestra there, and another there. It is easier for them to do that than to make other kinds of cuts, such as administrative cuts and so on. The noble Lord, Lord Boothby, said, "Stop the duplication of sport and the rest of it". You can blame the BBC for it, but only at second-hand. The fault is the original failure to supply the money to do what everybody in this country, both North and South of the Border, wants them to do.
Just a word about Northern Ireland: I very much admired the BBC Northern Ireland Orchestra when I was there. I do not think it is quite as tragic as is the case for Scotland, but it is a very bad thing indeed. The population is small and they have a very decent orchestra in the Ulster Orchestra which I understand Ulster TV are supporting. Still, the loss of the Northern Ireland Orchestra means a loss of a number of jobs to people where musical jobs are very few.
I should like, before I finish, to say just a word about what this means in the way of manpower. In the report by the noble Lord, Lord Vaizey, on training musicians, reference is made to something like 4,000 jobs, or 3,750, for the top class of musicians of all kinds. Of course, about half that number will be chamber music players, soloists, freelances and the rest. So the BBC was supporting well over a quarter of all the top-class musical jobs and now has reduced that by some 160 positions, which is, I think, a third or a quarter—I cannot do it in my head, but it is quite big.
At the same time, the Government are spending money—and they cannot suddenly stop doing this, though they have

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made one or two attempts to do so—on training these musicians in the most expensive way up to the highest level of performance. What will now happen is that the people who are studying all over the country—and it has already been said that 17 musicians in the Scottish Symphony Orchestra are teachers at the Academy there—and who are being trained in this way are not going to be able to find work. The 150-odd musicians whom the BBC are now going to sack will find it very difficult to get other work and the new ones coming on will find it extremely difficult to find work.
What will they do? I will tell you. They will go and play pop music and they will go and play for the cinema and TV, for those little scraps of things. I have a friend who is a top-class 'cellist, who now has a Strad 'cello and a Rolls-Royce and he has not played a serious piece of music for eight years. The Government are pushing these keen, musically talented students away from what matters into what does not matter. That is what I cannot forgive them for.
One last word: I do not agree with the noble Lord, Lord Boothby, that the question of censorship is relevant here. It is a very relevant question and it ought to be discussed, but I do not think it applies to this debate because it is a question not of censorship but of money. If the Government had given the BBC within a couple of pounds of what it had asked for, it would of course have discussed how things should be done and none of this would have happened. Therefore, I cannot accept that as an excuse. I am very sorry for the noble Lord, Lord Belstead. He and I constantly cross swords here, but I have very seldom had such an easy wicket, or he such a difficult one.
Lord BOOTHBY: My Lords, before the noble Lord sits down, may I ask him one question? Has he any good reason for supposing that if the increase in the television licence fee had been made the BBC would have restored the Scottish Symphony Orchestra?
Lord DONALDSON of KINGS-BRIDGE: My Lords, obviously I cannot say anything about that, but I certainly would not increase it unless they said they would,
8.9 p.m.
Lord BELSTEAD: My Lords, if I may say so, I was impressed by the speech made by the noble Lord, Lord Ross of Marnock. He spoke with obvious feeling and put the case very clearly. Indeed, the other speeches made by your Lordships in the debate this evening have followed the noble Lord in those respects. But I think that the case that has been made has disregarded to some extent three important points: the first is the nature of the relationship between the Government and the BBC; the second is the scale of the last licence increase; and the third point relates to the statements made by the BBC governors for alternative support for music in Scotland.
The home services of the BBC are funded mainly by the licence revenue. It is wholly a matter for the BBC governors to decide how the licence income is employed, but one implication of the Question which the noble Lord, Lord Ross, was asking this evening is that the Government ought to influence the BBC in deciding how to use its available resources.
As the noble Lord, Lord Boothby, has said—and mentioned again just now in his last intervention—that would be contrary to the arrangements governing broadcasting in this country, whereby the BBC is responsible for the day-to-day running of its affairs.
A further implication of Lord Ross's Question is that the Government should simply put up the licence fee again. I must say I am surprised to hear this view expressed from that side of the House. That enthusiasm comes a little strangely from noble Lords opposite, for the previous Government decided in 1979—soon after the 1978 licence increase—not to raise the licence fee again but to increase the borrowing powers of the BBC instead, so that the Corporation fell considerably into deficit. I will not make any further criticism of that because I think at the beginning of 1979 the then Home Secretary was faced with a difficult situation but I criticise, if he will forgive me for doing so, the words of the noble Lord, Lord Donaldson, so far as the attitude of the present Government is concerned, because in a great part of his speech he ignored the policy of the party for which he was speaking.

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It is the policy of the party opposite, as I understand it, to remove the licence fee entirely so far as retirement pensioners are concerned. Highly desirable though it would be to assist older people to enjoy television, which plays such a large part in their lives, a move of that kind would create a need immediately for a £50 colour television licence. It is no good the noble Lord and other noble Lords putting the case this evening and not mentioning that the party opposite is committed to a 50 per cent, higher licence anyway. That is to leave out of the debate a factor that would have to be met if the party opposite were arranging affairs, but which has not been mentioned in the debate this evening.
What have the present Government done? The new fees that were announced by my right honourable friend last November represented the largest increases in the history of the television licence. Over £1,000 million will be provided for the BBC in the two-year period 1980 to 1982, which represents a considerable increase over the corporation's previous expenditure levels. Again, if your Lordships will forgive me for saying so, one would not have gathered that from the debate which has taken place this evening.
In announcing these increases, which amount to some 36 per cent, for the colour licence and 20 per cent, for the monochrome licence, my right honourable friend made it clear that the increases must last for at least two years, and that they took account of the need for the BBC to pay off its deficit on current account, to increase its capital expenditure, and for an increase in BBC Welsh language broadcasts by the autumn of 1982. Even so—and I openly admit this—the increases were less than the corporation had hoped for; their plans would have involved a colour licence some £7 higher, to be set at £41; but my right honourable friend had to decide what would be fair both to the BBC and to the licence-payer. The economies which the BBC has announced are, as I have said, a matter for it.
The noble Lord, Lord Ross, has complained that Scotland is being discriminated against and he produced percentage figures to support that case. I followed the noble Lord, and I understand his reasoning, but I do not think that his
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case is really completely tenable if one studies the BBC Press release of 18th April. The reader of that Press release will notice that, although cuts in planned expenditure are to be made in a variety of the BBC's functions, the corporation obviously has reached its decisions with very great care.
If I may give one example of what I mean, the Press release on that date told us that in Scotland and Northern Ireland plans to replace inadequate and obsolescent studios that had originally been cut had been restored to the budget as a result of representations made. Again, that is not consonant with the charge that the BBC has turned a deaf ear to things that have been said to it.
However, among the economies which the governors have decided upon is the disbandment of five of the BBC's 11 orchestras. In his recent lecture to the Royal Television Society the chairman of the BBC, Sir Michael Swann, said that whereas in the early days the corporation could only put out all the music it needed by setting up its own orchestras, this encouraged musical appreciation so that other orchestras grew and multiplied. The noble Lord, Lord Ross, was more than fair in paying tribute to the BBC's patronage of music over the years. The result today, Sir Michael Swann continued in that lecture, was that the BBC's orchestras were not as well supported as the governors would like and provided more music than needed for broadcasting if the BBC was to do justice to all of the other admirable orchestras which the corporation had helped to create.
The governors have proposed cuts amounting to £2·6 million in the corporation's Scottish services. In view of that, the governors have decided that there is no alternative to the disbanding of the BBC Scottish Symphony Orchestra and that will involve a loss of 69 posts.
I come to what I asserted was the third point, which I think has been disregarded during the debate this evening, for the BBC has made it clear, again in its Press release, that these losses will be partly balanced by the creation of the BBC Scottish music fund, with the object of enabling more use to be made of freelance musicians in Scotland. In addition, the governors have indicated their willingness

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to encourage any efforts which may develop to find additional money for orchestral music. I am sure from the speech she has made that the noble Baroness, Lady Elliot of Harwood, will be glad to hear that. The governors have also indicated that the BBC will participate in urgent discussions to review orchestral music in Scotland as a whole. I really think that it is in that context that the suggestions made by the noble Lord, Lord Broadbridge, should be examined.
Therefore, the licence fee increases I say are fair to the BBC and to the licence-payer, and the Government have inescapably to take account of both of those interests. They will not detract from the BBC remaining the major force in public service broadcasting. The governors have not suggested that they are unable to carry out their public duty and their economies are a matter for their decision. The governors have approached the need to make economies with responsibility and have indicated their willingness to continue discussions. These are the reasons for the decision about which the noble Lord, Lord Ross, is asking this Question this evening, and I am glad to have had the opportunity to clarify these reasons.

COUNTY OF KENT BILL [H.L.]
  HUMBERSIDE BILL [H.L.]
  Reported from the Select Committee on Common Opposed Provisions with amendments.