Lords Sitting of 2 June 1980

Preamble
Reassembling after the Whitsun Recess the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers ¤Read by the Lord Bishop of Hereford.

MOBILITY ALLOWANCE FOR HANDICAPPED PATIENTS
Baroness MASHAM of ILTON: 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 what steps will be taken to achieve flexibility of use of the mobility allowance paid to severely handicapped longstay residents of hospitals for the mentally handicapped in order to improve their quality of life and to avoid abuse of the allowance.
Lord CULLEN of ASHBOURNE: My Lords, we are concerned at the amount of money accumulating in the accounts of some long-stay patients, particularly in mental handicap hospitals. We are looking at ways of enabling their social security benefits, including mobility allowances, to be used more flexibly while at the same time avoiding abuse. We shall consult widely before any changes are introduced.
Baroness MASHAM of ILTON: My Lords, I thank the noble Lord for that reply. May I ask him whether he is aware that there is much concern about this matter among community health councils throughout the country and also whether he is aware that when patients die, not having spent this money, the next-of-kin can claim it? Would it not be of benefit if the money went back to the Department of Health and Social Security, thus representing a saving to the state?
Lord CULLEN of ASHBOURNE: My Lords, as I have said, we are looking at the problem, but I must tell your
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Lordships that there are no easy answers. We have to balance the need to ensure that benefits belong to individuals to spend as they wish against the understandable desire of health authorities, where the patient cannot manage his own affairs and they are acting for him, to be able to spend the money more flexibly in order to improve the quality of life for patients rather than let it pile up. However, we have been working on this for some months now and I hope that we shall be able to put forward some proposals in the near future. As I have said, we shall need to consult widely before changes are introduced.
Lord SEGAL: My Lords, where anomalies exist, would it not be possible for the Government to consider publishing, if possible annually, a report on the awards of these mobility allowances, in particular where genuine cases of hardship are denied the allowance, and also on those cases which receive the allowance but which in some instances are quite unjustified?
Lord CULLEN of ASHBOURNE: My Lords, I will pass on that suggestion to my right honourable friend.
Baroness MASHAM of ILTON: My Lords, could I ask the noble Lord just how much money has piled up in people's accounts which is not being used at the moment?
Lord CULLEN of ASHBOURNE: My Lords, it is a large sum of money. The amounts recorded in the National Health Service accounts rose from £ 9–7 million in 1974–75 to £ 21–8 million in 1978–79. Even allowing for inflation, that is a rise of £ 54 million.

THE ROYAL OBSERVER CORPS
2.40 p.m.
Lord ALPORT: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement about the future role of the Royal Observer Corps in relation to home defence.
The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal): My Lords, the Royal Observer Corps is a field force of the United Kingdom Warning and Monitoring Organisation, which is part of the review presently being undertaken by the Home Secretary.
Lord ALPORT: My Lords, may I ask my noble friend, while thanking him for that Answer, whether he realises that the 10, 000 members of the Royal Observer Corps feel that the role that they have been playing over many years and the importance that they have for the future are not fully recognised by this Government¤and have not been by successive Governments? Would my noble friend consider, in conjunction with his colleagues in the Home Office, whether or not the Royal Observer Corps could provide a good foundation for an expansion of civil defence in the immediate future?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I can agree with the last part of the noble Lord's question and I am distressed to hear that the Royal Observer Corps feel that they are not properly recognised. This is something which we shall be seeking to rectify in the course of this review.
Lord SHINWELL: My Lords, will the Minister say what is the purpose of the review? Is it to disband this corps or to reorganise it and make it even more efficient? And does he recognise that we cannot afford to abandon any section of our forces who have served well in the past and may be called upon to serve very well in the future?
Lord STRATHCONA and MOUNT ROYAL: My Lords, the purpose of the review, of course, is to examine the whole field of civil defence, both from the Home Office point of view and from the Ministry of Defence point of view and to co-ordinate their two interests. I entirely agree with the noble Lord that the intention would certainly not be in any way to diminish the activities of an organisation like the Royal Observer Corps, whose importance is readily recognised.
The Earl of KIMBERLEY: My Lords, can my noble friend state when the
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Government review statement will be finally published?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I cannot answer that question; there is no particular date in mind at the present time.

WEEDOL: PUBLIC WARNING
2.41 p.m.
Baroness MASHAM of ILTON: 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 whether they will ensure that the public are fully warned against the dangers of brands of paraquat and diquat weed-killers which can be obtained in shops under the name of Weedol.
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): Yes, my Lords, as with all products which are cleared under the Pesticides Safety Precautions Scheme, the prescribed precautions must be prominently displayed on the labels of all containers which are put on the market. Weedol is no exception. I am sending the noble Baroness a specimen of the relevant labels. If she is aware of premises where products are being retailed without these labels, I hope that she will let me know.
Baroness MASHAM of ILTON: My Lords, I thank the noble Lord the Minister for that reply. Is he aware that I bought this packet of Weedol which contains paraquat over the counter, and the girl in the chemist's shop did not know that paraquat was a poison. This is not marked "poison". Is he aware that people sometimes make up weed-killers in lemonade bottles and if children drink this substance they can damage lungs and kidneys, and there is no antidote to this poison?
Earl FERRERS: My Lords, I was not aware that the noble Baroness had purchased a packet of Weedol, but I am grateful to her for the information. She is perfectly correct in saying that paraquat is a poison, but Weedol is not a

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scheduled poison because Weedol contains only 2.5 per cent. of paraquat, whereas the liquid form which is used by commercial farmers contains 20 per cent.
With regard to the observations made by the noble Baroness about the stuff being decanted into lemonade bottles, I agree with her entirely that this is a very dangerous practice and should not be done. If she reads the instructions properly, I think she will find that she will be informed that she should not decant Weedol into soft drinks bottles. I would assure her that the instructions are such on all containers containing paraquat that this should not be done, because if used injudiciously this is a very dangerous chemical.
Lord NUGENT of GUILDFORD: My Lords, may I ask my noble friend whether it would not be a wise precaution to have all packets of weed-killer which contain either paraquat or diquat marked "poison"? Although I take the point made by the noble Earl that the directions are clear, would not a red message marked "poison" on each package be a wise precaution which might easily save a serious accident and would cost no more to the manufacturer?
Earl FERRERS: My Lords, I perceive my noble friend's apprehension. I would merely tell him that what is a scheduled poison and what is not is decided by the Home Secretary on the advice of the poisons board, and the poisons board specifically excluded Weedol because it is in a granulated form and because as such it is undrinkable and unpalatable. I will certainly look into the point made by my noble friend, but I would reassure him that there are instructions on the packet which indicate how it ought to be handled, and obviously any chemical, if it is handled wrongly, can cause harm.
Baroness MASHAM of ILTON: My Lords, may I also ask the Minister whether he is aware that many doctors are concerned about this, because it takes only a very little paraquat to damage the lungs of small children, and many people in this country are careless, especially over locking up weed-killers in garden sheds, and anyway the children probably would not be able to read?
Earl FERRERS: My Lords, I will certainly see that the observations made by the noble Baroness are drawn to the attention of my right honourable friend.

SOMALIA: MILITARY AID SUPPLIES
2.46 p.m.
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the recent rapprochement between Somalia and Kenya, the question of offering military aid to Somalia could be reviewed, it being understood that the United States of America is currently negotiating for military facilities at the port of Berbera in the face of growing danger in the Arabian Sea and Gulf areas.
Lord TREFGARNE: My Lords, the Government welcome the indications of improved relations between Kenya and Somalia, but we have no plans to offer military aid to Somalia.
Lord BARNBY: My Lords, may I ask the noble Lord this: Since Eritrea is under the guidance of communist influence and Somalia is slanted to the West, would it not be advantageous¤in view of the present exercises of the United States of America in that area to safeguard oil supplies¤that military aid should be given to Somalia? May I also ask the noble Lord this: Would not the fact that 1½ million refugees from Russian pressure are in Somalia mean that, compassion aside, expediency and self-interest would justify a greater amount of support than the £ 850, 000 promised and, in view of the self-interest and expediency, there would be more dividend from that than from much other of the £ 220 million aid distributed by us annually in other directions?
Lord TREFGARNE: My Lords, the amount of humanitarian aid which we can give to Somalia depends not only upon the scope of the problem, which I readily acknowledge, but also of course upon our resources. As for military aid, of course we have to view that in a

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different light, and I can tell your Lord-ships that in fact the Somalians have not asked for any military aid at this time. As for the position of the United States, that is a matter for the American Government upon which I would not wish to comment.
Lord SHINWELL: My Lords, may I ask the noble Lord whether he is aware that I do not agree with my young friend opposite who is asking for unilateral action in this connection? But as the Americans appear to be interested in the area¤and quite naturally because of the circumstances¤would it not be advisable to engage in consultation with the US Government in the military sphere in order to ensure that we are acting in collaboration?
Lord TREFGARNE: My Lords, I can assure the noble Lord that we do keep in close consultation with the Americans in this and all other matters.
Lord AVEBURY: My Lords, has the noble Lord any information regarding the intensification of military action by the Ethiopians in Western Somalia, backed by Soviet and Cuban forces? Has he consulted with the officials of the United Nations High Commissioner for Refugees about the enormous number of persons who are displaced from their homes throughout the whole of Africa by the aggressive military actions of the Ethiopians? If he is not prepared to increase military aid in that region, would he consider favourably an approach from the UN High Commissioner for Refugees to add to the amount which we are providing to supplement these people throughout the region?
Lord TREFGARNE: My Lords, we are always prepared to consider any approach from the United Nations High Commissioner for Refugees; but as I said earlier, our response must be tailored to our resources.
Lord BROCKWAY: My Lords, following the noble Lord, Lord Barnby, and my noble friend Lord Shinwell, may another young Member of the House put a question? I should like to ask the noble Lord whether the Government would consider as an alternative to providing
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military aid to Somalia, the proposal supported by Somalia and by all Governments bordering the Indian Ocean, except Oman, that the Indian Ocean should be neutralised and cleared of all these military bases?
Lord TREFGARNE: My Lords, that is one of a good many proposals of its kind which we see from time to time. All of them are examined carefully, but that one in particular suffers from a number of shortcomings.
Lord SEGAL: My Lords, is the noble Lord aware that the Port of Berbera was in British possession for upwards of 200 years until the last war, and that the people of the old British Somaliland would probably welcome an increased use of the port facilities at Berbera by British trading interests along the Red Sea?
Lord TREFGARNE: My Lords, that is no doubt the case, but it does not, I think, arise from the Question.

BUSINESS
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 making a Statement on the European Economic Community Budget discussions.
That will be followed by my noble friend Lord Ferrers repeating a Statement being made in another place on the Council of Ministers (Agriculture).

CONSTITUTIONAL REFERENDUM BILL [H.L.]
Lord ALPORT: My Lords, I beg to introduce a Bill to make obligatory the holding of a constitutional referendum before a Bill which contains provisions to abolish the House of Lords, thereby reducing the Parliament of the United Kingdom to a single chamber, may proceed to a Second Reading in either House of Parliament. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.¤(Lord Alport.)
On Question, Bill read 1a, and to be printed.

HOUSING BILL
Brought from the Commons on Friday the 23rd of May last and printed pursuant to Standing Order No. 47; read 1".
ALEXANDRA PARK AND PALACE BILL [H.L.]
Read 3", and passed, and sent to the Commons.

SOCIAL SECURITY (No. 2) BILL
2.53 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, I beg to move that this Bill be now read a second time. In introducing the Bill I believe that it is essential to set it in the context of the Government's overall economic strategy. For, although it is a Social Security Bill, its purpose is primarily financial. It is a short Bill of only eight clauses and, leaving aside Clauses 7 and 8, which are largely technical in nature, Clauses 1 to 5 are entirely concerned with reducing public expenditure and so making a modest but significant contribution to the task of putting the nation's economy right. Clause 6 implements a pledge made at the time of the general election by this Government to modify the financial treatment of strikers' families by altering the rules governing the payment of supplementary benefit in these cases. I begin, therefore, by saying something of the economic background to the Bill.
The Government believe that, as a country, we must return to a sensible level of public spending so that taxes and Government borrowing can be reduced. We inherited expenditure plans which were too high and were set to grow considerably faster than production. I believe that your Lordships understand the problem created by the gap between planned expenditure and economic growth and that you will understand that it is impossible to ignore a budget as large as that needed for social security if we are to implement our commitment to reduce public expenditure.
The problem we face is that in social security, as indeed in other services, expectations have been built up over
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many years. There has been a continuing expansion of the whole range of social security benefits and these expectations have been combined with the great demographic change in the population. For example, one of the fastest growing groups is those aged 75 and over, thus making for a great increase in real costs.
At the same time the economy has limped along. Growth in the economy has averaged 1 per cent. a year since 1973 and part of that has been due to North Sea oil. Manufacturing output is lower now than it was during the three-day week¤that is to say the first quarter of 1974¤and the outlook for 1980 is not encouraging. Growth is expected to fall by 2.5 per cent. compared with 1979. Increased public expenditure has come largely from increased borrowing and the resulting debts have now caught up with us. Debt interest at £ 10, 000 million a year is now the biggest single charge on the Exchequer and costs more than retirement pensions. We have undoubtedly had the benefit of many social security and other benefits, but in the course of that achievement we have piled up debts for our children and for our grandchildren.
As I have already indicated, the Bill before the House is designed to reduce expenditure, but in saying that I would like to emphasise two facts. First, the social security budget costs some £ 20 billion a year which is equal to a quarter of all public expenditure. The Bill is designed to save a relatively modest sum of about £ 270 million in 1981–82 and £ 480 million in 1982–83, that is, 1.35 per cent. rising to 2.4 per cent. of the social security budget. Exaggerated statements that it means the end of the welfare state are therefore totally misplaced. For, at the same time¤and it is important to remember this¤the Government have taken steps to ensure that the elderly will continue to have their retirement pensions protected and so will those on supplementary allowances¤that is, most of those on supplementary benefit who are under pension age. Supplementary pensioners and others getting the longterm rate of supplementary benefit get a little less than the price protection this year, because their rate is being aligned with the retirement pension¤a point your Lordships will remember from the Social Security No. 1 Bill.

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In addition, the Government are giving extra help to needy families with children through the family income supplement scheme and through the child benefit addition for lone parents. Mobility allowances for many disabled people will also be increased in November from £ 12 to £ 14–50 a week; attendance allowance and war and industrial disablement pensions will go up in line with prices forecasts.
So much for the background. I turn now to the specific measures in the Bill. Clause 1 amends the up-rating provisions of the Social Security Act 1975, to enable the amount of the increase in certain specified benefits to be less, by up to 5 per cent. of the current benefit, than the amount necessary to restore their value. This means an increase of 11.5 per cent. instead of 16.5 per cent. from November 1980. The benefits concerned are unemployment benefit, sickness benefit, maternity allowance, invalidity benefit; industrial injury benefit and unemployability supplement¤the industrial injuries counterparts of sickness and invalidity benefits; and the increases for adult dependants paid with these benefits. The clause applies to the 1980 up-rating and it can be extended by Affirmative Resolution order to either or both of the 1981 and 1982 up-ratings.
It is important to remember that the benefits affected are ones which are not taxed at present but which it is generally agreed should be brought into taxation, for these are benefits which replace earnings. My right honourable and learned friend the Chancellor of the Exchequer announced in the Budget speech that benefits for the unemployed would be brought into taxation in 1982 and that arrangements would be made for the other benefits to be made taxable as soon as possible thereafter. Administrative difficulties make it impossible to achieve taxation of these benefits earlier, but, as I have explained, savings in the social security budget need to be made immediately. However, the savings that will be achieved¤about £ 130 million net in 1981–82¤are, in fact, only about one-third of the revenue which would be obtained if the benefits were taxed. Many people would, in fact, be paying substantially more by way of tax than they
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lose by way of abatement¤not least because very often these benefits are paid in years when there are also substantial earnings. The effect at present of the benefits not being taxed is, of course, that an income composed of benefit and earnings is worth more than an income of the same amount composed entirely of earnings.
Particular concern was expressed in another place about the position of invalidity pensioners, and I know that similar great concern will also be expressed in your Lordships' House. As your Lordships will know, invalidity benefit is the long-term maintenance benefit which replaces sickness benefit after the latter has been paid for 28 weeks of incapacity and ¤like sickness benefit but unlike retirement pension, to which it is closely akin¤it has not yet been brought into taxation. As a long-term benefit, invalidity benefit differs, however, from most of the other benefits affected by this clause, in that the others are paid for short-term eventualities. In view of this, my right honourable friend the Secretary of State for Social Services has given an undertaking that, subject to the availability of resources, the rate of invalidity pension will be restored to the same level as retirement pension once it is brought into taxation, which will be as soon as possible after April 1982. On 21st May, in another place, he extended this assurance to cover unemployability supplement, which is the counterpart, under the Industrial Injuries Scheme, of invalidity benefit. Those are two important points which I wish to emphasise.
The Government's position on the abatement of the other, short-term benefits is that when they are brought into taxation their level will be reconsidered in the light of all the relevant factors including the economic circumstances at the time. Finally, I think it worth repeating that the up-rating of the supplementary benefit in November will not be affected by the abatement measures in Clause 1.
I come now to the second clause of the Bill. This stops the automatic annual increase in the retirement pensioners' earnings rule¤that is, the amount a pensioner can earn without his pension being abated¤at £ 52 per week in November. The then Conservative Op-

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position secured the rise in the earnings rule to its present level, but this Government are committed to its abolition. However, the Government felt that, in the light of present economic circumstances, at a time when other groups are having to make sacrifices, it was difficult to justify an increase in the limit this year. The savings are about £ 1 million for every 1 per cent. rise in earnings over the year. The Government hope that it will be possible to raise the limit next year, for we are well aware of the arguments on this issue, but this must, of course, depend on the circumstances at the time. We remain committed to abolishing the rule as soon as possible.
Further savings, approaching £ 20 million in a full year, are expected from the effects of Clause 3, which is intended to take place in September 1980. This clause makes two provisions. The first is to eliminate payments of benefit for very short spells of incapacity. At present benefit is not normally paid for spells of incapacity lasting three days or less, but payment may be made where these short spells link with other spells. As a result of this clause, however, spells of incapacity lasting less than four days will not link with other spells and will never attract benefit. This change will produce savings of around £ 2 million in a full year and ease the burden of local offices and general practitioners but, as there is little financial need for these short periods, it is unlikely to cause hardship. I should remind your Lordships that there is a Green Paper out for discussion at the moment which deals with the possibility of employers, who already cover the great majority of employees for sick pay, taking over full responsibility for the first eight weeks of incapacity. Employers would not be required to pay for the first three days, though many do and would continue to do so.
The second part of the clause concerns the linking of claims for benefit. Linking allows separate spells on incapacity or unemployment benefits to count as a single period if the gap between them does not exceed 13 weeks. This clause will reduce the period from 13 weeks to eight weeks. Linking has different effects, some of which are favourable and others unfavourable to the claimant. Where spells link, fresh waiting days without benefit do not have to be served. Linking
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also allows a claimant to qualify for the higher rate invalidity benefit without necessarily having first to receive sickness benefit for 168 days without a break.
A reduction in the linking period will mean that fewer spells will link so that for some, more waiting days will have to be served. It will also mean that people who experience short, widely-spaced spells of minor illness will be less likely to qualify for invalidity benefit than the chronic sick for whom the benefit was intended.
Concern has been expressed in another place and by expert voluntary bodies representing the interests of the disabled about the extent to which the reduction in the linking period originally proposed by the Government¤to six weeks¤might cause hardship to the chronically sick who were attempting to re-establish themselves in employment or who suffered recurrent breakdowns in health. At present, entitlement to invalidity benefit is retained provided the health breakdown occurs within 13 weeks of the previous long incapacity. It was thought that too steep a reduction in this period might discourage the chronically sick from attempting to get back into employment as they would be afraid of losing their entitlement to invalidity benefit if they were unable to continue to work.
The Government accept that the reduction to a six-week linking period as originally proposed might in some cases be a little too short, and they therefore decided to accept an amendment which instead reduced the linking period from 13 to eight weeks. This should be long enough to safeguard the position of the chronically sick while at the same time reducing scope for inclusion of those for whom this benefit was never intended.
For the unemployed the reduction in the linking period will help those who suffer from frequent spells of unemployment. Under the clause such a person would need only a gap of eight weeks and one day between spells of unemployment to start a new period of interruption of employment. This will lessen the likelihood of exhausting unemployment benefit, which is payable for a maximum period of 312 days in any one period.
The Government have announced that they will be closely monitoring the effects of this change on those receiving

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benefits for incapacity or unemployment. The clause provides for regulations to be made by Negative Resolution to increase the linking periods for unemployment or incapacity benefits, or both, should this be considered necessary.
Clause 4 of the Bill provides for the reduction and subsequent abolition of the earnings-related supplement payable with unemployment benefit, sickness benefit, maternity allowance and, in certain circumstances, injury benefit, and the earnings-related addition to widow's allowance. It is intended that the reduction should take place from January 1981, and abolition from January 1982. The savings from this measure are substantial. The gross figures from abolition are about £ 360 million in the first full financial year, offset by supplementary benefit payments of about £ 75 million at current benefit rates. These broad estimates are being refined, and savings may be rather higher than originally estimated¤around £ 385 million gross.
When savings in social security expenditure have to be made, it is better that they should fall on the provision made for higher benefits for the higher paid rather than on basic benefits. It is significant that under successive Governments the real value of the earnings-related supplement has been allowed to decline since 1971. Maximum earnings-related supplement is now worth half what it was. A further factor is that since the supplement was introduced in 1966, occupational sick-pay schemes have been extended and improved, maternity protection has been introduced and redundancy payments have been improved so that there is in many cases less need for the supplement than formerly.
My Lords, it was suggested in another place that the abolition of the earningsrelated supplement in 1982 was in some way a breach of contract. The argument that was put forward was that the supplement paid out during 1982 will be paid for by contributions which people are paying at the moment, and that they will, therefore, lose a benefit for which they have already paid. It is true that entitlement to the supplement during the benefit year 1982 will be based on earnings on which contributions have been paid in the current tax year. With an earnings-related benefit
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there has to be an earnings reference point, and this rather distant one has been the best we could manage without a major headache for employers. But 1980–81 contributions do not pay for 1982 benefits. To explain why this is the case, it may be helpful if I spend a moment or two explaining the basis on which the National Insurance Scheme is funded.
The original proposals put forward by Beveridge were for a strict insurance scheme. The contributions each individual would pay over his lifetime would be related to the average benefits he could expect to receive over his lifetime. An inevitable consequence of this was that it would be many years before full retirement pensions could be paid out: Beveridge suggested 20 years. The Government of the day in fact introduced full pensions from the outset; and it followed that the scheme as originally designed was not financially viable. There was no problem in the early years, as many were contributing while only a few were drawing pensions, but it was clear from the very beginning that this position would change over time and that slowly but surely the taxpayer would be called upon to make an ever-increasing supplement to the income from contributions.
In 1959, therefore, the Government changed to a radically different approach to funding. Instead of contributions being designed to meet an actuarial estimate of the benefits accruing to an individual, they were set so that the income in each year would meet the outgo from the National Insurance Fund in that year. The basis of funding had been changed from an insurance principle to what may be called "pay as you go". The change was formalised by the passing of the National Insurance Act of 1959, and the system has been run on a pay as you go basis ever since. I may stress that this has worked to the advantage of all concerned, since it has made it possible to introduce real improvements in the level of benefits which the population can enjoy immediately. Had we stuck to strict insurance funding, real improvements in benefits could only be introduced years after an increase in the real level of contributions.
The position, my Lords, may thus be summarised as follows. The contribu-

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tions being paid in the current tax year go to pay for the earnings-related supplement being paid out in the current tax year. The supplement to be paid out in 1982 would have been paid for by contributions next tax year and the tax year afterwards. When my right honourable friend the Secretary of State comes to set the level of contributions for those tax years, the abolition of the supplement is one of the factors he will take into account.
Clause 5 of the Bill, which deals with the entitlement of occupational pensioners to unemployment benefit, will have the effect of producing further savings of some £ 25 million in a full year. It provides for the abatement of the unemployed benefit paid to men or women aged 60 or over who receive an occupational pension in excess of a prescribed amount of at least £ 35 a week. This is a measure which has been proposed by some who now oppose it and opposed by some who now propose it. But the fact is that what in easier times may have had fairly evenly balanced arguments for and against it the Government now believe has much to commend it. Unemployment benefit is intended as compensation for loss of earnings arising from unexpected or unforeseeable contingencies. Retirement at the end of a pensionable career where the person receives compensation for loss of earnings in the form of a substantial occupational pension is not really such a contingency. In the present economic circumstances it does not make sense to pay full unemployment benefit to such persons, especially as their availability for work may be suspect.
It has been argued that rather than reduce the benefit payable to all occupational pensioners the Government should make more effective use of the "availability for work" condition. It has always been a condition for receiving unemployment benefit that a claimant must be available for work. But it is very difficult to test the availability of occupational pensioners when jobs for older people tend to be scarce, particularly in those areas with a high proportion of retired people. In a recent survey, over half of those with substantial occupational pensions who were also receiving unemployment benefit admitted that they were not looking for work.
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The Government's intention is that only a substantial occupational pension should be taken into account¤hence the figure of £ 35. This would mean that a married man with the standard flat rate benefit, including an increase for his wife, will receive some unemployment benefit unless his occupational pension exceeds £ 68 per week in 1981.
Finally on Clause 5, I would add that entitlement to contribution credits will not be affected by the clause. Occupational pensioners will still be able to claim credits for unemployment even though they may receive no benefit. People of 60 are often worried about maintaining their national insurance contribution record. This will still be possible, so that anyone who is unable to get unemployment benefit will still be able to claim, and be credited with, contributions to protect his retirement pension.
Unlike the other main clauses in this Bill, Clause 6 is not primarily intended to reduce expenditure; its aim is to achieve a greater sense of financial responsibility and ensure that the union (or the striker himself, if he has no union) meets part of the cost of support of strikers' families now provided by the state. The clause provides that, where someone is out of work as a result of his involvement in a trade dispute at his place of employment, the supplementary benefit paid for the requirements of his family will be reduced by £ 12 per week. In addition, the clause amends the rules governing the disregard of any tax refunds received by a striker. The striker only gets a tax refund because he is on strike and has no earnings. In most strikes it is part of his regular weekly income. For the striker who claims supplementary benefit there is no case for duplicating part of the tax refund with an extra amount of benefit. Tax refunds will, therefore, be taken fully into account.
At present, although strikers are disqualified from receiving supplementary benefit in the normal way they can get limited payments if they are in urgent need. In future, as a general rule, urgent need payments will not be available to strikers and their families. There is, however, power in the Bill for regulations to be made to deal with individual cases of hardship. The Government intend to use their powers so as to cover the rare compassionate case without opening the

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door to wholesale abuse and so defeating the purpose of the clause. The circumstances we intended to cover by recoverable urgent need payments are hardship through loss or damage caused by fire, flood or a similar disaster. Non-recoverable payments may be made for: first, fares to visit ill or dying relatives; secondly, essential fares for special transport to take handicapped or disabled children to school; thirdly, immediate necessities for a new-born baby born during a long strike; or, fourthly, repair or supply of essential household equipment if, for example, there is no working form of heating during the winter. If experience shows that there are other rare circumstances for which similar provision should be made Parliament will be asked to approve regulations conferring the necessary powers.
The Government believe that for too long now strikes have been used as a weapon of first rather than of last resort. We believe it right that unions should face up to their responsibility to provide strike pay when their members strike. Non-union members, too, if they go on strike, must be ready to provide towards the upkeep of their families. The changes made in the clause to the financial support available to the families of strikers are overdue and are designed to make the unions accept their responsibility.
I recognise that this will be regarded as a tough Bill, but it is one that is designed to help us in a very tough economic situation. I should like to assure the House that in making these proposals in the Bill my right honourable friend the Secretary of State for Social Services looked very carefully at the whole social security budget, and he believes¤and I agree¤that the savings that he is making are fair. However, despite the savings that the Government are proposing to make, the up-rating in social security benefits from November will cost more than £ 3 billion extra in a full year. I believe that savings made now will contribute towards the national recovery that we are all seeking, and which will in turn ensure that we will continue to be able to pay for the benefits which will be needed in the future. My Lords, I beg to move.
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Moved, That the Bill be now read 2a.¤(Baroness Young.)
3.20 p.m.
Lord WELLS-PESTELL: My Lords, some 10 minutes or so ago it was my intention not to speak at any great length in this debate. One appreciates the fact that at Second Reading one can merely set out one's views. If one wants to deal in detail with the Bill and its various clauses, one can do that only at the Committee stage, and so this afternoon it is not my intention to go very deeply into each of the clauses nor to say in detail what we on this side of the House feel about them.
It is perfectly true that this is a little Bill, but if your Lordships look at it in detail I think you will agree that it would not be unfair of me to say that it is a very nasty Bill. In this regard one need look only at the Long Title of the Bill:
" to amend the law relating to social security for the purpose of reducing or abolishing certain benefits and of relaxing or abolishing certain duties to increase sums ".
We have been told by the noble Baroness that the sole purpose of the Bill is to save money; to save £ 270 million in 1981–82, and £ 480 million in the following year, 1982–83.
During the Committee stage of the first Social Security Bill in another place there was no suggestion that the Government were considering a fundamental change in their policy in respect of social security, and I ask the noble Baroness why, after the first Social Security Bill had been before Members of another place, did it suddenly become necessary immediately afterwards to introduce a No. 2 Bill?
It is a Bill which is aimed at that section of the community least able to afford it. The noble Baroness spoke about the need to save money, and I wish to ask her what right the Government have to save this amount of money at the expense of that section of the community who can least afford it. Why do they not devise a scheme whereby those members of the community who are in a far better position than the majority help to provide the amount of money that is needed?¤about £ 700 million, I gather. It would be comparatively easy to devise a system of

1121
taxation which would not be unbearable to that section of the community who can afford it. I wonder whether it could be a conscious attempt to depress the standard of living of millions of people to such an extent as to affect their purchasing power and so assist in the bringing down of inflation; and so I again ask, why was the No. 2 Bill necessary?
As I understand it, the Bill is an attack on the so-called work-shy syndrome, whereas there is no evidence at all that they exist in any substantial numbers. It is an attack upon strikers' families, and it also arises from the Government's belief¤which some of us have heard about time and time again¤that many people are better off on social security than they are at work; and again I ask, where is the evidence of this?
I wish to ask noble Lords opposite really to study the Bill. I think that the noble Baroness would agree with me that it is a complicated Bill. It is not easy to understand what the Bill seeks to do. Although one may have listened very carefully to what the noble Baroness has said today¤I did, and I am sure that most of your Lordships did, too¤nevertheless it is very difficult to under stand the matter accurately and to grasp what the Bill stands for and what it seeks to do. It is because I regard it as a serious and a complicated Bill, which I believe will have devastating effects upon a large section of our people, that I ask noble Lords opposite to study it in detail, and not to be content merely to try to remember what the noble Baroness has said, nor even just to read Hansard tomorrow. Rather they should study the Bill, because I am quite convinced that, if they do so, they will not be able to support some of its provisions; nor will they be able to go into the Division Lobbies, as we shall all be called upon to do, when we reach the Committee stage.
I wonder what is the reason for this sudden additional Bill. Did the Government get their sums wrong? Did they not know the financial position, or did they see this as a further opportunity to launch an offensive against the working people of this country and the trade union movement as a whole? This is how some of us see the Bill, because there is no escaping the fact that it Will bear down heavily
1122
upon people who cannot afford the reductions envisaged in it.
The noble Baroness was perfectly frank when dealing with Clauses 1 to 4. They affect the unemployed. They affect the sick. They affect the disabled, and, as I understand the Bill, they affect those receiving maternity allowance and widow's allowance. Under Section 125 of the Social Security Act 1977, sickness benefit, unemployment benefit and maternity allowance rise each year in line with prices, while invalidity benefit should rise in line with prices or earnings, whichever is the greater. As I understand the position, each of these groups will be affected by the Bill.
I notice that when the matter was before the other House my right honourable friend Mr. Orme quoted from the Disability Alliance, which stated:
" The Government has launched a deplorable assault on the welfare of sick and disabled people. The future living standards of all those who rely on social security benefits are to be cut. But one group has been singled out for a double blow—the 600, 000 long-term sick and disabled people who receive invalidity benefit ";
and, as I understand the noble Baroness, that is the situation. In view of what is likely to happen to the disabled and the sick, I must say that I am surprised that we have nobody on the list of speakers today representing the disabled lobby. When we were in Government, I cannot remember a single occasion on which those who spoke for the disabled did not take every opportunity to call our attention to the needs of the disabled. Yet there is no one here on the list today, on the Government side, to speak for the disabled. I think that we on this side of t he House are entitled to say that it is a reflection upon the organisations which seek to serve the disabled that they are not calling this Bill into question.
I go further, and say this. I look to the two right reverend Prelates on the Bishops' Bench. There are 26 right reverend Prelates who are Members of this House. I cannot remember a single debate or Bill on such a matter as this during our period in office when somebody representing the Church of England Board for Social Responsibility did not make a contribution; and whether or not I, as a Minister, agreed with that contribution, it was a valuable contribution. Yet we are to hear nothing from the Bishops'

1123
Bench today. I must say that it is always dangerous to pick people out, but I shall listen with very great interest to the one person on the list of speakers who has probably had more experience in this field than anybody else¤the noble Lord, Lord Boyd-Carpenter; and perhaps I may strain the indulgence of the House by wishing him a very happy birthday today. It may well be that I shall disagree with a lot of what he is going to say¤I do not know¤but it will be worth listening to him.
My Lords, the first Social Security Bill amended the indexation of the invalidity benefit by tying it to prices, like the other benefits I have mentioned. At the next up-rating, November 1980, instead of rising by 16½ per cent., certain benefits will increase, as the noble Baroness says, by only 11½ per cent. I know that the Government feel that these benefits should be taxable, and there is perhaps nothing between us on this matter of taxation of benefits. I accept that the retirement pension is liable for taxation; but I gather from the noble Baroness that, as it seems unlikely that the Government will be able to do this before 1982 to 1983, they are reducing these benefits by 5 per cent. The Government are presumably working on the assumption that all those receiving any of these benefits will be eligible to pay tax. My Lords, this is not so; and it really is a reprehensible way of saving money.
How many people in receipt of these benefits will have to apply for supplementary benefit? In point of fact there will be a considerable number who will have to apply for supplementary benefit as a result of this situation. I understand it is estimated that an additional 110, 000 people will have to apply for supplementary benefit when the earnings-related supplement is reduced. I want to ask the Government to give an assurance that, when these benefits are brought into taxation, any cuts made under Clause 1 will be restored. Not to do so will be little short, if short at all, of a scandalous situation. The earnings rule for retirement pensioners is dealt with by annual increases in fine with earnings. At the present time, a pensioner may earn £ 52 a week before his pension is reduced, and I understand that it is being frozen at that figure.
1124
I cannot say what the rise in earnings will be by next November, but the Government's assessment for prices is 16½ per cent. If the earnings rule amount was raised by 16½ per cent., the limit would then increase to £ 60–58; and it seems to me that if we are going to have indexation, then it should be applied to the earnings rule, and the earnings rule should not be frozen. I think this is a further example of a complete change in policy. Not only did the Conservative Party¤and here I speak from memory¤secure the indexation of the earnings rule during the last Government, but in their election manifesto they promised to phase out the earnings rule entirely during the lifetime of this Parliament, which I gather they are not proposing to do.
My Lords, I want to come quickly to Clause 3. At present, neither unemployment benefit nor sickness benefit is paid for the first three days. The noble Baroness has set this out very clearly, and I do not propose to go into any great detail; but I understood her to say that short periods of unemployment are going to be treated differently. I want to ask her why. Is it because the Government are afraid that those in casual work will not look for permanent work¤not that it is possible to get it these days¤if they are able to claim some sort of short-term benefit?
I want to come to Clause 4, the earnings-related supplement, which I think is one of the worst features of this Bill, and to what the Government are proposing to do in this clause. What the Government are proposing to do may be quite legal, but in my view it is open to serious question. I recognise what the Government want to do in this matter, but people have paid national insurance contributions over a long period of time, and I would find it very difficult to believe that in assessing the amount of their weekly national insurance some consideration has not been given to the amount which is likely to be paid out by way of an earnings-related supplement. I cannot think that we devise an insurance scheme and fix a weekly rate without taking into account what has to be paid out. What I suggest, therefore, is that, in working out the amount that has to be paid by way of national insurance each week, account must have been taken of the

1125
earnings-related supplement. That is now to be reduced.
I find going through my mind such words as "theft", "robbery", "stealing", "larceny" and "embezzlement", but I do not know which, if any, apply. However, it seems to me to be thoroughly dishonest to take money from people for national insurance purposes and then suddenly to say, "We are going to reduce benefit from 15 per cent. to 10 per cent.". I do not intend at this stage to go fully into this matter; that will be done in Committee, when one can argue the situation in some detail. At this stage I will merely say that I should have thought that the action which the Government are taking in this matter is on the fringe of the law.
I content myself today by reminding your Lordships that under Sections 14(7), 22(4) and 24(3) of the Social Security Act 1975, and Schedule 6, people receiving unemployment benefit, sickness benefit, maternity allowance and widow's allowance are entitled to an earnings-related benefit, after two weeks on benefit, which can be paid for for a maximum period of six months. The percentage payable at present is one-third of earnings between £17–50, which is the lower earnings limit, and £30 a week, and 15 per cent. of earnings between £30 and the upper earnings limit of £120 per week. The Bill will reduce the 15 per cent. to 10 per cent., which will mean, if I have done my sums correctly, a loss of between £4 and £5 per week—and if I am wrong I am sure the Minister will put me right.
It means that the average employee who is in the scheme will pay, in national insurance contributions, £7–29 per week and the employer, £14–80, making a total of over £22 a week national insurance contributions paid by the worker and employer. As I said earlier, some of it really must go to the earnings-related supplement, and I question the Government's moral right to do what they propose in this matter, and we shall return to this matter in Committee. If the clause is accepted, the Government will take—that is the best word I can possibly find to describe it—£65 million in 1981 and £360 million in 1982 from people who have paid increased contributions in order that they should get 15 per cent. earnings-related supplement. Quite apart from causing
1126
about 110,000 people to apply for supplementary benefit, it means that a large number of people will be impoverished as a result.
I do not want to deal with Clause 5, which seeks to end the right of unemployment benefit to those who have reached the age of 60. As the noble Baroness said, there is to be a clawback by the Government of 10p for every 10p where the occupational pension exceeds £35. I hope that at some stage, though not necessarily today, the noble Lord, Lord Banks, who is perhaps the best authority in your Lordships' House on this matter, will have something to say about it, and then we can make up our minds.
Clause 6, which legislates for a £12 reduction in the striker's family entitlement to supplementary benefit and other penalties, is likely to prove the most contentious clause in the Bill, but I do not think this is the time to develop my argument on that; I shall be happy to do so in Committee. Meanwhile I give this warning to the noble Baroness: this and certain other clauses and matters in those clauses will be dealt with very fully, and we hope, although it is a forlorn hope, that the Government will be receptive to reason and argument. They were not on the Social Security No. 1 Bill, and perhaps I am hoping for too much.
I conclude where I started. I ask noble Lords opposite not just to answer the Division bell and assume that your spokesmen on the Front Bench are infallible and must be right. I ask each of you, as I have never done before, to read the Bill for yourself and ask yourself whether this is something you can really subscribe to. Maybe you will be able to subscribe to a lot of it. Maybe there are things in it which will offend you. I hope that if they do, we shall all have the courage to do what we think ought to be done.

EEC BUDGET: UK CONTRIBUTION
3.46 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 Foreign Affairs Council which I attended with my right

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honourable friend the Lord Privy Seal in Brussels on 29th and 30th May. My noble friend Lord Ferrers will make a Statement on the Agricultural Council which took place at the same time. Both councils were the culmination of a long and complex negotiation which the Government began shortly after taking office last year on the size of the United Kingdom contribution to the EEC budget.
The Foreign Affairs Council, in which work continued throughout the night of 29th and 30th May, reached provisional agreement on a number of issues, as did the Agricultural Council which was meeting in parallel. After a meeting of the Cabinet today, the Government have informed the Italian Presidency that we accept the proposals that emerged from both councils. I should like at the outset to offer unstinted praise to Signor Colombo, the Italian President of the Council, for his outstanding chairmanship. His skill played a vital part in the work that was done.
At the Foreign Affairs Council on 29th May, the following arrangements were proposed to alleviate the United Kingdom's budget problem. The first element in the solution is the following formula: Provided our net contribution does not exceed the amounts estimated by the Commission, there will be ceilings on what we pay of £ 370 million in 1980 and £440 million in 1981. This would mean rebates of £710 million and £860 million respectively. All these sterling figures are converted at a rate of 1.65 units of account to the pound. These arrangements would result in a total rebate to Britain over the two-year period of £1,570 million.
A further element of the solution is a risk-sharing formula. Should the amounts of the United Kingdom's uncorrected net contributions in 1980 and 1981, as estimated by the Commission, in fact be exceeded, the arrangement is that in 1980 we will bear only one-quarter of this excess. For 1981 a more complex formula exists under which we would meet the first £12 million of any excess, the next £60 million would be shared between us and our partners equally, and thereafter we would meet only a quarter of the excess, as in 1980.
For 1982 it was envisaged that by this time the Council would have completed
1128
a radical review of the patterns of Community expenditure and the operation of the budget. However, if that had not by 1982 produced arrangements which would resolve the United Kingdom's budget problem, the Commission would put forward proposals along the lines of 1980 and 1981 and the Council would act accordingly. We can therefore be sure that for 1982 as well there will be similar restrictions on the level of the United Kingdom's net contribution.
"The payment of these amounts to Britain will be brought about by improvements in the operation of the 1975 Financial Mechanism, bringing our gross contribution more or less into line with our share of Community gross national product, and, for the rest, through Community expenditure in the United Kingdom. There will be a new regulation under Article 235 of the EEC Treaty to provide for this expenditure.
"Following the precedent of the Financial Mechanism, the credits under the new regulation will appear in the Community budget for the following year, but with the possibility of advance payments in the current year. For 1980, we would expect to be paid before the end of our financial year 1980–81.
"In the long-term the most important part of the package is the commitment of the Council to review the development of Community policies and the operation of the budget. This, together with the retraints imposed by the 1 per cent. ceiling, will enable us to press for lasting reforms which will among other things resolve the British budgetary problem. This review offers an opportunity which has never been available before, since we joined the Community, to work together with our partners for financial arrangements and Community policies which are to the advantage and interest of all the member states, as befits a Community of equals.
"We agreed to a statement of general principles on fisheries, which leaves the substantive issues open for consideration on their merits in the Fisheries Council, which will next meet on 16th June. A deadline of 31st December 1980 has been fixed for agreement on a revised Common Fisheries Policy. This is in the United Kingdom interest:

1129
Her Majesty's Government have repeatedly urged rapid progress towards a satisfactory Common Fisheries Policy settlement. I welcome the fact that the fisheries text recognises the need for this, and for a settlement of all the outstanding elements of the CFP together. It in no way prejudices the vital interests of our fishermen which we are determined to safeguard.
"When my right honourable friend the Prime Minister refused the offer our partners made at Luxembourg, she made clear that this was because the combination of amount and duration was not right. We have now negotiated better arrangements for the two years 1980 and 1981, taken together, than were on offer then; and we have also secured an arrangement for its third year, 1982, which was refused to us then. Furthermore, the Community has recognised that there will have to be a major review of the operation of the budget and the balance of Community expenditure and that the United Kingdom budget problem must be resolved finally.
"As my right honourable friend the Prime Minister made clear after Luxembourg, we also refused what was on offer then because we were being asked to accept agreements outside the field of the budget which were damaging to us. Since then, as the Minister of Agriculture, Fisheries and Food will make clear in his Statement to the Commons (and my noble friend Lord Ferrers here) on sheepmeat and CAP prices and related measures, we have secured changes in what was being suggested which give us substantial advantages. Taking the balance of these proposals together, the Government believe they add up to a fair and advantageous outcome.
"In a negotiation as complex as this, no one party can expect to get everything he wants and to concede nothing. There should be no belittling of the concessions our partners are making at a time when, whatever the impact on them of the Community budget, the general economic background is unfavourable. With this arrangement, Britain can play her part in developing further the internal and external policies of the Community. The negotiation
1130
has, moreover, focussed the minds of all member states on the unsatisfactory way in which the Community budget operates and, more clearly than ever, on the undesirable imbalance in the pattern of Community expenditure. With the review commissioned for 1981 and the proximity of the 1 per cent. VAT ceiling, we have an unrivalled opportunity to bring about sensible adjustments to the operation of the Common Agricultural Policy and to put the Community's finances on a sounder basis than ever before.
"This Government came to office determined to make a success of our membership of the Community. The first task was to tackle the inequitable budget contribution. That we have now done. But Europe is about more than that. The challenges that face the Community both internally and externally are as daunting as any in its relatively brief history. None of us can find adequate solutions to them on our own. This agreement gives us the chance to solve them together."
3.55 p.m.
Lord GORONWY-ROBERTS: My Lords, we are all grateful to the noble Lord for his Statement. Indeed, we should like to commend him for the skill and patience which once more he has contributed to some very complex negotiations. All the more reluctantly, then, I have to ask whether, in fact, this Statement represents more than a postponement of the fundamental problem. There has been some advance in granting to this country a reduction in its contributions over the next two years and some indication that there may be an arrangement in the third year; but beyond that there is nothing but expectation and no concrete assurance at all. The reductions in the British contribution this year and and next year, welcome as they are, may not be repeated in 1982. We do not know. The Community is going to have a look at it. But beyond 1982 there remains a persistent and fundamental problem which will have to be solved if, in fact, the economics of the Community are going to be so reasonable and are going to commend themselves to people in this country and to other countries to the extent that the great boon of political co-operation is made possible¤unless there is a parallel

1131
advance in rationality about economics, the first failure will be what everybody in this House wishes to see as a fact; namely, political co-operation.
Our contribution may well be at the rate of £1,500 million or more in 1982 unless there is a fundamental change in the arrangements beyond that year. Moreover, even the present arrangement, as I see it, keeps us still the second-highest contributor to the Community when we are the third poorest¤and perhaps the noble Lord may correct this calculation that I have made. The communiquée is vague about the structural changes (as it calls them) which are hopefully to be negotiated. At the same time, it is absolutely clear that the heart of the problem, literally 70 per cent. of the problem, the Common Agricultural Policy, is to remain fundamentally unchanged. The surpluses will continue. Indeed, we will add to them. The British housewife will pay 80p for butter; the Russians will pay 34p. They will be laughing all the way to Afghanistan and beyond with that sort of bargain. Nothing has been done about this repugnant aspect of the Common Agricultural Policy; namely, that our own housewives have to pay nearly three times as much as the people they are engaged almost everyday in condemning for their lack of international probity and decency.
What about the position of New Zealand? Is there any reaction from the Prime Minister of New Zealand? There are reports that the New Zealanders may exercise a kind of veto on this arrangement. We import, I believe, quite half of our sheepmeat from New Zealand. What will be the result of these arrangements on the position of New Zealand over the next four years in this, still, its major external market? What undertakings have been given on fisheries? The paragraph read out to us indicates that there will be a decision one way or the other in December 1980 and that that will be in our interest. It depends upon the decision. The vital interests of our fishing industry are to be borne in mind. Who are to say what they are? I hope that it will be the fishing industry. They have been very vocal in the past few days and have been talking a great deal of sense in comparing what is done in this country as compared with what is done in other countries in the Community for fishing.
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Was there any mention of oil? We have been told that there must be no linkage between oil, fish and lamb. Lamb is already linked, is it not? There has been a linkage between lamb and this arrangement. Fisheries are dealt with in the two non-commital paragraphs that we have heard. Was anything said about oil? Are not the problems of the budget, and the fundamental problem of the CAP, questions which must be tackled and solved irrespective of any other peripheral matter like British oil and British fisheries? It is too late to say "British lamb "of course. As to the intention on 16th June to discuss fisheries, I hope that these paragraphs mean that there is absolutely no commitment which may harm our already ailing fishing industry.
The point about our having withdrawn our assistance to the 5 per cent. increase in farm prices: I hope the Government realise that with these constant increases in food prices for this country they are making a complete mockery of any appeals that they may make to the trade unions to exercise wage restraint in the next few months. Those of us who have every sympathy with a rational wage and salaries policy find it increasingly difficult to talk to the leaders of the British working force about restraint in these matters. When rent, rates and now food go up in price almost every day, wage demands begin not really on the shop floor but in the kitchen, and here we are buying political co-operation by more subventions to European farmers, many of them grossly inefficient.
My criticism of this Statement¤and it in no way means a criticism of the noble Lord, whose capacity and devotion we all respect¤is that it has not come to grips, or does not seem to be about to come to grips, with the fundamental problem facing the Community and facing Britain in particular. I speak as one who has done his part to try to create in Europe the basis for the necessary political co-operation without which the defence of our freedoms in the West may prove impossible. I am concerned constantly that this supreme boon of political co-operation has been sacrificed to short-term concessions to interests which have regard only for the monetary financial advantage that may accrue to them already. We are told that the French farmers are demanding even

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higher increases in farm prices than the 5 per cent. now given to the Community farmers. I hope that the noble Lord the Foreign Secretary with his very great gifts¤I repeat this¤will seek on 16th June to revitalise negotiations that have been proceeding and not be content with this agreement, because this does not take us anywhere near a solution of the fundamental problems that have been afflicting the community and bearing very hard on Britain in particular for quite a number of years now.
4.4 p.m.
Lord GLADWYN: My Lords, we also should like to thank the noble Lord, Lord Carrington, for making this highly important Statement. We recognise, along with the noble Lord, Lord Goronwy-Roberts, that there are various outstanding points which will have to be cleared up in the next year or two. We entirely recognise that. However, while entirely recognising it, we Liberals¤unlike the official Opposition¤welcome the Brussels agreement wholeheartedly and we sincerely congratulate the Foreign Secretary, to whom I may perhaps refer without any risk of being misunderstood as our everpresent help in trouble.
Whether the present deal, for deal it is, is much better than that which seemed obtainable at Luxembourg¤as seems to be argued by the Government in the noble Lord's Statement¤is debatable, but is of course now immaterial. The great thing is that our absurdly disproportionate contribution to the EEC budget has¤provided that all the other Governments agree¤been very substantially reduced at the cost, it is true, of a small but, for the consumer, unwelcome rise in farm prices, mostly on goods also in surplus. This, however, was necessary if the Community was not to break up owing to individual action on the part of one or more members. Since the CAP is bound to be renegotiated in a year or two's time, as we all know, this is all in the nature of some kind of holding operation.
The overriding point is that in the event, with general agreement the EEC has survived a serious crisis and will continue. That will provoke the fury of the many isolationists and "Little Engenders" in this country who will make as much running out of the less pleasant
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features of the present agreement as they can. My first question is: Should not the Government now embark, in co-operation with the European movement, on a serious campaign to explain to the nation the very real advantages, both economic and political, of Community membership¤and, above all perhaps, to indicate what would happen if by any chance it broke up and we left?
Finally¤and my second question is this: Might not the Foreign Secretary suitably pay tribute to the helpful part not only played by the extremely intelligent Italian President but by many other of our partners, notably by the German Government, who, provided the opposition of their Finance Minister can be overcome¤and I believe it will be¤will have made what from their point of view were straight financial concessions to us amounting, so we read (and in electoral year, also) to no less than £ 650 million? Surely the much abused Commission might come in for some word of praise, too. We all know that the Commission may well be in need of structural reform; but at least in its upper reaches it contains some highly intelligent and devoted men determined to make a success of the one really hopeful effort in the way of regional international co-operation that has come about in the past 500 years.
4.8 p.m.
Lord CARRINGTON: My Lords, I am most grateful to the two noble Lords, though it will come as no surprise that I prefer Lord Gladwyn's intervention to that of the noble Lord, Lord Goronwy-Roberts. Lord Goronwy-Roberts is always so courteous that I will measure my words and speak as gently as possible. I will say one thing to him: A year ago, when this Government came into office, our predecessors had failed so dismally in understanding or putting over the problems which faced Britain that in Strasbourg last June the Prime Minister was not able to persuade the Heads of Government that there was a problem. In one year we have not only persuaded the Heads of Government that there was a problem (which the previous Government never succeeded in doing) but we have a solution which is satisfactory as far as it goes. I really do not think that it lies in the mouths of noble Lords opposite to complain about this settlement.

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Secondly, I would say equally gently to the noble Lord that from what he said I do not think that he understands what the Statement says. He was talking about a postponement of the problem and of the problems starting up again in three or two years' time. The whole point of this deal is that there is now a recognition by the Community that there has to be a new look at the financing of the Community; that it cannot go on as it is. If the noble Lord says that the Community will never come to any agreement about it because it is so difficult, the ceiling of 1 per cent. on VAT makes it inevitable that the Community has to come to a conclusion about this because otherwise the Community will go bankrupt. Therefore there is no question of a postponement of the problem.
What we have done is to get a solution for three years for the British problem¤a satisfactory solution, though not all of what we would like, as I have said¤and in the meantime the Community is going to look at the structure of its finances without the British being blamed for that. We shall not be responsible for it. It is the actual size of the budget which will cause this restructuring to take place and so there is no question of postponement, and I would ask the noble Lord to look at the Statement again rather carefully. If I could also ask him¤I do not blame him because I know how difficult it is, but he really must not mix up millions of pounds and 'millions of units of account, because the two things are different and it makes the figures rather less—
Lord GORONWY-ROBERTS: Mixing units of account! Really—
Lord CARRINGTON: The noble Lord can come in later, but I think I really would like to finish what I was saying. My noble friend will speak about sheep-meat, but perhaps I may speak in advance of him. I think this is an exceedingly advantageous deal for the country and for the housewife. As regards the 5 per cent. increase in agricultural prices, would the noble Lord please remember that throughout Europe there has been an inflation rate this year of between 10 and 20 per cent. and in this country of about 20 per cent. What we are asking our farmers to do is to accept 5 per cent.
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price increases when they have had 20 per cent. inflation. I really do not think it is entirely reasonable that the farmers of this country should be the only people who are not regarded as being worthy of any price increases because they have no other way of selling their products. I will give the noble Lord one other figure which might interest him. That is that since 1972 food prices have risen by something like 200 per cent. in this country, and of that 200 per cent. only 8 to 10 per cent. can be laid at the door of the Common Agricultural Policy. In terms of this settlement, on the Retail Price Index it is very small indeed. I believe that on that index it is something like 0.7 per cent. and so I think one has to bear that in mind.
I made it perfectly plain that we had agreed to nothing on the fisheries issue which prejudiced the fishermen of this country. I say that again: there is certainly no commitment of any kind, and if we cannot get a satisfactory fish settlement then we shall not get a fish settlement. There is no mention of energy in the Statement at all, so the noble Lord can set his mind at rest on that.
With regard to what the noble Lord, Lord Gladwyn, has said, I think that this is a better deal than was offered at Luxembourg and it says much for my right honourable friend the Prime Minister that the stand she has taken has enabled us to get this better deal. It is better because overall we get more back; it is better because we get the commitment again on 1 per cent. back and it is better because we have an agreement to look at the structure of the budget. I thought that in the Statement I had paid tribute¤if not, I do so now¤to those other countries who have sought to get a settlement. I most certainly do that. As for explaining the advantages of the Community, that is all explained; and do not let us underestimate the political advantages of belonging to the Community. I am glad to think that at any rate the noble Lord, Lord Gladwyn, will be with me in doing that.
Lord GEORGE-BROWN: My Lords, may I just put this point to the Foreign Secretary? This must be the third renegotiation since I first tabled the appli-

1137
cation on behalf of the then Government on terms which the then Government, and most of the party sitting there now, thought were acceptable. This third renegotiation¤the other two, I think, were conducted by the present Opposition¤has produced terms not only far better for us than the terms on which we tabled the application but far better than either of the two renegotations conducted before, both of which were commended to this House by the present Opposition. May I, therefore, if no one else is willing do do so, say on behalf of my then colleagues in the Labour Party how much I congratulate the Prime Minister and the Foreign Secretary on what they have achieved?¤and I hope it has taken me less time to say that than it took my unfortunate previous Minister of State to make his circumlocution to avoid saying that.
May I secondly ask the Foreign Secretary to take this from me: that many of us echo most heartily what he said towards the end of his Statement? Creating Europe was never about the CAP. It was never about the economic policy¤and indeed I made that clear in the speech I gave for the then Labour Government at the time we tabled the application. It was about creating a political Europe, creating a Europe with a common international and defence policy, creating a Europe with a common economic policy. There has never been a time¤not even at the time of the Hague Congress in 1948, or whenever it was¤when the world has stood so much in need of a political entity in Europe and a lead from Europe¤a lead which, alas! for the moment can no longer come from the United States and which for the moment is allowing all the running to be made by the Soviet Union. I hope therefore that, having got this third renegotiation out of the way on this, in a sense, minor matter of detail, everybody's attention can now be turned towards creating the political Europe which was the basis of the case in the very first instance.
Lord CARRINGTON: My Lords, the noble Lord will know that "renegotiation" is a pejorative word in the Community! This was, I think, a fairly satisfactory "readjustment ". With regard to his second point, I agree very much with what he said about the political entity of Europe. Now that we have got this
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settlement, do let us all lift our sights a little bit higher.

EEC AGRICULTURE MINISTERS' MEETING: CAP
4.17 p.m.
Earl FERRERS: My Lords, with the permission of your Lordships, I should like to repeat a Statement which is being made by my right honourable friend the Minister of Agriculture in another place. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a Statement about the Council of Agriculture Ministers' meeting in Brussels on 28th to 30th May, at which I represented the United Kingdom with my honourable friend the Minister of State.
"At that meeting the Agriculture Council completed its consideration of the 1980–81 agricultural prices and related proposals. We have pressed for and secured important modifications to the original proposals of the Commission. We have removed those elements of severe discrimination against our industries and we have secured a number of parts of the package from which we will derive substantial benefits.
"The Commission had originally excluded any continuation of the special butter subsidy currently worth 13p a pound on butter. We have succeeded in obtaining the continuation of this subsidy for the coming marketing year, 100 per cent financed by Community funds.
"For five years we have failed to obtain substantial refunds on cereals used in the export of whisky. We have now succeeded in obtaining the refunds. back-dated to the period since accession, and this will bring us in a net benefit of £ 40 million this year and approximately £ 16 million per annum thereafter.
"We did argue for no price increases upon those products in surplus. On sugar, however, the world price has now gone well ahead of the European price and therefore there will be no cost of disposing of Europe's sugar surplus in the present circumstances. Britain

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will retain the same sugar quotas as last year.
"The wine structural reform package agreed earlier this year is designed to make a major impact on the structural surplus and will impose an important discipline on producers in France and Italy. At the Council meeting in Brussels last week I insisted on a further discipline of a limit being placed for the first time on the amount of wine eligible for end-of-season distillation, and this will impose a limit of 18 per cent. on any individual producer whose production goes into store.
"The price increase on milk is offset by an increase in the co-responsibility levy so that the net increase on milk prices will be 2½ per cent.
"This increase does not affect the liquid milk sales in the United Kingdom. During the marketing years 1979–80 and 1980–81 the average increase in the price of milk in the Community net of co-responsibility levy will be 1¼ per cent. per annum and this, compared with the substantial increase in input costs of dairy producers, will mean that there will be a substantial reduction in real terms of the income of dairy producers throughout the Community.
"The total effect of the whole of the CAP package on the consumer will be an increase of 0.7 per cent. on the food price index and of 0.15 per cent. on the retail price index over a full year.
"The package includes the introduction of a new suckler cow subsidy worth about £ 12 a cow, financed 100 per cent. from Community funds. The original Commission proposals, limiting this subsidy to smaller herds only, was successfully eliminated. We also managed to retain in the package, contrary to the Commission's original proposals, the right to continue the variable beef premium. As Britain provides 26 per cent. of the specialist beef herd in Europe these measures will be of net benefit to the United Kingdom.
"I obtained agreement that at an early Council meeting the Council would consider structural proposals to benefit the agriculture of Northern Ireland.
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"At Luxembourg eight countries had agreed upon a sheepmeat regime based upon intervention throughout the Community. I believed that this would be bad for the British consumer, bad for the British producer and bad for New Zealand. I informed the Commission that there was no way the British Government would accept such a scheme in spite of it being backed by eight other member countries.
"I succeeded in persuading the Commission and the Council of Ministers to accept United Kingdom proposals whereby there will be no intervention in the United Kingdom and, where the arrangements will so operate that there will be no incentive for any British lamb to go into intervention in France or any other part of the Community.
"I succeeded, for the first time in the history of the Community, in persuading the Community to provide Britain with a full deficiency payment system financed 100 per cent. from Community funds. The only previous major example of the Community accepting the principle of deficiency payments was when the previous Government negotiated the beef premium scheme, but that, while hailed as a triumph at the time, is a scheme that still enables intervention of British beef to take place and is financed only 25 per cent. from the Community funds and 75 per cent. from the Treasury.
"The housewife will benefit because British lamb will tend to stay in Britain to be eaten by the British consumer at reasonable prices instead of being sucked into intervention overseas as would have happened under the Commission's Luxembourg proposals.
"British producers will obtain a 17 per cent. improvement in their guaranteed prices this year and can look forward to a secure future as the Community guaranteed price converges to a common price. These improved producers' returns will be financed 100 per cent. by the Community with deficiency payments, and I anticipate that on the completion of the first four years of the scheme we will receive an annual benefit from the Community to the order of £ 100 million per annum.
"It was vital to defend New Zealand's interests and the whole regime will take effect only if and when New Zealand

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reaches a satisfactory agreement on the volume of her imports into the Community in exchange for a reduction in the tariff. I have agreed with the Commission that this agreement should and must include a New Zealand agreement as to the possible use of any export refunds. The fact that Britain, which produces half the lamb of Europe, will now have no lamb going into intervention means that, unlike the Commission's original proposals and those agreed by the Eight in Luxembourg, there will be little intervention in the Community.
"Throughout the negotiations I have kept close to the New Zealand Government and will continue to do so until their negotiations are satisfactorily completed.
"Last year I was able to announce a price settlement which for the first time gave the United Kingdom a net benefit.
"Before making the budget adjustment now negotiated, this year's agricultural price settlement gives a net benefit of £ 37 million in 1980–81. In addition, the Commission's proposals to eliminate the butter subsidy, worth £ 108 million to British consumers, have been successfully rejected.
"We have in fact obtained a settlement of benefit to Britain and the success of the negotiations on the budget will mean that in future our partners will have a much greater financial interest in improving the common agricultural policy. "
My Lords, that concludes the Statement.
4.25 p.m.
Lord PEART: My Lords, I am grateful to the noble Earl for repeating the Statement which has been made in another place. One or two points strike me. I am rather surprised that there was some criticism of a previous Administration on the deficiency payments system. The noble Earl spoke about the previous Government negotiating the beef premium scheme. Yes, my Lords, they did and I was very proud that it was called the Peart premium. It was a breakthrough at that time. The previous Administration had done nothing about it and it was a Labour Government which, when it first went to Brussels, did something.
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I remember also being chided by a noble Lord opposite¤I do not think it was the noble Earl¤because it was said that we had done nothing for some sections of the industry. I quoted the pig subsidy that we arranged at that very same meeting. But I am not going to carp about that. I am glad that Northern Ireland's agriculture is to be carefully considered by the Community and that there will be discussions. I think that that is right. I know that it is an unusual step, but I support it very strongly.
Above all, I support what has been said about New Zealand. New Zealand's terms, in relation to the Community and ourselves, were discussed a long time ago at the Summit in Dublin, and since then every subsequent Government has safeguarded New Zealand's interests. So I hope that Mr. Muldoon, who made a statement to the Press the other day, finds that he will not be let down; that he will make certain that the present Administration ensure that New Zealand's exports to this country are allowed, and that we shall continue to recognise that New Zealand has a major part to play in relation to our own economy.
I know that there are people in this country who disagree with me, and I have even stood up against farmers on this issue. But I have always said that we are defending people who, in time of peril and war, came to our aid without being asked. So I hope that noble Lords opposite, and indeed noble Lords from all parts of the House, recognise that that section of the Statement will have the warm approval of us all.
I shall not criticise this Statement. On the other hand, one should not be too euphoric. I gather that an extra £ 710 million will be for the Treasury; but £ 300 million will be put on food prices and in the end inevitably the consumer will be affected. I agree that there should always be a sensible balance between producer and consumer, and I hope that this Government will not forget the consumer. However, I believe generally that this is a document which we could debate at some time, although we have had many debates on the CAP and other matters and at the moment it may well not be timely. Nevertheless, I hope noble Lords will consider carefully what the noble Earl has said. I still believe that we have to think

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in terms of being in Europe, not just because of what the CAP offers, but because of what is right politically.
4.29 p.m.
Lord TANLAW: My Lords, we, too, on these Benches welcome the noble Earl's Statement on behalf of the Government. I think noble Lords will agree that this is a much better Statement than the last one which was read out in your Lordships' House, and which said absolutely nothing. This Statement is coming to grips with the reality of trading with Europe, in the way that has been set out.
There are just two points of clarification on which I would ask Her Majesty's Government to assist, and they relate to the question of sheepmeat. What is not clear to me, at least, from what is said in the Statement is whether there is to be freedom of movement for British lamb into Europe or whether there are still to be restrictions upon movement. Many farmers are concerned that these restrictions may still exist. Secondly, it is not clear when the items relating to British Iamb will come into effect. There is no need to remind the noble Earl that 5th August is a key date for the Scottish National Farmers' Union, as indeed it is for all Scottish hill producers. Unless the situation is clear by then, it will mean a very serious drop this year in the incomes of Scottish hill farmers.
It may be worth reminding the Government that the 17 per cent. improvement in prices will be very much welcomed by the producers of lamb. However, there is a further 17 per cent. difference in the debt servicing cost to the British farmer as compared with his European equivalent. There have also been very serious setbacks this year, due to the weather, in the production of British lamb, certainly in the hill and upland areas, which will affect farmers' costs. Therefore the date of the implementation of these factors is very important. Consequently, I hope that it will not be too long before Her Majesty's Government are able to negotiate a just and fair agreement with the New Zealand interests and with those of the Community.
4.32 p.m.
Earl FERRERS: My Lords, I am very grateful to the two noble Lords for the welcome which they have given to this Statement. I would be the first to recognise the duty which the noble Lord, Lord Peart, did when he succeeded in obtaining the original beef premium. At the time I criticised him for it. Indeed, I may be the person he was thinking of, but I will not refresh his memory too much about that! The noble Lord succeeded in getting the beef premium scheme and, as he rightly said, this was the first time that the Community accepted such a scheme. We have built on that, if I may so put it. The only point that I would stress to your Lordships is that this premium scheme is 100 per cent. financed by the Community.
Although the noble Lord, Lord Peart, said that we should not be too euphoric about the Statement, I should like to be slightly euphoric because the problem of sheep was not affecting just agriculture; it was affecting the whole of the Community. A few months ago there seemed to be almost a total impasse. This Statement has at least shown that we have got out of that difficulty. We have got out of it in a way which does not put meat into intervention either in Europe or in this country. It keeps the price to the consumer in this country low, and it also puts the price to the producer in this country up. In that respect it is a major asset for which we can be grateful. It was difficult to achieve but it has been achieved.
I endorse wholeheartedly what the noble Lord, Lord Peart, said about New Zealand. May I remind him that the whole of this scheme will come into operation if and when New Zealand has come to a voluntary agreement on restraint? If she comes to such an agreement on restraint, then there will be the compensation for her of a lower tariff. The only point I wish to make about it is that this is not intended to be a restriction upon New Zealand imports. It is intended merely to prevent an excess of imports from New Zealand resulting from the new arrangements which have been made.
If I may turn to what was said by the noble Lord, Lord Tanlaw, he asked when this will come into effect. It will come into effect when the negotiations with

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New Zealand and the Community have taken place and are completed. I cannot tell him when that will be. I can only say that I hope it will be as soon as possible.
The noble Lord also asked¤I was grateful to him for this question because it is important¤whether United Kingdom sheepmeat will be allowed into Europe. When this new system comes into operation there will be free trade within the Community. I do not want to go into too much detail as to exactly how the premiums will work. However, there will be a price for the United Kingdom. If the market price falls below that price, there will be a premium available which will be paid by the Commission to the producer. If that lamb is exported on to the Community, that premium will be refundable, but if, as a result of the export to the Community, the price level of lamb to the consumer in France were to be lowered, then the French producer would get a higher premium relating to France. There is a further twist to that, which is that over the course of four years it is hoped to get a common reference price by which the United Kingdom producers will receive a greater benefit. But that is a detail which I think it would be more appropriate to leave until later.
Lord BALOGH: My Lords, can the noble Earl tell us what is the effect of the two agreements, agricultural and nonagricultural, under the present scheme and also under the Luxembourg scheme, on the British balance of payments? If the noble Earl cannot answer the question now, and I anticipate that he will say that he cannot, perhaps he will let mc know later.
Earl FERRERS: My Lords, the noble Lord is absolutely right. I am unable to give him the information which he has requested, which is a matter of very considerable detail. But I shall see whether I can obtain it for him and I will write to him about it.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that, while he is likely to get and while he is entitled to get unanimity on the success of taking the sting out of the sheepmeat controversy, certainly on all the help that we have got to give to New Zealand,
1146
some of us who held different views about things to do with the European Community over the years will feel a little disturbed about the nature of this Statement? Over the years we have found that things which matter have been submerged by the giving out of lots of detail and by intricate quotations which very often have not been understood and which have tended to cover up the real problems which have had to be faced.
The problem which now is likely to undermine the whole structure of Europe is the problem of surpluses. Unless something is done about the surpluses, for they are the things which eat into the budget¤and that will have to be done by getting outside all the intricate explanations of points of detail such as my noble friend has very ably given¤we shall not get to the point where the European Community can operate in the wholehearted and broad based way which has been suggested. Therefore I hope that my noble friend will use all the power and influence he has got with his colleagues in the Government to get to grips with this problem of the surpluses, even if it means having to allocate subsidies from national providers in order to ensure that they do not over-produce.
While I congratulate my noble friend on the way in which he has handled the intricate part of the Statement, I hope that we shall not have again what we have had over the years. Both the noble Lord, Lord Peart, and I were in those days very critical of Europe and felt that the basis of the Treaty of Rome was not the basis upon which we ought to join Europe. Nevertheless, now that we are in the Community, supported by a referendum, we want to make it work. But it will not work if we blind ourselves with the science of the details and intricacies which cover up the real problems; and the problem in the field of agriculture is the problem of surpluses.
Earl FERRERS: My Lords, I am sorry if my noble friend Lord Harmar-Nicholls felt that I had in any way obscured the facts by giving too much detail. All I would tell him is that if I gave him too much detail it was merely a tiny fraction of that which was given to me. I totally agree with him that we should not permit the details to obscure the facts, and also

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that one of the greatest problems is the surplus of production. That fact has been pre-eminently in the mind of my right honourable friend throughout the whole of the negotiations, and I think that every member state is aware that this is a real problem.
It so happens that this is only one of the problems. The other problem is to get the community of nations to work as a community. The challenge of the whole European concept is to see whether, within a generation, it will be possible to have a united Europe where these problems are less than they are now. That is the challenge which faces our negotiators. I can assure my noble friend that we take that very seriously into account, and that is one of the reasons why my right honourable friend took the stance that he did.
Lord CLEDWYN of PENRHOS: My Lords, I should like to add my congratulations to those of my noble friend upon the Statement which the noble Earl has just read. My congratulations are extended to certain aspects of the report but not to the report in its totality, because I think it is a report of such detail that noble Lords will wish for a great deal more time to study it before they come to a final judgment.
Will the noble Earl say, first, to what extent he feels that the common agricultural policy has been substantially amended by this package? It is, as the noble Lord, Lord Harmar-Nicholls, has just said, the common agricultural policy which is at fault. That is where reform is needed. It is important that the noble Earl and his right honourable friend should explain to Parliament how this report really helps in changing the common agricultural policy and in dealing, in part at least, with one of the main problems, which is the problem of surpluses.
Secondly, I wonder whether the noble Earl will be good enough to deal with one point of detail—namely, the effect of the Statement on dairy producers in this country, who have been much maligned and criticised from time to time but who in fact are efficient, whereas the problem of the common agricultural policy is that it tends to subsidise inefficient or nonviable agricultural producers in Europe. If this Statement in fact is to affect the
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income of dairy producers throughout the Community it is important that the House should know precisely how this package is to affect the dairy producers in the United Kingdom, bearing in mind that a considerable sacrifice has been made by British agriculture in the sense of creating viable farms. Many milk producers in this country have gone out of production over the last few years, as the noble Earl knows. How is this package to affect dairy producers? I think both the House and the industry would wish to know that in more detail.
Thirdly, I would ask the noble Earl how many of the recommendations of the report of Sub-Committee D of this House on agriculture and food have been implemented by this package? The Sub-Committee went to an enormous amount of trouble to look at the proposals which were then made by the Community and it would be interesting if the House could be informed how the recommendations of the Sub-Committee were treated in the negotiations in Brussels.
Earl FERRERS: My Lords, I am gratefull—I think—to the noble Lord, Lord Cledwyn of Penrhos, for his observations. He asked some penetrating questions and I am grateful to him for his appreciation of the Statement. He asked how the Statement had resolved the problem of surpluses within the Community. He will know better than I know, as he was a Minister himself, that one cannot resolve problems like that overnight; one can only make a gradual contribution towards doing so. I would point out one significant fact to him and that is that, under the sheep réegime, there was a near total confrontation. That has been avoided, and one of the ways in which it has been avoided has been the principle of what we used to regard as deficiency payments, which has enabled meat not to go into intervention and then to be sold to third countries, probably with an EEC subsidy, but has retained the meat within the countries of the Community, to be consumed as fresh meat. I believe that that is a major contribution.
The noble Lord then asked how the Statement had affected dairy farmers. He will be aware that there is a co-responsibility levy, that the common price increase is 4 per cent. and that the co-responsibility levy is of the nature of 1.5 per cent. and

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therefore the increase in support prices is only of the nature of 2.5 per cent. As that affects this country, of course, it refers to milk which goes into manufacture, because milk which goes on the liquid milk market is adjusted by my right honourable friend's movement of the price for milk on the liquid milk market. I would only remind the noble Lord, Lord Cledwyn, that in the past 12 months we have had three devaluations of the green pound and two price increases, all of which have helped the dairy farmer, although I accept that he faces a number of difficulties of which the noble Lord, Lord Cledwyn, is all too well aware. We shall be able to continue to carry out investment in the Community's schemes under the farm and horticultural development scheme, but only on those herds of up to 60 cows¤and that applies throughout the Community¤or where there is an increase in herd size of up to 15 per cent. but not more.
The noble Lord asked how many recommendations of the House of Lords Committee which dealt with this have been taken into account, and in connection with that I shall ask for the noble Lord's indulgence. I should have to do a certain amount of homework on that because I do not have the figures readily available¤and I rather fancy that he thought I would not have them.
Lord BRUCE of DONINGTON: My Lords, is the noble Earl aware that the views expressed by his noble friend Lord Harmar-Nicholls will find very wide support on this side of the House? Is he aware that over two-thirds of the cost of the common agricultural policy is in respect of the storage of these vast surpluses and in losses on their disposal? As I believe the Prime Minister herself has said, they represent a complete absurdity. Is he further aware that the time has long since passed when a radical change has to be made in the whole structure of the common agricultural policy? It is already the laughing stock of the world; it is already costing vast sums of money, and we on this side of the House shall not be satisfied until there has been some radical reform¤and when I say "radical" I do not mean tinkering about on the fringes; I mean a radical structural change in the whole of the present absurdity.
Earl FERRERS: My Lords, those are fairly harsh words and I would not go all the way with the noble Lord, Lord Bruce of Donington, on that, but of course I accept that, where large sums of money are being spent on putting good food into intervention, that seems to be wrong. We want to see that stopped; we want to see a change, but one does not just make a change overnight. The noble Lord, Lord Bruce, knows that full well. Where there are nine other countries to take into account, these things cannot be done either successfully or effectively if over night one set of traditions is swept away and replaced with another set. But I take his point entirely and of course we are just as worried as he is that so much money is spent on putting good food into store.
Lord SANDYS: My Lords, as your Lordships have been dealing with two very important Statements which together have taken over an hour of your Lordships' time, I suggest we should now return to the Social Security (No. 2) Bill.

SOCIAL SECURITY (No. 2) BILL
4.49 p.m.
Second Reading debate resumed.
Lord BANKS: My Lords, I should like first to thank the noble Baroness, Lady Young, for her very thorough explanation of the provisions of this Bill. As she made very clear, the purpose of the Bill is to save a little less than £500 million a year from the social security budget. Of course, the whole policy of reducing public expenditure at a time of recession is open to question. After all, the United Kingdom Government take a lower percentage of gross domestic product than any other EEC Government, and that percentage has not increased over the last five years. But this is not the occasion to debate the general economic strategy of the Government.
However, the Government have expressed alarm, and the noble Baroness this afternoon has expressed alarm, at the growth of the social security programme within the general expenditure. It has been pointed out that 10 years ago this consisted of 17 per cent. of public expenditure; now it is 27 per cent. and totals £ 20, 000 million a year. With

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gross domestic product increasing at about 1 per cent. per annum, we are told that social security spending cannot possibly continue to grow unchecked. I should like to make one or two comments on that argument; that is the basic argument upon which the Government present this Bill to the House.
The first thing I would say is that social security payments make no claims on resources. Building hospitals, building schools, providing welfare services¤these things do make a claim on resources; but social security payments do not; they merely redistribute income. There are various ways of redistributing income. In the 1979 Budget the present Government redistributed £ 4, 500 million, and that sum is a quarter of the total of the social security budget. They redistributed in the 1979 Budget in the form of tax reductions a sum equal to a quarter of the total of the social security budget. At that time the richest 7 per cent. got 34 per cent. of the reductions; that is to say a total of £ 1, 560 million.
Of course, the figure of £4,500 million for the reductions does not show in the public expenditure account, because it was money given away by means of tax reduction. But surely it would have been better to have made that figure £4,000 million instead of £4,500 million, rather than have this Bill, because it is £500 million we are now asked to find through this Bill, although it was possible to redistribute £4,500 million a year ago. Of course, it is true that social security payments go to people more likely to spend than to save, but since the general level of personal savings is high at the present time I do not think we need worry too much about that.
The second comment I would make on the Government's basic argument in support of this Bill is that over one half of the figure of £20,000 million consists of contributory benefits financed from the national insurance fund, to which the revenue pays only 18 per cent. of the cost. And one half of those national insurance benefits¤that is, a quarter of the £20,000 million¤consists of retirement pensions. Pensions have not been increasing as a percentage of national average earnings. It is recognised generally that they are too low as a percentage of national average
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earnings; indeed this was stated recently in the other place by Mr. Prentice, the Minister for Social Security. And the cost of pensions has not raised the percentage national insurance contribution; the small increase which was made in that recently was primarily due to the increase in unemployment and in consequent unemployment benefit.
Expenditure on benefits in 1978–9 was one per cent. lower than originally estimated, and for 1979–80 some 3 per cent lower. So half of the expenditure was as anticipated and contained within the national insurance fund. One wonders whether national insurance benefits should be considered together with the rest of Government expenditure. Surely only the 18 per cent. found by the revenue should be so included.
The Government White Paper on Expenditure published at the time of the Budget this year states that expenditure on social security grew by one-third in real terms between 1974–5 and 1979–80. But half of that increase was caused by the introduction of child benefit as a taxfree allowance, accompanied by the phasing out of child tax allowances. Once the former cost of child tax allowances is taken into account, the increase is reduced to one-fifth, and part of that one-fifth is due to an increase in the number of pensioners, which was foreseen, and in the number of unemployed. In other words, a considerable part of the increase is due to an increase in the number of beneficiaries rather than to improvement in benefit levels. There has been a 10 per cent. increase over that period in pensioners, and of course they account for 50 per cent. of the cost of the total social security budget.
So we have to take these factors into account. Social security payments make no claim on resources; they redistribute income. Half the current expenditure is on national insurance benefits largely paid for by earnings-related contributions and satisfactorily coped with by the national insurance fund. Half the increase in social security expenditure since 1974–75 has been caused by the introduction of child benefit replacing income tax allowances, and part of that increase has been caused by an increase in the number of beneficiaries, pensioners and unemployed. When these are all taken into account

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the argument that £ 500 million must be lopped off the total of £ 20, 000 million immediately wears rather thin.
Now may I have a brief look at some of the measures contained in the Bill. We have already heard that Clause 1 provides for a reduction in the real value of a number of benefits: unemployment benefit, sickness benefit, maternity allowance, invalidity pension, industrial injury benefit, unemployability supplement, the increases for adult dependants paid with these benefits, invalidity allowance and its industrial injuries counterpart. I repeat that Clause 1 provides for a cut in the value of these benefits.
They are to be brought into tax, and this, as we have been told this afternoon, is merely an interim measure. But we do not know for certain whether, when they are brought into tax, the cut in value will be restored at the same time. There is the qualified pledge to do this subject to the availability of resources as far as invalidity pension is concerned. But that phrase "subject to the availability of resources" makes the pledge at best an aspiration, and at worst an escape hatch. In the interim the beneficiaries will be affected quite arbitrarily, and the cut will be borne by those who would pay no tax.
Invalidity benefit has been treated as a long-term benefit previously, and now a gap is to be opened up between invalidity pension and retirement pension. It is important that that should be closed, as the noble Lord, Lord Wells-Pestell, said. He also pointed out that that benefit has been subject to two cuts; as a long-term benefit it was subject to the cut under the No. 1 Bill, by which it is no longer linked to earnings as well as prices but only to prices; and now it is subject to the 5 per cent. abatement.
This clause also throws more people on to supplementary benefit at a time when we should be trying to reduce the over-large numbers dependent on that benefit. The clause also requires an amendment of the No. 1 Bill which aligned supplementary benefit and short-term benefits¤this Bill now unaligns them. Finally as regards this clause, there is the question of the rate of inflation. The Government propose to increase the benefits generally by 16.5 per cent., abating that by 5 per cent. for the benefits covered by this clause. But, with a rate of inflation at 20 per
1154
cent., it could mean a very much bigger cut than the 5 per cent. actually effected in these benefits.
Clause 2 deals with the earnings rule. We know that the Government do not intend to fulfil their pledge to abolish that rule within the lifetime of the present Parliament. But this clause, by abolishing the necessity to review the amount which a person may earn without deduction from his pension in the light of inflation, makes the earnings rule more and not less severe, and therefore goes in the opposite direction to the Government's pledge.
Clause 4 abolishes the earnings-related supplement added to unemployment benefit, sickness benefit, maternity allowance and widow's allowance. My party has argued since 1963 for earnings-related short-term benefits to cushion the immediate effect of unemployment and sickness and to avoid hardship. Having been the pioneers in that regard, and having seen our objective eventually achieved, we naturally look with disfavour on this clause. This clause also throws more people on to supplementary benefit.
Today I shall refer to only one more clause, and that is Clause 6. The right to strike, to withhold one's labour, is one of the rights which we acknowledge should be upheld in a free society. We may deplore the use which on occasion is made of that right. We may wish to see that right used less frequently than it is and used only as a last resort, but most of us in this House, I imagine, uphold the right. In my view the right is given to individuals and not to unions. Individuals may choose to exercise it in combination with others through a trade union. It is recognised practice that if they exercise the right they cannot claim supplementary benefit themselves, but they can claim it for their families. However, as a result of this clause, the family of a striker is to be penalised if he is not in receipt of £12 per week strike pay from a union. The individual striker cannot determine whether or not he is paid strike pay. If it is felt that the unions have a duty to pay strike pay, it would be more logical¤I do not say that it would be more desirable¤to place an obligation to do so upon the unions. It seems thoroughly unfair to penalise a striker's family because his union has not paid out strike pay.

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I think that I have said enough to make clear why we on these Benches question the need for this attempt to reduce the social security budget by £500 million per annum, and why we object to many provisions in the Bill. We do not support the Bill, but in accordance with custom we shall not oppose the Second Reading
5.4 p.m.
Lord BOYD-CARPENTER: My Lords, the noble Lord, Lord Wells-Pestell, made such an agreeable personal reference to me¤he is such an artist in doing that because it so disarms a counter-attack¤that I am glad that I can begin by expressing agreement with at any rate one thing that he said. At the beginning of his speech he said that this was not the type of Bill which called for much discussion in detail on Second Reading. I agree with him that, as the Bill contains a number of clauses important in themselves, but not necessarily directly related to each other, it is a Bill that calls for more detailed discussion in Committee and for fairly brief speeches on Second Reading.
Having said that I must then take issue with the noble Lord. While exercising his rhetorical powers to the full, he looked at the noble Baroness and said¤and I took down his words—
" by what right do the Government come forward with this Bill to save this money? "
The answer is quite simple: The Government come forward with this Bill, with its avowed intention of saving money, because that is what they were elected to do and because at the general election, only just over a year ago, the Government made it perfectly clear that it was their intention to cut public expenditure; and they made it frankly plain that cutting public expenditure is not something that can be done without difficulty and without causing pain and perhaps hardship to some people. So, in reply to the noble Lords, somewhat rhetorical observation "By what right?" I say to him that the Government have the full right in a democracy to do what they were elected to do.
The noble Lord went on to say that he preferred, to the savings to be effected by this Bill, the imposition of additional taxation. If he will allow me to say so, I think that that is a remark worthy of
1156
an economic Bourbon. For that is precisely the policy which the Government of which he was an ornament, pursued with unrelenting vigour for a number of years with consequences with which we are all wholly familiar¤consequences with which this country is still struggling. The concept that because there are nice things that one wants to do, good things that one wants to do, where one just goes ahead and does them and raises the necessary taxation to do them, is not a concept that, in fact, worked when the noble Lord and his colleagues were in office and sought to do it. They produced galloping inflation, unemployment and a falling off in output.
The noble Lord must face the fact that social security, like everything else, is dependent upon the growth and strength of the national economy. This is where I quarrel with the noble Lord, Lord Banks. He said¤and he obviously liked the thought, because he said it in fact three times¤that social security payments made no claim on resources. When I was Minister of Pensions and National Insurance, I used to try that on the Treasury, with singularly little effect. The difference between me and the noble Lord is that I knew that it was phoney, but I do not think that the noble Lord does. It really is not true. If it were true, how much easier it would be. How much easier Government, and particularly social security administration, would be. But it is not true.
It is all very well to talk about transfer payments, but there is first of all¤although it is the smaller point¤the administrative cost of extracting further revenue from the taxpayer, and then the administrative cost of distributing it to the beneficiary. Neither of those is negligible. However, one must think the matter through a little further. If one is to raise further taxation to avoid these economies, broadly one can do it either through increasing direct taxation or increasing indirect taxation. If one increases direct taxation, surely it is the clearest lesson of the last few years that by diminishing incentive, by driving abroad some of the most capable and higher earners, one in fact does damage to the economy. One can argue¤of course one can¤the precise point at which that begins to operate; but that it does so operate surely is only too abundantly clear from our experience over

1157
the last few years. All right, let us say that one does it by indirect taxation: but then, of course, one raises the cost of living, including raising it against the very people whom one is seeking to benefit.
I am sure that the noble Baroness on the Front Bench wishes that the noble Lord were right; but the truth of the matter is that social security payments impose a burden on the economy, and therefore it is absolutely right that they should be looked at, at a time like this, with very great care and consideration.
I have a good deal of sympathy with the noble Baroness and her right honourable friend. As I mentioned in passing a moment ago, for some six and a half years I was, as Minister of Pensions and National Insurance, responsible for our social security system. But I was responsible for it in very different circumstances from those facing my right honourable friend and the noble Baroness. I held that post mostly during the Macmillan era, which I am bound to say looks like something of a golden age when seen through the storms which have since occurred. At any rate, it was an age when every year the national product rose; when every year output rose; when inflation was minimal; when unemployment was minimal and when national wealth was expanding. Then I was able to say—and I used this expression on many occasions when I had the privilege in another place of bringing forward measures which very substantially improved our social security system—that it is right to give the least fortunate sections of our fellow countrymen a share in rising national prosperity. No one can say that today; there is no rising national prosperity of which to give anyone a share.
Therefore, it is essential that Ministers in charge of this vast spending department, which has an enormous expenditure, as we have heard repeated today, should look at it not with a view to reckless cuts and, above all, not with a view to harming anyone who is vulnerable, but with a view to sorting out the priorities. It was Aneurin Bevan who waid:
" The language of priorities is the language of socialism ".
Lord GORDON-WALKER: My Lords, "the religion of socialism".
Lord BOYD-CARPENTER: My Lords, it is certainly the language of government. The noble Lord Lord Gordon-Walker, who of course was closer to the late Aneurin Bevan, says "the religion of socialism". I thank him for that; it makes it rather more telling. I am infinitely obliged. I shall not confess that I cast a line over him. It is the language of government. We must sort out the priorities¤above all, in a social security department. Even in the Macmillan era the Minister then responsible had to look at priorities, concentrate on the most important and cut back on those less clamant in their demands. As I see it, that is what this Bill does.
I am bound to say that I derive a little cynical amusement from Clause 2. The noble Lord, Lord Wells-Pestell, was perfectly justified in "twitting" the noble Baroness a little on the point about the earnings rule and its relaxation. He will probably recall that about two years ago, when he sat in the noble Baroness's place, I supported him in an effort to prevent my noble friends, now sitting on the Government Bench, committing themselves too far to the abolition of the earnings rule. I had a very direct difference of opinion, both with my noble friends on that Bench and with the present Secretary of State in another place.
It is not that I am suggesting that the earnings rule—though it has survived for 32 years—is necessarily a good thing; but, as the Government now appear to accept, relaxation of it is a pretty poor candidate for priority when funds are limited. Let us apply our minds to who benefits from relaxation of the earnings rule. Only the younger group of pensioners—those within five years of retirement—and then only that section which has the good fortune to have the health and opportunity to be doing a job which brings them in, at the present figure, between £2,500 and £3,000 per year. These are admirable people; of course one would want to help them if funds were unlimited. But can any noble Lord say that in the whole of our social security system, with all our social problems, that is the case for the highest priority? Quite plainly it is not. I am delighted that my noble friend has now come forward with a proposal which at least halts the extension of the earnings

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rule. I shall venture the prophecy that when this Parliament ends, the earnings rule will still be there.
I return quickly to the other parts of the Bill to which I should like to refer. I am delighted to see the provision in respect of the limitation of unemployment benefit for the occupational pensioner. There is no doubt that in certain parts of the country this had the elements of scandal about it. To register for unemployment benefit for a type of work which one knows is non-existent in the area where one has decided to settle was certainly perfectly legal. But I do not think that those concerned are entitled to any very great sympathy if their unemployment benefit is moderately restricted, as is proposed by the Bill. Here again, applying if you like the hard test of priority, is payment of unemployment benefit to such people necessarily of the highest priority? Personally I do not think that it is.
On the broad and major question of the application of income tax to short-term benefits, I remain sceptical as to the administrative practicability of this. Obviously, Whitehall can do almost anything if it is allowed to employ enough staff to do it. But I am bound to say that I remain sceptical whether the extraction of a limited amount of income tax would justify the administrative cost in this respect. I think that probably the right course is what is being done in the shortterm and which will turn out to be the long-term; that is, to adjust the level of benefits as best we can to take account of the fact that they are tax-free and, therefore, should not be compared on a 100 per cent. basis with other benefits which are taxable. I would express the view again that when the Government come down to the hard tack of seeing whether these benefits can really be made taxable, they may well find that the game is not worth the candle, and that, therefore, the sensible thing is to continue the proposed temporary provision of simply a lower scale of benefit.
Finally, I come to Clause 6, the clause dealing with payment of benefits to the families of those on strike. I very much welcome the taking into full account of the income tax refunds. I could never see any logic in limiting the amount, of
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what might be quite a large tax refund that was taken into account in assessing benefit, to £4. There seemed no logic in it. In parenthesis, it has always surprised me how in the case of strikers the Inland Revenue seems to move with such unaccustomed celerity in making the repayments. It is my own sadder experience that whenever I have found that the Inland Revenue owes me a small sum, it has taken months, if not years, to obtain it. I have had to get down on my knees; I have had to write them long letters before the money could be extracted. But apparently if one goes on strike—and this is the lesson that I should have learned—one gets it all back in a fortnight. Be that as it may, I am sure that this is sensible.
Then I come to the limitation effected by the presumption that there is strike pay of £ 12 a week. I realise that this is a sensitive issue. I have no doubt that this lay behind what the noble Lord—I thought unjustifiably—said about the Bill being an attack on the trade union movement. I believe that one wants to think this matter through as coolly and as calmly as one can. A man who is on strike is unemployed, but he is a peculiar category of unemployed inasmuch as, to some extent—at any rate in theory—he is voluntarily unemployed. It is an open question whether the community, which may be suffering great hardship and loss from the strike action in which that man is taking part, should be compelled to take over from him his full responsibility for the maintenance of his wife and family. If a trade union with large funds, as most of the major ones have, decides for good reason or bad to call out its members to take strike action, I think there is a reasonable case for saying that it is up to that union to use some of those funds to relieve any possible hardship among the families of its members rather than to seek, as the Iron and Steel Confederation did in the recent dispute, to shrug the whole thing off on to the shoulders of the very taxpayers and ratepayers who were being injured by that strike.
Therefore, although I am perfectly certain that this proposal will be criticised, I would say to those who will criticise it with vigour that they may find that their

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fellow countrymen will see a certain reason in it. It is essentially a British compromise. There is undoubtedly a logical, intellectual case for complete disqualification from benefit. There is indeed perhaps an even stronger case—my noble friend may say something about this when she replies to the debate—for making such payments on a loan basis, subject to repayment after the dispute. But that there is a case for some limitation in the liability of the public to those who, in pursuit of their own increased earnings, are inflicting some injury on the community is, I think, a reasonable one. It is perhaps typical of the careful policy of the present Government in these matters—matters which this House will be discussing tomorrow and on some later days—of not applying what hard logic would say but accepting the very strong body of opinion that the situation as at present is not satisfactory and that some intermediate or compromise solution should be reached.
I promised not to go into the Bill in any detail and I keep to that promise. I am quite sure that this House, with its great experience, will want to discuss the Bill fully. As I have indicated, I do not agree with every word or line of it, but I agree wholeheartedly with its basic intention that, faced with the problems which this country of ours faces, even social security¤for which I fought for some years at one time, as my noble friend Lord Thorneycroft may remember—must be examined, its priorities rigorously assessed, and it is because the Bill seeks to do just that that I support it.
Lord WELLS-PESTELL: My Lords, before the noble Lord sits down, may I ask him to answer a question? Given that the Government were elected to save money, does he really believe that if it was included in the Tory Party Manifesto that that would be done to some extent by cutting down certain social security benefits, the Conservative Party would have been elected?
Lord BOYD-CARPENTER: I would ask the noble Lord to consult the Con servative Party Manifesto, my Lords, which unhappily I do not have on me at the moment; I do not actually carry it about. I think it made it abundantly clear, as did the speeches of the Prime Minister
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in particular, that no area of public expenditure would be immune from examination and, if shown desirable, reduction.
5.24 p.m.
Lord SOPER: My Lords, this Bill attracts my enthusiastic opposition, not particularly because I happen to sit on these Benches but because, as I believe in the language of priorities, it is ethically ill-natured, and therefore I find the various defences that have been put up for individual articles in its premises and suggestions may or may not be vulnerable, may or may not be suitable to the particular need of the present day, but in principle I want to give a number of reasons why I believe the Bill is wrong. My noble friend Lord Wells-Pcstell deplored the absence of any episcopal presence in your Lordships' House this afternoon, although that was somewhat remedied a little later on. He did not, very properly, refer to the absence of a spiritual presence, and I think I may arrogate to myself on this occasion the ability to speak for the Church, not only the Church of England but the Methodists and others, who in general principle would support the kind of objections which I will now briefly adduce against the Bill.
First of all, the social commitments of the Church of England are at one with those of the Methodists and others in cherishing the welfare state, and I cannot but think that this is an attack on the welfare state. It is not a Bill about social security; it is a Bill about the monetarist policy of the present Government, and for that reason I object to the title.
I do not believe you can call a rake's progress a pilgrimage of grace, and I have no intention of attempting to do that. I do not doubt that there are a number of very important financial reasons for which this Government believe it right to reduce public expenditure. Many of those reasons I would find agreeable. What I find disagreeable is that this is defended at the very point at which it is most vulnerable to the ethical attack, because it is here that the attempt is being made to deprive those who are least capable of sufficient and adequate means of support of the kind of financial abilities which have been all too meagre in the past

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and now will afflict 1, 750, 000 more people who will be impoverished to some extent by the provisions of the Bill if it goes through.
Secondly, I was a little daunted by the noble Baroness introducing the Bill when she ventured into the realm of saying how modest it was, which prompted me to think that here is probably the old question whether you defend (shall we say?) immorality by the presentation of the child of such excess claiming it to be of modest size. This particular Bill is of modest size, but that does not in any way detract, in my judgment, from the basic wrongness of the principle which underlies it, which afflicts not those who have very largely escaped already from the rigours of the kind of situation in which we find ourselves, but those who have already suffered very much more than the general reality of the community as we in this House are tempted to regard it.
I will not presume to draw too closely on many years of social service or social activity, but I am sure I speak for my friends in all the Churches in the recognition that we are still in the kind of society in which we have not properly assessed the sort of sufferings that belong to those who are impoverished, those who have the fear of poverty, as well as those who suffer from its actual conditions. This is a Bill which will fall unevenly and improperly on those who already are heavily burdened with problems which, if I may say so without offence, do not normally oppress those of your Lordships' House and the vast majority of those who read the Daily Express.
Venturing a further comment in this regard, I am sure that behind the Bill is the assumption, quite improperly set forth, that there is a great deal of scrounging that goes on and that it is necessary to tighten up the kind of social security principles which are now being very largely exceeded in many ways which are deplorable. I say with all the fervour and, I hope, with all the experience at my command that I have never been impressed by the argument that there are very many people in conditions of social privation who belong to the category of scroungers. In fact, it is only very rarely that those who are in health and physical wellbeing can be brought under that general
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condemnation. I reject with contempt those who believe it is necessary for us to protect society from the scrounging activities of the vast number of people who are poor and prefer their poverty being very largely supported by the state rather than that they should activate their own abilities to look after themselves. That belief is wrong; it is not true; and the evidence of the social activities of the Churches in no way supports that kind of assertion, which in my judgment is quite vindictive.
I turn for a few moments to the question of the striker. I consider that the proposals in this regard are probably the most mean and contemptible of all the provisions in the Bill. Not for one moment do I support every striker in all that he does; of course I do not. But here is the only weapon which he possesses in a capitalist society. He has been, and still is, at least under the conviction that he is subservient to principles which he cannot control and to activities over which he has no control. His weapon is the weapon of withdrawing his labour, and to try to punish his children and his wife for his attempt to secure some kind of social justice is to me a piece of impermissible depravity, politically, economically, and in every other way.
Let me conclude this very brief intervention by saying how much I regard certain elements of the Bill as requiring consideration in greater detail. I agree that there is a measure of abuse in the linking period. I agree that—as the noble Lord who has just resumed his seat pointed out—something must be done about the unemployment of pensioners. I am quite sure that we are in a position of economic difficulty, but in the long run it proves far more expensive to impoverish those who are already poverty-stricken and costs much more to recuperate them than is saved by the kind of reductions in emoluments and benefactions to which the Bill is committed.
Therefore I very much hope that, whatever happens on Second Reading, we shall regard the Bill as no satisfactory means—even in our present economic troubles—towards meeting genuine needs. Indeed, I hope that we recover our sense of priorities and the language and substance of those priorities, and that we see the danger in creating, as we are now creating, a deeper division than ever

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between the two communities in which we live: those who have, and those who have not, or who fear they have not. It seems to me that the only hope of the kind of recovery to which our friends on the other side of the House, and indeed the whole community, would be agreeable, lies in a community in which we share the burdens and do not unfairly impose on one section burdens which we are not ourselves prepared to accept. We are living still in a class society. This Bill does nothing to remedy it. For that reason I hope that we shall treat it very severely when it comes to Committee.
5.33 p.m.
Baroness VICKERS: My Lords, I am quite certain that the noble Lord, Lord Soper, spoke with great sincerity, and I have always admired him very much, but I do not accept his allegation that on this side of the House we are always accusing people of striving to get money in the way that he described; in other words, scrounging. I used to hold a "surgery"—and I suppose that the noble Lord has done so, too—every week when constituents came to see me. One could point out to them various means that they could accept if they wished to do so. I found most of those people extremely honest, and the only time that I ever worried about the situation was when there were instances of social security people going into houses to examine things after cases had been reported by neighbours, which I felt was a most unfriendly way of going about the matter.
With regard to the question of strikers, may I point out that at present we are in (he EEC, and that unions in every country except Ireland help with strike pay for families. So on this side of the House we are not taking an exceptional course in putting forward this proposal.
Surely one of the reasons for the need for the Bill arises from the fact that productivity is so low. It we had only 5 per cent. more productivity per man hour we should not need the Bill at all; and even then we should be working fewer hours than is the case in Germany. Therefore, if people in this country do not want this type of Bill, it is up to them to take appropriate action.
Perhaps it would be wise to consider
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for a few moments what has been done in one year. When we get to the Committee stage we shall be able to go into the details of some of the clauses; personally I am not in favour of all of them. However, I consider that in the past year a lot has been done. Pensions have increased since last November by 20 per cent. and they will be going up again by 16½ per cent. Thirty-thousand pre-1950 war widows now receive a pension, and all war widows are exempt from income tax. The Government have promised to protect the pensioners against price rises.
Attendance allowances, which are so important, have gone up by nearly 20 per cent. and are to be raised again. The mobility allowance has been raised from £ 10 to £ 12, and will be increased to £ 14.50 in November. Fifteen thousand disabled people aged between 63 and 64 have been phased into mobility allowance. So one cannot really say that this Government are not a caring Government when one considers these figures.
Child benefits are going up and payment is to be made in respect of the first child of one-parent families, the figure rising from £2 to £2.50, and in November it will go up to £3. The first £6 of weekly earnings by a single-parent family are to be disregarded for the purposes of supplementary benefit. A higher or long-term rate of supplementary benefit will be paid to single parents after one year, instead of two years as at present.
In 1948 unemployment and sickness benefits were taxed. Mr. Orme (whom I believe I can quote because he was a Minister at the time) stated in 1976 that unemployment and sickness benefits should be taxed. He said in relation to unemployment benefit, sickness benefit, and invalidity pensions:
" There is little doubt that in principle all benefits should be taxed ".
The noble Lord, Lord Banks, mentioned the question relating to pensioners earning £52, so I shall not speak about that today. However, we should remember that many of the unions have enormous funds. During a recent strike the ISTC and the blast furnacemen had assets of £11 million. So it seems rather unfortunate that the general public should have to subscribe in such cases, particu-

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larly bearing in mind what I have said about what is done in all the other countries in Europe.
Mr. Sheldon said in a debate in the other House on 23rd June 1977:
" Not only do I agree with the taxation of short-term benefits, but I think everyone who has been concerned with these problems has agreed with it".
So there are people in the party opposite who have considered this problem and have come out with statements such as that.
One should also remember that six out of every 10 people have free prescriptions. These people include pensioners, children under 16 years, pregnant women, nursing mothers, and low income groups. Seventy million pounds to £75 million is to be put forward to help low income groups with heating costs in the coming winter.
Peggy Herbison, who was very well-known in the party opposite and who was a very good Minister, wanted the full superannuation scheme. She disliked earnings-related supplements. She wanted a full superannuation scheme, but was overruled, and had to fall back on a minor scheme of earnings-related supplements. In May 1979, 176,000 unemployed people were receiving supplements, although the number registered as unemployed at that time was 1,247,000¤a rather interesting figure.
Like other Members of your Lordships' House who have spoken today, I do not like Clause 3 of the Bill, but I do not really understand it and I hope that we shall have it fully explained. I have read all that was said about this matter in the other House, but I am still not completely convinced regarding this particular clause.
In his last Budget the Chancellor of the Exchequer announced new measures to help charitable organisations in regard to covenants. The Wolfenden Report, in 1977, found that in personal social services the input of the voluntary sector, whether measured by man hours or by expenditure, was greater than that of the statutory services. So perhaps we shall now have to rely a little more on these splendid voluntary workers. That would bring about exactly what the noble Lord, Lord Soper, wanted: getting one section
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of the community to work with another section of the community; and I hope that it would not lead to the class distinctions that he mentioned.
I should like to end by saying that if we can get the Warnock Committee Report and a Bill on that soon, then I think this will mitigate a lot of the difficulties. Here, I would ask my noble friend to bear one thing in mind in the future. I notice that once again we have this phrase which I do not like very much, "statutory instruments". I do not like too much of the work of these committees, which should be in a Bill, put in the form of statutory instruments. I would much sooner things were put in the Bill at the beginning.
5.40 p.m.
Baroness GAITSKELL: My Lords, it is a pleasure to follow the noble Baroness, Lady Vickers, despite the fact that I do not agree with a word she has said on this occasion, though I often do agree with her. I am going to be very brief, for there is really nothing left for me to say after the marvellous speech by my noble friend Lord Wells-Pestell¤he said it all¤and the speech of my noble friend Lord Soper. There is really very little I can add to any of it; and as I have not studied the Bill well enough for my own satisfaction, I shall, as I say, be very brief. My noble friend Lord Wells-Pestell said that there was no need to have a second Social Security Bill. I agree with him, but not for the same reason, I think, as he put forward¤and I should like to underline this.
The Government have in fact forfeited the right and decency for this, because they have already had a second Social Security Bill¤for the rich! That is what they have had. This is not a Social Security Bill for everyone. The Government's Social Security Bill is one for the rich, and not for the poor. After all, when they were elected they could not be quick enough in cutting taxes for the richest 10 per cent. people in this country. This is not my idea; this is what they did. Now this Social Security (No. 2) Bill is busy continuing on exactly the same lines¤cutting the benefits for the poorer people in the country.
The Bill as drafted is remarkable for the English in which it is written. The

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words are as if the people who drafted it had some kind of sense of shame, because nowhere does the word "unemployed" appear in it. Nowhere is the word "unemployed" used. It speaks of the "interruption of employment". Has anyone heard that kind of language used about unemployment? After that, it speaks of the reduction or abolition of benefits: not of cuts, but of the reduction and abolition of benefits¤benefits for the less fortunate people in the country.
So we arc told that the Government intend to tax benefits, and the noble Baroness, Lady Vickers, agrees and recommends this because of Europe. My Lords, the countries of Europe are not the same as this country; nor have they to deal with the same kind of people. They have not got as many unemployed, and so on. The Government intend to tax benefits of all kinds, and many vulnerable people are going to be hurt. The basis of the Government package will be seen, or they hope it will be seen, as an attack on scroungers. Here, I agree with my noble friend Lord Soper. I always think that is the meanest kind of thing to say. No one talks of city scandals; no one talks of tax evasion; but when things go wrong they talk about the working classes as scroungers. As for strikers and strikes, however much we deplore strikes on occasion¤sometimes often¤it will be a sad day for this democratic country when people are not able to strike. Democracy will then have flown out of the window.
I should now like to give a few figures concerning the consequences of the cuts that the Government are proposing. The consequences are that unemployment benefit will be cut by £1.50 a week in real terms, and the invalidity sickness benefit will be cut by at least £1.85. If the same thing happens next year, as the Bill allows, then by 1982 unemployment benefit for a couple will have been cut by a total of £3.15 and invalidity benefit by £3.95; and injury benefit, which is paid for the first six months after an industrial injury, will fall by £1.95 per week. As for those with children, they will suffer even greater losses because of large cuts, in real value terms, in child support for those in receipt of national insurance benefit. I will not go on, but this is only the beginning. There are many more cuts just like these, and they all add up. The larger the
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family the bigger are the cuts in benefit. My Lords, that is all I have to say.
5.47 p.m.
Lord UNDERHILL: My Lords, I always find it a delight to listen to my noble friend Lady Gaitskell, because she brings sincerity and humanity to these matters, and that is what we are really dealing with. The noble Baroness the Minister was very honest when she made it quite clear in her opening speech that the purpose of this Bill is primarily financial. At one time it was my intention to tear up my notes and to follow my noble friend Lord Wells-Pestell in making an appeal to the consciences of noble Lords in this House, but on reflection I thought it best to deal with some of the points in this Bill in order to indicate that we have arguments, as well as a feeling of sentiment as to what it is correct to do in these matters. It has often been said that the test of a civilised society is how it looks after the children, the aged, the sick and the needy. Have we really reached such an economic state (and I will come to this question when I close my remarks) that we can survive only by hitting the needy in our society? Because that is what this Bill is doing. I am certain that the Minister cannot be very happy at having to introduce some of the proposals that are in this Bill.
May I look briefly at some of the points? First, there is the freezing of the earnings limit for retirement pensioners at £52. As has been mentioned, we could have expected that in November this figure would have gone up to £60.58. This, as has been mentioned already, is a complete reversal of the Conservative attitude on this point, which was that there should be a complete abolition of the earnings rule. I have here the quotation from the Conservative manifesto, but I will not weary your Lordships with it. But instead of raising the earnings limit as a step towards eventual abolition, this Bill is freezing the limit at the present unjustifiable figure. This is to save just a fraction over £16 million; and, as with other bodies, Age Concern has expressed its serious anxiety about what appears to them to be a reversal of policy which will hit the aged.
This is not the only measure in the Bill which will be a blow to pensioners. Your Lordships have heard outlined the claw-

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back of unemployment benefit paid to a person over 60 who is in receipt of an occupational pension, and have listened to what may have appeared to be very plausible arguments as to why this should be done. I should like to ask this. Apart from the principle involved, what is the philosophy which has determined the Government to decide on £35? Is it a figure just plucked from the air? Why £35? If it is not plucked from the air, what is the philosophy behind it?
I have read the debates in the other place and I have listened to the noble Baroness in her opening speech, and I cannot see yet the philosophy or why the figure of £35 has been struck. The only philosophy can be that of treating the occupational pension as if it were a payment from an employer. If so, the cut-off should have some relation to the national average earnings. We must not overlook that many of those who have retired with occupational pensions before reaching the age of 65, when they will be entitled to the full retirement pension, do so for a number of reasons¤some because it suits their way of life, others because of failing health, of declining physique and because they cannot continue until the age of 65. Others do so because they are following what have been Government pleas to retire at an earlier age. And many do so because when they assess what will be their lower occupational pension by going at 60 or 61 instead of waiting until they are 65, they estimate that, with the unemployment benefit, they can make ends meet. With the present proposals, these people will feel badly let down and deceived. I believe it is correct¤did I not see a report on it recently?¤that the National Union of Mineworkers has expressed its serious concern over the position regarding many miners who left before their normal retirement age. Despite the arguments put forward by the noble Baroness, there is the question of the contributory principle; that when contributions have been paid, benefits should be received.
We go on to the earnings-related supplements issue which takes effect from January 1981. This is going to hit many people who are out of work. I use those words and not the words of my noble friend Lady Gaitskell. Many of them will be
1172
the sick and disabled. The present effect on a person who had national average earnings in the previous year of, say, £95 a week, will be a reduction in benefit of £3.50 on their present entitlement. This is made worse by the fact that the earnings-related supplement will end in January 1982. What is the Government's justification for this? We often hear about the Conservative manifesto. I have not found that in the Conservative manifesto. We must recall that the original intention of the supplementary scheme was in order to cushion the effect of any sudden loss of earnings. Furthermore, as with the other proposals to which I have referred, this undermines the contributory principle; when you have paid in, you should get something back. Although I listened carefully to the Minister and to her explanation regarding the contributions that have been paid, I cannot see anything in the Bill to say that there is going to be a cessation of contributions. People will still be paying it and when it is finished in 1982 they will draw no earnings-related supplement. My noble friend Lord Wells-Pestell used a number of epithets. My view is that this is akin to cheating. No matter what may be the economic argument put forward, many people will believe they have been cheated over this and particularly those who have paid earnings-related contributions over quite a number of years, many of them getting older, many who are likely to go sick for longer periods; and there is also the question of the unemployment figures which are rising. They will feel they have been cheated when this is withdrawn in 1982. I should like the noble Baroness to indicate whether there have been any overtures either from the employers' organisations or from the trade unions that the earnings related supplement is no longer desired. I have no information about that. I should like to know why the Government have decided on this particular principle.
Your Lordships will know of the reduction of £12 from a striker's family entitlement to supplementary benefit. The noble Baroness was honest. It is not to save public expenditure. It could not be so because in 1979, I understand, the saving would have been only about £1 million and over the last 10 years something like £21 million has been paid. The purpose is clear. The Government

1173
seem to have made it clear. They hope the strikers will be forced to return to work because of the possible suffering of their families. That is the only purpose behind it. It ends a long-held principle in this country that a person in need should be helped by supplementary benefit. There is talk of substantial reserves held by the unions. I can tell you of unions who do not have these substantial reserves. When we come to discuss the Employment Bill in Committee, perhaps noble Lords will keep in mind the necessity to have maximum union membership so that the unions will have the funds to meet this proposal if it is endorsed by Parliament. One Member of Parliament in the other place, Mrs. Peggy Fenner, said:
" In my book, a man's first responsibility is to his family. I do not believe that his first responsibility is to his trade union ".
Those words, fatuous words, roll easily off the tongue. They show very little understanding of the workers' history and of the years of struggle in the trade union movement and the fact that men, with the support of their families over the years, have made sacrifices for their fellows in order to get the standard of living that we enjoy today and which we must hold on to. People have risked a lot for the things that they believe in. People do not make sacrifices for the fun of it. In my view, this particular measure is a blatant and unashamed attack on the position of the trade unions.
I should like to mention one thing that I do not believe has been mentioned in this debate. Do the Government really believe that this measure is going to assist good industrial relations¤which is what all of us want to achieve¤or a better understanding between the unions, the country and the Government? This is the last thing to help in that direction. I come to the last point of Clause 1 which is the fact that those on what are now called short benefits will have only 5 per cent. of any increase in prices in the annual review. Despite all the arguments, this is a blow to the unemployed, a blow to the sick, to the disabled, to those on maternity allowances. I will not go into the details which have been mentioned by my noble friend Lady Gaitskell. The figures may not seem a lot when we are talking of £1.15 or £1.20; we toss these sums of money over the bar for a couple of drinks.
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But to somebody on unemployment benefit or sickness benefit this is a lot. That is the aspect that we should look at.
The intention of the Government is that taxation of these benefits should commence in 1982–83 or "as soon as possible thereafter". In the meantine there will be the 5 per cent. reduction carried through into 1981–82 at least. Many of the people involved in this will be below the tax limit. They will not have come into the taxation limit unless something drastic happens to our tax laws by 1981. These people will have a reduction of 5 per cent. starting in November1980. I am not a great mathematician, but, if inflation continues at its present rate, they will be 5 per cent. down this November, 5 per cent. down next November and 5 per cent. down the following November, so that by the time the taxation comes in they will have lost 15 per cent.; and if the figures are to be compounded it will be more than 15 per cent. I should like to see how the Government can justify that.
The Conservative Manifesto said that all too often many poor people are little better off or no better off at work than they are on social security; and then it talks about restoring the incentive to work as if the incentive to work is linked to whether unemployment benefit is too high or whether it will drive people to work. If my interpretation is wrong, what other interpretation can be placed on this? I should like to ask how cuts in unemployment benefit will provide more jobs. Incentive to work must depend on there being jobs available. There are something like 650, 000 people on invalidity benefit. Most of these are under pensionable age and have always been regarded as longterm benefit claimants. These benefits have always up to now been in line for retirement pensions. Now they are to be regarded as short term and have the 5 per cent. cut. I like reading the Conservative Manifesto. On page 28 it says:
" Much has been done in recent years to help the disabled but there is still a long way to go. Our aim is to provide an inherent system of cash benefits to meet the costs of disability so that more disabled people can support themselves and live normal lives ".
So in this Bill we now bring disablement claimants from long term to short term. That is how we carry out the Conservative Manifesto.

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On 21st May in another place the Minister for Social Security, Mr. Prentice, stated in col. 529 of Hansard that only two hours earlier he had been addressing a conference of RADAR¤The Royal Association for Disability and Rehabilitation—where he set out the reasons for cuts. He said that is it was well received and very well applauded. I do not know whether other noble Lords have received the same communication as I have had from RADAR. They say¤and I will not quote it all, but just a few extracts¤that unfortunately some 250,000 invalidity pensioners would not be liable for tax anyway, and a further 150,000 would pay less tax than they will loose through abatement. These are the long-term sick for whom an invalidity pension is their sole income. They constitute about two-thirds of the recipients of the pension. It goes on to say that if the abatement is generally intended as a rough and ready substitute for taxation and not a permanent cut, there could be no excuse not to revalue the benefits when they become taxed. The noble Baroness the Minister referred to this. So far the Government have given only a qualified pledge to revalue the invalidity pension. It says that it is hoped that the House of Lords will write compulsory revaluation into the Bill. If the assurances we have been told about are correct, I hope that in the Committee stage we may write this into the Bill as a compulsory revaluation.
Now, if I may conclude, reference has been made to the equality of sacrifice. I want to use temporate language. I can remember 1931, the year after I came into politics, when we talked of the equality of sacrifice. "Everybody must go down 10 per cent." The poor unemployed went down 10 per cent. and there was a ladder going into the water and they went under the water. It is nonsense to talk about equality of sacrifice. If we have really come to the economic situation that it requires equality of sacrifice, that it means even the unemployed and the sick must share in the sacrifice, then I hope that the Government will take a look at its various measures. I will not weary your Lordships again with the £4½ million tax cuts, which have been belaboured by this side of the House time and time again.
1176
When one reads in the paper of extravagances, that two big concerns are likely to be in trouble because they are going to lose £20 million from casino gambling profits in the West End, of the £13,000 spent for a 188 year-old bottle of champagne, people say, "Where the devil are equal sacrifices?". I say that if we have got to that stage then let us carry out equal sacrifices. I do not believe that we have reached that stage and therefore I hope, as my noble friend Lord Wells-Pestell said, that members opposite will look at their consciences, that they will realise that in whatever arguments that we use we are striking a blow at people who can least afford to be dealt with in this way. Unless we are really indulging in party politics, we ought to make many amendments at the Committee stage of this Bill.
6.4 p.m.
Baroness MACLEOD of BORVE: My Lords, so much has been said this evening¤and the noble Lord, Lord Underhill, certainly waived right across the whole gamut of this Bill¤that I intend to be very brief. I know that there is a lot to be done during this evening's business. First, I should like to thank the noble Baroness for explaining this Bill to the House. I think I might be right in thinking that neither she nor any member of the Government really want this Bill. It is only forced upon us and the members of our country by the very serious economic situation with which we have been faced since we came into power. Nobody can say that we were not warned about this before the last general election. I remember my right honourable friend the Prime Minister warned this country before the genera! election that she could see that we were going to have a very hard time of it indeed. I am certain that it would be right to think that it should not be just one section of the population that should have the very hard time. I think that we all expected this. The severity of this Bill is something which is going to hit us all, but maybe that is correct.
When somebody this evening said that the Conservative Party was out as a Government to "do" everybody, I am sure that they were absolutely wrong. The Conservative Party throughout their history have had a reputation which is

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second to none for helping those classes to whom reference has been made this evening: the disabled, the out of work, the old-age pensioners and all the people that normally get our sympathy. But at this time, when the country is in trouble, they are going to be asked to pull their weight as perhaps never before.
I want to touch briefly on only two clauses. First, on Clause 6. The noble Lord, Lord Underhill, said that the strikers will be forced to return to work because they might well be short of money. There is nobody in this Chamber who does not know that any man or woman in this country does not have a right to strike. They have a right to withdraw their labour. I do not think that everybody in this country thinks that all should pay for that right. It is this and the reasons for it that is being dealt with by Clause 6. When one realises¤and presumably it is true¤that the card-carrying members attending the Labour Party Conference are representing thousands and thousands of union members, all of whom presumably are paid-up members of the various unions in the country, the wealth of the unions must be enormous. Where that wealth goes to, I for one do not know, except that, first of all, one presumes it goes to the Labour Party and then to paying the officials of the Labour Party. Surely it must be right that when somebody wants to strike and withdraw their labour the unions which have been the recipients of some of the wages that have been withdrawn should pay some of that money to the members. Surely the members are entitled to have some of that money. That seems to me to be absolutely logical and fair. Although some members obviously will not like it, I think that the majority of the country do. If the members have consistently paid in, and there are very few who do not have the privilege of paying in, then they should receive something other than guidance when they are in need.
The other clause that I want to refer to is Clause 4. As president of the National Association of Widows, I have been asked whether I would say something about the problems that will certainly be faced by widows as a result of Clause 4. Before I do that, I want to say how grateful a section of widows are to the Minister for Social Security on his announcement
1178
last weekend that their tax-free pension is going up from £30 to £35 a week. Those are the service widows. No other widows are allowed a pension, tax free. We are all delighted by this, but women become widows at all ages and their husbands, regrettably, die for many reasons.
We were very grateful and indeed gratified that the Chancellor in his Budget awarded new widows an increased tax allowance for the year of their husband's death. This help was warmly received by widows throughout the country, principally because it was the first time that all widows had received a tax relief. But, in this clause, we are made somewhat unhappy, to say the least of it, by the abolition of the ERS. While acknowledging that it will save the state £15 million, it is each individual new widow who will suffer a reduction just at the time (within the first 26 weeks) when she needs all the help, both moral and financial, that she can get. As a result of Clause 4 she will receive a flat amount £38 for the first 26 weeks of her widowhood: that, of course, is taxable. The ERS, which varies from £2.83 up to a ceiling of £17.67, is a great help at this difficult time. If that is withdrawn and the widow has no other income, she cannot claim supplementary benefit, as the amount she receives would be just outside the limit which is imposed. Unfortunately, it also makes worthless the new tax allowance which is given to widows by the Chancellor. The abolition of ERS will also be felt by widows over 60.
I had promised to make these points because widows in this country, as I think your Lordships have heard me say before, are a disadvantaged collection of women and it is up to those of us who have perhaps been through the mill to stand up and be counted when we think something is being done that will be to their disadvantage. Otherwise, I welcome the Bill.
6.13 p.m.
Lord PITT of HAMPSTEAD: My Lords, I shall not delay your Lordships very long, but I feel the need to stand up and be counted this afternoon and to indicate my detestation of this mean Bill. I would also wish to express my sorrow that the Government have felt the need

1179
to bring in such a Bill. The Bill hits at the most unfortunate sections of our society: the sick, the old, the infirm, the unemployed and the widows¤and it is an unnecessary Bill. I was glad to hear the noble Baroness say that her noble friend the Minister probably did not like having to introduce this Bill. I suspect that that is so; but the Bill is unnecessary because it claims to save the Exchequer £270 million next year and £480 million in a full year. We can achieve that quite easily from a slight increase in the taxes on cigarettes and alcohol. I am absolutely certain that very few people in this country would complain about paying a little more for their cigarettes and drinks in order that old people, sick people and widows may be better off. Therefore, I find it difficult to understand why, under the guise of trying to save public expenditure and of trying to run a tight economy, we should go to this length. It is an unnecessary length. Despite the rhetoric and the brilliant oratory of the noble Lord, Lord Boyd-Carpenter, I insist that this is an unnecessary length to which to go.
Moreover, not only are the Government doing this: they are also¤how shall I put it?¤demeaning themselves. Having committed themselves to the abolition of the earnings rule during this Parliament, then one year after election, they come with a Bill which aims at pegging the earnings rule at a specific level. That is not the way we would expect this Government to behave. Moreover, the abolition of the supplement¤and I am glad that the noble Baroness, Lady Macleod, should tell us of some of the difficulties that may arise from this abolition¤is a breach of faith. It is a breach of faith despite everything the noble Baroness, Lady Young, has said in her attempt to argue in favour of it. It is a breach of faith because people have been paying for these supplements and then, having taken their money, suddenly they are to be told that they cannot have them. If any insurance company did that, I know quite well, and I am sure that all Members on the ministerial Front Bench know, what would happen. Therefore I think the Government should look at this again. This is a very wrong approach. On this occasion the sum is not negligible, admittedly, but it could be obtained in some
1180
easier way; therefore I should like to appeal to all Members of your Lordships' House to look at this Bill again. During the Committee stage, let us try to remedy the situation. Speaking personally, I would want to destroy it; in fact I shall want to go into the Lobby against all the clauses in this Bill.
My last point concerns the question of the attempt to force strikers to behave more responsibly by hitting at their pockets or, rather, at their families' incomes. This shows a gross misunder-standing of what happens when workers decide to take industrial action. On my way here, I came along Portland Place, down Regent Street and passed the musicians' pickets outside the BBC. I do not really believe that if they knew that when, if, their wives went to collect social security £12 would be deducted from the money the wives could get, that fact would affect them in any way: it just would not. It would have no effect at all, because when people decide to withdraw their labour they are usually doing it because of some very strongly held principle. It may be that sometimes they are wrong; but usually they feel strongly about it, and by making things financially more difficult will not stop them.
I notice from much of what the Government has said, not only now but a year ago, that they believe the opposite is the case and that financial influence could in fact restrain industrial action. My honest view is that it will have the opposite effect, because what it will do is to inflame attitudes and, because those concerned will feel that they have been hurt and that the Government have acted spitefully towards them, it will be much more difficult to get them to behave in a restrained fashion. Therefore, my own view of Clause 6 is that it is a gross error, and when the time comes I hope that we shall act against that clause.
Lord CARR of HADLEY: My Lords, I am grateful to the noble Lord for giving way. The only question that I should like to ask him is: Does he not think it would be right and proper for the Musicians' Union, in the case he has mentioned, or the appropriate unions in other cases, to be under a greater obligation to help to support their striking members? That is, surely, in the best and oldest traditions of trade unionism.
Lord PITT of HAMPSTEAD: My Lords, the noble Lord, Lord Banks, answered that question and I agreed with him. If that is the view of the Government then, in the Bill that we are debating tomorrow in Committee, they should put an obligation on the unions to pay strike pay. They would fight it, as they will fight all the clauses in the Employment Bill, but I can assure the noble Lord and other Members of your Lordships' House that that would have a better effect than what is now being proposed.
6.21 p.m.
Lord PLANT: My Lords, the noble Baroness, Lady Macleod of Borve, gave me the impression that she thinks that trade unions have a great deal of money. They have not. The noble Baroness also said that trade union funds are used to support the Labour Party. They are not. It is the political funds of trade unions, to which members may or may not subscribe, which are used.
As other noble Lords have dealt very fully with the taxation issues and benefits in this Bill, I want to confine myself to two clauses which demonstrate the Government's desire for further economies. Clause 2, which overturns a directive of the principal Act, that the earnings rule should be reviewed every tax year, is surprising from a Government which said that they would work towards abolition of the earnings rule. Then, under Clause 5 of the Bill, male occupational pensioners aged 60 and over, who are in receipt of an occupational pension of £35 a week or more, will have their entitlement to receive unemployment benefit restricted. The noble Lord, Lord Underhill, philosophised as to why the figure of £35 was selected, and I hope that the noble Baroness, Lady Young, will give us an answer to that in the winding-up speech.
Clause 5 permits the Secretary of State to take account of all the retirement benefits received by the pensioner in assessing the amount of his pension, even though the benefits may not actually provide the pensioner with an income. Attempts to introduce provisions on the lines of Clause 5 are not new. The question was first raised with the National Insurance Advisory Committee in 1966, and draft regulations were drawn up in 1968 under the National Insurance Act
1182
1965. Although the draft regulations were modified they were not, in the end, proceeded with. A third attempt to restrict occupational pensioners' entitlement to unemployment benefit was made in 1976 by the Labour Government, but was eventually dropped. Now that the Social Security Bill is in this House, this issue seems to have gone though the other place in its stockinged feet.
The main reason given by the National Insurance Advisory Committee for restricting benefit was the "serious misuse of the national insurance scheme "and the" potential misuse of the national insurance fund". They said that there "was extensive public criticism of the present situation". This clearly took no account of the widespread public criticism of attempts to restrict the entitlement of a group of unemployed claimants, which successive Governments have made. It is clearly an abuse of the national insurance scheme to deny to a group of contributors any entitlement to benefit under the scheme.
As I understand the position under current legislation, a claimant for unemployment benefit must show that he is available for suitable employment and must sign a declaration to that effect. He must prove both that he is unemployed and, also, that he is available for employment. In the case of a claimant who has retired from his regular occupation, his advancing years might place some restrictions on his availability for employment, and for this there is provision in the existing regulations. Any restrictions on his availability must be reasonable for a claimant to be awarded benefit, and benefit can be withheld where the restrictions on his availability are such as to preclude all hope of further employment.
It may be said that in areas where there are very few vacancies which are suitable for occupational pensioners, it is difficult to test whether such claimants are, in fact, genuinely available for work. The criterion for benefit for all claimants, whether or not in receipt of an occupational pension, should remain one of genuinely seeking work. Otherwise, different treatment would apply in different parts of the country, and in areas of high unemployment, where there were very few vacancies, very few claimants would be entitled to benefit. There is no more

1183
reason to doubt the integrity of occupational pensioners in genuinely seeking work than there is of any others in the same age group who leave work for a variety of reasons and seek new employment. Where abuse is suspected, there are ample powers already existing to refuse benefit.
I feel very strongly that it is wrong to require a person to pay contributions to the national insurance scheme and then to deny him¤and I emphasise" him", because this applies only to men¤any prospect of claiming benefit, even though in all other respects he would be entitled to benefit. To pick out a group of occupational pensioners and say, "You may not expect to receive unemployment benefit, but if you do find another job you will still be required to pay full national insurance contributions" cannot be reasonable by any standards.
The national insurance scheme already discriminates between men and women in the retirement age. The provisions of Clause 5 will affect only male occupational pensioners, thus further extending the discrimination between the sexes to the disadvantage of men. Between the ages of 60 and 65, a woman who is entitled to the same occupational pension as a man¤if, for instance, they retire from the same occupation¤and who is receiving a national insurance pension in her own right, will have a total income which is greater than that of her male colleague whose occupational pension, and any residual unemployment benefit which might still be payable, will be well below the national average earnings.
The clause will introduce discrimination between those who have provided for their old age in an occupational pension scheme, and those who have made other forms of provision or none. Public servants have accepted the social need for a national insurance scheme and have faced ever-increasing levels of contributions, only to find that many of their occupational benefits are abated on account of national insurance benefits. This further curtailment of benefits, which at present can be claimed only in genuine circumstances, will be regarded by all public servants as a further attempt by the Government to make a substantial number of them bear the main burden of
1184
our current economic ills. The Inland Revenue allows an occupational pension scheme to have a rule which provides for commutation of a quarter of the pension. This is optional. The lump sum is 10 times the commuted part of the pension. It follows, therefore, that more men will commute up to an amount which will reduce the pension element to £35 per week.
The Government's determination to reduce the numbers of people employed in the public services will inevitably mean that more and more of them will be compulsorily retired at age 60. No matter how genuinely they may be in seeking another job, they will be denied unemployment benefit which they may be claiming for the first time after a lifetime of public work and a lifetime of contributing to the national insurance scheme.
In this respect, and the other provisions of this Social Security Bill, the Government seem determined to renege on the principle inherent in the national insurance scheme, which is that the payment of contributions establishes a right to benefits. This unnecessary Bill hits at a wide range of beneficiaries who are among the poorest and the weakest of our community.
6.31 p.m.
Lord WALLACE of COSLANY: My Lords, we have had quite an excellent debate, although the number of speakers is comparatively small. I have made some calculations based upon the speeches which have been made and I have come to the conclusion that this is a most unpopular Bill. There were four speeches in favour and seven against. I only hope that at the Committee stage there will be a similar reflection when it comes to some of the amendments.
Of all the Bills brought forward by the Government as economy measures and also, we must not forget, to finance the hand-some income tax relief to the better off this is the most despicable and penal Bill that has so far been introduced as an economy measure. To some extent it can even be charged to be fraudulent. The sick, the injured, the unemployed and the pregnant are all due to suffer a 5 per cent. reduction in their benefits next November, because the Bill provides for an up-rating which is 5 per cent. below the rate of inflation. Those who

1185
would have been eligible for earningsrelated supplements as well will lose that right because, in a move which would have prompted a Department of Trade inquiry if it had been tried by a City insurance company, the Government are abolishing the scheme. Some of the sick and unemployed have been contributing for 30 years or more to the scheme.
Nothing in the Conservative manifesto, or indeed in speeches during the election campaign, remotely suggested such measures. It is all very well to refer to a generalised statement of cuts in public spending, but there were no detailed statements particularly relating to these measures. The noble Baroness, Lady Young, gave some complicated explanations of the legality of the move, but I can say this to the noble Baroness and to the House as a whole; to those affected it will not be accepted or understood. Their simple statement is that they have paid their insurance dues and they expect their benefits. With that statement one cannot quarrel.
On this, the Government have no mandate. Even as an interim measure, if such it be, it is an unfair burden on the most vulnerable members of our society. Certainly the right honourable gentleman the Minister in the Commons gave an undertaking on invalidity benefits and unemployability supplements, subject to availability of resources. If there were ever a beautiful get-out, that statement is it, because we know that any Government department making a cautious statement like that would hardly ever be rushing in to provide the detailed answer that the people expect.
For a moment I want to come to the attack on strikers' wives and children. This was mentioned in the Tory manifesto. It must be recognised, and I recognise it only too well, that this attack has a popular soap-box mob appeal, particularly to those young enough or wealthy enough not to remember the bitterness, the misery or the heartache involved in the early struggles of the trade union movement for social justice and against the exploitation of workers. Starvation was the weapon then. "Starve them out" was the cry. Are we on the downward path of return to those days? This may sound like exaggeration, but behind this is the point that they are reducing the
1186
possibility of people being able to strike because of their wives and families. And the effect on wives and families is a reduction in the family's chances of a reasonable standard of living.
I ask the House to remember¤and I am sure that the noble Lord, Lord Carr of Hadley, will appreciate this point¤that even as matters stand at the moment, before the Bill becomes operative, strikers, and particularly their families, face tremendous sacrifices and hardship. Not all strikes are wildcat. Union leaders do not put their members at risk in an official dispute without realising the effect on their members and their wives and children. Remember this, my Lords: not all strikes are the fault of unions. Management also can bear responsibility for strikes. It is always the unions who are blamed, particularly by the mass media and many unthinking people in the country. This move can only increase bitterness and class division. It will not improve good industrial relations. It is a foolish move. It is an act of vicious spite, no more and no less.
To revert to the disabled and the sick, for a Government which came to power with many promises to the chronically sick and disabled the effect of being in office seems to be a concentration of cuts to the disadvantage of these people, some thing which, in the mildest of terms, can only be described as insensitive. It is not only the severe cuts imposed in the Social Security Bills, but also the threat to personal social services brought about by economy pressures forced upon local authorities by the Government. Even before economies were announced, the provision of such services as home helps and meals on wheels in a number of areas was well below the standard considered necessary by the Department of Health and Social Security. It is far better to keep people in their own homes rather than force them into institutional care¤and, indeed, it is more economical. Cuts in personal social services are false economy as well as being against the better interests of the handicapped and the aged. The effect of these cuts, allied to the provisions of the Bill, is an unfair and callous burden, bearing in mind those generous income tax cuts in the Government's first Budget.
I do not intend to develop an argument on the monetary policy of the Govern-

1187
ment, or as to whether cuts in public spending are necessary or otherwise. My simple and direct view is that if sacrifices are needed, then the last sections of our community to be affected should be the disabled, the sick, the unemployed and the aged. Let the wealthy, the healthy and the securely employed carry the burden. Here in this Bill we are penalising the sick, the injured, the unemployed and the pregnant. This is unjust and against the principles of a caring community. Despite party three-line whips, this House enshrines the right of every Member to vote as conscience dictates and not as the Chief Whip dictates, with persuasive Government guardians on the doors. This House, irrespective of party pressures, has already asserted itself on school transport. In accordance with tradition, we shall, albeit with the greatest reluctance, give this miserable Bill a Second Reading, but, when we reach the Committee and Report stages, important amendments will inevitably appear to protect the disabled, the sick and the unemployed. Is it too much to ask that noble Lords and noble Baronesses will examine and consider their consciences and vote as their hearts¤and not their parties¤dictate?
My Lords, the disabled, the sick and the unemployed await your decision¤and it must be your decision¤on this Bill which is imposing great hardship. It is no good dodging the question and putting party first. There are in this Bill things which must be removed, and I ask the House to support us in the Committee stage.
6.41 p.m.
Baroness YOUNG: My Lords, we come to the end of a most interesting debate on this Bill and I should like to begin by thanking my noble friends who have spoken in my support and particularly the noble Lord, Lord Boyd-Carpenter, the noble Baroness, Lady Vickers, and the noble Baroness, Lady Macleod of Borve, for giving such vigorous and effective support.
At the beginning of the debate the noble Lord, Lord Wells-Pestell, asked the question: What is the purpose of this Bill? Why, after the No. 1 Social Security Bill which we have just debated and passed, should we have a No. 2 Bill? The answer to that is quite straightforward.
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This Bill is part of the Government's Budget strategy, as I made clear in my opening speech on it; and whatever the noble Lord, Lord Soper, may say¤and he said a great deal in the course of his remarks¤it is not a Bill which has anything to do with scroungers or the work- shy. Indeed, the Bill is not directed against scroungers, although some of the provisions are in areas where there is some scope for abuse. One was identified by the noble Lord, Lord Boyd-Carpenter, and if there is scope for abuse it is of course in regard to occupational pensioners who draw unemployment pay and who are not in fact available for work. But it is not intended to be against them. Fraud is not a matter of people at risk taking undue advantage; it is a matter of people without entitlement pretending that they are entitled. I think we must keep this whole matter in proportion, and it would be most unfortunate to think that the whole purpose of the Bill is something which it is not.
As I have said, it is part of our overall economic strategy. We may disagree about this strategy but, as my noble friend Lord Boyd-Carpenter made clear, the Government of the noble Lords opposite were not particularly successful when they were in office, when the mangement of the economy was in their hands. I believe even the noble Baroness, Lady Gaitskell, will recall that they too were obliged to make very considerable cuts in Government expenditure at the behest of the International Monetary Fund. They were obliged to do it because outsiders told the Government that they must, but what we are doing is considering very carefully all aspects of Government policy in making the decisions that we have come to. Indeed, I and my colleagues hope very much that our strategy will be successful. We hope this for many reasons, not least because if we are a richer and more prosperous country we can provide better benefits for those least able to help themselves.
In the past our record has shown that we have been successful in the management of the economy and we have provided good benefits. Why then, I have been asked, have we looked at the social security budget? We have looked at it because we believe that all aspects of Government expenditure must be con-

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sidered and that we could not ignore the vast amount that has been spent.
There was some considerable discussion as to the basis of this and I think I can do no better than to quote what my right honourable and learned friend the Chancellor of the Exchequer told another place in his Budget Statement on the 26th March. Referring to the social security programme he said:
"Its volume has grown by about 50 per cent. in the last 10 years, allowing for both inflation and the switch from family allowances and child tax allowances to child benefit. That rate of growth is more than three times the 15 per cent. increase in gross domestic product over the same period".¤[Official Report, Commons, 26/3/80; col. 1458.]
If one looks at the factors which have led to this growth, one sees that they include both demographic and economic changes, that is more old people and more unemployed and real improvements in benefits. Broadly speaking, the changes can be summarised as follows. Expenditure in 1970–71 at 1979 survey prices was about £12,000 million. Between that year 1970–71 and 1979–80 were added £800 million for more people unemployed, £1,100 million for more old people, £2,500 million for real improvements in pensions, £800 million for new benefits, excluding child benefits and £1,500 million transfer of child tax allowances to child benefit and £300 million for real improvements in family support. That adds up to a total expenditure of about £19,000 million or 27 per cent. of total public expenditure. It is hardly surprising that, however difficult it may have been, the Government felt that they ought to look at this vast area of Government expenditure.
I now turn to the detailed points which have been raised on different aspects of the Bill. There has, I think, been general agreement that short-term benefits should be taxed. Concern has been expressed about the interim period between the situation now and when these benefits in fact will be taken fully into tax. I recognise in this that there is an element of rough justice about it, but I should like to correct the figures given by the noble Lord, Lord Underhill, in this regard because they were not quite right. So far as invalidity benefit tax is concerned, 100,000 would pay less tax than they would get in abatement; 150,000 would pay no tax at all. That makes a total of
1190
250,000, not 400,000 people to which he referred. However, that 250,000 must be seen against the 650,000 beneficiaries, most of whom will not be worse off, although I accept, as I said at the beginning, that there is an element of rough justice in this.
The noble Lord, Lord Underhill, also asked about the 5 per cent. reduction carried through to the later years of 1981¤82, and I should like to make it clear right at the start of these proceedings before we go into Committee, that we have taken no decision at all on the 5 per cent. abatements in the following years, 1981 and 1982. I think it is important to make that point quite clear.
The noble Lord, Lord Boyd-Carpenter, asked whether in fact it would be less expensive or whether there would be savings once these particular groups of people were brought into taxation. I think the answer is that earlier schemes were very expensive in numbers of staff, and he made that point, but with unemployment benefit the scope for the use of computers and the fact that tax will not be deducted currently but normally after the return to work, will reduce the staff cost. So, too, does the transfer to employers of responsibility for the first eight weeks of sickness, which the Government propose in their consultative document, the Green Paper to which I have referred. So we believe that the tax scheme as envisaged will be more economical of staff than earlier versions.
Turning to Clause 2, I should like to reassure the noble Lord, Lord Wells-Pestell, who referred to this, that it is our intention to abolish the earnings rule as soon as possible. That remains our long-term commitment. But as I believe that I should be generous to my noble friend Lord Boyd-Carpenter I will accept his teasing of the Government on this particular point and I will take his strictures to heart. He had a good point to make and I do not blame him at all for making it on this particular occasion. However, I do not feel quite so generous to the noble Lord, Lord Underhill, who tried the same point, because, if I may say so, had he been here when his Government were in office he would have found himself on my side and not in fact making that argument at all.

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I turn now to the points which have been raised on Clause 3 about the linking. The noble Baroness, Lady Vickers, said this was a very difficult clause, and I agree with her. If I could put it in terms which I find somewhat easier to understand than the way it is put in the Bill itself, I think the problem arises if one takes the example of a man who has had a heart attack and is therefore off work and who wishes to go back to work and rehabilitate himself. Under the present situation he has up to 13 weeks to rehabilitate himself. He may have short periods of sickness, but during that time he is able to claim invalidity benefit. We originally proposed that this period of time would be reduced to six weeks, but after a great deal of discussion in another place we have increased this to eight weeks. He will have eight weeks to rehabilitate himself; after that time he will not get invalidity benefit should he be off sick, but he would have sickness benefit. I think taking a particular illustration makes it easier to understand than it is as set out in the Bill.
Clause 4, on the earnings-related supplement, has roused a very great deal of criticism and we have been accused of a great many things, including fraud. I do not wish to ask noble Lords opposite to do a great deal of extra work before Committee stage because I am sure we are all going to be very busy indeed. But I would like to refer them to the words that I used at the beginning on this point. There was a great deal of discussion about the principle, and whether or not we were taking away a benefit for which people had already paid. It is. therefore, very important that we should set out the facts correctly. I hope those noble Lords who have raised points on this will read what I have said once again. I suspect that at the end of the day they do not want to be confused by the facts of the situation, but I really do not think that we are committing the kind of sins attributed to us.
The noble Baroness, Lady Macleod, made a very interesting and important point on this clause, about widows. I listened with very great care to her speech; I recognise her great concern and knowledge about the difficulties that widows have. Clause 4 affects earnings-related additions to widows allowance.
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The flat-rate widow's allowance is higher than all other short-term benefits, and the allowance goes to younger widows who may be working before and after bereavement. I hope this statement may be some help to her. It is a matter on which I recognise she has a great deal of know ledge, and I shall certainly read very carefully what she had to say.
Turning now to Clause 5, the noble Lord, Lord Underhill, asked me an important point as to why we had chosen the figure of £35 for those with occupational pension schemes. The figure was chosen simply as a measure of a substantial pension. About 50 per cent. of occupational pensioners get less than £35 a week. With the £35 figure some unemployment benefit would be payable to a married couple with a flat rate unemployment benefit until the occupational pension exceeded £68 a week. The noble Lord, Lord Plant, also raised an important point about availability for work for those in occupational pension schemes. I referred to this in my earlier remarks. I should like to emphasise again that it is difficult to test availability for work, because employers are reluctant to take on people over 60 years of age; 56 per cent. of those likely to be affected who were interviewed in a survey admitted in the survey interview, though not of course to the benefits officer, that they were not looking for work, and this illustrates the point. So we feel that we are right to make this new arrangement. I was very pleased to have the support of my noble friend Lord Boyd-Carpenter for putting right what could be regarded as an abuse.
I turn now to Clause 6. I was grateful for the intervention of my noble friend Lord Carr on this. I recognise that Clause 6 is a very sensitive issue. I should like to make it clear that it is not in any way intended as an attack on trade unions. It is an issue on which we did fight in the general election, and we did indicate that we would be bringing forward legislation were we to be elected.
A number of points have been made and I will try to deal with them in the order in which they were made. The noble Lord, Lord Banks, raised a number of points. He advocated recovering the £12 from the striker rather than cutting the benefit. The answer to this is that recovery of

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benefit from all individuals would not be practicable. It would have to be done through their employers, making extra work for them, and indeed for the Department of Health and Social Security. It would also prolong ill-feeling caused by a strike, for weeks or even months after the strike was over.
Lord BANKS: My Lords, I am grateful to the noble Baroness for allowing me to intervene. I did not actually suggest that, but I fully understand the argument she has put forward against it.
Baroness YOUNG: My Lords, I am sorry if I misunderstood what the noble Lord said. I will certainly read his remarks and see if there are other matters to which I should refer when we come to this in Committee. He also said that it might be better to place the obligation on the unions to pay the £12 strike pay, because the individual cannot determine whether or not the strike pay is to be given. I think the answer to this is that the only practical way to enforce such an obligation would be to legislate for recovery of part of the supplementary benefit from the union. This would be cumbersome and administratively very costly, and would, I believe, be very bad for industrial relations. It does seem to us far better to leave it to individual trade unionists to influence unions democratically to pay a proper level of strike pay rather than to intervene in this particular way.
The noble Lord, Lord Underhill, referred to the estimate of £1 million savings on the basis of benefits paid to strikers in 1979. This figure is correct, but I think he will recognise that during the steel strike in 1980 the total benefit paid out was over £9 million. Clause 6 would have saved over £4 million on this strike alone. Incidentally, the amount paid out over the previous 10 years was very nearly £30 million, not £21 million as the noble Lord stated. For these reasons, we believe it is a fair clause. It is not intended, as I say, as an attack on trade unions, but is a recognition of their responsibility in supporting their members when they are out on strike. We hope it will be seen as something which is a fair measure.
In winding up, the noble Lord, Lord Wallace, made an impassioned appeal to the House against this Bill. I am very
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pleased to feel that he thinks this House has a virtue and has some point in speaking out about this Bill. We sometimes wonder¤particularly in view of some of the remarks made on Saturday at another conference¤what noble Lords actually feel about this House. However, we will accept his sincerity and his colleagues' sincerity in this matter, and we shall look forward to debating with them on the Committee stage.
I should like to conclude with the very important proviso that I made at the start of my speech on this Bill. It is true that this is a tough Bill. It is one that is designed to save money. But, nevertheless, the Government have taken steps to protect the elderly, and they will continue to do that, and those on supplementary allowances. Although it makes a saving in some directions, one must remember the fact that, at the end of the day, there will be an extra £3, 000 million being spent on benefits, regardless of what this particular Bill is doing in other respects. I therefore hope that I shall have the support of the whole House when we come to the Committee stage of the Bill.
On Question, Bill read 2a and committed to a Committee of the Whole House.

PORT OF LONDON (FINANCIAL ASSISTANCE) BILL
7 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that this Bill be now read a second time. The purpose of this Bill is to provide statutory authority for the Government's financial assistance to the Port of London Authority. Two years ago, the last Government promised the authority some £60 million of aid, and on 7th December 1979, my right honourable friend the Minister of Transport announced in another place that we were prepared to continue that assistance at essentially the same level in order to restore the PLA to profitability. The Bill marks, therefore, the acceptance by this Government of an inherited obligation towards the PLA, although, as I shall indicate, our approach is rather different from that of the last Administration.

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First, I should like to outline the changes in the ports industry, and particularly in London, which have made this Bill necessary. As the House knows, the ports industry has seen dramatic changes over the last 10 to 15 years. These have been due mainly to changes in freight handling technology, which have meant changes from traditional and labourintensive methods, to mechanical cargo-handling, generally referred to as the container revolution.
This change has had two major consequences. First, there has been a dramatic reduction in the demand for labour in the ports. In London, the number of registered dockworkers has fallen by over 70 per cent. since 1966, from 25, 000 to 6, 500, yet the port still has a manpower surplus. The second consequence of the container revolution, and the growing use of bigger ships, is that a great deal of traffic is being handled at specialised facilities, including container terminals, rather than in the old enclosed docks. In London, traffic has moved out of the Upper Dock systems, into facilities down river at Tilbury, to specialised river wharves, and in some cases it has left London altogether and gone to other ports. This is illustrated by the fact that the amount of general cargo handled by the PLA, most of which comes into the Upper Docks, has fallen from 6 million tonnes in 1970, to about 2 million tonnes in 1979.
As the United Kingdom's largest traditional port, London has suffered more than others from these changes. The dramaticdecline in manpower requirements of the port have made it necessary for the PLA to reduce the size of their own workforce, both registered dockworkers and staff. There have also been successive closures of dock systems in London, and the failure of most of the private stevedoring companies which worked from them. Under the arrangements which govern conditions of service in the ports industry, the Port of London Authority has, since 1973, had to take on nearly 5, 000 surplus registered dockworkers from other employers who have gone out of business, at a time when the authority itself has surplus manpower. Finally, London suffered a reduction from 16 per cent. to 12 per cent. in the 1970s in its share of Britain's port traffic.
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Since 1975, the authority's financial position has deteriorated rapidly, mainly because of the slump in world trade, and the changes in traffic which I have mentioned. In 1976, the last Government appointed Price Waterhouse and Company to provide an independent report on the authority's financial position and prospects. Subsequently, in June 1977, they agreed to stand behind medium-term loan facilities of £15 million, made available by Lazard Brothers, as agent for a consortium of banks. This loan was intended to help the PLA pay for the severance of surplus staff, and to refinance certain short-term borrowings.
But the PLA's financial position continued to deteriorate, and in July 1978, the then Secretary of State for Transport announced further assistance, in the form of £35 million in grants towards severance costs, and backing for a further £10 million of commercial borrowings. He also insisted that, contrary to the PLA's own proposals, the Royal Group of Docks should be kept open. But grants towards severance costs were made conditional on agreement with the trades unions of specific targets for manpower reductions. In October 1978 the PLA and the trades unions submitted a jointly-agreed Short-Term Trade and Manpower Plan, covering the period May 1978 to June 1979, which provided for manpower reductions of nearly 1, 500, divided about equally, between registered dockworkers and staff. In the event, about 1, 100 severances were achieved. Under a second short-term plan, submitted in June 1979, a further 1, 000 severances have been achieved so far, and more are in the pipeline.
Last June, the PLA submitted its strategic plan for the five years 1979–83 to the Minister of Transport, and again Price Waterhouse were asked to review the plan. Copies of the strategic plan and the Price Waterhouse report on it are in the Library. Price Waterhouse said that the PLA's preferred strategy, which it called the "concentration option", for the retention of a reduced level of cargo-handling facilities in both Upper Docks, did not appear to chart a course to viability. The other option presented in the plan was for the transfer of operations out of the Royal Docks, to the India and Millwall Docks, and Tilbury.

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In reviewing his policy in the light of the Price Waterhouse report, my right honourable friend the Minister of Transport decided that the Government should not involve themselves in the management of the PLA, but should aim to meet the obligation they had inherited from the last Government at least cost to the taxpayer. Consequently, my right honourable friend announced that assistance to the PLA would be subject to a strict financial limit, equal to the minimum needed to continue with the most rapid possible rundown of manpower, and to plan for the quickest possible return to viability. Subject to adjustments to cope with inflation and the latest forecasts, we have therefore set the limit of financial assistance at the level promised by the last Government in July 1978. Decisions on the retention or closure of docks, or indeed on any other management matters, are the responsibility of the PLA board, which consists of men appointed for their experience in commercial management.
We have every confidence that the authority is determined to achieve viability. As the House knows, it announced on 3rd March, that PLA general cargo-handling in the India and Millwall Docks would have to cease, because it had concluded that it was no longer possible to pursue the concentration option. In making that decision, the main factors it gave were losses amounting to £4 million in the first two months of this year, including about £2 million arising from the two-week strike over pay, and the insufficient movement towards implementing the changes in working practices, which have been identified as essential to the improvement of the PLA's competitive position. The authority therefore concluded that it could not continue to operate both of the up-river dock systems, and, at the same time, stand any chance of staying within its financial limit. Clearly this was a difficult decision. Nevertheless, I am convinced that the approach we have mapped out is the correct one; if the PLA and the unions continue to work together, there is no reason why the Port of London cannot once more become profitable, and play its part in the prosperity of London and of the British port industry.
Turning to the specific provisions of the Bill, the House will see that it provides first for financial assistance for measures to restore the authority's profitability through
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a reduction in the number of its employees; and second, for assistance for the carrying on of the undertaking while these measures are being taken. It has been argued elsewhere that this objective is too narrow and that surplus manpower is only one of a number of problems faced by the PLA. While it is true that surplus manpower is not the only factor affecting PLA's profitability, it is the overriding one. As the Price Waterhouse report said:
" Manpower costs represent about 70 per cent. of the PLA's costs and the continuing surplus has imposed a severe strain on the PLA's financial position. The nub of the PLA's present financial problem is a combination of the uneconomic use of manpower and its inability to divest itself of manpower which is already surplus ".
That is why the Bill is directed specifically towards reductions in manpower, as the key to profitability.
The first form of assistance is grants for severance payments, and these fall into two categories. Clause l(l)(a) provides for grants paid by the Department of Transport to the PLA for the severance of surplus staff; Clause 1(3) provides for grants paid for by the Department of Employment to the National Dock Labour Board in respect of registered dockworkers who take voluntary severance. Payments of severance grant were made in the financial years 1978–79 and 1979–80 on the authority of the Estimates, and the confirming Appropriation Acts, pending this legislation. The total grant committed amounts to £35 million promised by the last Government, plus an additional allowance of up to £5 million to take account of inflation. So far, a grant of £19 million towards the cost of severances has been paid, made up of £11.4 million for registered dockworkers and £7.6 million for staff.
Under Clause 1(1)(b), the second form of assistance is for the carrying on of the undertaking, while the measures to reduce manpower are being taken. This is provided by the two commercial loans totalling £25 million which the last Government agreed to stand behind; at present, the Government's liability under this head amounts to £23 million.
I should add that we also agreed last year to stand behind the PLA in negotiating postponement of a £3 million loan repayment due in 1980, and a similar payment due in 1981, but as this does not increase the Government's liability it does not

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count against the financial limit in the Bill. Finally, as indicated in my right honourable friend's Statement of last December, we have agreed, if necessary, to stand behind the PLA's existing overdraft facility up to a total of £5 million.
Clause 1(4) also provides that the aggregate of assistance given, whether in the form of grants, loans or guarantees, may not at any time exceed £70 million and, that assistance already given will count against this limit. As the total assistance I have outlined, including that already given, comes to £65 million, plus an allowance of up to £5 million for inflation, the Bill exactly provides for the financial limit we have set, and does not allow for any further increase.
Finally, may I stress, that the acceptance of this inherited obligation vis-d-vis the Port of London does not mean that the Government are embarking on a new policy of financial assistance to the ports of this country. The Government believe that ports should operate in full competition, one with the other, meeting the normal tests of commercial viability of being able to cover operating costs and service capital, without making any call on public funds. The assistance which this Bill provides for the PLA is aimed, therefore, as achieving the quickest possible return to such a position for the Port of London. I hope, therefore, that your Lordships will give this Bill a Second Reading. My Lords, I beg to move.
Moved, That the Bill be now read 2a¤(Lord Bellwin.)
7.14 p.m.
Lord BOSTON of FAVERSHAM: My Lords, as the Minister the noble Lord, Lord Bellwin, has said, this Bill fulfils a commitment, which was entered into by the last Government, to provide funds so that the Port of London Authority can give severance pay to those who lose their jobs, and to carry on its operations during the period in which the port becomes profitable. So far as the provision of money under this Bill is concerned, I believe that the only change, compared with the amount envisaged by the last Government, is that it has been increased to take inflation into account. Therefore, I would welcome the provision
1200
of financial help and would offer support to that. We are grateful to the Minister the noble Lord, Lord Bellwin, for having introduced the Bill and for the explanation which he has given.
However, I am sorry to say that we, on these Benches, are not at all happy about the terms by which financial assistance is being provided by the present Government under the Bill, for there are¤as the noble Lord suggested¤substantial differences of approach between us. I am bound to say¤and I share the views strongly expressed by my right honourable and honourable friends in another place¤that we very much regret that the Government have not attached certain conditions to the provision of these funds.
I would suggest that the terms in which this financial help is being made available are, to say the least, odd. They are spelt out at the very beginning of the Bill, in fact, in its Long Title, which says that it is a measure:
" … to provide financial assistance for and in connection with measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them ".
I emphasise those last words. What is odd about that is the underlying assumption that the reason¤indeed, the only reason¤why the Port of London Authority's operations are unprofitable is that its labour force is too great. Certainly, few would deny that that is, of course, a factor, but that is a very long way from saying that there are not other major factors as well. I believe that it is a pity that the assertion about over-manning is the one factor singled out by the Bill. Not even, for example, in its Explanatory and Financial Memorandum is there any acknowledgement or recognition of the many major factors that have played their part in bringing the Port of London Authority to its present financial state. I am thinking¤and I know that some of them have, indeed, been referred to by the noble Lord, Lord Bellwin, in moving the Second Reading of this Bill¤of such matters as the revolutionary changes, the technological developments, including the ones to which the noble Lord has referred, which have occurred in cargo handling; notably, of course, the container revolution, something which has enormously

1201
affected the Port of London in its role as a prime handler of general cargo; and also something which is not acknowledged in, I would suggest, the over-simplified assumption on which the Bill is based. It fails to acknowledge the extent to which this port has been affected by the changes in specialised cargo handling.
It also fails to recognise the extent to which London has been affected by the competition policy between ports, not only here in the United Kingdom but also between our ports and other ports in the countries of the European Economic Community. Then there are such other important factors as work practices, the way the port has been managed in recent years and, not least, the world slump. I do not want to go over all these matters again in detail today, but they need to be mentioned; because, in my submission, it would be quite wrong to suggest, to imply or to give the impression that the only thing that needs to be dealt with and that the only matter in which it is proper for a Government to be involved is the size of the workforce in the Port of London. Dealing with that alone will not produce a profitable port.
Therefore, one of the points about which we, on this side of your Lordships' House, are most concerned is that the financial assistance¤the money being provided under the Bill¤is being provided on the one and only condition that the workforce shall be run down. The Government do not appear to have sought any assurance at all in making this aid available that there will be any restructuring or co-operation between them and the Port of London Authority and, for example, the area's local authorities to seek to recreate a profitable operation. No question at all seems to have been raised about the desirability of maintaining any particular part or parts of the port's operations in, for example, the upper docks. The Minister has said today that the Government believe that it is not for them to become involved in matters of this kind. That is one point on which we would differ fundamentally from them.
But it is not only we on these Benches who would say that the Government ought to have imposed further conditions or sought further assurances. It is well known that my right honourable friend the last Secretary of State for Transport, Mr.
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William Rodgers, made it a condition of providing this financial assistance that operations in the upper docks should be maintained at least for the time being; that is to say, that both sets of upper docks¤the Royal group and the West India and Millwall Docks¤should be kept open for the time being. He was not alone in that view.
The most recent of the three Price Waterhouse reports on the Port of London also took the view that the time had not yet come to close down either or both sets of docks, and said it was right to examine further whether there was a sound basis on which to keep the upper docks running. The report said:
" it is too early to determine whether there is a totally viable basis on which those docks could operate ".
In the light of that, we believe it is regrettable that the Government do not appear to have sought any assurances, let alone laid down any additional conditions, about the possible future operations of both sets of docks, the Royals and the West India and Millwall, or indeed either of them. The decision of my right honourable friend Mr. Rodgers was based on two main considerations, both to ensure that in the end the best possible solution for the port itself should be found and because he recognised, as the last Government recognised, the devastating effect that complete closure of the two sets of docks would have on the lives of the workers and their families there and indeed the life of the surrounding areas, for we must bear in mind that for every person employed in the docks there are estimated to be three or four jobs outside the docks but in the general area which are dependent upon them.
There is another reason why these are considerations which the Government should have had in mind¤which we had in mind¤why Price Waterhouse should be heeded, and why it should not be left solely to the Port of London Authority. I make no accusation about the present management of the Port of London Authority, and to a great extent they are having to live with the effects of past management decisions. As I see the noble Viscount, Lord Simon, in his place, I would say at this point that he was in no way responsible for the sort of decisions we have in mind in discussing the matter here; they arose later. But it is a fact,

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and it cannot be ignored, that in the recent past there has been a series of different decisions. At various times recently we have had Port of London Authority plans to close both groups of docks; again, to close the West India and Millwall Docks and keep the Royals open; again, to close the Royals and keep the West India and Millwall docks working; and now, to keep the Royal group open and concentrate general cargo handling there. It has therefore been felt by some that there have not always been all the grounds for confidence there might have been in the management of the port.
One point on which I hope and believe we are all agreed is that the rundown of the Port of London's operations in the upper docks in recent years has been a sad spectacle, a tragedy for those affected and for the areas affected. It certainly is a depressing sight to see, in docks which were once bustling, the silent cranes, the vast empty sheets of water, the deserted warehouses and wharves and the stillness. Anyone who knows those areas knows what that means, and I happen to live in the heart of London's East End docklands. That is why we want to do all we possibly can to prevent any further unnecessary closures and to see that everything possible is done to revitalise these areas.
That is why we feel it is essential to underline what we see as the shortcomings of the terms in which the Bill is brought forward and the fact that, apart from the rundown of the labour force, the money provided under it is completely unconditional. There is no condition about it being dependent on the future operation of the docks concerned or of the port as a whole; it is not dependent on the effects of the overall problems and prospects of employment in the communities of the East End, which themselves have been dependent for so long on the Port of London and whose future is affected enormously by the decisions which are taken by the Port of London Authority; and it is not conditional on keeping open at least one or other of the two sets of docks, either the West India and Millwall or the Royals.
We on this side find it very hard indeed to understand why the Government have not at the very least made the Bill, and the provision of the money under it,
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conditional on retaining at least one of the great upper docks. Certainly that is the condition I should like to have seen in the Bill. It is true, of course, that the Port of London Authority has decided to concentrate general cargo handling on the Royal group and to transfer that type of cargo to it from the West India and Millwall docks, but whatever the virtues of the present Port of London Authority management are, it would be wrong of me not to point out that many people have doubts about the strength of the authority's determination to do everything possible to make a success of at least part of the upper docks operations in the long-term. After all, London's upper docks have enormous advantages; their very location alone, here in the heart of the capital city, speaks for itself, with the vast population and market in and around it.
I would say at this point that I take some heart from the fact that the West India and Millwall docks are still open for the special cargoes and the tenants there. So long as that continues, presumably it would not be too difficult if the occasion arose in the future to bring them back into full operation again. Here I would ask the Minister the one question I wish to put to him tonight, and that is if he would confirm that, for the forseeable future, those docks will remain open and continue to be maintained at least for the limited purposes for which they are being used now.
There is one other reason I wish to mention why we feel the Government are wrong not to impose further conditions in providing this financial help, and it concerns the future development of docklands. The last Labour Government, through their new inner cities policy, were helping, with the local authorities, to redevelop and bring new life to this very area¤the area in and around the upper docks¤among others. A significant amount of new development is already taking place there, as anyone who has been there recently will know, and who has seen any of the documents produced by, for example, the borough councils in London concerned. There is a significant reference to the redevelopment of the area in the Price Waterhouse report, on page two in the final paragraph:
" In reviewing the PLA's general strategy, there are wider issues than the detailed financial analysis. These wider issues, which we have not considered,

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include the relationship of the Port of London and the PLA to Dockland's redevelopment, the economic role of the PLA, competition policy between ports and the social consequences of the various courses of action ".
Two points arise here. The first is that those are clearly considerations which, in my submission, should be taken into account and which, again, are not acknowleged in the Bill. The second is that it is vitally important that no further closure should take place at a time when extra employment is coming into dockland and when new infrastructure will help to attract more industry. If further closure did take place, especially over the next few years, that would deal a major blow to the efforts being made to bring new life and development to the area through the inner cities policy.
I return to my main objection to the terms of the Bill. It is that it fails to demonstrate that a sound basis for the future of the upper docks is being secured, or even sought, and it fails to show that the associated problems¤the future of this whole important area¤are being taken fully into account. But to the extent that, in providing this money, it fulfils a commitment of the last Government, I would urge my noble friends not to oppose it.
7.28 p.m.
Lord BELLWIN: My Lords, the Government understand the concern which the noble Lord, Lord Boston of Faversham, expressed about the future of docklands, and we are indeed fully aware of the importance of the Port of London Authority in this respect, and we are sure they have a significant role to play in the future prosperity of the area. For their part, the PLA must move with the times and adapt to technological changes, mainly by reducing manpower and improving working practices. The new Urban Development Corporation will, at the same time, provide fresh opportunities for investment which have so far been lacking in docklands. I fear that the noble Lord and I will have to disagree as to the fundamental difficulty which faces the PLA. He quoted more than once from the Price Waterhouse report. I wonder, therefore, whether we also are not entitled to rely on that report when it refers to manpower. I quoted it earlier, and will not do so again because I think the point has been made very firmly.
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The fact is that manpower accounts for 70 per cent. of the total costs of running the operations. I entirely accept that it is not of course the only factor. There must be other factors¤the noble Lord mentioned some of them¤and who would quarrel with that?¤certaintly not I. However, that it is that percentage is the overriding factor, and I think that we should have to stand by that. That is why Government assistance is being directed towards improving working practices and concentrating on reducing the surplus manpower.
I should say that in doing this we are doing no more than continuing the policy of the previous Government, who insisted that the assistance they were giving was conditional upon the PLA securing
" the most rapid possible rundown of surplus manpower ".
One could always argue as to what is "surplus manpower", and I am sure that that is where a debate would be, but I should not want to enter into that question at this stage.
I say again that the £70 million limit that we are imposing is essentially that set by the Labour Government, subject to adjustments for inflation and the latest forecasts. It is only fair to all those involved that we should clearly indicate the limit of our assistance. It is a tight limit, but one which the PLA have accepted.
I am glad to be able to confirm one point in particular which the noble Lord mentioned: namely, regarding the position of the India and Millwall Docks. Yes, it is correct, as the noble Lord said, that the PLA have made it clear in their announcement of 3rd March 1980 that tenants' traffic and the PLA's bulk wine operation will not be affected by their proposals to transfer other traffic out of India and Millwall Docks. One has to say that this is their decision, and presumably it would go on being so in the future. However, I think that the noble Lord would be entitled to assume from that statement that, so far as I am aware, that is the position so recently announced. I have no information to indicate that the position is other than that. It is certainly currently the intention so to continue.
I realise that some people would prefer our assistance to be conditional upon

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the retention of the Royal Docks, but at a very early stage we concluded that the Government should not be involved in management decisions of this kind. Again, obviously that is an area in which we would differ. But in our opinion it is up to the PLA to decide how to achieve viability within the £70 million limit.
The noble Lord, Lord Boston of Faversham, was concerned about safeguards to avoid future closures, and I would have respectfully suggested that the best safeguard in that respect is to achieve viability. I am sure that it is the hope of the noble Lord, as well as my hope, and that of the Government, that what we are doing now will help them to do just that; and then indeed the problem which concerns the noble Lord, and all of us, would, one hopes, not arise.
It is still up to the PLA to decide how they operate, and it would be inappropriate for us to tell them to close or to keep open any specific part of their undertaking. These are management decisions for them. I repeat¤because I believe that this is important to the workforce concerned¤that encouragement can be taken from the fact that the PLA have recently told the workforce that they want to make the Royal Docks successful and that they will be improving facilities there to take traffic diverted from the India and Millwall Docks.
The sole purpose of the Bill is to provide funds for manpower rundown, and this was precisely the purpose for which the last Government promised aid. As regards the future of the Royal Docks, I repeat that we take the view that this is a question for the PLA. Finally, I want to make our policy quite clear. We consider that ports can and should operate in full competition with one another without help from public funds, and the aid in this Bill is designed to get the Port of London Authority back to such a position as quickly as possible.
On Question, Bill read 2a; Committee negatived.

THE MOSCOW OLYMPIC GAMES: POLICY
7.35 p.m.
The EARL of KIMBERLEY The EARL of KIMBERLEY rose to ask Her Majesty's Government whether
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they will make a further Statement on their policy towards the Moscow Olympic Games. The noble Earl said: My Lords, I beg to ask the Question which stands in my name on the Order Paper. First, I must re-emphasise that I was against the Olympics in Moscow long before the rape of Afghanistan. Afghanistan is just another chapter in the unhappy and bloody saga of Soviet aggression, following on from Hungary, Czechoslovakia, and the complete denial of human rights in Russia's quest for world domination.
At present there are 2 million political prisoners in 96 Soviet labour camps. From 1971 until the end of 1978 just over 79 million people have been murdered in the name of Russian communism¤that is more than the population of the United Kingdom¤and the figure does not include Afghanistan, Angola, Eritrea, Somalia, and so on. Perhaps Sir Denis Follows and Lord Killanin and the athletes, not just British but throughout the world, should stop and think again¤if Sir Denis Follows is capable of thinking at all, as the noble Lord, Lord Wigoder, asked the other day.
Is the gratification of an athlete's four years of training more important than the inhuman and barbaric treatment of Russian dissidents and of the citizens of Afghanistan, some of whose very children are today being taken to Russia by the KGB for Soviet education and indoctrination to learn the Soviet way of life? There are, however, some of our athletes who have seen the light¤such as Chris Stewart and Mr. Weir, as well as the equestrians and the hockey players. They have realised where their moral obligation and duty lie.
Is it really more worthy to carry out the whole Olympic charade than to show the Russians that this time they have gone too far? All the talk by the International Olympic Committee and the British Olympic Associaton about keeping politics out of sport is a complete fabrication and smokescreen. Do these two bodies really believe that if Dr. Sakharov had the necessary athletic qualification to win a gold medal for Russia, he would be allowed to participate? I do not want to give the impression that I have no sympathy for the athletes, because I do have sympathy, but I think that all of us should certainly have more sympathy and more

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compassion for the 15 million Afghans and their shattered lives. Do Olympic committees and young athletes know that the Soviet Government ordered their troops to shoot down women and children; that 300 women recently were slaughtered in the main square of Kabul because they came out in protest against the murder of one of their own colleagues? Do they realise that apparently there is no British journalist or correspondent covering the region?
The former Minister for Sport, the right honourable Denis Howell, stated on 19th February that sport had suddenly had its political importance realised. Either his memory is very short or his knowledge is very lacking. Forty-four years ago Hitler realised that in 1936, and the parallel is very similar. Then, many individual appeals were made to the British Olympic Association to withdraw the British team, but they all went unheeded. Even the then President of the International Olympic Committee, Count Baillet-Latour, issued a statement the fatuity of which pre-echoed with uncanny precision that of his latter day successor, Lord Killanin, that there was no ground for any opposition to the holding of the Olympics in Germany.
Perhaps we should inform the present generation of athletes, who were fortunate enough to be born after the last war, that the Olympics of 1940 were Dunkirk, the Battle of Britain and the Battle of the Atlantic. Thousands of those athletes died or were horribly mutilated. I am not asking the athletes of today to make the supreme sacrifice, but just, by their refusal to participate, to show that they are not the utterly selfish individuals which their attitude implies; and simultaneously to show that they are not exempt from the moral obligations that govern the rest of us mortals. Already these Games have become third-rate: let us make certain that they become a complete fiasco. I should like to point out to any athlete who may win a tarnished, third-rate gold medal, which in 30 years' time is sitting on his mantelpiece, that when one of his grandchildren goes up to him and says, "Grandfather, what is that?", he would have to say, "I won it at the Moscow Olympics in 1980". But I wonder whether he would be truthful and say, "But, of course, many of the
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world's best athletes were not present, so it really is not a gold".
There are some true gold medals going around, and these were presented yesterday by the "No to Moscow Olympics" movement, through its chairman, the honourable Member for Torbay, Sir Frederic Bennett, to those athletes who have acknowledged their moral obligations. I should like to ask the other athletes whether they know that the KGB is apprehensive about the influx of visitors to Moscow for security reasons. Do they realise that, contrary to the general belief, a "quota" of visitors has been agreed between the Soviet authorities and the Moscow Olympic Committee, rather than that anyone should be allowed in; that those who do go will be confined to certain prearranged routes, and that those who want to stray to right or left will not get far? Do they realise that specially-formed vigilante squads, the Druzhiniki, will help the KGB to keep contact between ordinary Russians and foreign tourists to a minimum? I want to repeat a quotation from the latest Soviet communist handbook, as it cannot be over-emphasised:
" The decision to give the honour of holding the Olympic Games in the capital of the world's first Socialist State was convincing testimony to the general recognition of the historic importance and greatness of our country's foreign policy, and the enormous service of the Soviet Union in the struggle for peace ".
That statement is pure fact, publicly written and stated by the Kremlin.
Now, my Lords, I want to mention Rule 24C in Sir Denis Follows' bible:
" National Olympic Committees must be autonomous and must resist all pressure of whatever kind whatsoever, whether of a political, religious or economic nature. In pursuing their objectives, National Olympic Committees may co-operate with private or government organisations. However they must never associate themselves with any undertaking which would be in conflict with the principles of the Olympic movement and with the rules of the International Olympic Committee ".
My Lords, either I am daft or, if I am not, Rule 24C has been completely and utterly disregarded by the Russian statement I have just quoted. Sir Denis Follows also claims to be horrified by the Soviet invasion of Afghanistan. If so, why does he not resign from the British Olympic Association if his sentiments and feelings are that strong?
So what are we left with? First, the Soviet Union has completely dishonoured and disregarded the Olympic Charter. Secondly, any Olympic Association and/or athlete who goes to Moscow openly condones the aggression and brutality of the Soviet Union. Third, the upholding of the so-called Olympic spirit will be discredited, perhaps for ever. The fact that the Games will take place at all will only serve to justify Russian militarism and aggression. The athletes will have proclaimed that they care nothing for the dead in Afghanistan or for the oppressed millions inside the Soviet Union. British so-called sportsmen who go to Moscow are not above but below politics, and beneath contempt. Led by Sir Denis Follows, they will have chosen not freedom, but infamy. Fourth, we can only hope that the BBC and the IBA will have the good taste to give this charade the minimum coverage, particularly as at the opening ceremony 6, 000 Russian students with 6, 000 Red Flags will convey the picture of a red carpet. But perhaps this is applicable as it is the same colour as blood!
Fifth, let it be made clear to all who go to Moscow that they will have failed to understand a simple moral obligation that by so doing they will encourage further Russian aggression in the future. Sixth and lastly, may I ask a direct question of the British Olympic Association through my noble friend? What does it profit a man or woman if he or she wins a medal by the strength of their bodies, but by doing so loses his or her soul, and that medal will be a badge of shame to keep for the rest of their lives? My Godfather, the late Sir Winston Churchill, said nigh on 37 years ago:
" It is not given to the cleverest and most calculating of mortals to know with certainty what is their interest, yet it is given to quite a lot of simple folk to know every day what is their duty ".
Let all of us realise what is our duty by backing up the Prime Minister, and the decision of our own Parliament, to boycott the Moscow Olympics voluntarily¤which we as a democratic and free nation cannot be ordered or compelled to do.
7.47 p.m.
Lord HOUGHTON of SOWERBY: My Lords, the noble Earl, Lord Kimberley,
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is, I think, to be thanked for raising this matter this evening; and he has put his case in robust manner and in vigorous language. After listening to this long catalogue of crime of Soviet imperialism, one wonders whether the Olympics should ever have been going to Moscow at all. In my view they never should. Moscow is not the sort of place to demonstrate the Olympic ideal. There is much more to the Olympic Games in Moscow than the more recent aggression and invasion of Afghanistan. Nevertheless, it is on that matter that we are called upon to express an opinion, and the noble Earl's Question asks the Government whether they have any further statement to make. It may be that the Government can only reiterate the statements they have already made. I think probably what is needed now is for public opinion to express itself more positively as the days go by, because there is still time for those who wish to reconsider their position to decide not to go.
My own intervention in this debate, quite briefly, rests upon a letter which appeared in The Times newspaper on 29th May from one whose words are more eloquent than mine and which carry a great deal more weight. It was from the Reverend Nicolas Stacey, an Anglican clergyman with notable service in the social and religious fields of public life. He deplored the decision of the British Olympic Association not to heed the Government's request that they should decide as a committee not to go, but he still pleaded with those who have the right of individual decision to decide, individually, not to go. Perhaps I may quote some of his words, because I think they are so relevant and pertinent to the present position. He said:
" If the mere handful of British men and women who have some chance of winning a medal were to accept that to compete in Moscow is to sip a poisoned chalice, what little interest the British public still have in the Games would soon evaporate ".
He speaks as a one-time Olympic Games competitor and as one who fought in the last war. He goes on to say:
" It is difficult for today's leading sportsmen, born after the war ended, to understand the horror that Russia has inflicted on Afghanistan ".
" Secondly, it is only in recent years that a mystique has developed round international sport and sportsmen and it isolates it and them from the real world. Athletes talk as though they sincerely believe that world statesmen and politicians struggling to maintain the peace of the world

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and to save the human race from destruction should not interfere with the true gospel of sport in which they participate as young gods exempt from the rules and obligations that govern the rest of us mortals ".
That is the message at the present time; and it should be expressed as frequently as we get the opportunity of doing so. After all, what will these competitors bring back (if they do bring back anything) that they wish to cherish in years to come? Surely, nothing that can be given honour in this country! As for having something to show to their grand-children, their grandchildren will be luck to be alive to be shown anything, the way in which the world is going at the present time with the mounting power of the Soviet bloc and Soviet Russia in particular.
Finally, there is an additional reason, apart from the morals of the matter as we see them, for supporting the Government call for a boycott; and that is to lend support to the call of the United States. In the USA, there is considerable disappointment with Britain at the present time. It may be that the disappointment is mutual. That makes it worse, because any of us who are realistic will understand that the perilous position of Europe would cause us all grave anxiety if the United States were no longer to be concerned with our future integrity and existence. That is one of the facts of life in the world today that we must not ignore. We cannot afford to have a breach in the alliance which alone in my judgment stands against the possibility of Russian aggression in a manner which would threaten our very existence. Again, that I think is a factor which we should take into account. It is that which I believe should be the message that we give on moral grounds, on international grounds and on what we believe is right at the present time, to urge those who otherwise would go to Moscow to stay at home and earn the gratitude and admiration of those who believe that that is the right thing to do.
7.54 p.m.
Lord GORE-BOOTH: My Lords, having spoken at considerable length on this and kindred subjects in the earlier big debate that we had in your Lordships' House on this question, I do not need to do all that again. None the less, there
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are one or two things, partly said already by noble Lords, which seem to need constantly repeating. I should like to start, perhaps surprisingly, with a word of praise. I should like to give unstinted praise and encouragement to those noble Lords and to those athletes everywhere who have decided not to go. I put it like this because I believe that it has meant a degree of courage to say, "No, I will not go, for reasons of conscience". It has also shown that noble Lords and members of the public who have taken this line have taken the trouble to read deeply into this very tragic and difficult question. After all, it is perfectly easy to present the situation as something where the athletes or the special interests, or whatever it may be, are fooling around again; whereas, as noble Lords (and particularly the noble Earl, Lord Kimberley) have made clear, in terms of the future of the world, this is of the greatest possible importance. This is not just an athletic matter or a sporting matter or anything of that kind. As has already been said, it is an effort to make it practical for the second largest country in the world, or, in some respects, the most powerful, to dictate to the rest of the world how it regards the Olympic Games and, much more important, how it regards the whole running, authority and character of the world. I am not exaggerating in the least about that. I am not saying that there is a great Soviet plan worked out in every detail; it is rather a very conscious effort to establish a basis of national power which is invincible.
Everyone who takes a decision about what to do must try, even if he or she finds it difficult, to realise that this is not exaggeration; it is truth. There are many points of detail around this country in which there is still a failure to realise this. When a newspaper or radio broadcaster talks about the "Soviet attitude" or the "Soviet proceedings in respect of", it would be so much easier, braver and truer to say: "This is a war starting. It is a Soviet war on Afghanistan." It is not a Soviet attitude or something of that sort. It is the real thing that has actually happened and is proposed by one authoritarian Government and by nobody else.
Apart from that, there is the question of what athletes should do. Here I do not wish to berate them, as it is tempting to do, for wishing to goodness that they could go to Moscow. I see that entirely and

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in my previous speech on this matter I expressed this sympathy at some length¤and especially for those people whose last chance it would otherwise be of going to the Olympic Games. I hope that they all realise that we feel this very sincerely, but, as I have said before, this is not just a sporting decision; it is something which affects the safety, the happiness and the democracy of the whole world. There is no getting away from that fact. We just have to think of the thing in those terms all the time. Indeed, noble Lords have alluded to the fact that one has memories. Does one really want to end one's life on earth with the consciousness that (no doubt without intending to do so) one has done something very dangerous in the way of abolishing the practice of democracy in the world at large?
It is really as dangerous as that. I apply this particularly to our friends the athletes because we know that it is a great sacrifice for them if they do refuse to go. We do not mistake that at all. But because the survival of democratic institutions and procedures and the observation of the rule of the United Nations are about the most important things we have to deal with in the world, there can be no satisfactory alternative to saying, "We simply cannot take part". It would be very difficult to live with if any number of our friends in the athletic world were to go to Moscow¤and to go for quite the wrong reasons.
There are one or two things on which one must express a little hope. I hope that at least in talking around noble Lords may feel that some thought should be given even now¤not in any detail¤on the point that if these Olympics are lost because of these policies by the Soviet Union, then let us begin at least to think, if not to plan, something that can come in succession to the aborted Olympics. That would be a new and real Olympic Games in which everybody will be able to partake without the fear of doing something that could be really damaging to their own country and to the democractic world. Our athletes deserve some preliminary thought in that direction. This might take a little of the edge off the great disappointment we know about that they will experience if they feel conscientiously, as I feel they should, that they should not go to this (shall we call it?) "specimen".
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Finally, may I also suggest very gently that Her Majesty's Government take serious note of the sacrifices in the givingup of the Olympic Games. Financial an emotional reactions to this renunciation should be thought about. I am not suggesting necessarily the financial effect. A sympathetic approach should be given to the athletes. There should not be too much thrown at them because their main occupational motive of course is to go to the Olympics and take part. We should regard that with great sympathy and if things can be done in any way to soften this very great disappointment, then I am sure that Her Majesty's Government will wish to make it quite clear that all of us, both Government and others, are deeply sympathetic with what is being given up but have consciously, in their expert knowledge of the Soviet Union and the character of these people and their institutions, realised that this is something into which we cannot get ourselves and we would not wish them to involve themselves in such a tragedy of undemocratic government and procedure. I hope, therefore, that our friends the athletes will understand this and follow the line that has been so properly suggested today.
8.4 p.m.
Lord GORONWY-ROBERTS: My Lords, I intervene now, rather than at the point that I would normally speak, through the kindness and understanding of my noble friend Lord Tweeddale and, I hope, the indulgence of the House because of the peculiar difficulty that I find myself in. I shall be as brief as possible, and speak quite personally. There can be no disagreement in this House or indeed in the country about the enormity of what the Russians have done in Afghanistan, or the need to make the strongest possible protest against their action. Indeed, there has been a remarkable unanimity up and down the world in the United Nations about this extraordinary behaviour which has imperilled detente, disarmament, the very peace of South East Asia and indeed has thrown the rest of the world into apprehension.
However, unanimous protest on this occasion¤as on similar occasions¤has not been followed by unified action. The result is that countries have been picking and choosing the actions that they will take to make their protest impactive.

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The United Kingdom is no exception. I am bound to say that, until there is international practice to match international protest, we are bound to have his kind of selective performance. The danger is of course that action may be so selective as to be uneven and even counter-productive. This is what has happened in this case.
The facts are that the Soviet Union are assured of the participation at the Games of about two-thirds¤perhaps three-quarters¤of the countries of the world. That is more than enough to enable them to hold the Games and to present them at least to their own people and to the peoples of the countries which do participate as a great triumph. They have the totalitarian means of making quite sure that this is presented as a tremendous triumph for them and against the West. Moreover, even among some of the countries whose Government's have decided against participation that is official, like the United Kingdom, individuals and teams have decided to participate regardless. There is no uniformity or unanimity even within those countries who officially are against participating in the Games.
Our own Government¤and I do not necessarily blame them for this; it is a very difficult question¤have adopted a policy of official disapproval without prohibition. We may therefore see in Moscow participation by perhaps a majority of British sportsmen despite the strongest disapproval of their own Government. It is not difficult to see what capital the Soviet Union will make of this. Just as the Free World is seen to be in disarray about its attitude, so internally the United Kingdom, like other countries, will be seen to be in disunity within itself about the Games. One could say that the Government should not have got themselves and the country into this position. It would be very easy to say that. I certaintly will say this: their original policy was sound. That is, to seek substantial agreement, if universal agreement was not forthcoming, in favour of transferring the Games to another site¤a more appropriate one, a more congenial one, perhaps a more traditionally suitable one.
My criticism of the Government on thisscore¤and I do not make it vehemently—
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is that I do not think that a real attempt was made as far back as January, when there was time, to switch these Games from Moscow to a more agreeable and more appropriate site. The Geneva Conference was clearly ill-prepared and abandoned after what seemed to many of us very little effort. Instead, there was a switch to the policy of persuading¤even to pressurising¤British athletes not to participate. Of course, as we have heard they have been singularly unreceptive to persuasion and even to pressure¤and for understandable reasons. I was much taken by the speech of my noble friend Lord Gore-Booth who in making it absolutely clear that he was for a boycott¤with which most of us would sympathise¤nevertheless pleaded for an understanding of the motivation of those who decided to go to Mosocw.
They have understandable reasons. One is that athletes, having invested years of training and self-denial in preparation¤perhaps in preparation for the last possible chance¤feel a profound reluctance not to put their metal to the test, especially when around them in their own country and in other countries they see competitors who do not take that view and who are coming forward to compete. Another reason why one is bound to try to understand is that athletes, like everybody else, especially in this country, are prepared to join in the common cause but not to make sacrifices which are not imposed on others. There is quite a lot of this feeling among athletes, and indeed among the general public.
Your Lordships may have seen or heard a discussion where there was a general audience on this matter. It rather surprised me to find what a large proportion¤a considerable majority¤of those non-athletes who heard the various arguments on whether or not athletes should go to Moscow were in favour of the athletes. There is this feeling among athletes, and indeed among the general public, that they are being asked to do something which others are not being asked to do. We have to try to understand this. For instance, athletes may not go to Moscow but butter may. It is no good saying: "It is not the same thing". It is the same thing to a great many people. They simply do not understand this. Trade can proceed, subject

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to a certain mitigation of special credits, which were not taken up anyway. Trade is sacred and may proceed: training is expendable. "Trade is more important than sport"¤tell that to the athletes, just as you can try saying to the trader, "Sport is more important than trade".
We are a country¤the finest democracy in the world¤where, at the risk of some little pain, we try to understand each other's attitudes. We simply must not let the events of this year shake or imperil the unity of the West; that goes without saying. But we must not let them so sour our attitudes to each other in this country that the gain to the totalitarians will be not only the propaganda they can make from the presence of some of these men and women in Moscow, but the fact that they have created a new reason for disunity in the major democracy of the West. So in discussing and debating this matter once more, I echo what the noble Lord, Lord Gore-Booth, said: let us, in putting forward our points of view, clutch to ourselves the understanding of what the motivations of these people are.
In these circumstances it is entirely right that the noble Earl, Lord Kimberley, and others should continue to endeavour to persuade athletes not to go to Moscow. It is entirely right that the noble Lord, Lord Killanin, should be here¤I do not know whether he is going to speak and put the other view¤but what is entirely wrong is that we should take a "holier than thou" attitude to what people do so long as there is no statutory provision as to what they ought to do¤and there is none in this case. What there is is the very powerful fact of the Government of the country making very clear their disapproval of attendance at these Games, for the reasons we all know. There are a great many people up and down the country¤athletes and non-athletes¤who take the same view, and there are others who do not take that view. There is no statutory provision, and I suggest that we should be rather chary of calling in aid to substitute for a statutory provision a rather specialised moral imperative, because at best that can only be subjective.
What can we do? I think we can all seek to minimise the harm which the situation may create for the Free World |
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and which may harm the Free World. We can, for instance, urge that even if the athletes go they will refuse to co-operate in the antics which for so many years have made certain aspects of these Games a nationalistic circus and an opportunity for self-seeking propaganda. There are signs that this is being done and that, although they are going, they are not going to take part in propagandist exercises. I think we might well wish those who finally decide to go good luck and gold medals, and hope that they will give everything they have got to the sport of their choice and nothing at all to making the Moscow Games a propaganda opportunity for totalitarians.
Finally, I think we should now start to work for a better future and a better regiment for international sport. There are many aspects of the Olympic Games¤and those who are closest to them and who have served them honourably for many years are among those who are aware of this¤which are increasingly repugnant to the vast majority of athletes, and, in so far as the general public are aware of those aspects, to them also. I refer to the prostitution of sport by nationalism. Then there is the fact that in many countries the distinction between amateurism and professionalism has been so blurred as to be non-existent. Also there are persistent reports¤founded, I fear, in fact¤that in some countries and within some systems young men and women are dragooned and drugged into an illusory excellence.
These things have been accumulating for some time. One can read quotations from recent writings and speeches by leading athletes, and I honour them for speaking so frankly. It may well be that the Games should be entirely reorganised as well as relocated. It may well be that they should be smaller and more frequent: a series of specialised occasions every year rather than a vast complex occasion every four years. There may be a plea for regionalism, culminating in a more select Olympiad at the very end.
If this country and its Association could take the lead in this, immense good might come from even this situation¤a situation which has developed, I fear, to the detriment of freedom and genuine amatuerism and to the advantage of the mortal enemies of both. I hope that this very useful

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debate, introduced most opportunely by the noble Earl, will not deter any of us from asserting our views to athletes and others between now and the date of the Moscow Games, and will do nothing to achieve among us the very disunity and disarray which will bring more aid and comfort to the enemies of freedom than even participation in their Games.
Lord GORE-BOOTH: My Lords, may I thank the noble Lord, Lord Goronwy-Roberts, very much for the kind things he said about me, but in justice to myself may I just say that I do not want that to be construed by anybody as meaning that I approve of our attending, because I hope I made it clear that I do not.
Lord GORONWY-ROBERTS: Yes, indeed, my Lords. As always, the noble Lord, Lord Gore-Booth, made his view abundantly clear. I merely paid tribute to the fact that he asked us all to respect the motivation even of those who do not agree with him, and possibly with me.
The Marquess of EXETER: My Lords, may I clear up a misapprehension¤?
Several Noble Lords: No! Order!
Lord LYELL: At the end.
8.21 p.m.
The MARQUESS of TWEEDDALE: My Lords, I thoroughly deplore the Soviet occupation of Afghanistan. It is certainly a monstrous act of aggression and I wholeheartedly agree with your Lordships' condemnation of it. Nevertheless¤and I am sorry to have to disagree with the noble Earl, Lord Kimberley, to whom we should be grateful for the opportunity of debating this matter¤I think that our athletes are quite right to go to the Soviet Union for the Olympic Games, and I hope that the Government will not obstruct them any more than they have already done.
The character of the Soviet Union¤the noble Lord, Lord Houghton, touched on this point¤has hardly changed since the decision was taken to give her the task of hosting the Games in I, believe, 1972. Indeed, it has not changed all that much since the time, 40 years ago, when the Russians annexed Estonia. Perhaps I do not need to remind your Lordships that the sailing events of the Olympic Games will be
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taking place in Estonia. The Soviet action in Afghanistan is entirely characteristic. Once again, the Russians have taken what they saw as a desirable opportunity as it has arisen. No doubt, they are still scratching their heads over President Carter's failure effectively to exploit the opportunity with which the Iranians presented him in November.
America's upset over the Russians' action is perfectly understandable. They¤at least, this is how it will be seen in Moscow and elsewhere¤have had a march stolen on them. I will not deny that we have a duty to give America effective support, where necessary. We certainly have such a duty where sanctions against Iran are concerned and we have, at least partially, fulfilled that duty. But I do not think that our duty extends to spoiling, albeit highly political, sport.
Much has been made of the propaganda value to the Nazis of the 1936 Olympics. That event will be in the minds of all and it will considerably colour the world's perception of the 1980 Olympics. For, despite the similarities between 1936 and 1980, 1980 is 44 years on and during those years the world has seen the true nature of totalitarianism in a way that it could not in 1936. I think it will be evident to the majority of participants in, and spectators of, the 1980 Olympics what kind of a regime has organised them. If the omnipresence of the KGB and the absence of any kind of spontaneity, dissident or otherwise, is not enough, the news media, with all eyes on Russia, have a rare opportunity to educate.
I do not believe that attendance at Moscow will be taken as some kind of endorsement of the regime. The Olympic Games, whatever their original spirit, are not a great multi-national party¤perhaps, alas. They are, in fact, a ferociously competitive meeting of nations, which takes place somewhere or other every four years. The athletes are there to win, not just for themselves but for the countries they represent. The bulk of the kudos¤and this is really my most impotant point¤goes not to the country which is hosting the affair, but to the country winning the most medals. In 1936, those were one and the same. By their action, the Americans have made absolutely certain that the same thing will happen in 1980.
8.24 p.m.
Lord GRANVILLE of EYE: My Lords, we are very indebted to the noble Earl, Lord Kimberley, for introducing this problem again. It is obvious that there are two views about it and, in contradistinction to the speech from my noble friend Lord Goronwy-Roberts, I cannot see why so many people are making a great fuss about not going to Moscow. I have said before, and I repeat, that the old Olympics as we knew them, and certainly as they were in the days of the Greek conception, are a dead duck. The change perhaps began in 1936 in that other totalitarian state. Perhaps we never noticed it happening then, or, if we did, we decided to disregard it.
Since then, there has been drug-taking by athletes and sex switching and, whatever may be said by the defendants, this is now a major weapon of Soviet foreign policy. Do not blame them, my Lords. They realise the propaganda value all over the world, in relation to their foreign policy. So they began in the schools making state athletes or state professionals entirely employed by the Moscow Government. Whatever excuses may be made, and whatever defence we put up, Moscow will be used by the Kremlin as a giant propaganda display, just as the 1936 Games were used.
But it is interesting to look at what is happening in our own country where sport is now god, where we have millionaire footballers, where a skater can win a competition and become a dollar millionaire next day, where we have riots on the terraces, where millions are gambled or won on the pools, and where there are side perks for winning. That is the name of the game, not the honour of winning.
When you talk to some of the people who are going to Moscow, they ask "What about Afghanistan? What was Munich?" I can understand that those who organise, and have to deal with this event every four years, may feel that they have a vested interest. How many sponsors have withdrawn and how many would like to withdraw? Have we any idea how many people are now saying that they will not pay a subscription any more to the Olympic fund?
A noble Lord referred to the television and radio. I hear people saying that
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when the Olympics in Moscow are shown on television they will turn them off, and I hope that the television authorities will take note of that. I wonder whether radio reports will be transmitted to Kabul. Then there are the labour camps. I wonder where the Russian dissidents are now. I believe that the Free World will begin again in the field of great international athletics, and that the Iron Curtain countries will have their own sports. That is what the future will be. We shall never go back to the old Olympics. The noble Lord, Lord Goronwy-Roberts, said: What can the Government do? Of course they cannot withdraw passports. But what we can do is to withdraw our acclamation.
8.30 p.m.
Lord GRIDLEY: My Lords, I consider that we in your Lordships' House owe a great debt of gratitude this evening to my noble friend Lord Kimberley. Before I state my opinion on these issues, may I refer to the speech of the noble Marquess, Lord Tweeddale. He feels that our athletes have every right to go to Moscow, but I wonder whether he has ever experienced personally what it is like to lose his freedom. Some years ago I lost my freedom when a country was overrun. I hope the circumstances in which I and many others suffered are not suffered by the noble Marquess.
The issues in the debate this evening are stark and real. They go far deeper than whether or not we should go to the Olympic Games. They involve the freedom of every individual in this country. They are designed to bring home to Russia the folly of making an unbridled attack on Afghanistan. My experience of the last war taught me that there is one thing that a nation which is partly Asiatic, as the Russians are, understands very clearly and very well; namely, the loss of face. I believe very sincerely that if there were to be a wholesale boycott of the Olympic Games the people who would lose face would be the Russians; and those people do not like losing face. I think it would be a contribution towards making them think, not once but many times, about whether it is wise to carry out an unbridled attack on another country. That is the first point I wish to make about freedom.

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I now wish to turn to the issue facing our athletes. Who are the people who are not going to Moscow? They are the Germans and the Japanese who lost the last war. They know very clearly what it is like to lose one's freedom. I do not know specifically whether they were influenced by their experiences some years ago, but it is my opinion that they probably were. They know only too well what suffering has been brought about through war and its attendant circumstances.
We in this country have never lost our freedom. We have never been invaded since 1066. I have felt on many occasions, when thinking about this boycott of the Olympic Games, that it might have been a good thing for some of us in this country if in fact we had been invaded and had come to realise what it would be like to lose one's freedom. We accept freedom totally, without accepting the responsibilities which go with it.
I fear that over the years there has been a woeful lack of leadership, particularly for our youth and athletes. I sympathise with them in their predicament. People ought to have got up, particularly people like Sir Denis Follows, and brought to the attention of the athletes of this world, and particularly of this country, what really are the issues. If our athletes go to Moscow, there is not the slightest doubt that the Russians will use it as a propaganda exercise. I must say quite frankly that I am ashamed of my country's lack of leadership at the present time.
I have a list here which shows that at today's date 77 countries are going to the Olympic Games, while 59 are not going. I hope that Britain will be added to those 59 countries so as to make the number 60. If 59 nations are not going to the Olympic Games, we shall be standing out by ourselves, yet this is a nation which has always prided itself on the fact that although it was not an architect of freedom it respects freedom and would go to any lengths to preserve it.
May I address my final remarks to the noble Marquess. If our athletes do not go to Moscow they will be playing a small part in preserving the peace of this country, of the world and of future generations. They will be making a small contribution to peace, and I believe that that is what this issue is all about.
The MARQUESS of TWEEDDALE: My Lords, before the noble Lord sits down, would he allow me just to point out, if it needs to be pointed out, that I am as much a protagonist of freedom as he is, but that the difference between us resides in the means which we each consider to be appropriate?
Lord GRIDLEY: My Lords, if the noble Marquess wishes me to answer him on that point, I equally am keen on one's freedom and attach value to it, but I think that sometimes one has got to make certain sacrifices, like not going to the Olympic Games, in order to preserve one's freedom. That is my answer to the noble Marquess, and I hope that we shall go away tonight and think about it.
8.37 p.m.
Lord AUCKLAND: My Lords, some people may think that this question has been bandied about ad nauseum, and they could well be excused for thinking so, because whether or not this very interesting debate¤my noble friend Lord Kimberley has rendered us a service by enabling it to take place¤will move the moguls of the Kremlin one iota is a matter for conjecture. Anybody who has been behind the Iron Curtain, as I have been twice, although not to Moscow, will know that the word "freedom" is not in their dictionary.
Having said that, I think we must go back for a moment to the tradition of the Olympic Games. Those who have watched by means of the media the sight of the Olympic torch being borne from Mount Olympus to where the Games have taken place will agree that it is a most moving sight, particularly the singing of the Olympic hymn.
One of the questions which obviously must be asked is whether, if our competitors take part in these Games, they should attend the opening and closing ceremonies in Moscow. There are those who take the view that these ceremonies should be boycotted but that our competitors should take part. If this were the case, it is difficult to see that the Kremlin would regard it as an almighty snub. If the decision were made, even at the last moment, that all our competitors should withdraw, it would surely be absolutely essential that they should withdraw not only from the opening and

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closing ceremonies but also from the Games.
I am among those who hope against hope that this will ultimately be the case although I think at this late hour it is a forlorn hope. But, having said that, I think that some of the aspersions cast on our would-be competitors have been a little overdone¤to say the least. Of course, it can be argued that they are misguided. They face considerable dangers, as anybody who has been behind the Iron Curtain knows: bugging, compromising and all the other dangers which can take place, particularly to young people in a Communist country. Also it can be said that in the last war and in the 1914–18 war many young people who would have been splendid athletes, splendid musicians, splendid politicians, splendid farmers¤all kinds of professions¤made the supreme sacrifice or lost limbs instead. This is a very tenable and worthy argument. On the other hand, let us put ourselves in the place of a youngster of 20 or 21 who has trained in his or her spare time and often at his or her expense, to take part in a ceremony which carries a great deal of prestige, even though on this occasion it is being held in a country where the meaning of freedom is virtually unknown.
As the noble Lord, Lord Goronwy-Roberts, said, the Government themselves have not been entirely consistent on this¤perhaps through no fault of their own¤and I wonder whether my noble friend Lord Trefgarne, can tell your Lordships how much trade with Russia and her satellites has been cut off. I know that two wrongs do not make a right and probably so far as the Soviet Union is concerned they are too rhinoceros-skinned to feel the reductions in exports of the few machine tools or pharmaceuticals or some other product. But I think it would give some incentive to those athletes who still intend to take part and I believe that their outlook, however misguided, is sincere. They are not involved in politics and in their own minds they believe that they have a job to perform. Whether one likes it or not they see, and many people see, not only in this country but also in Australia and New Zealand who also (unhappily, in my view) have voted to take part in the Games but they may well see the sight of their governments carrying on too much trade (in their view) with
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Russia and her satellite countries. Therefore, I believe our Government and other governments could give a rather greater lead in this direction.
I think we have to look to the future as well. In four years' time the Games are due to be held in Los Angeles, a city which I have visited on one occasion and which I hope to visit briefly in about 10 days' time. I am not suggesting that Los Angeles will have the same problems as Moscow. In Los Angeles one can move freely, one has not got the KGB and others behind one's back, but there are other tensions. Los Angeles is a multiracial area; it is an area where there is a lot of poverty and I do not think that it will be all plain sailing. Indeed, wherever the Olympics are held today the same thing can be said. There is a growing feeling¤and I expect your Lordships have had it put to you, as I have¤that if we are to continue with the Olympics on their present scale they should go back to Greece.
There is a lot to be said for that. Of course, Greece is a country which has not known complete freedom and there are still tensions there now, but looking round possible countries where the Games could be held this would seem to be a solution if we are going to continue with these very worthy and very great Games. Another possibility, of course, would be a city which I know and love¤Helsinki. Helsinki has a spendid stadium but of course it is a small country; it would need a great deal of finance and there are considerable difficulties there. These are all points which I think have to be considered for the future, whatever happens in Moscow.
In conclusion, I would say this: We have heard a lot about Afghanistan and it is a shocking episode. I well recall in 1945, when I was a national serviceman in Austria, some of the depraved be haviour of Russian troops then¤and since. If one looks in retrospect, which of course it is always easy to do, the original choice of Moscow was bound to bring about these tensions because there has never been any real change in the Soviet Union in depth. There has perhaps been some surface change but these tensions and these barbaric conditions will always continue.

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In the last analysis all that we can hope for is that our athletes will in due course see the light. The reading of the Soviet Weekly, which only this week castigates the Americans for taking part, I think proves that some of the nerves of their teeth have been touched by the drill. One must only hope that some of the other countries and particularly countries such as Australia and New Zealand, who have narrowly voted to take part, will change their minds. But for a Government of a democracy such as ours, the powers of persuasion here are extremely difficult.
8.49 p.m.
The Marquess of EXETER: My Lords, I will not keep you more than a few moments, but there is obviously a great deal of miscomprehension as to what the Olympic Games actually are. They do not belong to the country which organises them. The country is given the privilege of doing that and they provide the facilities. When the Games start they are taken over by the International Olympic Committee, the International Federations of the sports concerned and the National Olympic Committee and this is the crest of a gigantic mountain. To give your Lordships some idea, the athletic one has 15 member countries. That is only one of them; admittedly it is the largest. If you like to take the Olympic committees, in this country the 21 sports in the summer Games have 59,500 lcubs. There are many clubs and bodies supporting it. There are millions and millions of people all over the world.
I have been in the Olympic movement ever since I was quite young. I competed in three Games and have attended all since then. I felt at the end of the war that what was going to happen in the world was that people were going to snarl at each other over the fence until they fought, or else ordinary people would be got out in full agreement with each other in a new camaraderie and friendship. I went to Moscow with that in mind, and they did come in due course, and they now mix freely in the village and wherever they go and in the international matches that they have. All this talk about moving the Games at short notice is quite ridiculous. It takes six or seven years to organise it. There are at the present moment 86 countries which have accepted
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to go, there are 29 who have said no, and 27 who have not answered.
The Earl of KIMBERLEY: My Lords, would the noble Marquess give way?
The Marquess of EXETER: My Lords, I have the list here; this is from the International Olympic Committee. I have got their statement here, and I have counted them up myself. I do not know where the noble Earl has got his information from. At any rate, that is what has happened. I felt always that this was right and it has worked. I have been, as head of the world athletics, in practically every country in the world and many times over. It is no good sitting back in one country and saying that it does not. You ask our athletes who travel overseas. They will all tell you that they have made friends with the people there. They live in the Olympic Village. Admittedly, they have language difficulties, but they become friends. It does bring I people closer together. There is a warmth and camaraderie which you get from sport; it is the only movement in the world bringing the mass of ordinary people into a camaraderie, and that is why everythhing must be done to help.
That is why many of us felt that it was quite wrong in regard to the Afghanistan problem¤we are all opposed to what happened there¤to use as a weapon the one worldwide movement which is accepted by every country and amateur sport in the world. I am not talking about professional sport; professional sport is the entertainment business and you go into it for a livelihood, a perfectly worthy one. But that is not what we are talking about. In the Olympic Games all the people who take part see the notice on the board saying, "The important thing in the Olympic Games is not winning but taking part", as the essential thing in life is not to have conquered but to have fought well. It is nothing to do with countries. This silly business of using medal scores is ridiculous. How can you compare a gold medal which Bermuda gets in the yachting, a country with 30,000 people, with a country with 200 milliion people on the other side. It is an individual competition and there is a certain charisma about the Olympic Games which is not there in any other competition in the world. When you have competed,

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as I have, and been to them all, when you are asked, you say, "Yes, I competed in the Olympic Games". You do not say, "I won a gold medal or a silver medal "¤I won both, but that is not the point. That is not what sticks in your memory. You have been privileged to compete in the Olympic Games and feel part of that worldwide family. These are pure statements of fact and ones about which I can speak from personal experience because I have been all my life connected with the Olympics. I have been on the International Olympic Committee since 1933, and, as I say, I have been to all the Olympic Games as head of the world athletics for 30 years before I resigned four years ago. I know how strong this movement is.
I think it is quite wrong to try and take it out of the athletes by saying they must not go, and not do anything in any other direction to try to show your objections to what has happened. The invitation went to the Olympic Committees. As I say, 87 have said, Yes, including ours, except for three or four sports; all the rest have weighed things up and think that they ought to go, and they are going. That is what the position is today. I do think it wrong for this political pressure to be put on such a worldwide movement. They are the International Olympic Committee Games, not the Russian Games. They can be proud if they provide good facilities, like Tokyo, Montreal, Mexico, and as London was too. The actual games are nothing to do with the country where they are staged. They are entirely a matter for the International Olympic Committee.
Lord GRIDLEY: My Lords, I wonder whether I may ask the noble Marquess this before he sits down. These are figures from the Foreign Office today. Can he explain how it is that there are 59 countries not going and only 77 going?
The Marquess of EXETER: My Lords, I do not know where they get their information from, but I am taking it from the International Olympic Committee. All the information is given to them, and I have all the countries listed. There are 86 who have said yes, 27 who have said no, and there are 29 who have not answered, or had not when this came out on 29th May. This is from the body
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that runs the Games, not from the Foreign Office. This is the International Olympic Committee and they know how many people are going.
Lord GRIDLEY: My Lords, is he noble Marquess saying that the Foreign Office is inaccurate?
The Marquess of EXETER: My Lords, the Foreign Office are not running it. The invitation goes to the national Olympic Committees. It is the Games of the International Olympic Committee and their figures are much more likely to be right than any others you might get anywhere in the world, because they are the people who run it.
8.56 p.m.
The Earl of DUNDEE: My Lords, I must apologise for not having put my name on the list of speakers yesterday. As your Lordships know, some of our newspapers published in Scotland, and which do not have printing offices in London, do not get here until the following afternoon. It was not until this afternoon, rather late this afternoon, that I heard for the first time that the local authority in Fife, where I happen to live, have made a gift of £1,000 to Russia for the purpose of financing the Olympic Games, which may bring some joy to the Russians but none at all to the unhappy people of Afghanistan whom they are now oppressing and depriving of their homes and also of their freedom. I would have hoped that the local authority of Fife might perhaps have spent this money on the social and economic improvement of their own local population, who might have gained a little real benefit from it. But, my Lords, the local authority have preferred to make their handsome gift to the most oppressive Government, the Government of Soviet Russia, which our long-suffering world has ever known, and I hope that their unfortunate constituents in Fife will not forget it.
8.58 p.m.
Lord KILMANY: My Lords, I, too, must apologise for not having put my name on the paper to speak earlier than I did. May I confine myself to following my noble friend on the local point, but although what I specifically raise is the figure concerned in Fife, it is the fact that

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other regional councils in Scotland have been moving in the same direction. The situation in the Fife region is that that council, on a vote, decided that they would donate £1,000 of the ratepayers' money to the Moscow Games appeal. It seems to me that in this free country if people want to support one thing or another they can do so, but to use the ratepayers' money for this purpose, which¤despite what my noble friend Lord Exeter has just said¤to very many people, as has been displayed in tonight's debate, is this abhorrent purpose, is to me an outrage. I do not want to speak merely in theory. I should like to ask my noble friend who is to reply to this debate whether he would be so good as to investigate the legal situation; whether in fact it is legal to devote ratepayers' money to such a purpose as this. He will no doubt require time to think it over, and I shall not press him too hard tonight, but perhaps he has already furnished himself with the answer.
It seems to me that it is outrageous for a regional council¤and this could apply not only to Fife, but to Strathclyde in bigger figures and to the Lothians Council in a figure between the Fife figure and the Strathclyde figure¤to act in this way. Is it really right, as regards a matter about which people feel so very sincerely, to devote the rates to such a purpose as these regional councils have seen fit to do?
9.1 p.m.
Lord HARMAR-NICHOLLS: My Lords, the fact that three noble Lords have felt excited enough to make a contribution without having put their names on the list is a tribute to the debate and to my noble friend for initiating it. Normally one comes in to listen to one's colleagues and if one's name is not on the list one feels that restraint must win, and one does not speak. However, not on this occasion, because I think that this is an important debate which has raised so many different points.
I was really surprised by what the noble Lord, Lord Goronwy-Roberts, said. He seemed to give the appearance of wanting to throw in the sponge. The whole burden of his speech was: "Well, it may have been right to try to persuade people not to go, but it is all over now". However, it is not too late. Indeed, the
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impact of last minute decisions could perhaps be even more significant and important than they would seem to be if organised from the first and everything goes according to a preconceived plan. So I am sorry that he gave the impression of wanting to throw in the sponge. There is still time to do something about it.
The noble Lord then made what I thought was the rather amazing comment about nobody else having been asked to make the sacrifices other than the athletes. It depends how far back one wants to go. One recognises the point and the athletes have our genuine sympathy¤a point made by the noble Lord, Lord Gore-Booth. Of course, they have trained for many years and have given a lot of thought to the matter; they have displayed great keeness, and it must be a grievous disappointment for it to be suggested that when the Games take place they will not be allowed to compete. One remembers in the last war how many professional people who had trained for years in their professions, how many people in business, and how many people in other aspects of life had given a great deal of their life to training and they knew that because the war had started they had to give it up, and did give it up, and it cost them a great deal. I claim that that was just as significant, and perhaps even more significant in the effect it had on their future life, their livelihood, and their ability to look after their families, than what one is asking the athletes to consider now.
They may say, "Ah, but that was wartime". Perhaps noble Lords do not appreciate that this war has been going on for some years. This is part of a war that has been going on for a considerable time. It is a war that we are not winning. Every year over the past five years they have taken over another country. It has been done under the auspices of somebody else, or they are supposed to have been invited. However, there is no cloak surrounding Afghanistan: they have gone right in. This war has been going on and it is one that we have been losing. There is a good chance that one can say that, in terms of getting themselves poised and getting raw material at their disposal, it is a war that the others are winning. So, I do not think that the noble Lord, Lord Goronwy-Roberts, who is usually so

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astute as regards these matters, can say that they are being asked to make a sacrifice no one else has made. It is common form that people should make sacrifices of this kind when the issues at stake are as important as this one.
Lord DAVIES of LEEK: My Lords, would the noble Lord do so?
Lord HARMAR-NICHOLLS: My Lords, I tried to suggest that in the last war I had to do just that. I had been articled and trained. I had reached the vital part of my business career and had borrowed money from the bank in order to become established. I had my commitments, but the law came in and I had to shut up shop.
Lord DAVIES of LEEK: Just remember, my Lords, that 20 million Russians gave their lives as well, and Lady Churchill was running the charity.
Lord HARMAR-NICHOLLS: My Lords, if the noble Lord wants to suggest out of gratitude that for part of the last war the Russians were our allies, but for only part of it when the real danger had gone, and if he is suggesting that in return for that sacrifice we must now forgive them anything they do and overlook any challenges they make to the freedom of the world, then I do not agree with him.
Lord SANDYS: Order, my Lords; the noble Lord must not make interruptions from a sedentary position.
Lord DAVIES of LEEK: My Lords, I am moved to do so when there is such rubbish spoken.
Lord HARMAR-NICHOLLS: My Lords, that is all very well, but the noble Lord's outlook is not the same as mine. I am saying that the noble Lord's noble friend in throwing in the sponge and in saying that no one else has made sacrifices, has not got his facts right. He speaks from the wrong basis.
I shall tell the noble Lord another matter that interseted me about what the noble Lord, Lord Goronwy-Roberts, had
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to say on this matter. He suggested that we ought not to ask the athletes to think about withdrawing their competition because it had not been made statutory. How long has the noble Lord, Lord Goronwy-Roberts, believed in conscription for everything? The strength of this is that it is a voluntary effort. Indeed, if it were to be made statutory¤which is conscription¤it would have lost its impact. I would say the same to my noble friend Lord Auckland as regards this matter. The strength of it is not that we have not removed all of the trade and all of our other commitments; the strength of it is that it would have been a message from people to people. It was not just another Government move against another Government.
I should like to point out to my noble friend Lord Exeter that if he really believes that the prestige of where the Games are held goes only to the International Athletics Committee and not to the country where they are held, he is completely wrong. It was shown in Germany, and it is clear again to-day if one reads the pamphlets and advertisements that have already been issued by Russia. They have made the great claim¤it is there on the record for the noble Marquess to see¤and they have said, "We are accepted because our country has been chosen to be the base for the Games". They are already doing it. The noble Marquess said that it is not their Games. He was quoting the pure theory that the regulations and the rules of the International Olympic Committee state that the Games are international. He and I have been in Greece when the European Games were held there, when the Colonels were sitting alongside us. He knows that the place where the Olympics take place benefits from a large part of the prestige that flows from the Games.
The Marquess of EXETER: My Lords, perhaps I may clear up that point. From the moment of the opening ceremony the Games have nothing to do with the host city. The host city has only to provide the facilities. The International Olympic Committee, the International Federation and the National Olympic Committees take over the whole thing for that time. The host city can be proud of the facilities, but it has no say in the Games.
Lord HARMAR-NICHOLLS: My Lords, I merely say to the noble Marquess that of course that is true. But he is quoting the theory of it. I am trying to remind him of the facts of the case. In their advertisements over the last six to eight months the Russians have not said how proud they are to have the Games in Moscow. They did not say that it was the International Olympic Committee that was entitled to all this prestige. Of course there is prestige. The noble Marquess also referred to the great power because of the charisma which the Games have. It is because they have that charisma and they have that impact that the contribution which they can make to freedom in the world can be made use of by the athletes.
The noble Marquess, Lord Tweeddale, asked why in 1972 the Games were held in Germany in the first place. It is a very fair question. However, in the light of the situation it was not necessarily a stupid move. In 1972 we were in the middle of what was known as detente, when everybody wanted to try to smooth out the antagonisms between the East and the West. In those years there were signs that perhaps both sides had seen the light and there was a chance that we would have detente and some sort of co-operation, one nation with another. It is the events that have taken place since then that have confirmed that detente seems to be a myth. It is because things have changed that the idea of their being there and their approach to it also have to change.
I do not think that we can ignore the impact which the Games had on Germany, which was raised by the noble Marquess. The only person I remember who at that time, in 1972, made a real protest about the Games going to Moscow, funnily enough, was Mr. Beverley Nichols, the journalist and writer. He was the one; yes, I think so. He said that he was at the German Games in 1936 and he recognised the impact that that was having, and at the time that Russia was accepted he recommended that we did not do it because of the impact it could have. He was the only person I can remember who made a first-class effort to try to avoid it happening.
But I believe that there are bigger issues at stake. My noble friend, who quoted
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Los Angeles, said that the multiracial problems would be present. Of course, there will be all sorts of problems. He recognises the difference between the internal problems and stresses that we all have and the attacking of another country, such as happened in Afghanistan. If we do not recognise that this is something special and significant, of course our views must be different. The noble Marquess, Lord Tweeddale, said that we must not spoil the sports. If the choice is between spoiling the sports and, as the noble Lord, Lord Gridley, said, making a contribution to the freedom of the world, then we have to spoil this particular sport. I am sorry that some noble Lords are so irritated, but it is an issue that I wanted on the record, and I should like my contribution to be included in it. I hope that even at this last minute the athletes who have the power in their own hands as individuals will see that possibly the greatest contribution they can make to the freedom of sport in the future is not to take part in these particular Olympic Games because of the circumstances surrounding the attack on Afghanistan.
9.13 p.m.
Lord TREFGARNE: My Lords, although I have answered more than one starred Question on the matter before us tonight, this is the first occasion on which I have been able to put the Government's position in any detail. I am therefore grateful to my noble friend Lord Kimberley for this opportunity to do so. First, I want to emphasise that the Government's attitude towards Britain's participation in the Moscow Olympics stems from our belief that the success or failure of the Games will affect every nation of the world and each and every one of their people. As I ventured to suggest to your Lordships some months ago, the edifice of detente has lately been shaken to its very foundations. Indeed, the new climate in international relations threatens a return to the cold war of 20 years ago.
What is it that has brought us to this sorry pass? It is quite simply that Russia, one of the two most powerful nations on earth, has, without the faintest shred of a pretext, marched into a nonaligned and sovereign neighbour in an obscene, display of massive and unprovoked aggression. They are now encamped no more than 400 miles from the

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heart of the West's vital oil supplies and hardly further from the deep, warm water ports of Pakistan, so long the object of their desires and aspirations.
But in the midst of these vital strategic implications, let us not forget the plight of the poor Afghanis. They find themselves ruled by an alien puppet no more representing their considered choice than the man in the moon. They find the Russian soldiery at every street corner, they hear incessant gunfire and rumble of tanks, and your Lordships will have seen the reports of many civilians, including school children, being shot and killed. Thus, we and our friends had to consider what effective¤and I emphasise the word "effective "¤action we could take to bring home to the Soviets the enormity of what they have done.
There was clearly no purpose in cutting off ordinary commercial contacts which the Russians could easily replace elsewhere. Equally there was no purpose in stopping routine exchanges about which ordinary Russians knew or cared little. We thus decided that our response to Afghanistan needed to be selective and would rely for its success on being visible and obvious to the whole world, including above all the Soviet people. I will not dwell on the detailed steps in commercial and cultural fields which my noble friend the Foreign Secretary announced on 24th January, except to recall that the single most important component of that package, and certainly the one likely to be far and away the most effective, was a Western boycott of the Olympics.
We reached this conclusion because we knew that the Russians attached the highest propaganda value, and understandably so, to the world-wide television and media coverage of the games. They would seek to show, by implication at least, that the very fact that the world had come to Moscow for the Olympics indicated approval of Soviet policies and the Soviet System. We believed then, as now, that if re-location of the Games could not be achieved, it was highly desirable that the watching world, not excluding the Russian people, should see the gaps and notice the absences, particularly from the winner's podium.
Let no one doubt the importance the Russians attach to these Olympics. They
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have made it clear, as my noble friend Lord Kimberley said, that the Games were to be used as a demonstration to the world of what they called the "correctness of the foreign political course" of the Soviet Union and of its services to peace. Your Lordships may recognise these words as coming from the now notorious Handbook for Party Activists which I have quoted to your Lordships before. The use of the Games in this way, as a vehicle for phoney and cynical political expression, surely flies in the face of the ideals of the Olympic movement.
The British Government have themselves been criticised for abusing the Olympic Charter by allegedly putting pressure on our athletes not to go to Moscow. Some press reports have referred to "berating", "bullying" and "hectoring". I am surprised that the Prime Minister's advice in her letters to Sir Denis Follows has attracted such criticism. The critics appear to overlook the fact that the Soviet Union would not itself stop at just offering advice to its athletes. Indeed, the lengths to which the Russians are going to ensure the propaganda success of the Games are extraordinary. The steps taken against dissidents, such as Professor Sakharov, to ensure that they have no contact with visitors have dismayed the Free World. These and other measures taken to ensure that the Olympic area in Moscow is rendered clinically clear of any temptation which might contaminate Russian citizens are reminiscent of the action taken by the Nazis at the time of the 1936 Games.
Indeed, the Soviet authorities themselves published, as early as April last year, well before Afghanistan, a propaganda book on past Olympics which contained a telling chapter on the Berlin Games. In it they said that the preparatory programme of Nazi propaganda included
"a number of police actions, with a view to concealing from the foreign public elimination of democratic freedom".
The book contains several other interesting parallels between 1936 and 1980, including complimentary references to athletes who refused to attend the Berlin Games because of Nazi policies. It is hardly surprising that after Afghanistan this book has been withdrawn from the Soviet market and copies rounded up.
It is also said that we should not mix politics with sport. Yes, in a perfect

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world that would indeed be very nice. But, alas! the Soviets have always seen international sport as an important instrument of government policy. Politics were much in evidence, were they not, at the Montreal Olympics? I will not bore your Lordships with further quotations from the Handbook for Party Activists which I mentioned earlier, but suffice it to say that, contrary to the wishful thinking of many, sport and politics are already hopelessly entwined.
Again, it is said that the Government are unfairly asking the athletes to fight their battles for them. I have already referred to the importance, in Soviet eyes, of a successful Games. Thus, we are not asking athletes to fight our battle, but their battle. In former times the British have not been unwilling to stand up on a matter of principle. We are surely entitled to ask the athletes, the officials, and the spectators to do their duty now.
May I now pause for a moment to deal with some of the specific points that have been raised this evening. The noble Lord, Lord Houghton of Sowerby, referred to United States' disappointment that so many of their friends and allies had not been able to follow their example in not accepting the invitation to go to Moscow. I certainly think that the noble Lord is right. We deeply regret that the IOC fail to recognise the need to stand foursquare behind the United States in this matter.
The noble Lord, Lord Gore-Booth, asked about the position regarding compensation. Citizens, whether athletes or not, have rights and responsibilities towards the maintenance of freedom. It would be consistent with these responsibilities, as I suggested earlier, if they were to decide to stay away from the Moscow Games, but the decision has to be made by individuals themselves. We have every sympathy with those placed in this dilemma, but we consider that the Government should not be under any obligation to pay compensation to those who choose not to go or who have unfortunately lost deposits placed, for example, with travel agents.
My noble friends Lord Dundee and Lord Kilmany referred to the question of the donation which is apparently to be
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made by the Fife local authority. I am informed that local authorities do have the power to act in this way and that they are able to contribute a sum of up to 2p rate for this kind of purpose. As my noble friend said, it is of course up to the local authorities to decide how to spend ratepayers' money, but local authorities also enjoy financial support from central Government through the rate support grant, and clearly we shall wish to consider whether there is anything further that we should do in that connection.
Several noble Lords raised the position regarding television coverage. Worldwide television coverage of the summer Olympics is clearly essential and indeed vital for the propaganda drive that the Russians will undoubtedly stage during the Moscow Games. In our country the BBC and IBA have of course complete editorial responsibility for the contents of their programmes, subject to the law and within the general rules prescribed by the BBC Charter and the Act of Parliament governing the Independent Broadcasting Authority. As my right honourable friend the Home-Secretary said in another place on 28th February, it would be contrary to long-established practice, endorsed by successive Governments, for Ministers to seek to influence them in deciding what to broadcast. It is therefore for the two authorities alone to decide what coverage to give to the Moscow Olympics, and we understand that they are in close touch on this matter.
My noble friend Lord Auckland referred to the possibility of a reduction in ceremonial at the Games. Reduction of ceremonial is no substitute for a boycott. We welcome the proposal discussed by both the Executive Committee at Lausanne and the Western European NOCs in Rome, and indeed we note that Lord Killanin made proposals on the reduction of ceremonial to Presidents Brezhnev and Carter; but we do not believe that a reduction in ceremonial would be an adequate substitute for non-participation, which remains the most effective way of bringing home to the Russian people the international opprobrium to which Soviet aggression has given rise.
My noble friend Lord Auckland also asked me how much trade had been cut off. I am afraid that I am not able to give him a figure because at this stage it is

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not possible to guess how much trade would have flowed from the soft credit agreement which has not been renewed, but low interest rates provided for by that agreement would doubtless have been very attractive to the Soviet Union, particularly in the present international climate of high interest rates.
My noble friend also referred to the Greek offer of a permanent site for the Olympics. This is indeed an interesting offer, but it is for the IOC to consider this matter in the first place. I believe that for Governments to comment at this stage would be to inject a political element which the offer is designed to avoid, but we understand that the IOC are now actively considering this proposal.
Finally, my Lords, perhaps I might offer some additional figures on those who have accepted and refused. I am not quite sure where the so-called Foreign Office figures came from, because they are not the ones that I have by me; but according to the figures that I have, 78 countries have accepted and 55 have refused. But, of couse, there are additional countries which have not yet made up their minds.
This brings me to the success or otherwise of the boycott. Much has been spoken and much has been written on this subject, and doubtless there will be more. There are those who claim that since the majority of the NOCs have accepted the invitation to go to Moscow, the boycott has failed. Others¤and I count myself among them¤believe that it is not quantity but quality that counts. An Olympic Games in which there are no American athletes, no Germans, no Canadians, no Kenyans and no Japanese cannot be a meaningful international event. The Moscow Organising Committee has said that a number of NOCs have not yet replied to the invitation to go to Moscow, and that the deadline will be extended in order to enable them to do so without penalty. They could decide either way. In addition, the deadline for the submission of the lists of competitors is not until 10 days before the event. The fact that an NOC has accepted to go to Moscow and has submitted a list of events in which it will compete is not the end of the affair. There is still time for individual sporting associations and
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individual athletes to change their minds and to decide not to compete. We hope that they will do so.
In one sense, of course, neither the boycott nor any of the measures we have taken since the Soviet invasion can be regarded as wholly successful while the killing and maiming continue in Afghanistan. That is why, from the Government's point of view, it is deeply regrettable that many of our sportsmen and women have decided to go to Moscow, and that similar decisions have been taken elsewhere, in many cases against the advice of Governments. That is why we shall continue to advise and to seek to persuade our athletes not to go.
But as we have said from the very start, the decision on whether or not to go rests finally with the athletes themselves. They must reconcile their decision with their consciences. They must have regard to their duty as citizens as well as to their particular sport. They must consider the overwhelming evidence that they will be assisting the Soviet Union's propaganda machine. They should reflect upon the fate of the many dissidents rounded up and imprisoned lest they should blurt out the awful truth of life in their dreary and soulless country. But, above all, they should reflect upon the fate of those hundreds, even thousands, of Afghanis who now lie murdered in the streets and mountains of their homeland. British athletes may doubtless win more medals this year than prevoiusly, but I, for one, will turn away in shame as they mount the winners' rostrum in Moscow.