Lords Sitting of 25 June 1980

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

LEGISLATION: PROGRESS ON CONSOLIDATION
Lord RENTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been and is being made with regard to the consolidation of legislation, and what steps will be taken to accelerate it in accordance with Recommendation 53 of the Committee on the Preparation of Legislation (Cmnd. 6053).
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I am happy to tell my noble friend that good progress is being made. Apart from measures relating only to Scotland, 13 Acts were passed in 1979. So far this year, six Acts have passed and a further six Bills been introduced. All that can be done to further consolidation is being done, but my noble friend will, of course, appreciate that it is not at present possible to deploy additional resources on this work.
Lord RENTON: My Lords, I should like to thank my noble and learned friend for that most encouraging reply. May I ask him whether, in order to maintain and perhaps even improve upon the present momentum in this vital work, he is quite satisfied that enough parliamentary counsel are being devoted to it?
The LORD CHANCELLOR: My Lords, in terms of draftsmen, there are four full-time and three part-time draftsmen at the Law Commission. The senior full-time draftsman is not involved on consolidation work, but almost all the time of his colleagues is devoted to it. In addition, consolidation Bills are oc-
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casionally drafted in the Office of Parliamentary Counsel when circumstances permit.
My Lords, my noble friend asked me whether I was satisfied. I think that the answer is: No, but I am doing my best.
Lord ELWYN-JONES: My Lords, although there is never room for satisfaction in this or in many other fields, is it not the case that the output of consolidation legislation has been unprecedently good in the last two or three years? Is not a tribute due on this occasion to the Joint Committee on Consolidation Bills? As the noble and learned Lord will know, the task that falls on that committee is very great indeed. Although we can never be satisfied that enough is being done, this is a field of law reform where enormous progress has been made.
The LORD CHANCELLOR: My Lords, I am very encouraged by what the noble and learned Lord has put to me. Since the beginning of 1975 some 53 consolidation Acts have reached the statute book, even leaving aside purely Scottish measures. As I said in my original Answer, 13 Acts were passed in 1979, and there will be a possible 12 this year. I do not think that we should be complacent, but I share with the noble and learned Lord, and I am sure with the whole House, our sense of gratitude to the Consolidation Bills Committee. I think that I can say with the noble and learned Lord, that a measure of congratulation should be reserved for the Lord Chancellor's permanent staff.
Baroness BACON: My Lords, is the noble and learned Lord aware that those of us who were members of this Committee and who spent several arduous years on it are very pleased to hear that such progress is being made? Will he not further agree that if some of the other recommendations were put into operation, it would mean that there would not be such a need for consolidation in future years?
The LORD CHANCELLOR: My Lords, the noble Baroness, whose name betrays a long and fruitful connection both with my family and my office, has put a very good but complicated question. I should like to see further progress made

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in implementing the recommendations of this committee and, indeed, of the Law Commission in this respect. I was a little disappointed at the reception which the Bill of the noble and learned Lord, Lord Scarman, received earlier this Session, when I did my best to redress a balance of almost universal disapproval for it, which I did not share. It is a little difficult to say. The use of the Keeling schedule is, of course, a very valuable device, but it depends on a good deal of very detailed work; and how difficult it is will, I think, emerge when I come to deal with the Highways Bill in Committee later this afternoon.
Lord SIMON of GLAISDALE: My Lords, while presuming to congratulate the Government, the Law Commission and the Joint Select Committee on the momentum of consolidations, I should like to ask the noble and learned Lord two questions which may appear technical but which I think are of constitutional importance. Will he ensure that the Joint Select Committee is not bypassed by the use of the Keeling schedule, to which he referred, for the consolidation of multiple enactments? Secondly, will he ensure that the draftsmen do not arrogate to themselves the right to decide, without reference to the Joint Select Committee, whether enactments are ripe for repeal on the ground that they are of no further utility, as that involves, not infrequently, a political judgment?
The LORD CHANCELLOR: My Lords, I should have to think rather carefully before answering either of those two questions in a positive way. I know that we do not want to bypass the Joint Select Committee. That would be a retrograde step. The Keeling schedule is probably a valuable device and probably does not require separate Committee scrutiny, because all that a Keeling schedule does is this. Supposing that a subsection is to be added to a Bill, you reprint the section with the proposed amendment in a schedule to the Bill. I would rather question how far Joint Select Committee reconsideration was necessary for that, but my noble and learned friend should not think that I am turning down that part of his question.
What is and what is not an arrogation by the draftsman of a political judgment
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can be a matter of degree and opinion, but I would agree that in general where a question arises it should be resolved by putting it to the Joint Select Committee. I think we shall see later this afternoon, when I come to deal with Amendment No. 8 of my Bill, an example of what I do not think really requires a judgment because it went to the Law Commission first, but it will none the less effect a small alteration in the law. I am anxious that the Joint Select Committee should not be bypassed.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, there are the usual four Starred Questions on the Order Paper. I suggest that perhaps we ought to move on to the second one.
Lord AIREDALE: My Lords, my noble friend Lord Foot has been trying very hard to get in a supplementary question.
Lord FOOT: My Lords, the question is not perhaps of all that importance, but I was going to ask the noble and learned Lord whether he considers, as a matter of English grammar, that you can accelerate a process of consolidation.
The LORD CHANCELLOR: My Lords, I think all processes can be accelerated in principle, but as a matter of English grammar I must submit myself to the judgment of the House.

UNIVERSITY TEACHERS: PAY PROPOSALS
2.45 p.m.
Baroness DAVID: 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 the pay proposals agreed between the University Authorities' Panel and the Association of University Teachers have been approved; and, if not, whether they can say how soon the matter will be settled.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young:)My Lords, the joint

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proposals of the Association of University Teachers and the University Authorities' Panel were received by the Department of Education and Science on 20th May. There can be no approval of the proposals in advance of negotiation; a meeting of the main negotiating parties with representatives of the department, in negotiating Committee B, will be held as soon as possible.
Baroness DAVID: My Lords, while thanking the Minister for that reply, I cannot say that it is altogether satisfactory or informative. What they are anxious to know is when the decision will be made. They have waited for a long time. In early 1979 they agreed to go to Clegg for a feasibility study. In the autumn they were told that it would have to be a full study; in April of this year they were told that a full study would not be possible without a feasibility study first, so they were back where they were a year ago. Is the Minister aware that agreement has been reached and is within the cash limits, so it would not seem difficult to ask to have a reply by a certain date? Can the Minister possibly give that?
Baroness YOUNG: My Lords, we are aware of all the circumstances that the noble Baroness has outlined. I should like to assure the House that there will be no unnecessary delay in bringing this matter to a satisfactory conclusion, and indeed we expect this to be before the end of next month.
Lord FLOWERS: My Lords, would the Minister agree that one of the most difficult problems facing the universities in the present financial framework in which cash limits are imposed is the uncertainty arising from salary claims and the effective value of their block grants? If so, would she further agree that an early settlement of academic salaries would benefit not only the university teachers themselves, among whom I should declare myself to be one, but—
Several noble Lords: Reading!
Lord FLOWERS: I am sorry, my Lords. An answer would very greatly help the universities to make the most effective use of the limited resources now placed at their disposal.
Baroness YOUNG: Yes, my Lords, we very much appreciate the position that the noble Lord has outlined. I cannot go further than what I have said in my answers to questions this afternoon.

DEFACING OF BANKNOTES
2.48 p.m.
Lord AIREDALE: 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 the prevalent habit of defacing banknotes by writing on them is an offence; and, if not, whether they consider that it ought to be an offence.
The MINISTER of STATE, TREASURY (Lord Cockfield): No, my Lords. Simply writing on a banknote is not an offence and it would be impracticable to make it one as it would be unenforceable.
Lord AIREDALE: My Lords, I am much obliged. However, if the Bank of England were empowered to refuse to take back untidy banknotes upon which cashiers had been doing their sums, would this not very quickly put an end to this untidy habit?
Lord COCKFIELD: My Lords, the Bank of England endeavour to maintain a good standard of banknotes. This task is in fact delegated to the clearing banks, which examine the notes which go through their hands and withdraw those which are in an unsatisfactory condition.
Lord STRABOLGI: My Lords, would the Government consider introducing a pound coin, since this would be more difficult to deface and would also take account of inflation?
Lord COCKFIELD: My Lords, such a coin was in common use before 1914. The Government are aware of the suggestions which have been made but they do not contemplate early action on these lines.
Lord ELWYN-JONES: My Lords, would not the answer to the Question on the Order Paper depend on what was written on the banknote?

SOUTH AFRICA: THE BRITISH LIONS' TOUR
2.50 p.m.
Lord HATCH of LUSBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the violence again being practised by the South African authorities, they will strongly urge the rugby union authorities to withdraw their touring team immediately.
Lord MOWBRAY and STOURTON: My Lords, I am sure that the recent tragic incidents in South Africa will have shocked everyone in this country and it is most unfortunate that the British Lions rugby team is playing in South Africa at this time. This only serves to underline the soundness of the advice given by the Government to the home rugby unions that this tour should not take place. But it must be for the rugby unions themselves to decide whether the tour should continue. They know full well the Government's view and I do not think that a further appeal would serve any purpose.
Lord HATCH of LUSBY: My Lords, while I thank the Minister for that Answer, may I ask whether he would agree that the Government have used far more publicity in their opposition to the attendance of British athletes in Moscow than they have to the tour of the Lions in South Africa? Would he further agree that this seems somewhat strange in view of the fact that the policy of apartheid, which we all abhor, directly affects the sport of rugby in South Africa, whereas the situation in Afghanistan hardly affects the conduct of sport in the Olympic Games?
Lord MOWBRAY and STOURTON: My Lords, far be it from me to start judging whether the apartheid in South Africa or the treatment of hundreds of people in various camps in Russia or the invasion of Afghanistan by the Russians add up and make whatever number they ought to make. I would say that in the case of the Olympics, there has been considerable reaction, as the noble Lord will be well aware, both at home and abroad and
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concentrated in a short period of time. Her Majesty's Government have been acting in this matter in concert with our international allies and, as such, our actions have naturally involved the Prime Minister and Foreign Secretary as well as the Minister for Sport. Moreover, there are several sports involved in the Olympic Games and the activities of Her Majesty's Government regarding the games are but one element in a package of measures. On the single item of the rugby tour, the Minister for Sport has represented the Government's views and has been publicly supported by the Prime Minister, too.
Lord BARNBY: My Lords, is my noble friend aware that probably a large proportion of the voters in this country deplore governmental interference in competitive recreation or sport anywhere? Is he further aware that in the Republic, vast numbers of non-whites as well as whites enjoy watching and indeed playing rugby football, which is there regarded as an illustration of national prowess?
Lord MOWBRAY and STOURTON: My Lords, I am aware that there has been some improvement in games in South Africa, but it is not sufficient, in the view of Her Majesty's Government, to warrant our going back to the Commonwealth with whom we made this agreement in 1977. The Government give advice to all; people tend to be selective about which advice they take and which they disregard.
Lord BROCKWAY: My Lords, as a rugby footballer 70 years ago, may I ask the Minister if he is aware that rugby was then a religion to us which included playing with others whatever their race or colour? Is he aware that our opposition to playing in South Africa today is based on the fact that there are rugby players who are Africans who are as capable as any white players, as the Rugby League in this country shows, but who are not able to play for their country as anyone should have the right to do?
Lord MOWBRAY and STOURTON: My Lords, having been brought up at a religious Benedictine institution where rugger was second only to religion, I am

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well aware of what the noble Lord felt when he played 70 years ago. We are well aware of the sadness of the case that not all people can represent South Africa, and that is precisely why the Government have gone along with the Gleneagles agreement and completely supported the same view as the last Government.
Lord GORONWY-ROBERTS: My Lords, may I strongly support the intentions behind the questions put to the Minister this afternoon by my noble friends, but ask him whether he will confirm that now, as in the past, Her Majesty's Government equally denounce the actions in Afghanistan and in South Africa and equally advise our sportsmen to decide not to participate in the Olympics and in South African sports? Beyond that, will he confirm also that there is nothing but equal denunciation and equal advice passed on by the Government to our sportsmen in both cases? May I, in passing, hope that the noble Lord continues to enjoy rugby and Benedictine?
Lord MOWBRAY and STOURTON: Unfortunately, my Lords, at my Benedictine place of education we did not get the drink of the name! I can assure the noble Lord that the Sports Council are in receipt of advice from the Government, which, according to their charter, must, as noble Lords opposite are aware, be taken. They are not, by Government advice, allowed to sponsor any events in South Africa or where official South African teams are playing, just as they are not allowed, by our same advice, to support anything going on in Moscow at the Olympic Games. The advice is the same in both cases.
Lord HATCH of LUSBY: May I bring the Minister back to my original Question, my Lords? While congratulating the Government on maintaining the stand taken by the Commonwealth in 1977 at Gleneagles, may I ask whether he would agree that in the present circumstances it would reinforce the advice that was originally given by the Government to the rugby unions if, at this very tragic time, that advice was repeated and the Government strongly urged the four rugby unions to recall their touring team in view of the violence we have seen in the past week in South Africa?
Lord MOWBRAY and STOURTON: My Lords, I find myself in my heart wanting to tell the noble Lord that I wish he would take our advice equally to heart on other matters. There are people being oppressed in Russia and there are occupation forces in Afghanistan. The rugby tour he refers to is three-quarters of the way through. We have given constant advice, but it has not been taken. I suggest it is very unfair that noble Lords should always concentrate on one side or the other; we give advice to both sides. I do not hear the noble Lord complaining about Olympic teams going to play with the Russians in Moscow.
Lord HATCH of LUSBY: My Lords, there is no apartheid in the selection of Olympic teams. May I ask the Minister to withdraw the allegation or suggestion he made that I am partial in the attempt to maintain full sporting contact irrespective of colour or creed, which is being debased in South Africa but which, so far as I know, has nothing to do with the selection of sporting teams in Russia?
Lord MOWBRAY and STOURTON: There are matters apart from occupation, my Lords. There are matters of intelligence and intellectual freedom not being allowed their sway. We are giving advice to both sides on this matter. The Barbarians and other rugby teams and any other body wishing to go to South Africa are strongly advised by us not to go. No Government hospitality or anything like that is forthcoming. The same pretty well applies to the Russians, because we do not think that the great Russian public should be allowed to believe that we do not disapprove strongly of what they are doing and have done.
Lord FERRIER: My Lords, would my noble friend agree that the great feature of rugby football, be it religion or what have you, is that you never know which way the ball is going to bounce?
Lord MOWBRAY and STOURTON: That is indeed true, my Lords.

LONDON TRANSPORT BILL
2.59 p.m.
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to

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move the Motion standing in my name on the Order Paper. The House will recall that it agreed last Thursday to an Instruction on the London Transport Bill moved by the noble Viscount, Lord Simon, regarding the provisions for compensation payable to certain Church authorities in respect of the works authorised by Part II of the Bill. I have considered how best the Unopposed Bills Committee can give effect to the Instruction, and I have come to the conclusion that it would be an advantage to the committee if they could hear evidence from parties, other than the promoters, who are affected by the Bill. The present situation is that Private Bills Standing Order No. 124 provides that
"A Committee on a Private Bill shall not, without express authority from the House, hear evidence other than that which may be tendered by any parties entitled to be heard".
Your Lordships will appreciate that in the case of a Bill such as this, where there are no petitions against it, the committee might be at a disadvantage if they were limited to hearing only evidence submitted by the promoters, who would of course be the only parties entitled to appear before the committee. Therefore the purpose of the Motion to which I am asking the House to agree this afternoon is to give the committee on this Bill the authority to hear extra evidence, should they wish to do so, in addition to that of the witnesses called by the promoters. My Lords, I beg to move.
Moved, That the committee to whom the Bill is referred may hear evidence other than that tendered by the promoters. —(Lord Aberdare.)
On Question, Motion agreed to.

OVERSEAS DEVELOPMENT AND CO-OPERATION BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

STATUTE LAW REVISION (NORTHERN IRELAND) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill he now read 3a. —(The Lord Chancellor.)
Lord BLEASE: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor for progressing this consolidating measure. We have noted the tenth report of the Joint Committee on Consolidated Bills which considered this particular Bill. I also wish to compliment all concerned with this consolidating measure and warmly to welcome the considerable amount of work which has been undertaken to repeal the obsolete, spent, unnecessary and superseded legislation which, according to my count, covers 195 separate Acts, dating back as far as the Gaming Act 1738. We warmly welcome and support the legislation now before us.
The LORD CHANCELLOR: My Lords, I am deeply grateful to the noble Lord, Lord Blease, for what he has said. Northern Irish law is in a very complicated state, and I am glad to do what I can to assist in simplifying it.
On Question, Bill read 3a, and passed, and sent to the Commons.

HIGHWAYS BILL [H.L.]
3.6 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that the House do now resolve itself into a Committee on Recommitment on this Bill.
Moved, That the House do now resolve itself into Committee on Recommitment. —(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[Lord Aberdare in the Chair.]
Lord ABERDARE: With the permission of your Lordships' Committee, where there are no relevant amendments on the Marshalled List I shall put the clauses en bloc, unless any noble Lord indicates that he wishes to speak on any of them. Therefore, the first Question is that Clauses 1 to 6 stand part of the Bill.
Clauses 1 to 6 agreed to.
Clause 7 [Delegation etc. of functions with respect to metropolitan roads]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 6, line 38, leave out ("(2) or").
The noble and learned Lord said: I shall have to move these amendments clause by clause, but it might be for the convenience of the Committee if I speak to them together. The Committee may think it odd that there are 27 amendments to a consolidation Bill, but, with the leave of your Lordships, I can be very brief. With one exception, to which I shall come, all the amendments are drafting or technical amendments, and none makes any change in the existing law. Most of them correct mistaken references or cross-references in the original draft. In a Bill of 348 clauses and 25 schedules some minor drafting errors are surely excusable.
The one exception is Amendment No. 8, which I shall explain now and move formally later, if that is convenient. This amendment changes the law but only in accordance with, to my mind, a wholly acceptable recommendation of the Law Commission. The amendment refers to Clause 305 of the Bill, which is the penalty clause. By what was apparently a legislative oversight, but, if it was not, almost certainly a legislative mistake, what was originally a single penalty clause in the Public Health Act 1875 was diverted into two separate legislative channels by the Public Health Act 1936 and the Highways Act 1959. The Law Commission now recommends that they be restored to a single main stream by the omission of subsection (1) of Clause 305.
The effect will be that all offences covered by Clause 305 will be subject to a maximum fine of £25, which is a fairly modest sum, with a continuing maximum surcharge of £5 a day in the case of a continuing offence. In my opinion, though it might be open to question, the effect is thus minimal, but it marginally increases the maxima applicable in offences now covered by the existing Clause 305(1). Having said that, I beg to move the first amendment standing in my name.
On Question, amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendments Nos. 1A, 2 and 3:
Page 7, line 22, leave out second ("to") and insert ("by").
Page 8, line 1, leave out ("subsection (3)") and insert ("subsections (3) and (4)")
Page 8, line 4, leave out ("it applies") and insert ("they apply").
The noble and learned Lord said: I formally beg to move these amendments.
On Question, amendments agreed to.
Clause 7, as amended, agreed to.
Clauses 8 to 35 agreed to.
Clause 36 [Highways maintainable at public expense]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 4:
Page 37, line 8, after ("by") insert ("the Minister of Transport or").
On Question, amendment agreed to.
Clause 36, as amended, agreed to.
Clauses 37 to 260 agreed to.
Clause 261 [Power to confirm, etc., compulsory purchase order in part and postpone consideration of remainder]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 5:
Page 231, line 36, leave out ("7(4)") and insert ("7C").
On Question, amendment agreed to.
Clause 261, as amended, agreed to.
Clauses 262 to 286 agreed to.
Clause 287 [Power of Minister and Greater London Council to execute in Greater London road improvements not involving widening]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 6:
Page 255, leave out line 3 and insert ("the Minister or the Council may specify for this purpose in a notice given by him or them").
On Question, amendment agreed to.
Clause 287, as amended, agreed to.
Clauses 288 to 291 agreed to.
Clause 292 [Supplementary provisions as to powers of entry for the purpose of survey]:
3.10 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 7:
Page 258, line 38, leave out from ("jointly;") to end of line 39 and insert—
("(b) in relation to statutory undertakers carrying on any railway, tramway, road transport, dock, harbour or pier undertaking, the Minister of Transport; and
(c) in all other cases, the Secretary of State.").
On Question, amendment agreed to.
Clause 292, as amended, agreed to.
Clauses 293 to 304 agreed to.
Clause 305 [Penalty for obstructing execution of Act]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 8:
Page 265, leave out subsection (1).
The noble and learned Lord said: This is the amendment to which I drew special attention in my opening speech. I beg to move.
Lord ELWYN-JONES: I have been looking in the direction of my noble and learned friend Lord Simon of Glaisdale, to see whether he would rise in wrath about this, but he does not look particularly wrathful at the moment. It seems to me that, given the assurance that the change in the law which is involved here has the approval of the Law Commission, that indicates that this is not a rushing through of something behind the back of the watchmen who observe that the interests of Parliament are carefully preserved.
However, would the noble and learned Lord indicate where the Law Commission has animadverted (if that is the right word) upon this matter? I am not doubting that what he has told us is the case, but it is of interest to know (for the record, at any rate) where this matter was dealt with. I am merely playing for time, to enable the answer to be communicated, and I think the judgment from on high is about to be delivered any moment now. It would be of interest to know whether it was in miscellanea or
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whether it was referred to expressly. But subject to information about that, I myself have no objection to what is proposed because on the merits of what is proposed it seems to make good sense, and that, after all, ought to be the test of any legislation.
Lord SIMON of GLAISDALE: I certainly do not feel any occasion for wrath in relation to this amendment, but I should like to ask my noble and learned friend whether he is quite satisfied that this comes within the provisions of the Law Commission Act. I have not got the formula exactly in mind, but I think it has to be a minor amendment. There is another epithet, which escapes me, but it is to much the same effect. Is my noble and learned friend quite satisfied that that provision is intra vires?
The LORD CHANCELLOR: I am very grateful to both noble and learned Lords for what they have said. To the noble and learned Lord, Lord Elwyn-Jones, I would say that the answer is, Yes, it is referred to especially. It is referred to in Report No. 100, Recommendation 19. To my noble and learned friend Lord Simon of Glaisdale, I would say that I think I am in a position to give him an answer. I cannot quite read it, but it says, "Yes, it does". That was my opinion, because in my original speech I said I regarded it, not indeed as minor but as minimal.
The point really is this, that there were certain prescribed offences in subsection (1) which provided that a first offence should be punishable by a fine of £10 and a second offence by a £20 fine. That was some time ago. The effect of the total withdrawal of subsection (1) is that the maximum is now £25 for both first and second offences, and in the event of a continuing offence it is £5 a day. I personally regard this as minimal, but I am willing to accept "minor" on the basis that the greater includes the smaller.
On Question, amendment agreed to.
Clause 305, as amended, agreed to.
Remaining clauses agreed to.
Schedules 1 to 18 agreed to.
Schedule 19 [Compulsory acquisition of rights: modification of 1946 and 1965 Acts]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 9:
Page 331, line 19, leave out ("5") and insert ("4").
On Question, amendment agreed to.
Schedule 19, as amended, agreed to.
Schedules 20 to 22 agreed to.
Schedule 23 [Transitional provisions]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 10:
Page 344, line 12, at end insert—
("National Freight Corporation
.Until the appointed day within the meaning of Part II of the Transport Act 1980—

(a) subsection (4) of section 221 of this Act has effect as if the National Freight Corporation were included amongst the bodies mentioned in paragraph (i) of that subsection,

(b) subsection (4) of section 331 of this Act has effect as if the National Freight Corporation were included amongst the bodies mentioned in that subsection.").

Lord ELWYN-JONES: I take it that the use of the consolidation process to catch up with new legislation is customary and is in order? I gather this is the purpose of this amendment?
The LORD CHANCELLOR: Yes, I think this was an accidental omission by the draftsman. I am told by my noble friend that it is also customary. My noble friend is most helpful. The extraordinary versatility of my noble friend has more than once been commented upon in your Lordships' House: he is now turning his attention to law.
Lord ELWYN-JONES: He is also supposed to be able to run very fast, which is characteristic of so many Welshmen, if I may say so.
On Question, amendment agreed to.
Schedule 23, as amended, agreed to.
Schedule 24 [Consequential amendments]
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendments Nos. 11 to 21:
Page 346, line 4, at end insert—
("Public Health Act 1936
. In the Public Health Act 1936—

(a) in section 20(1)(b), for "Part IX of the Highways Act 1959" substitute "Part XI of the Highways Act 1980";

(b) in section 21, for subsection (4) substitute—

"(4) Nothing in this section shall be construed as limiting the rights of a county council under section 266 of the Highways Act 1980.".")
Page 347, line 12, at end insert—
("London Government Act 1963
.In Schedule 9 to the London Government Act 1963, in Part II, in paragraph 5, omit the words from "and" to the end.").
Page 348, line 32, at end insert—
("( ) in section 27(6)(a) for the words from "classified" to "or as" substitute "by virtue of section 12 of the Highways Act 1980 (whether as falling within subsection (1) or as being so classified under subsection (3)) a principal road, or";")
leave out lines 33 and 34 and insert—
("( ) in section 84B(8) for paragraph (a) substitute—
"(a) by virtue of section 12 of the Highways Act 1980 (whether as falling within subsection (1) or as being so classified under subsection (3)); or ";")
line 39, at end insert—
("( ) in section 108(3) for "the Highways Act 1959" substitute "the Highways Act 1980";")
Page 349, line 3, at end insert—
("( ) in Schedule 3, in Part I, in paragraph 2(d) of the entry relating to the Acquisition of Land (Authorisation Procedure) Act 1946, for "Schedule 7 to the Highways Act 1959, as amended below," substitute "Schedule 6 to the Highways Act 1980".")
Page 350, leave out lines 16 to 18.
Page 352, line 9, at end insert—
("Local Government Act 1972
.In Schedule 16 to the Local Government Act 1972, in paragraph 17(a), after "under" insert "section 12(3) of the Highways Act 1980 or".")
Page 353, line 17, leave out ("and "special road"") and insert ("," special road" and "trunk road"")
Page 354, leave out line 1 and insert—
("(ii) in the definition of statutory undertakers" for "the Highways Act 1959, the Post Office," substitute "the Highways Act 1980, the Post Office and"; and omit the words from "and, except" to "highways)".")
Page 354,line 6, at end insert—
("Development of Rural Wales Act 1976
.In Schedule 3 to the Development of Rural Wales Act 1976—

(a) in paragraph 9(2)(b) after "purposes of" insert "section 10 or 14 of the Highways Act 1980 or of";

(b) in paragraph 40 for "the Highways Act 1959" substitute "the Highways Act 1980.".")

The noble and learned Lord said: I think it would be for the convenience of the Committee to move the amendments to Schedule 24 en bloc. They are all corrected references, I think.
On Question, amendments agreed to.
Schedule 24, as amended, agreed to.
Schedule 25 [Repeals]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendments Nos. 22 to 26:
Page 354, line 20, column 3, insert ("Section 23(1).")
Page 354, line 41, column 3, at end insert ("In Schedule 9, in Part II, in paragraph 5, the words from "and" to the end.")
Page 354, line 43, at end insert—

"1965 c. 24.

Severn Bridge Tolls Act 1965

In section 22(2) the words "(whether before or after the passing of this Act)".").

Page 356, line 5, column 3, at beginning insert—(" In section 16, paragraph (c).")
Page 356, line 44, column 3, at end insert— ("In section 44(1) in the definition of "statutory undertakers" the words from "and except" to "highways)".")
The noble and learned Lord said: I think I can also move these amendments together. I beg to move the amendments relating to Schedule 25.
On Question, amendments agreed to.
Schedule 25, as amended, agreed to.
House resumed: Bill reported with amendments.

CORONERS BILL
3.19 p.m.
Lord RENTON: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Renton.)
On Question, Motion agreed to.

FILMS BILL
3.20 p.m.
Lord TREFGARNE: My Lords, I beg to move that the Films Bill be now read a second time. The main purpose of this Bill is to change the financial arrangements of the National Film Finance Corporation, (the public corporation created by statute in 1949 to finance film making). There is also provision for some existing measures to be prolonged, such as the screen quota, which ensures that at least a minimum percentage of screen time at cinemas is used for showing British-made films, and the Eady levy, which is collected at the box office and provides a pool of money to be used as an incentive to film production in Britain. Some adjustments to current provisions are also proposed; for example, the operation of the screen quota (to which I have already referred) at multi-screen as opposed to single-screen cinemas. Finally our films legislation will be made compatible with the Treaty of Rome in that the labour cost requirement under our legislation for a film to be registered as "British"—thus becoming eligible for payments from the Eady levy—will now be extended to include citizens of EEC countries.
Before I explain the provisions of the Bill in detail, I think your Lordships might like me to say a few words about our film industry. Since the last war the United Kingdom has become a major centre of quality film production. We now enjoy an enviable reputation. There is the excellence of our actors and actresses, the expertise of our producers, technicians and script-writers, and the highest professional standards of all who participate in the making and finishing of films. Our studios have been in the forefront of modern technological advances.
Despite all this, some will say that the film industry is now in a state of crisis. But I recall the opening sentence of the Second Report of Sir Harold Wilson's Interim Action Committee on the Film Industry:
"The British film industry has been having crises for over 50 years, for most of its long life".

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Film making is an odd hybrid; a mixture of manufacturing and art, producing an end product which is never standardised. Each film is a unique one-off product. This makes it impossible to predict the reaction of the market with any certainty. Yet the scale of investment in a film can be very great and the risk enormous. I am told that only one film in 10 shows a profit and perhaps another two in 10 break even. Clearly it is not easy to keep a sense of proportion about an industry with such characteristics. It is hardly surprising that for over 50 years opinions have frequently swung between extremes of pessimism and optimism.
There is no doubt that change has had, and is still having, a great impact upon the film industry in most countries. The rapid growth of television and leisure activities in the United Kingdom has led to dramatic reductions in cinema attendances. Immediately after the war there were on average about 31 million attendances a week; last year there were about 2 million a week. Over the same period the number of licensed cinema screens decreased from 4,700 to 1,600, while seating capacity has declined to about one-sixth of what it was thirty years ago. It is difficult to believe that even massive sums of public money, if they had been available, would have done much to halt this decline, which, I fear, simply reflects changes in leisure habits. And we need to remember that television has provided a growth market for filmed material, and thus for the employment of many people who a generation ago might have worked in the cinema film industry.
The Bill now before your Lordships gives effect to the statement of policy in July last year by my right honourable friend the Secretary of State for Trade. That described our intention of restructuring the finances of the National Film Finance Corporation which is now approaching the end both of its statutory power to lend money and of the funds available under existing legislation.
Clause 1 of this Bill extends for five years, that is, until the end of 1985, the power of the corporation to make interest-bearing loans for the production or distribution of films on a commercially successful basis. The functions of the corporation will remain unchanged except
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that it will now have power to give direct financial assistance to meet expenses such as script-writing fees, which are incurred before the commencement of film production. Your Lordships will appreciate that fees for script writing have to be paid on many more projects than ever turn into films; and these have to be paid (even on successful scripts) some time before production begins.
Since the passing of the Cinematograph Films Act 1975, loans for such assistance have been provided from a body called the National Film Development Fund, which in turn is financed by payments from the Eady levy. This type of assistance formerly provided by the National Film Development Fund may now be made direct by the National Film Finance Corporation. Experience has shown that the fund has not had the means to market scripts, whereas the corporation will be better able to take full advantage of the scripts it backs. I should like to thank most warmly all of those who have given their services, largely voluntarily, to the National Film Development Fund, particularly all those who have served on its advisory committee.
Clause 2 of this Bill introduces the "new look" to the corporation's finances which my right honourable friend announced last year. Since its inception the corporation has borrowed from Government at appropriate rates of interest. Its borrowing limit has been progressively raised to £11 million. This limit has now been reached and the corporation is thus unable to give further support to the industry. Although the corporation has laid upon it a statutory duty to achieve a financial break-even, it has not been able to do so and bit by bit it has lost money; although over the years it has advanced over £31 million to aid the production of some 750 feature films. Film making is a very speculative business and, although the corporation's track record in selecting projects is no worse than the industry in general, it has not yet managed to back what the trade calls a block-buster. It is on these that investors receive handsome returns to offset the more frequent but smaller losses.
Clause 2 repeals the department's power to lend the corporation money and proposes to write off all its capital debts owing to Government, at present £11

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million. Your Lordships will not be surprised to learn that this proposal has been publicly welcomed by the corporation. Although these loans have been made to the corporation at Government lending rates—and indeed over £4 million has been paid to Government in interest charges over the years—no interest has been paid for the last three years. The interest outstanding is now nearly £2 million. This and the capital debt of £11 million, making £13 million in all, will be written off. Clearly the corporation cannot repay these sums and we should not delude ourselves by pretending it can. We want to give it a fresh start. To this end we propose to make a once-and-for-all grant to the corporation of £1 million as financial pump-priming until other sources of funds are forthcoming.
What are to be these sources of funds? One may be short-term commercial borrowing. The corporation has long had the power to borrow up to £2 million from non-Government sources, with the approval of the Secretary of State and the Treasury. This limit is to be increased to £5 million. Such borrowings will be approved but not guaranteed by Government. As an interim measure, pending the enactment of this Bill, we have recently undertaken to guarantee borrowings up to £1 million. This guarantee will cease when the new measures have come into effect.
The other main source of funds for the corporation brings me to an important innovation in this Bill. It is to provide the corporation for the first time in its history with an assured annual income, enabling it to plan and budget ahead. I have already mentioned to your Lordships the so-called Eady levy, which has been a major feature of the post-war British film industry. After payments from the levy, which may be made annually to certain bodies associated with the film industry, the remaining amount of levy is then distributed to the makers of films which qualify as British. We propose that an annual subvention to the corporation shall in future be the first call on the levy. Each year for the next five years the corporation will receive £1·5 million, or 20 per cent. of the levy, whichever is the greater. This alone, the corporation estimates, should ensure its participation
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in four or five feature-length films a year that might not otherwise be made.
We believe that these measures, taken together, will enable the corporation to continue to play a distinctive part in British film making, and to play it far more independently than ever before. The board of the corporation is composed of seven persons, all appointed by the Secretary of State. At present five members can be appointed in addition to the chairman and the managing director. Clause 3 proposes that one extra member may now be appointed. The maximum number of members will thus be six, plus the chairman and the managing director. This will provide more scope for a broader balance on the board. One possibility, for example, is that because of the diversion of part of the Eady levy to the corporation the extra member might be a person directly representative of the interests of the makers of British films. This has not yet been decided, but it is an example of the possibility of a broader balance that I mentioned.
Clause 4 extends the life of the levy to 1985. It will continue to provide an incentive and a reward to the makers of films in this country. It will also provide a guaranteed income for the corporation in the manner I have described. The details of the collection and distribution of the levy are dealt with separately in regulations which are laid before Parliament in the usual way.
Under Clause 4 there will be four levy periods of 52 weeks and one of 56 weeks. The 56-week period has been introduced at the request of cinema exhibitors. It is simply to correct an anomaly in the calculation of their levy payments caused by the calendar. After 23 years, the commencement date for the levy is now almost one month earlier than in the original legislation, putting cinema exhibitors with high seasonal fluctuations in their takings at a disadvantage in the calculation of levy payments. Clause 4 will correct this anomaly by moving the starting date of the levy periods further away from the end of the holiday season.
Clause 5 extends the life of the screen quota for five years, to the end of 1985. The quota is the oldest form of legislative protection for the film industry. Since 1928, there has been an obligation on

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cinema exhibitors to show a prescribed quota of British films. Since 1973, Community films have qualified for quota levy equally with British films. In fact, films made in this country still account for by far the greater part of the quota achievement. The Bill does not make any changes in the percentage of United Kingdom and Community films which must be screened. These have been 30 per cent. for first feature and 25 per cent. for supporting programmes since 1950 and 1948 respectively. Changes in these percentages may be made by the Secretary of State only after consultation with the Cinematograph Films Council, the statutory advisory body on film matters, and by an order which must be approved by Parliament.
Clause 6 also concerns quotas, and deals with a problem which has arisen in the last few years. Many cinemas have been subdivided into smaller auditoria, known as multi-screen complexes. This development offers not only more economic operation but also more variety to cinema-goers. Under present arrangements exhibitors must achieve the 30 per cent. and 25 per cent. quotas on each individual screen in a complex. It is proposed under Clause 6 that all screen performances in a complex may, providing the screens are in common ownership, be added together for calculating quotas. Exhibitors at complexes will thus be able to show films on whichever screen they consider to be most economic in terms of seating capacity. They will be able to devote certain screens to certain types of films instead of having to move films around from screen to screen within a complex, after making time-consuming calculations as to how they may achieve the required quotas on each screen. In short, there will be greater flexibility and simplicity for exhibitors, helping them to make the best use of their facilities.
Clause 7 proposes that the Secretary of State shall have power to suspend, but not abolish, the quota requirements; and to reimpose them should this seem necessary. This power could not be used before consultation with the Cinematograph Films Council. An order made under this section would have to be approved by both Houses.
In recent years doubt has been cast
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upon the effectiveness of the quota, and Sir Harold Wilson's Interim Action Committee were unable to come to a unanimous verdict about it in their second report. The report explained that, although in general producers and the unions are in favour of the quota, distributors and exhibitors would be pleased to see it go. The point was also made that, to the extent that the quota obliges exhibitors to show films other than those they might choose on commercial grounds, the cinema is that much less attractive to the public and less levy is therefore collected. The Cinematograph Films Council, after an investigation of the quota, voted last year—with some members dissenting—for power to be taken to suspend the quota. The council considered that it no longer fulfilled its original protective purpose.
I should like to make quite clear, however, that we have not made up our minds about the quota. But it would seem less than sensible not to at least have the power to suspend it. Before taking such a decision there would be consultations with all sides of the industry. Even if it were then decided to embark upon a trial period of suspension and if the experiment showed no ill effects, amending primary legislation would still be necessary to do away with the quota system. In other words, there would have to be further detailed assessment and scrutiny by the industry and by both Houses.
Lord DAVIES of LEEK: My Lords, would it put the Minister off his stroke if I asked a simple question about Clause 5 and Clause 7 together? I may be completely wrong. Under the quota it was obligatory to show a British film. I understood from the Minister's speech as he was going along—here I may be wrong—that if an EEC film—a French film or a film from any country in the Community—is shown the exhibitor will have followed the law and will have shown his quota. Lastly, the Minister put a saving provision in Clause 7. If the Government feel like it, and exhibitors all over are dead against it, the quota system can be abolished. Have I got it right or have I muddled it up?
Lord TREFGARNE: My Lords, the noble Lord is not quite right, I think. I

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wonder whether he will allow me to deal with that point more fully when I come to wind up at the end of the debate we are to have. The noble Lord has raised a proper point which I will deal with properly at the right time.
Clause 8 amends our existing legislation. Section 17 of the Films Act 1960 requires that for a film to be registered as British a requisite amount of the labour costs should be payments to British subjects or citizens of the Republic of Ireland, or persons ordinarily resident in a Commonwealth country or the Republic of Ireland. The "requisite amount" referred to is usually 75 per cent. of the total labour cost. The significance of the 75 per cent. requirement is that to be registered as "British" is the first hurdle a film must clear on its way to be eligible for distributions from the levy. In August 1979, the EEC Commission drew our attention to their view that this requirement appeared to be incompatible with Article 48 of the Treaty of Rome, concerning freedom of movement of workers within the Community. Similar observations were addressed by the Commission to four other member states in respect of their film aids.
Following discussions between my honourable friend Mr. Tebbit, the Parliamentary Under-Secretary of State at the Department of Trade, Viscount Davignan, the Industrial Commissioner, and M. Vouel, who is concerned with competition policy, it was proposed that, first, the United Kingdom would broaden the 75 per cent. labour cost requirement to include citizens of other member states; and, secondly, at the same time amendments would be introduced to preserve the infrastructure of the British film-making industry.
Clause 8 deals with the first aspect of the 75 per cent. labour cost requirement. Citizens of other member states will now count equally in the labour cost qualification with Britons, Irishmen, Australians, et cetera. This satisfies the requirements of the treaty but is unlikely to make much difference in practice to the way our industry works. Films are the product of teamwork. People who have worked together before, knowing each others' talents and idiosyncrasies, understanding each others' language and style, often prefer to work together again.
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As regards the second aspect—preserving the infrastructure of our film industry—this will be done later by statutory instrument. Clause 8 of the present Bill will not come into force until that instrument is approved by both Houses, when there will be full opportunity to discuss the details. These have not yet been drafted, but their objective will he to ensure that films that are to qualify wholly or partly for levy distributions are prepared, made and processed wholly or largely in this country; or, where overseas location shooting is involved, that shooting is prepared in and based on this country. There have been discussions with representatives of film-makers and film unions, and they are broadly satisfied with this concept. But it must be made clear that until the statutory instrument is approved by Parliament, the present labour cost provisions and the present levy distribution regulations will continue to apply. Under Clause 9, this Bill (except for Clause 8) comes into force on the Sunday after the day it is enacted, mainly because of technical aspects of the levy.
I should like to conclude by saying that the Government whole-heartedly support the concept of an indigenous British film industry. Our priorities are to put the National Film Finance Corporation on a better financial basis, and to renew those arrangements such as the screen quota and the Eady levy which benefit the whole film industry. These are the matters with which this Bill mainly deals. They are matters of some urgency; without this Bill they will soon lapse and uncertainty will be caused in the film industry. Although described as "a modest Bill", it is thus of considerable importance to the film industry. I trust your Lordships will therefore see fit to endorse its modest but worthy aims. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Trefgarne.)
3.41 p.m.
Lord BEAUMONT of WHITLEY: My Lords, I should like to thank the Minister very much for his explanation of the Bill. May I be allowed to say, since by some chance it is the first time that I have been speaking on a matter of which the Minister was in charge, how much

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we all appreciate—I certainly do—the clarity of exposition which he brings to everything in your Lordships' House. It certainly is outstanding, in my experience.
This is a modest little Bill, as the Minister said. In fact, it is so modest that it almost disappears. It was very noticeable that of all the time spent on it in another place, including three sessions in Committee, very little was spent on the actual Bill and a great deal on what the Bill should have been, or what another Bill should be, because there is very little to the Bill itself. Probably one of the most interesting things about the Bill and this debate will be that we shall be able to welcome the maiden speech of the noble Viscount, Lord Gormanston. I have had the pleasure of knowing the noble Viscount in times past in Ireland in different capacities, and I look forward very much to hearing him speak often in your Lordships' House.
One of the matters which took up a great deal of time in another place was the fact that this Bill in effect merely carries the position on to 1985. This was distrusted by a number of speakers because they thought that it gave the Government too much of a let-out. They would have liked to see something rather more permanent on the statute book, given the difficulty that there always is in finding time to consider Bills. I do not take that point of view. I think that we are very lucky that this Bill goes on only to 1985, because it means, I am sure, that we shall have another opportunity of discussing the whole matter. I hope that it will give this Government the opportunity to consider what it should do about the whole film industry in the rather difficult position in which it finds itself. I will refer to that in a moment.
First, I should like to mention one or two of the details in the Bill. Although a little disquiet has been voiced in certain quarters about the provision for multi-screen showings—the possibility that it may allow people to get away with always putting the quota films in the smallest cinemas—I think it is probably a very wise and good one and that we can, on the whole, see that it works more to the benefit of the quota than otherwise. Certainly flexibility in any matter like this is useful. It reduces the resentment
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which some people have at being under the obligations of the quota, and it enables those obligations to be fulfilled rather more wholeheartedly.
As to the matter of the EEC, your Lordships will not expect a spokesman for a very European-minded party like my own to object to this aspect, but obviously the industry may have legitimate qualms about it. On balance, I believe that it will probably be all right. In the cinemas in the capital which show EEC films anyway there will not be any great tendency to squeeze out the British ones, and in other places the British films will make up a large proportion of the films which are shown under the quota.
I remember previously quoting in your Lordships' House the plaintive statement of a lady: "We do not see very many foreign films in Bury St. Edmunds". I do not expect that under this Bill she will necessarily see many more foreign films shown there. We can be reasonably happy about the situation. But there is a question mark over it and that is one of the reasons why we ought to do our best to keep the levy and these arrangements.
I am dubious about the provision for the suspension. I am in principle not happy about opposing something which gives Government greater latitude for experiment. It is just a question of whether one trusts a particular Government to make wise use of that latitude. On that I had better reserve judgment. I think that there will be a number of people in your Lordships' House who care greatly for films, who will keep a close eye on this matter and who will question strongly any proposals which the Government may put forward to suspend the arrangements.
I return briefly to the main point, where it seems to me that this Government will be in a difficulty over the next few years if they are to work out a good film policy. This Government are opposed to both Quangos and lame ducks. There is no point in pretending that cultural efforts and cultural projects in this country are responsive to the kind of hard, rash, abrasive economic laws which the present Government would like so much to apply. If we are to cultivate the arts in this country we have to protect them.
It is going to be very necessary over the next few years to do this, not just because

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of the special needs of the arts in a period of high inflation, when they suffer more than a great many other things, but because when a country is going through a depression (and the whole of the western world is going through a depression which has certainly not yet reached its nadir) artistic and cultural resources are extremely important for a country, so that it does not lose its heart—its soul, if you like. I think we should pay very great attention to this. In so many branches of the arts in this country, the fact that we are able to subsidise them has helped them greatly. The BBC is a prime example. The National Theatre is another.
All these things have probably paid off in monetary terms, as well as in terms of the total balances for this country. Certainly the number of visitors that we attract to this country to see our theatres, the number of productions that we sell abroad in theatre, film and television, are all worthwhile. However, film, which is one of the most expensive and important of the arts, gets very little help at all. Indeed, all the arts get very little help at all. I was having lunch today with colleagues of mine from the Liberal Party in the Bremen Land and they were telling me how very, very sad it was that the theatre (and the theatre alone) in the city of Bremen got only 20 million marks a year, how disgraceful that was, and how it must get much more.
We in this country subsidise our arts very, very little and we subsidise our films hardly at all. Over the next few years we need to build a plan for a national film authority, which would stop this ridiculous situation whereby film is dealt with by two Government departments, and which would bring together all the various and sometimes unwieldy bodies that try and do something for films in this country. We should face up to the fact that we probably ought to put the support of film, both as something valuable in this country as trade and also as an important art form, on a really satisfactory, protected and flourishing basis.
Meanwhile, I think this measure gives us enough time. I hope that the Government will be able to assure us today that they will look at some of the problems that I have spoken about, and which I am sure other noble Lords will speak about, and that they will use the time wisely
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before we face this question again in 1985. In the meantime, I wish this Bill, such as it is, well.
3.51 p.m.
Viscount GORMANSTON: My Lords, I hope your Lordships will give me the indulgence of the House. I am fortunate that on this occasion I am able to address your Lordships for the first time on a subject that I have been interested in for many years. My interest in the film business started during a school holiday many years ago, when I worked as an extra on a film in which the noble Lord, Lord Olivier, was the star. For my two days' work as an actor I was delighted to receive what in those days seemed to me an enormous sum. At that time in the industry, with substantial United States investment behind it, the level of production was extremely high throughout the United Kingdom. This, as has been widely reported in the newspapers in recent weeks, is definitely no longer the case.
It has been said that this Bill's purpose is to relaunch a modest, independent but effective British film-making body and to renew measures which assist all British film-makers. One can only welcome this, for without the quota system and the Eady levy, long-term survival would be rather doubtful. There has always been a question as to whether film-making is a creative art form or a commercial venture.
To give an example, I recently went to see an exciting and inventive screen adaptation of Shakespeare's Tempest, made by a talented young English director who, not without considerable difficulty, independently financed and completed his film for the modest sum of £125,000. After opening in just one cinema, to very good reviews, it is on its way to recoup its investment for its backers. So a creative and original film can emerge as a commercial prospect.
The National Film Finance Corporation last year provided the majority finance for another similar independent production called Babylon, which is soon to emerge. But I wonder if in future the provisions of this Bill will permit them to continue financing the independent young directors in a sufficiently positive way. It also seems odd that it is not possible for us to support this kind of indigenous filmmaking as an art form to the same extent

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as we do opera and the theatre, bearing in mind that the end product has an extremely high export potential.
In the Working Party report entitled The Future of the British Film Industry there was a recommendation aimed towards bringing the film and television industries into closer co-operation. Recent technological developments seem to indicate that this is happening, in the shape of cable television. In the near future, in the United States, every house to which the Bell Telephone Company has cable access will be able to dial the telephone company in response to advertising campaigns and ask them to relay to it a showing of a newly released feature film—to be shown on their own television set in their own home. The Bell Telephone Company will then charge the subscriber for the showing of the film, on his quarterly telephone bill. On a recent visit to Los Angeles I saw a film in just this way on their own Channel Z cable network, the charge for this facility being a mere 45 dollars per quarter. I believe there is a similar cable network, called "Home Box Office", with 24 million subscribers, each paying 174 dollars per year.
When the four major cable networks in the United States are fully operational they will have an immense product requirement and, consequently, it should prove possible to recoup the costs of a high-budget film in maybe one or two nation-wide showings. With the enormous volume of films used in this system, not only should the large production companies, who far-sightedly own several of the cable companies in America, gain quite a proportion of the market but also the small independents should find a place there.
In concluding, may I point out that the consequences of allowing our film industry to run down at a point when such a large new potential market is on the horizon could have disastrous consequences for its competitiveness in the future. The dispersal at this juncture of our technicians, who have been largely instrumental in attracting such major foreign productions as "Star Wars" and "Alien", may well prove fatal to future hopes of revitalising the industry.
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Hopefully, your Lordships will not regard this Bill as the final answer to helping the film industry, for in order to encourage private sector finance into such a high-risk market some constructive tax incentives, along the lines recommended in the Working Party's report, must be found to enable the industry to expand its production without detriment to the taxpayer.
3.56 p.m.
Lord LLOYD of HAMPSTEAD: My Lords, it is my very pleasant task to be the first to offer our congratulations to the noble Viscount who has just spoken for his admirable, charming and extremely well informed maiden speech. He has also, if I may say so, set us all a very pointed lesson in the art of delivering an interesting speech with the highest degree of brevity.
Several noble Lords: Hear, hear!
Lord LLOYD of HAMPSTEAD: I am particularly gratified that he should have chosen this subject to come along and address us upon for the first time, because it is a subject of immense importance but, nevertheless, one which on the whole does not tend to arouse very great interest, having regard to the number of those who actually attend our debates on this subject in your Lordships' House. I am sure it is our wish that the noble Viscount will attend our proceedings frequently from now on and address us on this subject, as well as on others about which I am sure he can speak with full competence.
I should like also, if I may, to express my admiration for the way in which the noble Minister has introduced the Bill, with his customary lucidity, and displayed once again his extraordinary versatility. This, I believe, is his first incursion into the jungle area of the British film industry, and he has acquitted himself with remarkable skill in this first encounter.
I am sorry, therefore, that my opening remark needs to be that I find myself able to summon only one cheer for this particular Bill and the manner in which it seeks to deal with the film industry. The reason for that is, of course, not so much for what it contains as for what it leaves out. I think we would all agree on the importance to the United Kingdom

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of having a film industry which is capable of producing indigenous films of high quality and with international appeal. We have in this country a remarkable tradition of achievement in the film industry and an endless fund of talent. Thinking in terms of past achievement, one has only to mention such outstanding names as Alexander Korda and Sir Michael Balcon, with his remarkable repertory of Ealing films which created such an immense impact both at home and abroad.
But, of course, as has been pointed out, the making of feature films is a high-risk industry; it involves a good deal of finance. But finance in itself is not enough. That finance has to be linked with a great deal of creative flair, and this is rather emphasised by the very unhappy announcement made only the other day that one of the greatest names in British films in the past—Rank—after putting forward a fairly ambitious programme only about three years ago, had now decided to withdraw from film production.
I was particularly dispirited by the report of an observation attributed to one of Rank's leading executives. When asked about this unhappy development he said, seemingly with great candour, that "there are better things we can do with out money". I venture to think that that is not a view that would commend itself to the moguls of the cinema industry in Hollywood who have found the enterprise of film-making in recent years one of the most profitable which even the enterprise of that very enterprising country, the United States, has been able to attain. Indeed, it is not a sentiment which would have commended itself to the great J. Arthur Rank, himself, who played such a role in putting the British film industry into a position of international repute.
The fact is that the private sector alone cannot be left to pursue the making of films. They tend to lack courage and vision, and the experience of all European countries which are concerned to any major degree with film-making has been the same: that private sources are not enough; that substantial Government backing is what is needed. For the last three years, the Interim Action Committee, under the admirable chairmanship of Sir Harold Wilson, has been pursuing
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its labours. I speak of the activities of this committee with a little diffidence, being a member myself, but one can say that it has laboured very hard under Sir Harold's chairmanship. I am sure all in the House would join me in the sentiment of wishing Sir Harold, who has just undergone an operation, a speedy recovery from that unfortunate event. On our committee we are certainly most anxious for his speedy return to assist us in our labours.
This Committee has laboured now for some three years. It has so far issued three reports. There are further reports to come. It has made a number of proposals, especially the proposal in the first report for the establishment of a British Film Authority. This proposal, I think I can fairly say, has been widely welcomed; and indeed the arguments for it, which are very well known indeed and need no repetition at this moment, are overwhelming. Some hostility was aroused in Government circles when the proposal was first put forward, on the basis that this appeared to be setting up a new kind of super quango, but I think that on the whole these fears have been dispelled. It is accepted that far from being a quango it is, in fact, a body which will eliminate at least three other bodies and will very largely be financed from the monies that those three other bodies at present either deploy or engender by their activities.
I am sorry to say—and this is one of the reasons why I started off with a single cheer towards this Bill—that the thinking and proposals of the Interim Action Committee have very largely been ignored in this Bill, and all we have really is a kind of holding operation to keep the National Film Finance Corporation alive. I personally have the highest regard for the NFFC and for the remarkable job that it has done over a long period of years. I should like, if I may, with your Lordships' permission, to take this opportunity of paying a tribute to Sir John Terry, so long the managing director of that body, who performed such arduous and successful activities in making the NFFC play a most valuable role in the development of feature films in this country.
Equally, I should like to express confidence in his successor, Mr. Mamoun Hassan, as a person who can certainly be expected to do everything possible to

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enable the NFFC to do whatever job lies within its scope. The fact of the matter is, as indeed anybody familiar with the NFFC would be ready to admit, that the basis on which that body functions, and the very limited resources at its disposal, hardly put it in a position to make more than a fairly marginal contribution to what should be a healthy industry.
It is very sad, therefore, for those of us who have a deep concern for this once great industry, which played such a role in spreading British prestige both at home and abroad, to see it now neglected and virtually abandoned by Government at the very time when its European rivals are being strenuously and increasingly supported by their Governments. Nor is it only in Europe that this phenomenon occurs. One sees it happening in other countries; for example, in Canada and Australia, with very considerable effect.
This is not in any way a partisan matter. There is no question of any sort of party consideration or party point. Indeed, one could say in fairness that just as, so it seems to me, the present Government are failing to do what is necessary to help to put this great industry on its feet, so too the same charge could be made of the previous Government who, at the very last moment before the election, suddenly came out with a resounding declaration that they supported the setting up of a British Film Authority, but of course at a time when they were in no position to implement that proposal, notwithstanding the fact that they had had a very considerable time before then to reflect upon it and to take the appropriate action.
I find all this particularly saddening because at the present time I detect genuine signs of goodwill by the present Secretary of State, and also by his Ministers, towards the industry. But the fact is that, however resolute be the arguments that one makes on behalf of the industry, one is simply faced with the inevitable plea of lack of money.
So I would ask your Lordships whether they want to see this vital industry, and all the native wealth of talent that we possess, eager as that talent is to make British films, simply dissipated and forced
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to emigrate to Hollywood or other countries; however reluctantly that body of talent may be to go to other countries, and however anxious they may be to make British films. One could mention numerous names—I am not going to weary your Lordships; many of them will be known to you—of distinguished figures in the film industry who have given up the task of trying to make films in this country because it has not proved to be a viable proposition, and they have gone over to America and have been greeted with open arms.
Speaking as a former chairman of the British Film institute, as chairman of the National Film School since its inception and as a member of the Interim Action Committee, I am only too well aware of the frustrations which are felt at the present time by young film-makers in this country. Of course they turn to television, and there is nothing wrong with that; there is the closest connection between films and television. This is most desirable, and indeed it is an issue which the Interim Action Committee is examining at the present time; but we have to recognise that television is no substitute in itself for a feature film industry. Indeed, as Mr. Norman Tebbit, who introduced the Bill in the other place, pointed out, half the graduates of the National Film School go into television and, unfortunately, television at present makes only a trifling contribution to the existence and financial subsistence of the National Film School. Mr. Tebbit went on to describe this, and I quote his words, as "inherently unfair and wrong".
That is a point of the greatest importance, and although I cannot develop the argument here because it would probably be too far away from the Films Bill as such, nevertheless I venture to make the point to your Lordships and to the Government. Perhaps we may have an opportunity of returning to it in a more appropriate focus when the Broadcasting Bill comes before us later on.
One thing which the work of the National Film School has demonstrated is that the United Kingdom is uniquely placed, at any rate so far as human material is concerned, to restore and develop a flourishing film industry. But that must depend—and this is the crucial point—on a reasonable injection of equity

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capital along the lines suggested by Sir John Terry's working party which was set up a few years ago and whose proposals have since been substantially endorsed by the Interim Action Committee. Of course, a contribution from the Eady money can play a useful part; but it is not sufficient just to give the industry a final £1 million and then "leave it to Eady". Eady is a comparatively modest annual subvention; and it must always be remembered, of course, that Eady money is not government money: it is not revenue but comes out of the box office returns, and is part of the industry's own revenue. Be that as it may, simply to rely on a modest subvention of this kind is palpably insufficient and, with all respect, really cannot be said to be more than tinkering with the problem.
I come now to my final point. Eady provides not merely finance for British films but also a subvention to certain bodies in the film world, in particular the National Film School, the British Film Institute Production Board and the Children's Film Foundation. A large slice of Eady money is to go to the NFFC. In its second report, the Interim Action Committee was careful to point out when it made recommendations about the use of Eady money to support film-making, that the BFA, that is the British Film Authority, should ensure in administering this matter that the annual grants to these various bodies should continue to be paid, and indeed should provide a more secure basis for such payments in the future.
Speaking in particular in regard to the National Film School, that derives a substantial part of its revenue from the Eady money and of course it could not survive a sudden reduction or elimination of this subvention without some alternative provision. I venture to think it would he highly irresponsible to suggest that by using Eady money for something else the National Film School should thereby get along without this subvention, or with less. I should like to ask the Government whether they could give some assurance that the National Film School, as well as the other bodies to which I have referred, will not suffer any loss of revenue as a result of Clause 2 of the Bill.
Of course, the Cinematograph Films Council has to be consulted when questions arise as to what allocations should be
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made out of the Eady money for such purposes. In many ways, the Cinematograph Film Council has proved to be a rather unsatisfactory body. I cannot go into the details of that now, but one of the reasons for wishing to have a British Film Authority was the belief that the functions now performed by the CFC could be far better performed by a body such as the British Film Authority. It is fair to say, notwithstanding that, that the CFC has always shown considerable understanding and appreciation of the work of the National Film School and has given it full support. It has always advised the Minister year by year that the annual requests for an appropriate sum out of the Eady money should be fully met. I am happy to say that the Minister has always accepted that advice. However, there is a danger that future subventions may be imperilled, and I would ask the Government, therefore, to give an assurance that this is in no way their intention.
I am also a little concerned by the wording of Clause 2(8) of the Bill. I think I understand what is intended, but it seems to me to contain a provision which could lead to some misunderstandings. Subsection (8) says this:
"It shall be the duty of the Agency"—
that is the body which hands out the Eady money—
"to make any payments in respect of any amount due to the Corporation"—
that is, the NFFC—
"under subsection (5) above in preference to any other payments they are authorised or required to make …".
As I understand it, all that is probably saying is that if it turned out that there was not enough money in the kitty to pay everybody, the NFFC would be a sort of preferential creditor and would have to be paid first, and nobody else would get anything. That is understandable, but it is a remote contingency because it is highly improbable that the Eady money would ever shrink to that degree.
What gives me some anxiety about the wording of this clause is that it might suggest to some people that in some way the right of the other bodies to have their claims considered is to some extent diminished because of this other payment. There might conceivably be arguments raised because this 20 per cent. is now to

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be paid to the NFFC for film production, it therefore must be taken that in some way subventions to the other bodies might be considered as less pressing and so conceivably could be reduced. I hope the Government will make it clear that that is entirely remote from their intentions.
In conclusion, I would say that this is a small Bill which can only be regarded as an interim measure. Can we not hope for some broader and more imaginative approach which, sustained by the thinking of the Interim Action Committee, could do something to revive and inspire an industry with both life and hope—an industry, I may say, as I think will be universally accepted, which has served this country well in the past and may do yet greater things to restore, at a very critical time, our prestige and morale both at home and abroad?
In his final words on the Third Reading in another place, Mr. Norman Tebbit agreed that "more needs to be done". I can only say that I hope that that holds out some expectation that the Government have grasped the nature of the problem, and are still ready to move on to a comprehensive solution, not excluding a British Film Authority, without which, I venture to suggest, real recovery is hardly possible.
4.21 p.m.
Lord GRANVILLE of EYE: My Lords, I found the speech of the noble Lord, Lord Lloyd of Hampstead, very interesting, because he knows this subject. He is one of the very few people who tell us about the film industry who have had any real and practical experience in this very difficult and complicated industry. I should like to join him in adding my congratulations to the noble Viscount, Lord Gormanston, on his maiden speech in which he managed to say so much in a short time. I am sure that your Lordships' House will listen to him in future with very great interest.
I suppose that the Government would call this a brave little Bill, in many ways, but, as the noble Lord the Minister said in introducing this Bill, we have had much legislation since the days of the Board of Trade, the quota and the Eady levy, and I suppose that this is really another one of those Bills. Like the noble Lord, Lord
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Lloyd, I am not sure that it will help us all that much, because the industry is going through such a very difficult time at present. As he said, unless you can find backing, capital, money to finance these various films, then even this Bill with its good intentions will not help very much.
I was interested in the Minister's explanation of Clause 8, which extends to a certain extent the quota arrangements. But my experience of this industry—and I think that it is the experience of most people—is that America always seems to get round the quota. In trying to help this industry we have to consider, as the noble Lord, Lord Lloyd, suggested, exactly how America comes into this as the biggest film and television producer in the world. For a start, they have a home market of 200 million, so that when they budget for a film they can nearly always expect to break even on the home market. Then they have the opportunity of coming to that other English-speaking market which requires no Continental dubbing, the United Kingdom, and making their profit. That has been the story of the film industry for the last 50 years.
Of course, in America, or Hollywood, they have this amazing international star system and block booking in cinemas, but, nevertheless, as the noble Lord, Lord Lloyd, said, the French—who started it—the Canadians and the Australians are today producing good films on a shoestring. I am sure that the Minister realises that when one has a story and has someone like—in the old days—Rank, who is interested in making films, the first things that are required are a script, stars, a producer and a director, in what is called a package deal, and then financial backing from what are called "angels".
When all is said and done—and all the committees, the National Institute, the Film Corporation and so on have dealt with this—if the industry is short of capital to finance films, then no films will be made. I suppose that if we really hope to attract considerable investment into this very important and interesting industry, we need a Korda, a Hitchcock or, as the noble Lord said, a Michael Balcon, because they had flair and understood the British market and what would be a commercial success.

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But today, in films and in television, there are some directors who think that a film begins and ends with a brass bed like a nickelodeon and "What the Butler Saw". As the noble Lord, said Rank's have now retired, although they still have Pinewood which they are prepared to let to any ambitious company or package deal which can find the finance to back a film and pay the rent. But on the larger scale, we are left only with what is called the Grade-Delfont syndrome, which—and much of its success is due to this—manages to penetrate that 200-million American market for its distribution. I should like to suggest to the Minister that, maybe, there is a case for United States-Great Britain co-operation to develop films in this country with a guarantee of American distribution, because we have tried everything and without that the film industry is in the doldrums.
I am not sure what this Bill will do to help the National Film Finance Corporation. I am not sure that that can help or even understand the mass market, where the real talent is not always encouraged. It is the same with television. The level of television today is such that it is concerned only with "Coronation Street', sex, porn, "Star Wars" and so on.
The Bill does one thing which is helpful. It deals with the triple cinema problem. The existence of many cinemas has necessitated their depending upon ice-cream, pop and children on Saturday mornings to keep the doors open. Without that, they would have had to close the doors on many of the circuits. So I think that the suggestion in this Bill will help quite considerably. The Government ought to try to do something about this industry now. We have first-class technicians in this country. We have brilliant script-writers. We have excellent directors but, as the noble Lord said, all this, and even this Bill, gets us nowhere at all, unless we can get the required financial backing to put the films into production.
4.30 p.m.
Lord BIRKETT: My Lords, I thought that if I added my one cheer to the one cheer uttered by the noble Lord, Lord Lloyd of Hampstead, it might, by the end of the afternoon, add up to a modest welcome for the Bill. I am reminded of
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the American Senator who is reported to have said, "A billion here, a billion there, and pretty soon you're talking real money". That is not utterly inapposite to the film industry because the sums of money involved are so very much larger than they are in the other arts.
Before going further, I should like to add my own welcome and congratulations to the maiden speaker, the noble Viscount, Lord Gormanston. It is particularly cheering that he should have chosen to speak upon films and to have spoken with such obvious weight and knowledge. I hope that we shall hear much more from him. I also found his speech rather encouraging, rather heartening, especially about cable television. It would be churlish to disagree with anything in a maiden speech. I simply wish that I had the noble Viscount's confidence in its future. I, too, have seen the benefits which it can offer, and I wish I were more confident that it would arrive soon. It would be a blessing to us all. I wish it well, and I hope that his optimistic view of the future is righter than my slightly less rosy one.
The problem that films in this country have always faced—and it is something with which I must not weary your Lordships because I feel sure that I have said it before in your Lordships' House—is that films, being, as they are, so expensive and often so excessive, acquire a generalised overall reputation for excess which is unfair but understandable, in view of the publicity that some films at some time or another have achieved. It is quite possible, with a pencil and a piece of paper, to be inefficient or even downright irresponsible. It is possible to be so with a canvas and a paintbrush. But imagine how much easier it is with a 35 millimetre camera, thousands of pounds worth of stock and the enormous crew that goes with it. The excesses of our industry have always been notable but they are not, and never have been, the norm.
Equally, the success of some of the products of the film industry has been its own worst enemy. Because one or two films make such a spectacular "killing" in the market place, it often seems that the film industry as a whole only has to adjust itself to the level of "Star Wars" and it will be perfectly all right. "Make another Star Wars'", everybody says.

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It is not possible to do this, with the best will and the best intentions in the world. So sometimes its very success has meant that the film industry does not look as though it needs the help which it does. That is why I, too, utter one cheer for the Bill. It does preserve the National Film Finance Corporation.
May I echo the tribute paid by the noble Lord, Lord Lloyd of Hampstead, to Sir John Terry, for all his work in the past? He, like everybody else, has been subject to the seemingly inescapable law that only about one in, say, five or possibly 10 films is a success. Every film intends to be a box-office success. Even if it is a small and quite avant garde film on a tiny budget, nevertheless it has every intention of recouping at the box office more than it costs. There is no exact statistic, but somewhere between one in five and one in 10 is the success ratio, and it is not a success ratio which most wise bankers would view with any degree of enthusiasm. Nevertheless, film is an art. It needs encouragement. It is an art which is probably more persuasive and more influential and which has certainly done more in terms of what, in an old fashioned way, used to be called propaganda for this country than any other art form, despite the notable successes of our theatres, our orchestras, our artists, our authors, and so on. So my modest cheer is beginning to turn into a sigh of relief that the film industry is not yet, at least, being allowed to die.
The noble Lord, Lord Lloyd of Hampstead, mentioned one recipient of the Eady funds, which are now to be reallocated, about which he is most concerned. That is the Film School. I have another concern. I am chairman of the production committee of the Children's Film Foundation who, for over a quarter of a century now, have been making what we like to think is a first-class and almost unique contribution to children's entertainment. The matinée movement in British cinemas, for which our body was designed, is unfortunately inescapably declining. As a result, the contribution made towards our production funds from the Eady funds has already been cut in half, with a severe warning that it may decline further. That is not to say this is not economic sense. It is possible that
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as audience figures go down, the amount of money that the industry itself should spend in direct subsidy ought to go down with it.
We are at this moment trying to put together a new form of Children's Film Foundation. The new set-up will be a multi-media one. It will encompass all the media. This needs the agreement of a very large number of bodies within the film industry, so it may he a little time before we can announce that we have achieved it. I hope that when the Eady funds are re-allocated, as they needs must be now that the National Film Finance Corporation is to be dependent upon them, the Children's Film Foundation, which has done so much for this country in terms of prestige, both here and abroad, will not be forgotten.
Finally, I should like to echo what other speakers have said: that out of the interim action committee's report one vitally important thing must not be allowed to escape—namely, the setting up of a British Film Authority. For me, the mere intimation that by setting up one body we can get rid of three others is a recommendation in itself. As an industry, we proliferate in terms of technical bodies, management bodies, consultative bodies. Quangos we do not have, but bodies we do, in very large numbers, and anything which will reorganise them into a more rational form will certainly he welcomed by me. That is not the only recommendation in favour of a British Film Authority but it is a strong one, and I most earnestly beg the Government to consider the setting up soon of such an authority.
4.38 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I prepared some remarks on the basis of yesterday's speakers' list which consisted only of the noble Viscount, Lord Gormanston, but we have had such an informed series of additions to that list that the greater part of my preparation would be repetition. So I can skate a little faster over my notes than I should otherwise have to do. In particular, I am very glad that the noble Lord, Lord Lloyd of Hampstead, pointed out the needs of the National Film School, which is disgracefully little supported by television and which is truly

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and well supported by the Eady levy. I very much endorse his hope that the Minister will keep up the pressure. I was going to say something, too, about the Children's Film Foundation, but I am delighted that its chairman has anticipated me. It is an absolutely first-class body and it is very important that it should be helped.
Both the noble Lord, Lord Lloyd of Hampstead, and the noble Lord, Lord Granville of Eye, spoke about the need in this country, culturally as well as economically, for a proper film industry. So, of course, did the opening speaker, in whose praise I must join. It is unusual for a Minister to get praise of this kind and I do not wish not to take part in it. It was a very clear exposition and we all enjoyed it. All the noble Lords spoke about the need in this country for a proper film industry.
I am very puzzled as to what one ought to do, so I can add a cheer to the two already given for this Bill. It is a Bill which nobody can oppose. It is necessary. I should like to see it go a great deal further, but at this stage I cannot say in exactly what direction. I think that the noble Lord, Lord Beaumont of Whitley, made clear that he hopes—as I think we all hope—that this is working up to a careful study of the Wilson interim report, when it is finally finished, and a real examination of what can be done to help an industry of this kind.
It is most difficult. Lord Granville did say that the French succeed in doing this on a shoestring, and exquisitely. So they do; they have got to because they have only got the limited market of their language in general. We were beginning to do this before television changed the film prospects throughout the world, and it is extremely important that we should go back to doing it.
There are one or two things in the Bill about which I should like to comment. In the first place, I think it does well to write off £11 million and a couple of million interest on past debts for the National Film Finance Corporation, and give it £1 million to go on with. This, plus £1½ million of Eady money will keep it alive until 1985. I do not think it will do much more. I think somebody said earlier that what it used to take to
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invest in 20 films a year it now can invest in four. This is a tremendous decline, but it can potter along at that rate I think. I feel that the distribution of the rest of the Eady levy back to the industry is a very crude way of helping it. I would have much preferred, as my colleagues in the other place suggested, there to be an increase in the proportion of Eady money going to the NFFC to 30 per cent. rather than 20 per cent. and to give the corporation more power to back hopeful ventures rather than add to the reward of the successful ones, which is what the balance of the Eady money is now being used for. Some of these may be successful for very dicey reasons, including pornographic ones. It is a very crude way of assisting the industry. I think it desirable to do it, but I think it could be done less, and more could be given for the more positive use of the NFFC.
There is said to be a tendency for distributors to demand the makers' Eady contribution as a guarantee against loss in return for putting on the film. This was certainly not the intention of the levy. I do not know whether the Minister has anything to say about it. It seems to me very undesirable, but I do not know how easily it can be stopped. The distributors are virtually a duopoly, two distinguished companies, and I make no criticism of them except that I think they are much too powerful. The history of that marvellous film Kes, for example and the great difficulty of getting it distributed shows how easily too much power can be misused.
Let me now turn for a minute to congratulate our maiden speaker. I thought that the four minute tour de force was extremely satisfactory, and if the noble Viscount never speaks for longer than that he will be an extremely popular speaker in this House. Also, he said many things of the greatest interest. I do not quite agree with the noble Lord, Lord Birkett, I do not want to be able to have a film in my home by ringing up or whatever one does. I hardly have time to read a book as it is, and I like to look at the news and an occasional television programme. I do not want something else in the home; I have all I want already. But this may not be true of other people. Anyway, the speech of the noble Viscount was a most enjoyable one and I hope we shall hear from him on many occasions.

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I should like to come back to the Eady levy. May I ask the Minister to answer in unequivocal terms the question that the noble Lord, Lord Lloyd, asked? I was going to ask it myself. The position is that the Eady levy is an uncertain figure; the £1½ million for the NFFC in the Bill is a certain figure. Therefore, the balance may fall. If the balance falls, can we have an absolute assurance that the other smaller things, like the British Film Institute, the Children's Film Foundation, the National Film school and one or two others, will get their slice without any reduction? If there is any reduction it goes into the rewards for success to the industry, which the Eady levy is used for finally.
As to the quota, the Bill maintains it precariously to 1985, and I hope the tendency of the erstwhile protectionist party opposite to move slowly into the shadow of Cobden will not induce the Minister or his successor to exercise his rights under Clause 7 and abolish the quota before 1985. One does notice in the monetarist approach to economics something very much like a free trade element of a rather violent kind, and I hope this will not be the case. I think without the quota our film industry would pack up altogether; I think we have simply got to keep it for the moment. It is true to say that the quota is in fact regularly being met at this moment without any particular difficulty.
Over the question of the BFA, which has been brought up by a number of people, let me say a word of caution. There is a strong case for a body of this kind to co-ordinate the activities of what after this year will be a completely unsubsidised industry, both film-making and distributing, the only subsidy being from the NFFC which is taken from the industry itself and not from Government. I am anxious not to interfere with the cultural side of the business. The cultural side is subsidised to the extent of £5¾ million by the Department of Education and Science under the Minister for the Arts. This money is paid to the British Film Institute.
The functions of the BFI are not primarily commercial, and under its new chairman two years ago, and its new director this year, I think it has an important future. Let me tell noble Lords the kind of things it has to do under its
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articles of association. It has to keep and maintain a national film archive. This is most important. This is just as important in a sense as books in the British Museum or records in the British Institute of Recorded Sound. It is a very important thing; it is a very expensive thing—expensive to store and expensive to change, because most of the old films are inflammable and they have to be moved across. The BFI also arranges the exhibition of films of cultural importance through the National Film Theatre. It has a production board, which a noble Lord said he had been on, which produces films of an infinitely different kind from the commercial blockbusters we have been talking about. It produces experimental films. It gives students the opportunity to produce first films and to recoup the money later on. Generally speaking, it is doing exactly what ought to be done on the cultural side, getting good films made and giving opportunities to people interested in the cultural side of films. Then, of course, it has 30 theatres which it subsidises throughout the country for film societies.
These functions are not commercial but they really are important. There is in all the arts a progression from pure entertainment to something of greater artistic value. In general, the pure entertainment can look after itself commercially, but the higher artistic values need subsidy. The noble Lord, Lord Beaumont, has already said this. The film is an admirable source of entertainment, which should need no subsidy, but it can and should also be an art of the most expressive and moving kind with the highest aesthetic values.
The only word of caution I want to say about the proposed British Film Authority is that I do not want to see this body, the BFI, which is absolutely dedicated, in rather a highbrow way if you like, to the film as an art, to be subsumed under a body run by enormous companies investing huge sums of money and regarding the whole thing as commercial. So let me say I am very glad the Government have not rushed into the BFA; I should want a lot of notice before I thought it right to absorb the BFI into it.
I certainly believe that we should give the Bill a Second Reading, but I think

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that it is in the hope, on all sides, that this is an interim Bill and that the Government will try to tackle the larger and very difficult problem in the course of the next five years.
4.50 p.m.
Lord TREFGARNE: My Lords, I am conscious after all the kind words that have been said about my earlier intervention, that I face something of a crisis of expectation at this point, not unlike, no doubt, the crisis that has been facing this industry, according to some of its critics, for all of its long life. However, I shall deal as best I can with some of the points that have been raised.
To start at the end, the noble Lord, Lord Donaldson of Kingsbridge, and, indeed, the noble Lord, Lord Lloyd of Hampstead, and others, asked about the position of the levy allocation after the amount has been paid to the National Film Finance Corporation, as provided for by the Bill. I am afraid I cannot assure noble Lords that bodies such as the National Film School or the Children's Film Foundation will have allocations at any specific level. I understand that the allocations are considered annually by the Cinematograph Film Council which advises my right honourable friend the Secretary of State, who makes the final decision in these matters. However, my right honourable friend is very well aware of the importance of these bodies—and I may refer to them again in a moment—and their need for financial support, and I am certain that that will remain the position.
I should like to jump back in time to the first speech this afternoon, by the noble Lord, Lord Beaumont of Whitley. He asked about the Government's position vis-à-vis the British Film Authority. That point was also raised by the noble Lord, Lord Birkett, and the noble Lord, Lord Donaldson. The Bill, of course, in no way pre-empts or prejudges the setting up of a British Film Authority. The Government have, as yet, taken no decision on that subject. As I have described, the Bill has two priorities—that is, the continuation of some existing measures to serve the film industry in general, and a re-launching of the National Film Finance Corporation. To set up an authority such as has been suggested would, of
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course, require major legislation and indeed, the provision of sizeable finance. Neither of those is a step which we could contemplate at this moment, although we certainly do not rule it out for the future.
I turn now to the admirable maiden speech of my noble friend Lord Gormanston which, like that of every noble Lord who has spoken, was of the greatest benefit to your Lordships. I hope, like the rest of your Lordships, that we shall hear my noble friend again soon, and often. My noble friend referred in his speech to the question of tax allowances and I should like to make some remarks about that matter. The Inland Revenue statement of practice in August last year, indicating that expenditure on the master print of a film would qualify for 100 per cent. capital allowances, was, I believe, widely welcomed by the industry. Unfortunately there were signs, not indeed confined to film investment, of complicated schemes being developed to make individuals handsome returns from the taxes thus allowed. I understand that the Finance Bill proposes to stop that loophole, but in a way that should not adversely affect film production where most investment is undertaken by corporate bodies.
The noble Lord, Lord Lloyd of Hampstead, expressed regret—regret which we share—as regards the decision by Rank to stop film production. It is, of course, regrettable that Rank has decided to cease producing its own films. The company has made a major contribution to the post-war British film industry, but clearly it is a decision that has been made only after a close review of the company's film-making activities. However, we understand that Rank intends to continue its long-established policy of renting out the excellent facilities of Pinewood Studios which it owns and which, I think, the noble Lord, Lord Birkett, mentioned, and Rank is also a major cinema exhibitor. The company owns about 270 screens in some 130 cinemas and we understand that it intends to continue those activities.
As the company's decision to re-enter the film-making business was as recent as 1977, and it had not been engaged in major film projects of its own for some 10 years

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prior to that, hopefully the decision to discontinue film production will not have a major impact on the activities to which I referred earlier and which, of course, Rank has been carrying on for a great many years.
Several noble Lords asked me why the Government were not putting more money into the film industry in one way or another. I think that perhaps it might be helpful if I just recapped on the money that we are actually making available through this measure and in other ways; and I point out of course, that it goes further than noble Lords suggest. The Bill provides for a writing-off of no less than £13 million, which would otherwise have to be repaid by the film industry. Furthermore, the Government are foregoing £0·7 million of interest per annum which would, in due course, have been payable by the NFFC, on the debt which we have written off. We are providing a £1 million grant to the NFFC. We make a grant of £5·75 million, as the noble Lord, Lord Donaldson mentioned, to the British Film Institute; and the National Film School, which the noble Lord, Lord Birkett mentioned, receives a grant of about £0·69 million. If my arithmetic is right, that is very close to £20 million altogether. So, the total sum that we are making available is really not insignificant by any standards. Indeed, I think that that point was also mentioned by the noble Lord, Lord Lloyd.
If I interpreted him correctly, the noble Lord, Lord Granville of Eye, felt that the Bill was making an inadequate contribution to the problems of the film industry. It is perhaps worth saying that without this Bill the NFFC would be unable to continue investing in film production at all. The Eady levy would lapse, removing an incentive for film production and the support of several worthy film industry institutions to which I have already referred. Moreover, the quota would also lapse, and we have had evidence of the alarm that that would generate.
1 should now like to say something specifically about the National Film School to which the noble Lord, Lord Birkett, referred. The grant to the NFS comes from two sources: first, the Office of Arts and Libraries, which is part of the Department of Education and Science—as the noble Lord, Lord Donaldson,
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mentioned—provides £0·7 million, as I have said; and secondly, there is the Eady levy, or a contribution from the Eady Levy, which is £0·215 million. While it is clearly impossible to anticipate what the level of the future grant will be, the Government are very conscious of the importance and quality of the NFS contribution and there is certainly no reason to believe that Clause 2, of itself, will lead to a reduction in the Eady grant to the National Film School.
As regards that point the noble Lord, Lord Lloyd, and the noble Lord, Lord Donaldson, asked why the payment to the NFFC was to be a first call on the levy. I can assure noble Lords that there is no sinister significance in that. It is intended only to guarantee the payment annually to the NFFC for budgetary purposes—after all film production is a long-term business—and, if necessary, to show that an annual income will be forthcoming as a surety for its commercial borrowings.
The noble Lord, Lord Davies of Leek, intervened earlier. I can tell him that he is correct in thinking that European films qualify equally for quota under the quota arrangements. As for the quota system, the Bill authorises only the suspension of the quota system, not its abolition, and even that suspension will need parliamentary approval.
I should like to refer once more to the Children's Film Foundation, on which the noble Lord, Lord Birkett, spoke. I can only repeat the admiration that has been expressed by Government spokesmen for the past work of the Children's Film Foundation in this country and for what I hear of the value of its present work overseas. However, markets are not static. I fear that the foundation's audience at home has been largely tempted away, and my right honourable friend has, therefore, urged the foundation to seek other markets and, indeed, other sources of revenue as distinct from the Eady levy, upon which perhaps they have for too long been dependent. We understand that they have set up a committee to look into these matters and, clearly, this is the right way in which to proceed. Other sources of funds might, of course, include television sources.
Finally, the noble Lord, Lord Donaldson, referred to what he called "French

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shoestring assistance" for their film industry. It is a fairly handsome shoestring, amounting to something like £35 million per year. Their circumstances are, of course, very different from ours, and I think that the admittedly interim arrangements which we propose under the Bill stand examination. On that basis, I beg to move that the Bill be now read a second time.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TREES (REPLANTING AND REPLACEMENT) BILL [H.L.]
5.2 p.m.
Report received.
Clause 1 [Obligation to plant new trees]:
The Earl of CORK and ORRERY The Earl of CORK and ORRERY moved Amendment No. 1:
Page 1, line 5, leave out ("or any person acting on its behalf").
The noble Earl said: My Lords, I apologise to the House for not moving this amendment at the Committee stage, but I should explain that I had not actually noticed the necessity for it. Having done so now, I think that probably everybody else has noticed it as well and, therefore, I need say very little about it.
The effect of the words which I ask the House to delete from the Bill is a curious one. The Bill as drafted says:
"Any local authority, or person acting on its behalf … shall"
be required, if he cuts down a tree, to plant another two trees. This implies that if the local parish council, or whatever it may be, employs a man to cut down a tree, that man, as the Council's agent is responsible for planting two more trees in its place. That cannot be the intention of the Bill and I do not think that the noble Lord, Lord Somers, intended that to be the effect. I submit that the Bill would read correctly if those words were simply deleted from the clause. I beg to move.
Lord SOMERS: My Lords, I can quite see the difficulties in these words. I wonder whether it would be possible to reword the clause so that after "any
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person acting on its behalf" the words "the said Council shall plant" et cetera, could be added. Of course, that is possibly a matter for Third Reading, and I am perfectly happy to accept this amendment now.
Lord MOWBRAY and STOURTON: My Lords, I take the point made by the noble Lord, Lord Somers, but I think that the noble Earl, Lord Cork and Orrery, has made a better point. There would be a legal obligation on the man who actually fells the tree, acting on behalf of the local authority, to plant two trees at some other time in his life. He might not even be employed by the local authority when it came to the planting season. I think that this must be a good, commonsense amendment.
On Question, amendment agreed to.
Clause 2 [Planting of new trees]:
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 2:
Page 1, line 17, leave out ("trees which have been growing for less than three years") and insert ("naturally regenerated trees less than two metres in height").
The noble Lord said: My Lords as at present drafted, the Bill provides in Clause 2(4) that:
"Section 1 above shall not apply to trees which have been growing for less than three years".
On Second Reading the noble Lord, Lord Somers, made it clear that he was here thinking of terms of self-sown or self-seeded trees. At the Committee stage it seemed to many noble Lords, including the noble Earl who has just sat down and myself, who tabled amendments, that this was too sweeping and that it should be stated specifically in the Bill that it should apply only to self-sown trees.
My proposed amendment would have made it apply to self-sown trees of any age. This amendment seemed to be gaining the approval of the Committee when it was dealt two mortal blows; first, by the noble Lord, Lord Inglewood, who pointed out—and he was subsequently supported by the noble Viscount, Lord Simon—that it was impossible to tell in a tree of a considerable age—50 to 100

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years—whether or not it was self-sown. Secondly, the noble Lord, Lord Balerno, pointed out that not all trees reproduce themselves by seeding and that, therefore, the phrase "self-sown" was inappropriate. It was he who suggested the phrase, "naturally regenerated".
The amendment that I now put before your Lordships would confine the exclusion to:
"naturally regenerated trees less than two metres in height".
I have preferred to limit it by reference to their height rather than to their age because it is impossible to tell how old a tree is without cutting it down and counting the annual rings. Therefore, I felt that the height was more appropriate. I am aware that by limiting it to two metres I am probably excluding more trees than if it was limited to trees under three years of age. But some of these self-sown, self-planted or naturally regenerated trees grow at a great rate, and I do not think that two metres is excessive. I beg to move.
Lord SOMERS: My Lords, I think that this is a distinct improvement to the Bill. I am perfectly happy to accept it. I must point out to the noble Lord, however, that it is perfectly possible to tell the age of a tree by counting the years' shoots on a branch without cutting it down. However, I think that this is a much better way, and I imagine that before very long we shall all know what a metre is; I think that it is something like a yard. In any case, we shall soon get used to it.
Lord MOWBRAY and STOURTON: My Lords, I am glad that the noble Lord, Lord Somers, likes this amendment because I, too, think that it is a very sensible amendment.
The Earl of CORK and ORRERY: My Lords, as the noble Lord, Lord Somers, has accepted the amendment I am loath to waste the time of the House by saying any more about it. But I would draw attention, with diffidence, to the words "naturally regenerated". I believe that they emanated from the noble Lord, Lord Balerno, who is a scientist. The noble Lord is not in his place, but I am not quite sure whether he was speaking from his scientific knowledge or simply
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off the cuff. My idea of what happens when a tree or any other creature is given birth to is that it is generated. Regeneration implies a kind of second birth, which is not very common in nature. I do not know whether that is the appropriate word. Whether or not the word is right, I do not believe that one can have unnatural generation or unnatural regeneration. I simply commend to the noble Lord, Lord Somers, the thought that perhaps he might consider this phraseology between now and Third Reading.
Lord SOMERS: My Lords, I think that I am far too ignorant about generation and regeneration to be able to do that with any authority.
Lord TREFGARNE: My Lords, I apologise for intervening, but this is a Report stage and the noble Lord should have asked the leave of the House.
Lord SOMERS: My Lords, I apologise.
Lord KILBRACKEN: My Lords, as the mover of the amendment I believe that I am entitled to reply. I am grateful to noble Lords who have supported the amendment. I say to the noble Earl that certainly it is the practice in forestry always to talk about regeneration, whether it is etymologically correct or not.
On Question, amendment agreed to.
The Schedule [Species and variety of trees to which Section 1 applies]:
Lord SOMERS Lord SOMERS moved Amendment No. 3:
Leave out the Schedule.
The noble Lord said: My Lords, this amendment is simply to take the place of one put down at Committee stage by the noble Lord, Lord Kilbracken, who unfortunately was not here to move it. Since the alteration in the earlier part of the Bill there is now no point in having a schedule at all. Therefore, I beg to move.
Lord KILBRACKEN: My Lords, this amendment is consequential on an amendment of mine that was approved at Committee stage. I should only like to apologise to the House for the fact that

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I was unavoidably unable to be present on the second day of the Committee stage and could not then move it.
On Question, amendment agreed to.

EUROPEAN COMMUNITIES (DEFINITION OF TREATIES) (SECOND ACP-EEC CONVENTION OF LOMé) ORDER 1980
5.12 p.m.
Lord TREFGARNE Lord TREFGARNE rose to move, That the draft order laid before the House on 3rd June be approved. The noble Lord said: My Lords, I beg to move that the draft European Communities (Definition of Treaties) (Second ACP-EEC Convention of Lomé) Order 1980, which was laid before this House on 3rd June, be approved. I would also draw the attention of your Lordships to the three treaties listed in the schedule to the order, which were laid before the House on the same day. These are the new Convention itself, the provisions for tariff-free access for ACP products in the area covered by the European Coal and Steel Community, and the arrangements for the implementation of the Community's aid obligations under the new Convention. The text of all these treaties is contained in Command Paper No. 7895.
In addition, I gather that the House has asked for consideration to be given in the context of this debate to three other documents, as follows: Document 11817/79, which provides for the maintenance in force of the main provisions of Lomé I, pending completion of the ratification procedure for Lomé II; Document 11932/79, which provides, on the basis of the Lomé II model, for the renewal of the 1976 Overseas Countries and Territories Decision governing relations between the Community and the dependent territories of the member states; and Document 6204/80, which provides for Community ratification of the new Convention.
The first Lomé Convention, which expired in March, established a treaty relationship between an important part of the industrialised world and a considerable number (originally 46) of developing countries, known as the African, Caribbean and Pacific Group (or ACP for short). The Convention contained
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provisions for both large-scale aid from the Community, channelled through the European Development Fund, and important trade advantages for the ACP, including free access to Community markets for over 99 per cent. of ACP products and a novel scheme, known as Stabex, for compensating shortfalls in export receipts for certain, mainly tropical, agricultural products. A Centre for Industrial Development was set up to promote industrial co-operation, and joint ACP/EEC institutions were established, notably a Joint Council of Ministers and a Consultative Assembly. Special provision was made for the access of sugar, rum, bananas and beef from the ACP producers of these commodities, many of whom are Commonwealth members.
Inevitably the new Convention cannot be a landmark of the same historic significance as the first Lomé Convention, which can fairly be said to have broken new ground in the relationship between developed and developing countries. But it is nevertheless of major importance, and it is fitting that it should be debated on the Floor of the House. Lomé II is neither the radical advance on Lomé I which the ACP wanted, nor a mere consolidation of it. The prevailing world economic situation in effect ruled out a more generous settlement, but the extent of the improvements should not be underestimated. Against the present background of rising oil prices and a slow-moving North-South dialogue, Lomé II is likely to seem more valuable to the ACP with every year that passes.
For the ACP, Lomé II, as well as confirming all the benefits of Lomé I, also contained significant additional gains. On the trade side the ACP have obtained better access to the Community market for several important agricultural products, including notably rum (of particular significance to Commonwealth Caribbean producers) and beef (which is important to Botswana, Swaziland and Kenya). The Banana Protocol has also been revised and improved. The provisions governing the operation of the rules of origin have also been revised and made more flexible, particularly as regards requests for derogations put forward by least developed members of the ACP. These changes will make access to Community markets easier for the ACP, while still ensuring that they

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are not merely used as a back door entry for non-ACP goods.
The Stabex scheme, which stabilises export earnings for countries dependent on certain products, has also been improved. The new scheme will cover an expanded list of products, including for the first time rubber, pepper, cashew kernels, cotton seed, oil cakes, peas, beans and lentils. The Community has also agreed to consider in the future the possibility of including tobacco (this is of special interest to Malawi and Zimbabwe) and sisal products (which are important to Tanzania). A number of new provisions, notably over energy matters, have been added to the range of industrial co-operation between the Community and the ACP.
The aid provisions of the Convention have also been improved. Community aid and European Investment Bank lending have been increased to a total of 5,227 million European Units of Account (equivalent to £3,136 million). This represents a substantial increase over Lomé I, and is more than enough to make up for inflation. The United Kingdom's share of the European Development Fund for Lomé II is 18 per cent. At £523 million this represents a contribution of over £100 million per year. The new Convention will also provide for more flexible aid programming procedures, designed to meet the ACP's needs.
A new arrangement has been drawn up which is designed to cover the special problems of ACP mineral producers (notably Zambia and Zaire) by assisting them to remedy harmful effects on their income of serious temporary disruptions beyond their control. On investment, new commitments have been made on both sides concerning the promotion and protection of investments made in ACP countries by both the Community and individual member states. The new Convention contains a chapter on the new subject of agricultural co-operation, and a new technical centre for agricultural and rural co-operation is to be established. The joint European Community/ACP Declaration on Sea Fishing, in the old Convention, has been considerably expanded. It now provides for the possibility of bilateral fishery agreements between ACP states and the Community.
We must, of course, ask ourselves if the new Convention represents a satis-
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factory outcome for the United Kingdom? The answer must be, yes. Our main aim was a new Convention which would reaffirm the Lomé relationship, and that has been achieved. We also sought to confirm and extend the benefits available to the 29 Commonwealth members who belong to the ACP, and we have succeeded. The Sugar Protocol, which is of immense importance to Commonwealth sugar producers, was confirmed; some progress was made on beef, bananas and rum. A new feature of the Convention is minerals, for which a new scheme has been agreed, admittedly falling short of ACP demands but nonetheless significant. On Stabex the United Kingdom achieved its aim of tying the use of transfers to development objectives.
The main disappointment for us was the absence from the final text of a human rights provision. A specific reference to human rights was unacceptable to ACP, who argued that it was not appropriate in a Convention of an economic character. But there is a reference to the principles of the United Nations Charter, which covers human rights, and the preamble to the new convention describes one of its aims as being to promote the well-being of the populations in ACP states. The question whether the Community would be able to stop aid if there were gross and persistent violations of human rights in one of the ACP states has naturally been considered. The Community will be bound contractually to give aid to all the ACP. But in cases of flagrant violation, the Community intends to take particular care to ensure that its aid benefits the people, and not the régime responsible for such violations.
To sum up, the Government take the view that Lomé II should be seen as a successful consolidation and development of Lomé I. It is certainly possible to criticise the new convention. In an ideal world many things in it would have been made bigger and better. It is also true that the Lomé relationship continues to favour the ACP much more than the Community favours other developing countries. It would be better if the Community's development policy were applied to all developing countries on an equal basis. But, in the real world, Lomé is much better than nothing, and radical extensions of it were simply not practicable.
Criticisms of Lomé should in any event not blind to its virtues. The convention brings together nine developed and 58 developing countries, including 29 members of the Commonwealth, with a total population of some 600 million. It makes a very useful contribution to the North-South dialogue. It has a major impact on Africa in particular, bringing anglophones and francophones closer together on a basis of co-operation. However far the Lomé achievement has so far fallen short of the aim—the establishment of a new model for relations between developed and developing countries—the promise of the venture has certainly not faded. On the contrary, it remains very much alive.
Lomé remains, too, of special interest for the United Kingdom, perhaps even more than before. Lomé now includes two-thirds of the Commonwealth. The Anglophone ACP have increasingly asserted their influence in the ACP group; the new ACP Secretary-General is a Kenyan and his deputy is from Trinidad. There is a major role for the United Kingdom to play in promoting the success of Lomé II through both Community and Commonwealth links.
I should also like to draw attention to the opportunities for United Kingdom firms available under the Lomé II. Community aid under Lomé II to the ACP States—in the form of both EDF grants and EIB loans—offers a virtually captive market for firms in the Community and ACP States. Over £2,200 million will be available under the new convention. There is also some 20 per cent. of Lomé I money, roughly £430 million, still to be taken up, particularly in the 29 Commonwealth ACP countries. Contracts are let by the European Development Fund and administered by the European Commission in Brussels. They offer complete financial and legal security. But so far British firms have failed to win anything like the share of business which we had hoped and expected, given the traditional British involvement in overseas markets and given the fact that 29 of the 58 ACP states are Commonwealth countries. Up to the end of 1979 only 10.2 per cent. of all the EDF business won by firms in the Community had gone to British firms; this represents 7 per cent. of all EDF business, an increasing share gradually being won by the ACP themselves.
Some firms have been put off by unfamiliar procedures, but the opportunities available justify an extra effort to master them. Since we were returned to office the Government have laid great emphasis on the need to improve our performance. Our export promotion services here in Britain and abroad have been working to improve the flow of information and to assist British businessmen in every possible way. Our efforts may be beginning to pay off. According to our latest figures, British firms won nearly 13 per cent. of all EDF business won by member states in the second half of 1979. We shall continue our efforts and hope that this success will encourage more firms to have a go. At the end of the day, however, we have to depend on the enterprise and tenacity of our firms to secure the share of this business which we should be able to obtain; there is a limit to what the Government by themselves can do. I hope the order will commend itself to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 3rd June be approved.—(Lord Trefgarne.)
5.26 p.m.
Lord BRUCE of DONINGTON: My Lords, we on this side of the House support the Motion, and we do so willingly in the light of the clear and lucid exposition given by the noble Lord, Lord Trefgarne. We feel that within the whole concept as put forward in the recent Brandt Commission Report, the new steps taken under the second Lomé Convention represent only a step in the direction in which we must tread over the next few years if far greater calamities are to be avoided. But it would be churlish to deny that the second convention presents a significant step forward, and we therefore support it.
We were a little surprised to hear from the noble Lord that the initiative and enterprise shown by British firms for the opportunities offered to them in these territories was not being taken up to the degree which even the noble Lord would regard as completely satisfactory. We are more than a little worried about that in view of the budget incentives that were offered a year ago with the precise objective of encouraging enterprise, initiative, enthusiasm and drive, and we hope the firms and industries concerned will take careful note of the very wise comments

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made by the noble Lord. My noble friends and I support the Motion which was so ably moved by the noble Lord.
5.28 p.m.
Lord BANKS: My Lords, I too join in thanking the noble Lord, Lord Trefgarne, for his very comprehensive summary of the provisions of the second Lomé Convention. When we debated the first Lomé Convention in this House on 27th November 1975 I said at that time that it was a valuable experiment of great significance, and I think we can say today that it has been a successful experiment. The fact that 58 ACP countries have sought to renew it is proof of that. The President of the ACP Council of Ministers, at the signing of the second Lomé Convention, said:
"The first Convention of Lomé was indeed a first step, albeit a significant one, towards a fundamental restructuring of the internal economic system and global Power relations".
It is generally agreed by representatives of both EEC and ACP countries that, on balance, Lomé II is better than Lomé I, and the Governments of the 58 ACP countries and the nine EEC countries, and the Commissioner responsible, Mr. Claude Cheysson, deserve to be congratulated on that. I welcome what the noble Lord said about human rights, athough I would not want to pursue that further this afternoon.
At the time of the first Lomé Convention much interest was expressed in the Stabex arrangement for income support. This has proved extremely useful, and I am glad to learn that it is to be improved; that it is to have increased financial resources and is to cover a wider range of products. Originally only 12 products were covered by this facility. Now that has grown, and under the new Convention 44 will be covered. It is interesting to note that the benefits paid under the Stabex system to the 35 poorest countries are made by way of grant. The Brandt Report comments on this and on the similar facility of the International Monetary Fund which provides the benefit by means of soft loans. The Brandt Report expressed the hope that the International Monetary Fund facility will develop on the lines of the Lomé provision.
It is encouraging to see that the new facility has been made available for
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minerals. The Brandt Report sees these income support arrangements—Stabex, Minex (as the arrangement for minerals is called) and the International Monetary Fund facility—as working together with price stabilisation arrangements, such as it is proposed to have under the common fund arrangements. It sees both of these sets of arrangements being necessary in many cases. There will be some cases where price stabilisation is not possible, and a Stabex arrangement can then take its place. However, according to the Brandt Report there are other cases where both these methods will be essential, working in co-operation for one particular product.
The noble Lord, Lord Trefgarne, has outlined the other improvements in the Convention: the fact that the European Development Fund will have more money; that it will show an increase in the real value of the resources; that free access for the Lomé nations, which previously existed for 99.5 per cent. of the goods imported into this country, will in fact be increased marginally.
I think it is a considerable achievement to have reached this agreement, in view of the fact that, as the noble Lord hinted, the negotiations were difficult. There was a difference of standpoint between the two sides. As the noble Lord pointed out, the EEC, faced with the movement into recession, rising oil prices and financial stringency, were looking for consolidation and marginal improvement. The ACP countries were looking for a decisive step forward towards a new economic order; and in the end there was a compromise. The EEC were pushed farther than they had intended to go, and the ACP countries were left with some not inconsiderable frustrations.
The ACP countries objected to the fact that there was no unhindered access for agricultural products, though in fact the bulk of their agricultural products do enjoy access. They would have preferred greater liberalisation in the structure of the rules of origin for their semi-processed goods, although there has been improvement there, as the noble Lord, Lord Trefgarne, pointed out. They pointed out that Stabex does not help ACP economies which are heavily dependent on the export of services. As the noble Lord reported, they were not

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entirely satisfied with the new arrangement for minerals. They claimed—and this rather surprises me—that the volume of aid will make a smaller contribution per head of the population than was made by Lomé I. They expressed a fear that there would be inadequate financial resources to implement the chapter on industrial co-operation.
Nevertheless, the ACP countries recognised the improvements. The Secretary General of the ACP Group said:
"The ACP countries consider Lomé II to be a substantial improvement on Lomé I".
But it is of course limited in scale and scope, as the noble Lord, Lord Bruce of Donington, suggested, when compared with the need of not only the ACP countries, but the Third World as a whole. As the noble Lord, Lord Bruce of Donington, indicated, I am quite sure that something on the scale and with the scope of the proposals of the Brandt Report is necessary to cope with the situation. I regret that the Summit of the Seven, which has just concluded, was not in this connection more positive than it turned out to be.
I hope that some steps will be taken to arrange for a summit of a few leaders from the West, from the oil producing countries (OPEC) and from the Third World, as the Brandt Commission has suggested, in order to try to take this report and its proposals a practical step further. In the meantime, I wish the second Lomé Convention, with its more moderate scope, a useful and successful five years.
Lord WALSTON: My Lords, very briefly, as one who, when a Member of the European Parliament, was a member of the Committee of that Parliament which dealt with these matters and who has visited Lomé for discussions of this kind, I wish to welcome the order as proposed by the noble Lord, Lord Trefgarne. We hear so much of the failures and the shortcomings of the Community that at times it is good for us to remind ourselves of some of its positive achievements. To my mind, the original Lomé concept, and particularly the concept of Stabex, is one of the very real achievements of the EEC. It is modest—far too modest; it should go very much farther—but
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within the constraints imposed upon it (and for this the Commissioner, M. Claude Cheysson, deserves much credit) Lomé has taken a very big step forward in the practical implementation of pious hopes, which we so often hear from all sides, of bridging the gap between the rich and the poor, the North and the South.
I welcome this second convention, particularly in the hope that before too long it will lead on to a considerably stronger and more generous effort to implement the findings of the Brandt Commission and to some extent to reduce the gap between the rich and the poor countries, instead of allowing it still further to increase.
5.39 p.m.
Lord PITT of HAMPSTEAD: My Lords, I fear that I am prepared to give Lomé II only a guarded welcome. We are having this debate today only one day after the announcement of the largest unemployment figure in this country since the war. It may well he that Britain's journey in the field of increasing unemployment is faster than that of her partners in the Community, but the fact remains that this increase in unemployment is part of a pattern. Therefore, it seemed to me that the Lomé agreement, as we now have it, is a missed opportunity. There was an opportunity to have transferred much larger resources to the ACP countries.
That point brings me, first, to the European Development Fund. The Minister pointed out, quite rightly, that the fund has been increased. But the fund has not been increased nearly as much as all the arguments indicated that it ought to be. What is more, I speak subject to correction but I gather that some of the funds which were not used in Lomé I were taken into account in deciding the level of funds for Lomé II. To my way of thinking, that was a gross error. For one thing, the reason why there was a left-over of funds from Lomé I was the amount of bureaucracy; the rigid way in which the funds were being administered, and the amount of time that was being taken to process applications.
My first suggestion to the Government—because we have agreed that the sums are there, the agreement is signed and, there-

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fore, one can only make suggestions which are within the confines of the agreement—is that on this occasion some attempt should be made at greater flexibility and that there should be a greater reduction in the bureaucratic approach of the administration of the EDF. This is a feasible and quite practicable suggestion, and I hope that the Minister will be able to impress on his colleagues the need to work along those lines, because I know that the real criticism of the EDF from the point of view of the ACP countries is that there has been too much bureaucracy and the processing has been too slow—and also, of course, that the funds are not enough.
I join with the noble Lord, Lord Walston, in commending the introduction of Stabex. Stabex was an imaginative act on the part of the EEC in agreement with the ACP countries. The trouble with Stabex, however, is that the commodities were arbitrarily chosen, and it is still so. Although the number has been increased from 12 to 44, there is still this arbitrariness about the selection of commodities that are acceptable for Stabex. Therefore, my second suggestion is tied up with the first one. It is that the EEC should try to be more flexible in its administration of Stabex, too. Again, as I see it, that is not an impracticable suggestion.
The third criticism that the ACP countries have always had, and still have, is that although in theory they have access for their processed and manufactured goods to the European Community markets, in practice it is proving much more difficult than was ever thought. They are inclined to blame the safeguard clauses; the invisible, non-tariff barriers and the increasing protectionist attitudes of the EEC. The Minister has himself mentioned the rules of origin. The ACP countries have been very concerned that, because of the way in which the rules of origin have been defined, there has been great difficulty, and, rather than their benefiting in terms of building up a certain amount of industrialisation on a light scale, they have had to be very careful, because unless it fell strictly within these rules of origin then they did not have this free access. Therefore, again my first suggestion is along the same lines: that we should try to be more flexible on that one,
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too, because it is the rigidities which are in fact preventing us—I use the term advisedly, because I mean both the EEC and the ACP—from benefiting from the agreement to the extent to which we ought.
In saying that, I am not suggesting that that is the whole story, because it is also my view, for what it is worth, that the ACP countries have some blame to bear in that they have not made sufficient use of the facilities which are available to them. That is also my view; and one of the thoughts that I would throw out is that they ought to do some research as to what the obstacles are to their better use of this facility. Because, when all is said and done, it was always thought that some degree of capital formation would be able to arise as a result of their being able to export their processed and manufactured goods into this large market, and there is no evidence that that is happening at all. Therefore, in effect, I think they ought to be doing some researches to discover in what way they can remove the obstacles. I know from experience that it is always easy to pick the most obvious obstacle and say that that is why something does not happen, but after careful research you discover that it is not that obvious obstacle at all; there is something else, much more fundamental and much more important.
The noble Lord, Lord Banks, also touched on this question of industrial co-operation. That has been very slow in moving, but I think that is understandable in the circumstance. One hopes that in fact it will move forward much more quickly than it has done so far. I want to conclude as I began, by saying that I agree with the Minister that Lomé II is better than nothing. I also agree with the Minister that, in spite of whatever criticisms we may have of the convention, it is a very worthwhile agreement. What I hope—and this is my plea—is that in administering it the EEC will be more flexible than it was with Lomé I, and so enable both sides to gain.
5.48 p.m.
Lord TREFGARNE: My Lords, I will not detain your Lordships for more than a moment in concluding this short debate, but I should like to say to the noble Lord, Lord Pitt, that it is not in fact correct that the unspent Lomé I funds were taken into account in considering the

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size of Lomé II It is quite normal, I think, for a period of expenditure to extend beyond the five years of the convention, and that is what happened in this case. As for the time taken by the authorities to consider applications it is also the case that in many instances the Commission require details to be given and studies to be carried out by the recipient countries, and I understand that some of these studies relating to applications made have indeed taken rather a long time. But it was in most cases the recipients themselves who took a little while to complete their studies, and that is why the time-scale was sometimes rather longer than expected. In any event, I think it is right that these applications should be properly and carefully considered, and if the alternative to the slow and careful consideration that I have described is swift but less careful consideration, then I think I prefer the former.
As for access to Community markets, the safeguard clause has never in fact been used. It is there as a backstop, necessary to allow emergency short-term protection to deal with disruption in industries such as textiles, which are already badly affected by low-cost imports and are thus highly sensitive. I think that apart from the noble Lord, Lord Pitt, the order has been accorded at least two cheers from your Lordships, and I hope the House will now approve it.
On Question, Motion agreed to.

NATIONAL RADIOLOGICAL PROTECTION BOARD (CONSTITUTION AMENDMENT) ORDER 1980
5.50 p.m.
Lord SANDYS: My Lords, I beg to move the Motion standing in my name on the Order Paper, namely, That The National Radiological Protection Board (Constitution Amendment) Order 1980, laid before the House on 3rd June 1980, be approved.
The National Radiological Protection Board was set up in 1970 under the Radiological Protection Act 1970 to advance the acquisition of knowledge about radiation protection and to provide information and
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advice to those having responsibilities for this subject in the United Kingdom. Among other duties, the board has been specifically directed by the Secretary of State for Social Services, acting on behalf of all the Health Ministers in the United Kingdom, to advise appropriate Government departments and statutory bodies on the acceptability of standards of radiological protection proposed by international organisations.
Section 2(1) of the Act states that the board shall consist of a chairman and not less than seven, nor more than nine members. Section 2(2) gives powers to the Secretary of State to amend the size of the board by order, after consultation with the board, and subject to approval by each House. The order before the House seeks to enlarge the maximum permissible size of the board from nine to 12 members. The recent White Paper on Non-Departmental Public Bodies (Cmnd. 7797 of January 1980) recognised that the retention of the board was essential and this was accepted by the Government, but your Lordships may well ask why such a Quango should be enlarged at a time when the present Government have been seeking to reduce the number of such bodies. There are good reasons which have been supported both by the present and by previous Governments.
The Royal Commission on Environmental Pollution in its Sixth Report Nuclear Power and the Environment, 1976, recommended that the composition and organisation of the board should be reviewed in the light of the additional responsibilities it recommended for the board. In May 1977, the Government responded in a White Paper of the same title (Cmnd. 6820) and undertook to carry out such a review. This review was in progress in January 1978 when Mr. Justice Parker reported on the inquiry at Wind-scale. He endorsed the advisory role of the board on radiation protection standards but recommended that consideration be given to the inclusion of some wholly independent person or body with environmental interests in the advisory system. The previous Administration concluded that the most appropriate and effective method of responding to these recommendations was to increase the authorised maximum size of the board from nine to 14 members and the then

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Secretary of State announced his intention of introducing an order to that effect in a written reply given in another place on 21st March 1979—Official Report, Commons, Vol. 964, No. 76, col. 642.
The present Government have given careful consideration to the need to enlarge the board and have also taken account of the proposed expansion of the nuclear power programme and the board's increased work on radioactivity in the environment. It is in agreement with the previous Administration on the need to expand the board but has concluded that it is sufficient to provide for a maximum of three rather than five extra members. This is not a political issue, merely a judgment that a more modest expansion is sufficient for practical purposes. The Secretary of State accordingly announced his intention to consult the board on the expansion of the board to a maximum of 12 members, in his reply to a written question in another place on 18th March 1980. The board has accepted this proposal.
It may reassure your Lordships to know that, apart from a modest salary paid to the chairman, the members of the board provide their valuable services without payment. In view of the important role of the board in advising on proper standards of radiation protection and the need to strengthen and broaden the expertise of the board's membership, I commend the draft National Radiological Protection Board (Constitution Amendment) Order 1980 for your Lordships' approval.
Moved, That the draft order laid before the House on 3rd June be approved. —(Lord Sandys.)
5.57 p.m.
Lord WELLS-PESTELL: My Lords, we are grateful to the noble Lord, Lord Sandys, for introducing this order in some detail. We on this side of the House approve the order and give it our support and backing. I do not think there is any need for me to say much, other than that the Joint Committee on Statutory Instruments, I note, made no comment whatsoever on this order; and, as your Lordships know, they are a very good watchdog in matters of this kind. In view of our knowledge of the environmental situation today, new developments,
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the observations of Mr. Justice Parker when he took the Windscale inquiry, and the fact that we are very much concerned with a good deal of nuclear development, it is desirable that we have on this broad members (other than members of the medical profession) who can look after the more scientific, specialised aspects of the environmental factors. Therefore, we approve the increase in the number of members of the board.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness White): My Lords, as a member of the Royal Commission on Environmental Pollution, which a long time ago recommended this addition to the numbers of the board, may I say that we are grateful that at long last our recommendations should be given effect. It is regrettable that quite so much time has been taken over deciding to do this. There have been delays along the line, partly owing to the change of Administration; but that, after all, was some while back. However, better late than never. I am sure the Government will take great care in choosing appropriate persons to be added to the board so that the breadth of interest and experience which we hoped for may be forthcoming.
Lord SANDYS: My Lords, I am grateful to both speakers for supporting the order in the terms that they have and, despite the strictures of the noble Baroness concerning the timetable, I commend this order to your Lordships.
On Question, Motion agreed to.

INSURANCE (TRANSFER OF GENERAL BUSINESS) REGULATIONS 1980
5.59 p.m.
Lord LYELL: My Lords, I beg to move that the draft Insurance (Transfer of General Business) Regulations 1980, laid before the House on 2nd June 1980, be approved. These regulations implement a requirement of the European Communities non-life insurance establishment directive, which was adopted in 1973. Before I describe the regulations in detail, your Lordships may find it helpful if I were to recall the main elements of the non-life directive, and the steps already

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taken to implement it. The directive deals with the authorisation of companies to carry on insurance business. It also sets out the different classes of insurance business and prescribes the solvency margins companies must possess—that is, the excess of assets over liabilities. That same broad framework is found in the Insurance Companies Act 1974, and it has been possible to implement most of the directive by making regulations under the European Communities Act 1972 which have modified the authorisation; classes of business and solvency provisions in the Insurance Companies Act 1974.
Another provision of the directive requires an authorisation to carry on insurance business to be valid throughout the entire national territory. It has been implemented already by the Insurance Companies Act 1980 which extended the 1974 Act, modified by the regulations I have mentioned, to Northern Ireland and repealed the virtually identical Northern Ireland legislation. But we are still left with the important clement of the directive to be implemented. This is the requirement that each member state should make it possible for an undertaking to assign all or part of its portfolio of policies, subject to the approval of the competent supervisory authority.
The purpose of the draft regulations which your Lordships are considering today is to implement that requirement. Unlike the earlier implementing measures I have described, these regulations do not take the 1974 Act as their starting point. They are, as we might suggest, free-standing since they cover new ground for United Kingdom statute law. At present, insurance policies, like other contracts, can only be transferred from one party to another either with the consent of all the parties concerned, or, in the case of a compromise or arrangement, with the sanction of the court. These draft regulations enable the Secretary of State to approve the transfer of general business insurance contracts from one company to another. Once the transfer has been approved, the transferee company assumes all the rights and obligations of the transferor company under those contracts.
With that brief summary in mind, your Lordships may find it helpful if I run
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briefly through the regulations. Regulation 1 is mainly conventional and is just descriptive. Regulation 2 defines various terms. I should like to draw your Lordships' attention in particular to the definition of "affected policyholder". The term naturally covers the holders of policies included in the transfer. In addition, it covers other policyholders either of the transferor or the transferee company whose interest may be materially affected by the transfer. Regulation 3 deals with applications for approval of transfers. The transferor company applies to the Secretary of State. Both companies will be obliged to supply all the necessary information, which will range from details of their own status and solvency to information about the policies to be transferred.
Regulation 4 deals with the extensive publicity arrangements that are central to the procedures. The object is to give those affected by a proposed transfer the opportunity to make representations to the Secretary of State. I have already drawn your Lordships' attention to the broad meaning given to the term "affected policyholder" in the regulations. Regulation 4 also recognises that those with an interest in a policy should have the opportunity to comment. We have in mind, for example, the case of a building society which has a financial interest endorsed on a householder's fire policy.
I should like to say something about the way in which the Secretary of State's discretion under Regulation 4(1)(b) will be exercised. Before making a direction that the transferor need not notify every affected policyholder, we shall examine carefully the claims experience of the company. We shall need to be satisfied that for any policy for which notification is not proposed, the probability of any further claim is small—so small as to make notification inappropriate.
I would emphasise very strongly that we are dealing here with general business policies which are renewable annually and not with long term, that is, as we describe them, life assurance policies. We expect that in many cases a company seeking to transfer general business policies under these arrangements will no longer be carrying on business of the type in question when it makes the application. In most cases the policies which are to

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be transferred will be old, and in some cases they will be very old indeed. We believe that it would be unduly burdensome to require notification to holders of all policies which had expired so long ago that it was improbable that claims would be made and settled, bearing in mind the stipulation in most policies that claims must be made within a reasonable time. But we find that experience varies from company to company and between different classes of business. Claims under employers' liability policies may emerge years after the policy has nominally expired. We shall have to examine each application in the light of experience and form a judgment on which policyholders a company need not notify. I should make it clear, however, that it seems probable that in most cases some of the policies to be transferred will be so old as to make some direction under Regulation 4(1)(b) appropriate.
For one type of business, which we call freely assignable marine insurance, the holder of the policy at any one time is often unknown to the insurance company. In these cases, a direction will generally be made.
Regulation 5 deals with the decision of the Secretary of State. The requirement in Regulation 5(1) to consult with the supervisory authorities of other member states is found in the directive. There are a number of pre-conditions which must be satisfied before an application can be entertained, and these are set out in Regulation 5(3). If those conditions are fulfilled then the Secretary of State will weigh all the relevant factors, including representations made by interested parties, and take his decision. Regulation 6 deals with the publication of the Secretary of State's decision.
Regulation 7 deals with the effect of approved transfers. The transferee, that is, the recipient of the policy, will assume all the transferor's rights and obligations under the contracts. Regulation 7 also ensures that, generally speaking, a policyholder who has not been made aware of a transfer is not bound by it until he has been duly notified.
Regulation 8 deals with transfers into and out of Lloyd's. The arrangements have to be tailored to Lloyd's to take account of two special factors. First,
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Lloyd's operates in syndicates, so that the transferor or the transferee in the case of a transfer involving Lloyd's will be several "names". It is convenient to have one person authorised to act on behalf of all the members of a syndicate. The committee of Lloyd's will therefore pass a resolution authorising one person to act on behalf of the members of Lloyd's concerned. The second modification to the arrangements reflects the fact that the directive solvency margin applies to the members of Lloyd's together and not to individual syndicates or "names". Regulation 9 is concerned mainly with the service of documents and is self-explanatory.
After that somewhat detailed explanation, I should like to outline how we expect the regulations will be used if they are approved. They will certainly not be used as an easy way out for companies which want to off-load business with which they have become disillusioned. The procedures laid down are such that only a company that genuinely believed that a transfer would be in its own interest and could be shown to be in the interests of its policyholders would embark on the exercise. We know of some two dozen or so companies which are hoping that the regulations will be made. For the most part, as I have already mentioned, they are companies that have ceased taking on new business. They have generally re-insured the risks still on their books, often with other companies within the same group. Although they have become no more than shell companies, they cannot at present be dissolved until all their liabilities have been discharged. These regulations would enable them to transfer their liabilities to an active company as a prelude to their own dissolution.
Once those companies of which we are already aware have taken advantage of the procedures, we would not expect many further applications. At the same time, it is right to introduce these procedures because, until we do, we are in breach of a Community obligation. We believe that they will provide useful, even if rarely used, facilities. For that reason, I commend the regulations to your Lordships and I beg to move.
Moved, That the draft Regulations laid before the House on 2nd June be approved.—(Lord Lyell.)
6.10 p.m.
Lord BRUCE of DONINGTON: My Lords, we on this side of the House are most grateful to the noble Lord for having explained so lucidly the order before your Lordships. It is, as the noble Lord indicated, an order with a very limited function affecting but a small area of the insurance market. It would seem that the insurance community generally would be glad if it were approved. It tidies up a situation and it will facilitate transfers in accordance with Article 21 to which the noble Lord referred. It reflects part of the legislation which has been running around the European Community for some time. It affords an opportunity for the House to consider the general position that arises at this time in connection with insurance business other than life assurance business. This particular order relates to the EEC Directive No. 73/239. There are still substantial parts of that that have to receive your Lordships' attention. As the noble Lord, Lord Lyell, says, the facility offered by the original directive is purely one of facilitating the establishment within member states of insurance businesses on the basis that of course they will be in full conformity with the laws obtaining within those member states. This is a step forward.
There is another associated Directive, No. R95 of 1976, which was presented to your Lordships' House on 1st December 1976, which is a draft directive on the co-ordination of laws relating to direct insurance other than life assurance, and laying down provisions to facilitate the effective exercise of freedom to provide services. This particular directive is indeed complementary to the directive under which the present order is laid. I hope that your Lordships will agree that it is possible to use this occasion to review progress as to what has happened to this most important directive, which was designed to facilitate the provision of services throughout Europe across the frontiers, because, of course, it is this particular business that is of the greatest possible interest to the insurance industry of this country.
Your Lordships hardly need to be reminded that the invisible exports of the United Kingdom play a very significant part in the country's balance of payments,
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and that the insurance community—notably that in the City of London—has made very considerable contributions indeed in this particular field. It was to be hoped, following entry into the European Community, that the provisions of the Treaty relating to this would be speedily brought into being and would have some beneficial effect upon the United Kingdom.
I note in particular Article 59 of the Treaty which says:
"Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be progressively abolished during the transitional period in respect of the nationals of member states who are established in a state of the Community other than that of the person for whom the services are intended".
Under Article 60 it lists the various services including those of the professions which in turn include those of the insurance community mainly in the City of London.
What has happened to this? This Treaty was signed, I believe, somewhere round about 1957, so the transitional period has been going on for a fairly considerable period of time. Nevertheless, draft Directive No. R95 of 1976 was eventually produced and was considered by a Select Committee of your Lordships' House which produced a report on this particular subject on 1st December 1976. In the report of your Lordships' Select Committee it was stated in paragraph 1 that the proposal was not expected to be presented to the Council before the end of 1977. It is now two and a half years after the end of 1977 and one wants to know what has happened to it; and, more particularly, in connection with yet another directive that is supposed to follow the second directive to which I have referred. It is said that this particular report, No. R95 of 1976, was still under consideration on 22nd November 1979, by the Council.
This point is raised with no party political intent at all. The previous Government may have been responsible in part for the delays that have occurred. There may be a number of reasons for this. But this much I do know, as a member of the Economic and Monetary Affairs Committee of the European Parliament, representing your Lordships' House: that this particular directive was obstructed at Committee level and every

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conceivable level for a period of about two years. This obstruction may have gone on since.
I raise the point simply to express some dismay that whereas the provisions of the Common Agricultural Policy seem to be adopted and put forward by the eight other member states with some considerable alacrity, some might even say indecent haste, when it comes to items which have a direct fundamental benefit to the United Kingdom—freedom to pursue quite freely across frontiers the business of non-life insurance—one finds as a matter of practice that every conceivable obstruction is raised at Committee level, often at COREPER level, certainly Council level and not infrequently at Commission level.
This, as I have ventured to emphasise, is a matter of some concern to the United Kingdom, and the United Kingdom has every right in my view, and, I trust, in your Lordships' view, to say: "This is all very well. We are admitting your goods freely here. Our trade deficit in terms of visible goods, including raw materials, is some £4,000 million a year. Why can you not go on so that we may quite legitimately proceed in accordance with the Articles of the Treaty to extend our activities in your territory in a field in which we are expert and in a field which will bring some benefit to us?".
I say that not in any kind of partisan spirit; indeed, it would be most difficult for me to do so in the light of the whole manner in which this regulation was introduced by the noble Lord, Lord Lyell. We are both members of the same profession, and that very often helps. But I venture to draw the attention of the House to this factor and to ask the noble Lord—and I have given him advance notice of the questions I was going to ask—just what is the status of this regulation. Just where is it being held up? Is it in the Legal Affairs Committee of the European Parliament, the Economic and Monetary Affairs Committee of the European Parliament, the plenary session of the Parliament itself, the COREPER, the Economic and Social Committee, or the Council? Where is it now; when are we going to have it; and when can we pass the appropriate legislation in this House to enable this country and its insurance industry to draw some benefit from it
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instead of—as in a good number of other spheres in connection with the Community, as emphasised by the right honourable Lady the Prime Minister herself—eternally paying out?
6.21 p.m.
Lord LYELL: My Lords, we are very grateful to the noble Lord, Lord Bruce, for his welcome for the regulations and also for his forthright support of all that the insurance industry does for the United Kingdom, especially his last comment about the balance of payments and how we would wish to improve our balance of payments in general with the Community. The noble Lord took a fairly firm line with this directive on insurance services, which we are grateful he gave some advance notice of, but in general I have nothing very detailed to add to what the noble Lord—and clearly he is an expert—has dealt with. I refer to the specialised professional matters as well as the other matters he was speaking about in regard to our mutual profession.
Indeed, I am sure many of us would wish that the professional attitudes that the noble Lord and myself share could be adopted so far as this particular directive is concerned. But, as we are aware, and as the noble Lord pointed out, the directive has been under discussion since 1977. We understand that the blockage is still occurring in what the noble Lord called the COREPER level and, so far as is known, at the moment the COREPER, at the instigation of the Commission, has asked for a progress report from the working group before the summer recess—and I understand that in European terms that is a little earlier than the Summer Recess in your Lordships' House.
The Government welcome this move and we will do everything in our power to ensure that COREPER, when they consider the report—and that will be, I think, within the next month—will take steps to speed up the matter. We share the noble Lord's concern. The Government do indeed share the noble Lord's anxiety that the negotiations should come to a speedy conclusion so that the insurance industry in the United Kingdom can take the fullest advantage of all the effective freedoms mentioned by the noble Lord to provide services across all the frontiers of the Community to which the Treaty of Rome entitles us.

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We hope the Community will be taking stock soon—before the Summer Recess—of progress made at the experts' level, and indeed we cannot, we believe, do much more than add our support to all that is being done by our representatives at COREPER level My Lords, that is as far as I can go at the moment.
On Question, Motion agreed to.

GAS BILL
6.24 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(The Earl of Gowrie.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
[Amendment I not moved.]
Lord IRVING of DARTFORD Lord IRVING of DARTFORD: moved Amendment No. 2:
Before Clause 1, insert the following new clause:
"Obligation not to discriminate
(. The General obligation of the British Gas Corporation to supply gas on demand shall include an obligation not to discriminate against industrial Consumers of gas in terms of either—

(a) supply opportunities; or

(b) price.").

The noble Lord said: In seeking to move my new clause I would ask the leave of the Committee for permission to discuss my second new clause at the same time.
This little Bill, of only two clauses, is nevertheless of the greatest importance to most industrialists in this country. Not all of them have yet realised the significance of the Bill, and I think that is why it had such an easy passage through another place. I speak on behalf of the paper and board industry, with which I am associated, and I am very happy to declare that interest. The Paper and Board Industry Federation is very disturbed at the con-
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sequences of the Bill. It has 26 of its member companies who use more than 25,000 therms a year, a total of 113 million therms in any year. It believes that these, and possible new, users of gas will be at a great disadvantage in regard to the availability of gas if the Bill is not amended to give equal oppotunity to industrial and domestic users.
But the paper industry is not the only group of industrialists which is worried. There was a very telling article in The Times of 7th March, in which the President of the Chemical Industries Association, Mr. Eric Sharp, was quoted as saying, that,
"projects were being postponed or scrapped and foreign investment in Britain deterred because of the inability of companies to secure gas supplies".
He also said that the British Gas Corporation's inability to meet demands from industry arises from the overwhelming demand from domestic users. This was stimulated, as the noble Earl, Lord Gowrie, said on Second Reading, by higher prices for oil and, of course, one knows that it was also stimulated by a very powerful campaign over a number of years directed at domestic users by the British Gas Corporation. This morning the National Federation of Clay Industries was in touch with me and expressed its anxiety about the Bill, and they asked for what the paper and pulp industry asks for—a fair crack of the whip between industrial and domestic consumers and a proper continuity of supplies.
The Bill is seeking powers to allow the British Gas Corporation to have further powers over whether and how it supplies gas to industrial users—that is, users of more than 25,000 therms a year—while obliging them to guarantee supplies to all domestic users and others where the use is below 25,000 therms a year. As far as we are concerned, the Bill provides further evidence that the policy of the British Gas Corporation is to give priority to domestic users in both supply and price terms, while adopting an exploitive and "take-it-or-leave-it" attitude with industrial users—that is, users of more than 25,000 therms a year—which in many cases results in supplies not being given, or in severe interruption of supplies being made, and exceedingly high prices being charged—which in many cases are substantially higher than those charged to

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industrial users in countries with which the United Kingdom is in competition. That is why my new clause before Clause 1 wants to place an obligation on the British Gas Corporation not to discriminate against industrial consumers of gas in terms of either (a) supply opportunities or (b) price.
In supply contracts there have been a number of cases, both within the paper and board industry, and within other industrial sectors, where the British Gas Corporation has either refused to agree to supply gas, without any grounds for doing so, or where the board has adopted an attitude and set prices in such a way as to make the supply conditions totally unacceptable to the consumer. When these cases have been made known to senior officials of the British Gas Corporation, the response has usually been, "It is the Gas Corporation's policy to be interested in supplying gas to domestic consumers or to industrial users who are prepared to pay premium prices". This policy has put Britain at a grave disadvantage as against its continental and other competitors. The President of the Chemical Industries Association Mr. Sharp, has estimated—and it is very ironic in view of our gas resources in the North Sea—that industry pays an average of 5p a therm more for comparable supplies than continental chemical manufacturers. This amounts to an annual gross additional burden of £60 million.
The energy costs in the paper and board industry are fairly high although they are not the only problem, because they constitute 15 per cent. of total costs. So it is a highly significant additional cost which makes competing with other countries, which is already difficult enough, in some cases almost impossible. But the average of 5p mentioned by the President of the Chemical Industries Association covers a wide variation in foreign gas prices. A recent survey of gas prices revealed that British gas customers pay the world's highest prices for supply; they also receive less benefit from price discounting than any other country in the world. In the survey Britain topped the list as the most expensive of the eight countries surveyed.
In the United Kingdom, 100,000 therms cost 24p, with no process price reduction. Belgium was next with 23.7p. Germany
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came third with 22.6p per therm, but with a 13 per cent. process price reduction. Fourth was Italy with 22p per therm, and a 22 per cent. process price reduction. The United States came next with 14.8p with a 10 per cent. reduction. In other words, United States customers, the industrial users, are getting their gas at half the price that our own industrial users have to pay in this country; and we are still expected to compete with them, New Zealand pay 13.6p per therm and Canada 8.1p per therm, with a 7 per cent. reduction for process use.
United Kingdom users get no benefit from either process or load use, and when you go up to the higher lever of the purchase of 1 million therms they get only a half of 1 per cent. reduction, which is lower than the reduction that almost any other country, with the exception of two, gives at the purchase level of 100,000 therms. It really seems to some of us an extraordinary way to treat industry when the Government's policy is to do everything to help the regeneration of industry, to help it compare, and when it is vital to the recovery of the whole country.
In asking for no discrimination in favour of domestic users, I want to point to the intolerable situation in which the price to the domestic consumer in the United Kingdom is 19.3p per therm. The noble Earl may say, of course, that the first 52 therms are at 24.6p per therm compared with 26p to 33p a therm to industry. Even when industry takes supplies on an interruptible basis, which it is usually obliged to do, the price is between 23p and 24p per therm, again much higher than the domestic price. That is for volume purchased in excess of 1 million therms a year. This is why one of my new clauses asks first that prices to all consumers, industrial and domestic, should be charged on an equitable and fair basis; secondly, that pricing policies shall be established on a normal commercial basis; and, thirdly, that some price concession shall be given to high volume users.
I mentioned interruptible supply contracts. Supplies to industry are mainly on an interruptible contract basis for the reasons I have mentioned. This means that when supplies are limited (for example, during winter high-load

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conditions) it is the industrial consumer who has his supplies cut. This has resulted in severe hardships for many industrial concerns, when cuts have had to be made, often with as little as 12 hours' notice. Altogether, we need to ask the Government to look again at this Bill and to remove from it the impediments to industry in its struggle to compete in the world. Industry's struggle is the country's struggle, and it deserves better treatment than is given in this Bill.
The Earl of GOWRIE: I apologise to the noble Lord, Lord Irving, if I did not hear him aright, but did he say that he was addressing himself also to his leave out Clause 1 amendment, or does he want me to speak simply to his first two amendments?
Lord IRVING of DARTFORD: I hoped that the noble Earl, as I had the leave of the Committee to discuss the second new clause, might reply to the substance of the second new clause at the same time.
6.35 p.m.
The Earl of GOWRIE: I will then proceed along that line. By these amendments, the noble Lord is proposing, as he has very clearly and trenchantly set out, that there should be no discrimination between industrial customers and domestic gas customers; he would therefore continue the preference for the pre-1976 customers, and by doing so—I am not quite going so far as to accuse him of putting forward wrecking amendments—he would altogether create the circumstances for the arbitrary rationing that our Bill seeks to avoid.
May I just remind the Committee of the problem that we are trying to face and deal with in the Bill. It is an acknowledged fact, I think, that because of oil pricing and supply problems the British Gas Corporation are at present unable to satisfy all new demands for gas. That is likely to remain the position for the next few years until the investment projects aimed at increasing supplies come into fruition. On Second Reading we had some discussion about the new gas gathering line, and the like. As long as demand exceeds supply, there must inevitably be some form of rationing of available supplies.
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This situation can only be made worse if the consumer is charged unrealistically low prices for his gas supplies. For the domestic market the Government have recognised on a number of occasions—and indeed I made this point myself in a debate in your Lordships' House on 30th January of this year—that the price of domestic gas should be raised to a proper economic level so as to ensure a balance of supply and demand, and avoid the risk that supplies would be diverted from the industrial to the domestic sector, thereby treating industry unfairly, as the noble Lord wishes us not to do.
As your Lordships know, the Government have already set the British Gas Corporation a three-year financial target which is based on a gradual correction of this under-pricing. We have also endorsed British Gas's well-established policy of relating industrial and commercial gas prices to the competing oil products, because not to do so would make suicidal demands, in our view, on our gas reserves. The Bill removes an impediment to the implementation of this policy in the present legislation, and aims to allow need and price—rather than an arbitrary entitlement—to determine supply. That is not a new departure from policy. Because of the under-pricing of domestic gas, the noble Lord's amendments would either cause British Gas to relate domestic prices to oil, which would result in higher domestic prices than would be necessary if British Gas are to meet their target, or the effect would be to cause the under-pricing of large volumes of gas in the industrial and commercial sector. That, in our view, would create enormous supply difficulties by sending demand through the roof.
Lord IRVING of DARTFORD: I am most grateful to the noble Earl for giving way. He talks about the under-pricing of gas. Will he explain why, if our gas is under-priced, almost every other major country can receive it at a cheaper price than ours?
The Earl of GOWRIE: In a nutshell, they will not be able to get away with that much longer, because any country which fails to relate the price of gas to the price of oil, unless it is in almost unique circumstances such as very few countries find themselves in, is either going to create a

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demand for gas, whether at home or abroad, that it is not going to be able to fulfil, or it is going to deny itself enormous sources of revenue. Therefore I should very much doubt that that situation would continue; but in fact I am also somewhat dubious as to whether it is at present the case. We are often asked why it is that gas prices in other European Community countries are lower than in Britain. I find that somewhat difficult to confirm or refute, because valid international comparisons of representative contract prices are especially difficult at this time, when oil price increases, as I said, are still working their way through into gas prices. The short answer to the noble Lord is that he needs to watch the degree at which other countries are allowing oil price rises to work their way through gas prices. I think that will inevitably have to happen in other countries as well as in our own.
I think the substantive point to make in the context of this country is that the fact that domestic gas is currently under-priced and has been so for some considerable time is no reason for industrial gas to become also more under-priced than it already is, because then again the balance of supply and demand would be put out of kilter altogether.
May I turn quickly to the noble Lord's amendments in rather more detail? I have really been making Second Reading points so far, and the noble Lord, no doubt through no fault of his own, was not able to be with us at Second Reading. Amendments Nos. 3 and 4 seek to place on the BGC certain obligations in respect of those customers to whom they have a statutory obligation to supply. Clause 1(1) of the Bill will amend the Corporation's obligations to supply gas set out in paragraph 2 of Schedule 4 to the Gas Act 1972, so that they will no longer be obliged to supply any premises at all with more than 25,000 therms a year. The provisions in the proposed new clauses would therefore apply only to customers receiving quantities up to that amount; that is to say, the new maximum statutory entitlement.
The Gas Act already requires British Gas to avoid undue preference in the supply or pricing of gas to tariff customers. The relevant provisions here are contained in Sections 24(1) and 25(5) of the 1972 Act. Since virtually all British Gas
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customers who are consuming less than 25,000 therms a year are supplied on tariff and will remain so under this Bill, including the vast majority of small businesses, the provisions in Sections 24 and 25 to which I have referred will continue to apply to them after this Bill is enacted. So, in our contention, these amendments will add nothing of great significance to the existing protection given to customers with a statutory right to supply.
With regard to the other proposal made by the noble Lord in his Amendment No. 3—the proposal that British Gas should be placed under an obligation to give high-volume users a price concession—that, in our view, would represent an unwarranted involvement in the management of the Corporation's business. It is a matter for the Corporation, where contracts are being negotiated, to negotiate with its customers without interference from ourselves.
Finally, in asking the noble Lord not to press his amendments I would ask him to consider the very grave consequences for this country of our failing to adjust, as the entire Western world is having to adjust, to the new terms of trade in relation to energy. We are in a very fortunate position in respect of North Sea oil and gas which theoretically enable us to do that, but I do not think anybody or any political programme is seriously suggesting that we should not have to make this adjustment, whether we have to adjust as domestic consumers or as an industrial nation, because that would be the surest way to turn our backs on the very great good fortune in the North Sea which we have found. I would ask the House to resist these amendments.
Lord IRVING of DARTFORD: I find a number of the statements made by the noble Earl contentious, but I do not want to detain the Committee tonight. I hope perhaps to return to these matters at a later stage of the Bill, and I ask leave to withdraw these amendments.
Amendment No. 2, by leave, withdrawn.
[Amendment No. 3 not moved.]
6.46 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
The Earl of GOWRIE: I wanted to explain to your Lordships at this point that it was no fault of my noble friend Lord Lauderdale that he could not be here. He thought the Bill was coming on at an earlier stage. I have had a word with him and it is satisfactory to him if I write to him in detail about his amendment, which he has kindly told me he would not seek to press. If any of your Lordships feel rather short-changed by this, I shall be delighted to send them copies of my letter to my noble friend.
Clause 1 agreed to.
Clause 2 agreed to.
Title agreed to.
House resumed: Bill reported without amendment; Report received.

OIL SPILLS IN NORTH SEA: PREVENTION
6.47 p.m.
Lord BUXTON of ALSA Lord BUXTON of ALSA rose to ask Her Majesty's Government whether, now that they have taken new initiatives to deal with oil spills in the North Sea after they have occurred, they will now seek to prevent spills before they occur by creating, in agreement with our European partners, new sanctions against substandard vessels and substandard crews. The noble Lord said: My Lords, this is the third time I have spoken on this subject in about 18 months and, remarkably, looking up the file this morning, the last time was on 25th June last year: exactly a year ago. On this occasion it is important that I make it clear that the issues have been narrowed down and I am raising only one specific aspect on the North Sea problem. I have worded the Question somewhat laboriously and explicitly to concentrate only on the 15 per cent. of the world's tanker fleet which is the predominant and prevailing danger to traffic in the North Sea and everywhere. Secondly I am not part of an anti-oil or anti-trade lobby; the reverse is the case.
The importance of North Sea oil to our economy and the need to export it from the North Sea in the foreseeable future clearly has to be accepted by any realistic conservationist, and even bird-
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watcher. But, in addition to endeavouring to save birds and marine life and people living by and on the sea, it is also to save the Government from embarrassment and difficulty in the future that we have to be relentless and persistent about this problem. I shall continue to be so, my Lords, perhaps even on the 25th June again next year. The Government Departments concerned must not hide behind the skirts of IMCO and international negotiations and make them an excuse for inertia and slow progress. Nothing is easier than to say we cannot do this or we cannot do that until we have got international agreement, and then until ratification by individual states; but that takes years, and a far more effective way to speed up the process is if pacesetters, especially the United Kingdom and other North Sea countries, implement essential policies as an example, or even as experiments, rather than deliberately move at the pace of the slowest.
Other countries, in particular France and Sweden—and I must add the Shetland Islands Council as an exception—are already more thrusting and purposeful than the United Kingdom as a whole, and our official sluggishness in surveillance and control over sub-standard tanker shipping might soon become an embarrassment to the British public when the next major disaster occurs, and another after that.
The questions that will in due course be asked, in my view, will not be, "How is it going to be cleaned up and how much damage will it do?", but, "How did the captain get his certificate, who gave it to him and what training and experience did he have? Was his registration Greek, Liberian, Panamanian or Cypriot?" Further, I want to make it clear that my arguments are favourable to oil companies and oil company-owned tankers, and to properly managed shipping lines if they own tankers, and they, also, should be behind the drive to eliminate the substandard spot charter tankers from the North Sea.
To turn to sub-standard crews, there are IMCO conventions concerning constructional and equipment requirements for tankers, but there are, as yet, no comprehensive international manning standards in force concerning the experience, ability and numbers of crew. This is a

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very serious gap in international legislation, and accounts for much of the trouble that the oceans are suffering around the world today. The primary cause of the high proportion of serious incidents caused by tankers, many sailing under flags of convenience, has been proved to be poor manning: in other words, just plain human inadequacy and unjustified economy. At least 75 per cent. of all incidents at sea are due to human operational failure and error.
It is therefore clear that what is lacking is adequate international standards for crews but since it will be many years, if not decades, before these could be agreed and ratified by all nations, including flags of convenience, or perhaps forever, it is obvious that we and our North Sea neighbours have got to be more resourceful and aggressive. We cannot wait for final international agreement, or there will be a continuous and worsening situation with disasters around our shores.
For a start, as I said in the last debate a year ago, the North Sea must be recognised in IMCO as a special case, as the Mediterranean is by international agreement. Even the Baltic is regarded de facto as a special case by the States concerned, and more stringent joint controls apply there than we exercise in the North Sea. There is simply no room for argument that the North Sea is a special case. It is obvious to everybody that it is, being a shallow shelf, partly enclosed and partly cut off from the rest of the oceans. The waters do not interchange freely with the deep oceans in a semi-landlocked situation. You do not have to be a scientist to understand that. All you need is a bucket and spade, and if you go down on the beach at low tide you can work it out very swiftly.
The North Sea is a special case. The only question is whether the Government are disposed to recognise it and to claim it as such. One thing the Government cannot do is say that the North Sea is not a special case. Why then, if it is a special case—and we have to agree that—must we take the risk and permit a small minority of inadequate and unqualified crews to use the North Sea?
As background, I quote from a recent report by the Netherlands Maritime Institute:
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"Control over this total maritime safety concept is in the hands of the national shipping authorities. At present such control is most strict over construction and equipment requirements, and weakest over the human element, especially the operational part … The measure of control exercised by national authorities over these standards is not uniform. Some nations have strict controls and may even go beyond IMCO requirements. Others exercise hardly any control at all. A few nations are not associated with IMCO, and let owners under their flag set their own standards".
That is a recent publication.
Oil company-owned tankers do not, in general, tolerate low standards in manning. There are, indeed, many worthy tanker operators who maintain respectable manning standards. The absurd thing is that every time we get a "Torrey Canyon" or an "Amoco Cadiz" a flurry of new rules and regulations is proposed at international level. But that is exactly like proposing new legislation to cover all road traffic simply because two unaccompanied L-plate drivers collide on an open road. Such legislation is unnecessary for the majority of drivers and, furthermore, it does nothing to prevent a similar occurrence with other unaccompanied L-plate drivers quite soon afterwards. The "Torrey Canyon", in particular, led to a flood of international maritime legislation, yet this did nothing to prevent similar disasters thereafter, such as "Amoco Cadiz" Eleni V", "Argo Merchant" and so on, because it is not legislation, but surveillance, policing, discipline and enforcement which are the first requirement.
The logical step, of course, is to ban the equivalent at sea of unaccompanied L-plate drivers, but that is easier said than done; and in the case of tankers, to enforce strict standards for captains and crews, and that is easier said than done; and, until these measures are agreed internationally through IMCO, to effect ways, either direct or indirect, of preventing access to the North Sea. After all, this will be necessary anyway, because some countries are not associated with IMCO and allow operators under their own flags of convenience to set their own standards. This lax category of operators must ultimately be totally excluded from the North Sea, because they will be around to menace the place even after IMCO conventions have been ratified by all its adherents. So we may just as well get on with it now.
The group we are concerned about is not the tankers owned by oil companies, which are, in general, above criticism, nor are we primarily concerned with independently-owned tankers chartered to oil companies over long periods. The problem is the third category, only 15 per cent. of the whole, which is independently owned tankers chartered for short periods and used for spot-chartering.
The oil companies used to own nearly half the world's tanker fleet. Now this has dropped to 38 per cent. and it is still falling. So that other categories are increasing, and this means that short-term spot-chartering is on the increase, and the situation is getting steadily worse. There are numerous reasons, commercial and financial, why the balance is shifting unfavourably but there is no doubt that if only the oil companies could put their house in order and cut out spot-chartering of sub-standard tankers they would be doing a service to mankind and to the environment and would deserve, and earn, universal acclaim. May I ask them to think about it?
The oil companies do not get good marks for being holier than thou with their own tanker operations, and then spoiling it all by spot-chartering substandard vessels from independent owners over whom they impose no standards before charter. The sub-standard tankers are easy to find. It is always hazardous to generalise, but in this case there is ample and convincing evidence from all sources that the main culprits are tankers flying the flags of Liberia, Panama, Greece and Cyprus. These four flags account for almost two-thirds of the number of incidents investigated by the Netherlands report over a recent five-year period. The accidents and incidents caused by these four flags are way above the world average, and these accidents were only rarely caused by technical failure; almost invariably by human inexperience, incompetence, the shoddy management of the owner-company concerned or unjustified cost-cutting.
One problem is that these flags of convenience tend to be symbols for lack of control and lax standards for masters' certificates. They therefore attract substandard tanker owners and those with
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low crewing and manning intentions, who turn to these flags for registration. It is a kind of bad club, which offers cover for rogues. The worst cases tend to happen in these clubs.
Because of the seriousness of this aspect of the matter, I ask your Lordships' indulgence if I quote the case of the Greek tanker "Scenic", which you may know was a disgraceful case in Shetland last January. Thanks to the robust initiative of Shetland, an unacceptable situation was dealt with with commendable and forthright intervention. The first report came out in the Shetland Times only last week, and I must ask your Lordships to allow me to paraphrase it, because it should now be on record and it is a most incredable example of what has happened in our own waters.
The Greek tanker "Scenic" berthed at Sullom Voc on Wednesday, 9th January. The next morning there were already two violations of the terminal safety regulations and loading had to be suspended. The violations included smoking in unauthorised places, the non-availability of fire extinguishers, leaking scuppers (I am not sure what those are) and it was discovered that the vessel's anchors were still secured by wire and chains, and therefore could not he used in an emergency.
Next morning, the oil pollution control officer reported that the vessel was in an extremely dirty condition, both on the decks and within the accommodation, and that an uncontrolled build-up of water on the decks was such that it was overflowing the sheer strake angle and running down the ship's side into the sea, causing a sheen to appear on the water.
Loading was resumed in the afternoon and, shortly after, an oil spill of crude oil occurred. Loading was again suspended and the oil was cleaned up. The vessel was refused permission to load until daylight hours the following morning, and would not have been allowed to load at all but for stability problems caused by slack tanks. Loading was completed around 1600 hours. However, instructions had to be issued to port control that the vessel was not to sail during darkness hours for safety reasons, due to the general poor husbandry and condition of the ship.
It was then reported by the terminal operator that the vessel was overloaded in excess of 4,000 tons. The cause was due to "segregated" ballast having been retained on board. The terminal operator took samples of the "segregated" ballast which were found to contain 18 ppm of oil content. Permission for this to be discharged into the harbour was refused—also, permission for the vessel to shift or discharge any ballast, cargo or bunkers until an inspection had been made by the DOT. On Sunday, the port officer was dismayed by the general state of the vessel, the decks being covered in a thin layer of oil making it difficult to walk. The accommodation was dirty and in a general state of disarray and disrepair. The "Scenic's" master stated that he suspected the main cargo tanks were leaking into the segregated ballast, and he had decided, in order not to risk further pollution, that the ballast be retained on board until the vessel had put to sea. Mark that, my Lords! The master was instructed that his vessel could not sail until either the excess ballast or cargo was discharged ashore. A plea to pump the ballast into the Voe was also rejected.
The officer and the DOT surveyor, on a brief inspection of some of the vessel's fire-fighting and safety appliances, were shocked to find again a state of general dilapidation. The port lifeboat engine would not start and in the process of attempting to get it started a small electrical fire occurred of sufficiently large proportions to have ignited any hydrocarbon gas in the vicinity. Fortunately, there was none. One of the gas-tight covers of the lifeboat emergency lights was unhinged due to negligence and lack of attention, exposing a naked electric light bulb. Old fire extinguishers were lying around ad hoc. Crude oil was discovered to be leaking from a deck hatch which had been improperly sealed. The impression was that absolutely no attention whatsoever had been paid to the safety and firefighting appliances on hoard the vessel and there appeared to be a complete disregard for such matters as oil pollution. The excess oil was discharged back to the terminal, as the sooner the vessel left Sullom Voe the safer the port would be. Subsequently there was an engine room explosion on the "Scenic" 30 miles away. After three days the vessel was
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towed to Rotterdam and one hopes will never be seen at Sullom Voe again.
I am sorry about the length of that description, but it is very important that it should be on the record because we do not need anything further to describe to us what we mean by the third category of sub-standard charter and spot charter tankers. The fact that it is Greek really must not inhibit one from giving it the maximum publicity. If it had been British I would have been making a much bigger fuss about it. But the fact that it was Greek means that it belongs in this category of the four flags which cause most of the damage.
While the main cause is bad management or crew failure, we must not ignore the technical failures of the 15 per cent. Take the case of the tired tanker. This is a very recent report from the Daily Mirror. It refers to another case, the "Tanio". The Daily Mirror wrote:
"Large-scale oil pollution will become an increasing threat to South of England and Brittany beaches unless rapid action is taken to keep a close check on oil tankers using the Channel.
"This warning has been given by French experts following the breaking up of the 18,000 ton tanker ' Tanio ' off their coast 10 days ago …
"The Tanio ' was 23 years old when she snapped in two, and Captain Michel Bougeard, who once served on it, says: 'She was broken up by heavy seas that any tanker should be able to withstand. She was already a tired old ship 10 years ago '".
There we have two examples of this category that we are talking about, and I should like to give a third. We have had the case of the badly managed and badly crewed ship and we have had the case of a ship which cannot even stand up to normal seas. The third is all the more remarkable.
A young student at the Bremen Maritime School, training to be a ship's master, went to the Panamanian Consulate in Bremen where he bought a ship's master's certificate for 50 Deutschemarks. And here it is. It is valid. It has not been cancelled. It entitles a young man of 21, who was only a student at the Bremen Maritime School, by paying and giving a few details, to a master's certificate. It entitles him to be the master of any ship on the ocean.
The danger to our shores around the British Isles is vastly accentuated by the fact of the English Channel. There have surely been enough disasters already,

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including the "Amoco Cadiz", to convince anyone that the Channel cannot reasonably be open freely to all tanker shipping which cares to use it as it pleases, when 15 per cent. of them are rogues in the spot charter category.
Pilot boats should be stationed at both ends of the Channel and it should become compulsory for every tanker to take on a pilot for the trip. I understand that electronics also are becoming available for checking the contents of tankers and dangerous cargoes. When available, these should be mandatory. Inspections should take place of any vessel suspected of not meeting stringent standards, and offenders should be refused passage. Sometimes corners are cut to save money.
A good example, although it was not in the North Sea, occurred in Sweden. A few months ago, noble Lords may remember, a large ship went down a river and demolished a bridge, several cars and lorries going into the river, which seems an incredible thing to happen. I have now had a full report on that. It happened simply because the master did not wish to hire tugs in order to take him down the river. Therefore, he economised, cut corners and went straight into the bridge.
My hunch is that if strict disciplines were introduced by Britain and France, there would be an instinctive tendency for sub-standard tankers to avoid the Channel route, and without further ado to set sail round the West and North. This would keep the offending vessels out of the vulnerable areas of the Channel and the inner North Sea, but we have to take note of the fact that that is certainly not desirable from the seabird point of view.
The only answer is to get rid of bad tankers altogether. The French are more aggressive than we are, following the "Amoco Cadiz", and now, even worse, the "Tanio", and take more forthright and effective action against would-be offenders. Wisely and logically, they have extended their territorial limit to 12 miles, out of 22 at the narrowest point. The United Kingdom, on the other hand—slow, bureaucratic, and hiding behind the snail-like progressions of IMCO—have stuck with a three-mile limit leaving a pointless open breach in the Channel of seven miles, over which nobody has any strict control. This is, surely, the most footling aspect of all in this complex
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problem. When it comes to being positive, the Shetland Isles are a shining example for Whitehall, and we must not be petty and proud and shrink from following their example.
Greece is anxious to enter the EEC and is, I believe, now amenable to representations regarding sub-standards on tankers and crews. I think that they are very anxious to brighten the shop window. However, I fear that that may simply push the offending traffic elsewhere and that new flags of convenience will soon be available in other parts of the world. There is apparently some prestige to be gained in the world as a flag of convenience, and there may be many aspirants ready to hoist new flags, even when the existing ones have corrected their ways.
We and other industrial nations give encouragement to flags of convenience and therefore to lapsed standards for mariners. We are compromised, in a way, for allowing it, and are morally responsible for their prosperity. The only way to deal effectively with this problem is not to permit access, through the Channel or to North Sea ports and terminals, to vessels and crews which do not have certificates of the required standard, or to tankers like the "Scenic" which should never have been allowed within sight of our shores. Nor should they be insured. There are certainly ways of preventing reputable insurance from giving cover. We should introduce strict and irksome disciplines, as a first step, for all those who insist on passage, and this in itself may deter the worst and keep them away. Secondly, as I said last year, there must be persistent surveillance and aerial scrutiny, preferably in co-ordination with defence and with NATO and their activities. We do not allow rogues in the air, and we do not allow rogues on the roads, or on the railways. Why do we allow them on the sea?
The reason is that in the case of air, roads and railways there is the obvious factor of human casualties, without a threat to the human environment. But are we really so blind that we cannot recognise the long-term threat to the human and natural environment, an infinitely greater threat to the future of this country for generations to come? Furthermore, it is sheer folly to shrink

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from protecting our environment for fear of reprisals in some distant sea. Surely no nation today could seriously and openly fight in favour of pollution at sea.
7.10 p.m.
Lord TANLAW: My Lords, I think we on these Benches should be grateful to the noble Lord, Lord Buxton, for introducing what is a prophylactic debate, in the sense that we are concerned about the problem before it arises and not after the event. I am certainly impressed by the examples he has given. This debate, even though it is one of many that we have had before, is timely, as I think still more assurances are required from Her Majesty's Government that all possible is being done to prevent the sort of disasters we have had in the past. There is only one point where I think I might disagree with the noble Lord, although I think not in any serious degree. In his final sentences he said, with regard to pollution, that the human casualty aspect seems to have been overlooked, and it is this side that I want to emphasise.
We have had a number of debates in this House which have covered virtually all aspects of oil pollution and methods of prevention in the past. In particular I recall that about a year ago, I think perhaps in the debate referred to by the noble Lord, Lord Buxton, regarding the effects of pollution on wildlife on the shores of Orkney and Shetland, I remarked that while serious attention should be given to preventing this kind of shoreline pollution it was a very different kind of pollution that was taking place in South-East Asia. It was not seabirds, it was broken boats and human flotsum that were being washed ashore on those beaches. I said that to emphasise the varying conditions and standards of acceptability of what is considered to be pollution in different parts of the world. This may be one of the reasons which makes international regulations so difficult to accept and to implement.
Returning to the question of oil spills in the North Sea and the subsequent damage to the shoreline and environment and wildlife, I should like to quote two statistics produced by the Royal Society for the Protection of Birds in their report entitled Marine Oil Pollution and Birds.
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It would appear from the society's survey that in 1978 there were 10,937 bird casualties around out coasts. In the following year that figure fell to 8,358. It is statistics of this kind, which are given so much publicity in the media and are often accompanied by rather grisly photographs, that create a public demand for something to be done by the Government as soon as it has happened.
However, there is another set of statistics which, unfortunately, do not receive similar publicity but which, I believe, may help to put the whole question of oil pollution into proper perspective. In 1978 the total world oil spillage from large tankers amounted to 282,350 tonnes, with a resulting loss of life at sea of 29 men. In the following year the total spillage fell by approximately half that figure to only 105,000 tonnes from large tankers, but deaths at sea directly connected with those spillages rose to 177. In the two years I have taken, the total oil spilled from tankers of all kinds, both large and small, amounted to 450,000 tonnes, with a total loss of life of 397 souls. For those who are interested in statistical information, it would appear from these figures that currently every 881 tonnes of oil spilled at sea represents the loss of one human life. It is this statistic that I find quite unacceptable in the context of pollution. Any regulations and their enforcement must surely be framed to prevent tragedies at sea, which not only cause loss of life but create a situation which results in most of the shoreline pollution in the world and accounts for most of the seabird casualties I have quoted.
I should like to take this opportunity of reminding the House that despite recent technological advances the sea still remains a hostile environment for all those who make their living from it, and oil tanker crews and crews of other vessels carrying dangerous cargoes are perhaps at even greater risk than those who ply the sea for pleasure or for fishing or for commerce. Therefore, in my view, the safety regulations should be designed as far as possible to prevent loss of human life at sea, and by so doing thereby reduce the risk of creating shore pollution as a result of a maritime tragedy, rather like the kind which the noble Lord described. This does not include those who deliberately

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pump oil into the sea for one reason or another, and those cases of deliberate scuttling and foundering of the vessel.
Current legislation is focussed on the Inter-Governmental Marine Consultative Organisation (IMCO), the Safety of Life at Sea (SOLAS), Marine Pollution Convention (MARPOL), and every responsible skipper and shipowner knows about these conventions and wishes to implement the recommendations of them. It is when these recommendations have not been implemented, due to neglect, or through cost-cutting by speculative charterers, that the problems arise.
What I believe to be the most helpful development in international regulations is the recent acceptance by some nations of what is known as port state jurisdiction; this is the concept that the administration of any port that is visited by a ship should have the right to check on the standards laid down by the conventions the noble Lord and I have mentioned. This concept is novel and could be significant for the future. If port state jurisdiction is accepted internationally there is some point in pursuing legislative solutions to the problems of marine safety. This concept could perhaps be taken even further, in that a Lloyd's certificate would not be granted unless these regulations were adhered to. Lloyd's agents in the various ports could perhaps act as inspectors, certainly for insurance purposes, on these occasions. I think it is worth adding—as I am sure the noble Lord who is to answer for the Government is aware—that the National Union of Seamen strongly support the concept of port state jurisdiction. Perhaps Her Majesty's Government will take note of this fact when promoting this concept in their future international negotiations on oil pollution.
Although I have not personally been given a reason why the NUS are supporting this kind of thing, I feel it is the safety of their crews at sea which is their concern, and indeed it is our concern from these Benches, because if that is protected then ensuing oil pollution risks should be reduced. There is, of course, one practical problem, which is the lack of Government inspectors qualified to enforce even the existing regulations. It would be helpful if the Government in their reply could indicate what steps we in this country are
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taking to improve the situation by engaging more qualified inspectors. I am told that perhaps the reason for the difficulties arising in this area is the very poor terms of salary that such inspectors are getting. Perhaps the Government could take this into consideration when they are trying to recruit more inspectors.
I think it would be useful also if the Government would indicate what action they propose to take to shorten the extraordinary length of time being taken by member Governments of IMCO to ratify the conventions that have been collectively put together. The tanker industry claims, perhaps rather smugly, that it has a far better record than that of Governments in ratifying its own recommendations.
Finally, and perhaps on a more depressing note, it is only possible to implement rules and regulations for those operators who are members of the International Chamber of Shipping or similar organisations. But the tanker market has moved, as the noble Lord indicated, for a number of commercial reasons, away from the traditional large shipping companies to those who can be described as fringe operators or one-off charterers. I believe it is the latter who now make up more than 50 per cent. of the carriers of oil, and the majority of these are not members of the International Chamber of Shipping.
I would take up one point touched on by Lord Buxton. One way, perhaps, of meeting this problem is through electronic surveillance. It seems to me that if it is possible for yachts racing in a trans-Atlantic yacht race to have a transmitter put on the cabin top to indicate to those ashore the position of the yacht at any time, it is possible that some similar form of transmitter, through a satellite link, could be put on board all carriers, all vessels carrying oil and other dangerous cargoes.
It occurs to me that one of the problems is that nobody knows where these ships are located to blame them either for some pollution that may have occurred, or indeed for some deviation in course for various other reasons of a criminal nature that have taken place or are alleged to have taken place recently. I know that that is looking perhaps a little to the future, but in many cases the problems have arisen because nobody quite knows where

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these vessels are and it is impossible to keep a proper track of them. I believe that the technology is available for this to be done, and I do not see why organisations such as NATO, or any other defence organisations, should not have the facilities or be able to monitor this situation and make the movements of those type of vessels known to those concerned on the shores. That is all that I wish to say on this aspect, and I hope that the noble Lord in his reply on behalf of the Government will take up some of the points which have been mentioned.
7.21 p.m.
Lord RITCHIE-CALDER: My Lords, I wish to thank the noble Lord, Lord Buxton of Alsa, for returning to the problem of oil pollution of the North Sea. Indeed, I am grateful to him for concentrating on this particular aspect at a time when we might be beginning to develop some complacency about the general picture.
As the report of the Advisory Committee on Oil Pollution of the Sea (ACOPS) showed, around the coast of this country we had, last year at least, a reduction of spills and so forth. We could in fact—as we did in ACOPS—take some satisfaction in that reduction because it was partly due to our constant vigilance and the pestering of Governments, if I may put it that way, that we began to improve the surveillance and the cleaning-up process. It means that we may—and I hate to say this grudgingly—have been fortunate. In fact, somebody asked me the other day whether there would be another major oil disaster. I said that of course there would be one.
This particular industry is increasing. There is a vast increase in traffic and at every stage the risks about which we have been talking are being multiplied by the number of ships, including the substandard ships, to which the noble Lord, Lord Buxton, drew our attention. However, we had a reasonable record and also an achievement in the sense that in this country we have now set up Admiral Stacey's marine pollution unit in the Department of Trade. As the noble Lord, Lord Buxton, pointed out, we shall be able to move quite smartly when a disaster occurs. But what I and I hope everyone in your Lordships' House are
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concerned about is to ensure that these disasters do not happen.
Therefore, preventive measures have been neglected. People involved, certainly those involved in ACOPS, have been stressing for years the need for a sea-use policy. The sea-use policy must encompass and incorporate all departments of Government. As the noble Lord, Lord Buxton, properly pointed out, the Department of Trade is concerned with shipping and ships. The ships are its clients and it is up to the department to make shipping and ship trading possible. So there is no justification in my opinion—and I have said this emphatically—for the Department of Trade being the supervisory agent to the exclusion of, in many cases, even discussions with the Department of the Environment or with the Foreign Office.
The noble Lord, Lord Buxton, quoted some shocking examples of pollution which we can multiply a hundred times. Substandard ships, incompetent manning and so forth are not only putting those ships at risk—it is rather like two hot rods colliding on a road; you write them off and say, "Well that was their fault"—but at sea substandard ships are exposing the main traffic to hazard as well.
I agree with the noble Lord, Lord Buxton, that the North Sea is a special case. We are all preoccupied—as we are at present, in the UN Conference on the Law of the Sea—with the redefinition of freedom of the seas and so forth. There is a great deal of jealous guarding of the freedom of the seas. I can assure your Lordships that there is now no legitimate freedom of the sea—there cannot be, because we have now reached the stage where we must have rules and regulations. We must give up some of our fundamental rights in order to have jurisdictional control or proper control. It is rather similar to saying quite definitely that we have the right to walk where we want to walk. We can walk in the middle of the road, but it would be rather awkward if we did not observe the basic rules of the road. So, we have to give up our fundamental rights for conventional laws and we must ensure that this increasingly happens. That applies to every aspect of traffic in the North Sea, because that is a virtually enclosed sea.
There must be controls over the inlets and outlets. There is, at present, as far

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as we can judge, only a supervisory system—which is quite inadequate—via Her Majesty's Customs around the Channel. There is a certain amount of inspection or at least calling up and trying to check all around there. Also, there are the Shetland Islands—good luck to them!— struggling very courageously to deal with the problem which they did not ask for, but which they are now trying to remedy. They are doing what we, as self-respecting people, and as a nation should be doing: they are taking action against what the noble Lord, Lord Buxton, called "the rogues". That again was a point raised by the noble Lord, Lord Tanlaw.
There is no argument: we must get to a port state jurisdiction instead of a flag state jurisdiction as at present. We must make it a port state jurisdiction whereby, if people do come into our harbours and into our waters and they are what they are—high risk vessels—we ought to be able to take charge of them and see that they do not cause any more harm. We ought to be able to prosecute them for all the sins that they commit in terms of oil pollution and so forth. We must get port-state jurisdiction.
The other matter that is paramount is that while we are waiting for a total global marine policy in the shape of UNCLOS—I do not know when we shall get it, but I seem to have been living with it for most of my life—we must come to terms with what we have. We have a great body of insight as regards laws of the sea in the shape of IMCO, with all its unratified delays and so on. Nevertheless, it is all there—what we are talking about is there. Why we, as intelligent human beings, cannot put into practice the manifest advantages of practical use of these things, I do not understand.
The other matter which is obvious is that we must, not just through the Bonn Agreement, but by very effective agreements between the EEC countries, and particularly the North Sea members and Scandinavia, make sure that we have a common set of rules and practices, and that people will not get in and out as they are doing at present; it must be the corporate responsibility of the nations. That is what we are trying to achieve now in the Mediterranean, where Govern-
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ments are accepting mutual responsibility for the practices within the Mediterranean.
This is something which is urgent; it is plain. All the experience has shown that there are delays in getting international agreement—and I totally agree that these things should be achieved by international agreement and by consolidation of international agreement. But, in the meantime, at least let us be sensible. Let our Government have another look at what the noble Lord, Lord Buxton, has been saying.
There is no reason why we should not have surveillance and why we should not have what the noble Lord, Lord Tanlaw, is suggesting, including electronic equipment; certainly we could use infra red equipment sufficient to detect oil spills and so forth, even at night. But you do not have to detect them all. It is rather like operating a radar trap on the roads; if people know that these traps are in operation, they will know that they are liable to be caught, and they will be discouraged from doing the sort of things that they do now.
It is merely a question of organising our capacities; of organising our ships at sea: of getting our responsible oil people—and the big oil companies are responsible—to get rid of these cut-price charterers who, as the noble Lord, Lord Buxton, pointed out, apparently just go out to the taxi rank of the seas and pick up what is offered to them, and then degrade the whole of the industry.
So we want to discourage this type of chartering, which is thoroughly disreputable. We want to ensure that the supervisory operations in the North Sea enable us to deal not with a disaster—and we would be better able to deal with such disasters if we knew what the ships were carrying—but that we do not have any disasters; we want to stop them, which is what the noble Lord, Lord Buxton, is proposing tonight.
7.33 p.m.
Lord FERRIER: My Lords, I apologise for jumping in, but I have listened carefully to this debate and I think that we owe a great debt to my noble friend for raising this desperately important matter, as subsequent speeches have proved. When I was listening to the noble Lord,

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Lord Tanlaw, who called the debate a "prophylactic debate"—and this sort of prophylaxis is extremely important—it crossed my mind to ask the noble Lord who is to reply whether the Government keep in close contact with the Worshipful Company of Master Mariners, because they seem to me to be a source not only of infinite advice and experience but also of inspectors—if, indeed, it is possible to increase the numbers, as the noble Lord, Lord Ritchie-Calder, said.
7.34 p.m.
Lord KENNET: My Lords, this debate seems to have taken the usual form so far of debates about sea pollution and, indeed, about the management of the sea in general; that is to say, that all those who speak in them are unanimously agreed in their general approach and on most of the details. I cannot believe that even the shipping industry itself would disagree with very much that has been said this evening or, indeed, in our last debate on sea mismanagement or in either of the other two debates which the noble Lord, Lord Buxton, has initiated. If it had disagreed with what was said, no doubt it would have found noble Lords to voice its disagreement.
Commonly at the end of such debates the Government get up and say, "We agree too, but unfortunately we cannot do anything". I probably express the feeling of the whole House in hoping that tonight the noble Lord, Lord Lyell, who is yet another new face—and a very welcome one—on this subject, will be able to say, "Not only do we agree, but we shall do something, and it is the following."
I said that I agreed with every word of the speech of the noble Lord, Lord Buxton, but there is one implication in the wording of his Motion with which I do not go along, and it is in the sentence:
"… now that they—
the Government—
"have taken new initiatives"
about cleaning up oil spills. Very well, perhaps they have: but things are not getting better there, and the Government have halved the budget of the Warren Springs Laboratory where the governmental research work on clean-up was done. So far as I can make out, they did that for completely ideological reasons.
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There was no saving of money. They simply decided that half the money was to go to universities and non-governmental bodies, and that only half was to remain at Warren Springs. Result: demoralisation in the Government institution. Why? I hope that even now the Government may be able to think again about that.
Things are not right. Mention has been made of the Channel system, the system of the control of vessels coming up the Channel. Two things are wrong there. First, it is not observed very well, even as far as it goes; that is to say, one ship a week carrying a dangerous cargo—whether it be oil, natural gas or chemicals —flouts the regulations, of course with impunity. The regulations are only enforced in the French half of the Channel, as I think the noble Lord, Lord Ritchie-Calder, or the noble Lord, Lord Buxton, pointed out. I understand that this is having the effect of sending the worst vessels, the most sub-standard dangerous carriers, round the North Cape to gain entry into the North Sea, which is not in itself a desirable result. I shall come to the cure, which is obvious, in a minute.
Things are not getting better. British shipyards are still building sub-standard ships. This emerged from an Answer to a Question which I tabled only a week or two ago. I asked: Are we seeing to it that every tanker or bulk carrier built in a British shipyard and destined for dangerous cargoes is built either to present or, preferably, future IMCO standards?
The answer that came back was: The decision on standards to which ships are built in British shipyards lies with the purchaser of the ship. Things are not getting better.
Perhaps the noble Lord, Lord Lyell, can tell us what happened at the European Community Transport Ministers' Meeting yesterday. We know that the French have this great proposal for a major new crackdown on sub-standard shipping in the Channel. What is the status of the world meeting on sub-standard ships and crews which France has proposed for later this year and which we understand was accepted at yesterday's EC meeting as a European Community objective?
What is the news about the proposed Community directive from the Com-

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mission which would mean that substandard ships would not be allowed to leave Community ports until they have proved that they are complying with IMCO and International Labour Organisation standards? What is the news of the proposed European Community data bank on individual vessels?—where one would simply be able to press a button showing the name of the vessel and receive its history, its type of construction and also its history of infringements, if any, of any regulations anywhere, which would be an enormous safety measure in itself because it would be available not only to port authorities but also to charterers.
We blame the oil companies for chartering sub-standard vessels. They do not always know which are the substandard vessels. I think they have a shrewder idea than they admit, but sometimes they do not know, and if they are stuck for a quick taxi with a load waiting somewhere and money wasting, they may in all innocence take a substandard vessel. Such a system would stop that. This register would be of use to salvage operators, to tug operators of all sorts so that they would know what they were going out to tug, to pilots and to harbour masters. If it could be computerised on to a terminal, so that one could receive instant information, half the battle would be won. I verily believe this. What is the news of that EEC proposal? In so far as it applies to the North Sea, of course Norway must be part of it and presumably this elementary point is not being neglected.
I have a certain sympathy with the Government. They have so many platforms on which to stand; there are so many foundations laid upon which the edifice of marine safety might be set up. There is The Hague Memorandum of Agreement, which is not inter-governmental; it is between maritime authorities. But it is useful as far as it goes in the exchange of information and as a system of reporting sinners between port authorities. In some respects it goes beyond the present UNCLOS text, which is good, One could build on that. There is the Paris Convention, the Oslo Convention and the Bonn Convention. These three European conventions taken together
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cover oil pollution by run-off from land, oil pollution from ships, oil pollution from fixed installations in the North Sea and general oil pollution, and of course, taken together, cover the oil pollution from a ship which is tied up to an oil rig. Is that a ship or an installation? I believe in law it is part of the installation, but as soon as it moves it becomes a ship again with the possibility of falling between stools.
Most of this is exchange of information, but one could go further and build enforcement and regulation on that platform. For myself, I welcome the gossip I hear, that although the signatories of the Oslo and Paris Conventions have not even met for the last 18 months, yet there is a prospect that the secretariats of all three agreements, Bonn, Oslo and Paris, should be unified just behind the Law Courts in London. A unified secretariat, even if the spread of signatories of the three conventions concerned is not identical, could be a good foundation to build on.
Can we not do more about insurance? Sometimes I am amazed by the tiny load insurance carries in preventing pollution and in compensating the victims of pollution in the world. Beyond a certain point it falls on the state. If the insurance industry were to devote half the ingenuity to identifying and analysing the risks that it was insuring against, that it now devotes to spreading the risks among the reinsurance clubs and systems that it has, I believe that we should quickly see an automatic raising of standards because the substandard people could not get cover.
Of course, there is the glaring fact which is brought out again and again in this House and elsewhere, that liability is related not to the amount of damage your cargo can do but to the tonnage of your ship, which is an unjustifiable scandal that continues year after year. There is no need to repeat it yet again. Possibly the most expensive clean-up case ever in the history of oil pollution arose from a 10,000 ton East German tanker which sank off the coast of France a couple of years ago.
Presumably beyond all that we have to look at the jurisdiction question, and this is the nub of the matter. Let us

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remind ourselves of our three old friends: flag state jurisdiction, port state jurisdiction and coastal state jurisdiction. Flag state jurisdiction is what we have: it is what we have always had. It means, broadly speaking, that any sin, crime, infringement, tort, or whatever committed by any ship on the high seas can only be reported to the flag state and action against it can only be taken by the flaa state.
This becomes more and more ridiculous every year. The noble Lord, Lord Buxton, showed us a flag state master's licence bought for 50 Deutschemarks by a boy of 21. If you want to register a ship with several of the flag state Governments now offering registration you do not even have to go to that country. You go to its agent, who is very likely to be in London, or he may be in New York. The agent is sitting there making his own rules because his patron Government knows nothing about the matter; and he is sitting there settling his own fees because the patron Government takes no interest in how much he earns for himself or for them, and you buy your registration.
It is of course worthless because the ship never goes to Panama, the owner of the ship never goes to Panama, the master of the ship has never seen Panama in his life; the presence of Panama on the scene is a pure fiction, and when it comes to reporting an infraction of some regulation to the Government of Panama the hope of action is what we all know it to be. The Panamanian flag fleet has increased by 60 per cent. in the last year. Things are not getting better.
We turn now to coastal state jurisdiction. There has to be some of this because Governments have to have the right to stop a ship and say, "Who are you? Where are you going? What is your cargo?" Some ships do not answer if you call them up on the RT. That is coastal state jurisdiction. More than most other countries in the world, ships go through our coastal waters without touching us, because of our narrow seas. We have not got it.
Port-state jurisdiction is the trump card; the ace. It is only the port state which can really enforce any regulation which can be made because that is the next state which will have physical power
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over the ship. We have to get to a situation where a coastal state, or a flag state, can report an infraction to the port state where the ship is going and where we can be certain that that ship will be held until the matter is settled, and no nonsense about it. This is a matter of international law.
The Government will say, I know, that they cannot take port state jurisdiction to this country because it has not yet been agreed in any convention coming out of the United Nations Conference on the Law of the Sea. It is not yet international law. Let me run ahead of the argument. I would then say to them, "Why was it that they were able to take a 200 mile fishery protection zone when that was not yet international law?" It was customary international law, and they took it.
The Government will then answer, I believe, "In that case we were not the first to take it. Several other countries had done so before. We do not like to lead the pack". To which I would answer to the Government, "Why should we not lead the pack in this matter?" We have in fact led the pack on inserting into the draft negotiating text at UNCLOS the concept of port state jurisdiction. We have been among the leaders of the pack. It is there. It has survived several drafts. There is consensus on it. UNCLOS now has a programme. It is meeting again at the end of this year and again at the beginning of next year, and that is virtually certain to be there.
Why do we not take port state jurisdiction along with our friends? Although whether we define our friends in this case as being the European Community countries or the so-called maritime group which work together in UNCLOS is something that I would not like to decide. Once again, I recognise the Government's difficulties in choosing between all these foundations to build on.
We are all agreed that one thing is certain, and that is that as long as it is profitable for shipowners to run, and for charterers to charter, substandard vessels, and as long as we allow them to insure against the fines which may be inflicted upon them, and as long as we let them off full liability for the damage that they do by gearing into their tonnage and not to the damage they do, so long will society

1705
be subsidising substandard vessels and so long will our seas be polluted.
7.47 p.m.
Lord LYELL: My Lords, I believe that we on these Benches would join with other noble Lords, and indeed the whole House, in expressing our indebtedness once again to my noble friend Lord Buxton of Alsa for raising what I have found to be a fascinating Question on oil pollution of the sea by ships, which is undoubtedly a matter of continuing public interest and concern, and above all of especial concern to your Lordships' House.
It is exactly a year since we discussed this broad theme at my noble friend's initiative. Indeed, I was grateful to have the kind comments of the noble Lord, Lord Kennet, about a further fresh face. I do not quite know whether he was hoping that I would still possibly be at this Bench in another year's time. Certainly I look forward to possibly breaking the happy chain that we have had a different fresh face answering this particular debate every year. I hope that if there is another debate I might have the chance of answering it, and above all of listening and learning about the particular subjects that have been raised this evening.
We are not necessarily directing our attention primarily to the questions, as we have been in past debates, of our contingency arrangements for dealing with the oil pollution and indeed oil slicks. But I hope that the House will feel it right that I should place on record that the Department of Trade has its marine pollution control unit and how it is continuing to improve those particular and especial arrangements. I should like to mention in particular that the two so-called caches of salvage equipment, which are still to be located at Rosyth and Pembroke Dock, will be fully operational later this year.
Aircraft operators, I would stress, have been invited to put forward costed proposals for a nationwide airborne dispersant spraying capability, which of course will take care of pollution once it has happened. I wish that to be very much on the record.
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Coming to the question of the prevention of pollution, I would begin by emphasising the need to consider the whole of shipping matters against the worldwide perspective. I hope the House will not forget—indeed, the noble Lord, Lord Kennet, mentioned this—that we still are very concerned with shipping matters. As the noble Lord, Lord Ritchie-Calder, also pointed out, we have a major merchant fleet which operates and straddles the entire globe. The North Sea, to which my noble friend Lord Buxton directed our particular attention, is not necessarily our private pond, nor indeed the exclusive preserve of the seaboard States. It is part of the ocean, a sea, used by the ships—and not just by tankers—of all the nations of the world.
One of the fundamental tenets of our maritime policy is that shipping is inherently an international industry. This operates most effectively within a single regulatory framework established on a worldwide basis, and we have heard a great deal about that this evening. The best forum for establishing that framework on technical matters in covering pollution, the prevention of pollution and other matters referred to by noble Lords—indeed, the noble Lord, Lord Tanlaw, mentioned electronic surveillance—is, we believe, the Inter-governmental Maritime Consultative Organisation, which we know as IMCO. It is the specialised agency of the United Nations and we are happy to have it established here in London.
We are pleased to be able to say that in the year that has passed since my noble friend last brought these matters to our attention in your Lordships' House, the International Convention for the Safety of Life at Sea 1974, which is the cornerstone of IMCO's pursuit of safety, has been brought into force. Also in the last year, the United Kingdom became the first major maritime power to ratify the International Convention for the Prevention of Pollution from Ships 1973, which is known in its acronymic form as MARPOL, and the 1978 protocol to that. It is these instruments that symbolise IMCO's resolve to safeguard our oceans and especially the North Sea.
There is only one major IMCO convention relating to maritime safety and pollution prevention that we have so far

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not ratified, and that is the International Convention on Standards of Training, Certification and Watchkeeping 1978. If my noble friend should think, once again, of celebrating the anniversary of this debate this time next year, I have every confidence, and I am sure your Lordships share that confidence, that the Government will have ratified that convention as well. That is a brief record of our ratification of conventions, and we believe it compares very favourably with that of the international community of nations at large.
We also welcome the decision last November of IMCO's governing assembly to concentrate this year and next on bringing into force the many conventions that have already been developed and the accumulating evidence of an increasing pace of ratification by other countries. We look with a sense of achievement at this creation of a worldwide framework of technical standards to meet our reasonable wishes as regards marine safety and pollution prevention, and we look forward with confidence to the entry into force of instruments that embody those standards.
That still leaves us with the question of enforcement, on which my noble friend properly focuses our minds this evening. We must not lose sight of the fact that many seafarers and shipowners—indeed, I believe the great majority of these categories—are every bit as concerned as we in your Lordships' House are to promote safety and protect the environment. Both shipowners and seafarers are anxious to be guided by rules which are sensible, reasonable and enforceable, and all of those make an indispensable contribution towards developing all the relevant provisions. But as in all fields of activity, especially by humans, the problems which we and they face are the deeds and the misdeeds of the minority. My noble friend attempted to put a reasonable figure on what he regarded as the sinners—the minority who cause pollution—and it is on that minority that we should focus our attention.
There has been discussion in close detail about the question of flag state and port state enforcement and jurisdiction. The Government do not regard port state enforcement or jurisdiction as a
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substitute for, but rather as a complement to, flag state enforcement, because we believe that the flag state is generally best placed to enforce standards when a ship is built or registered (I take the point made in this connection by the noble Lord, Lord Kennet) and, once the ship is built and registered, to continue that supervision on a regular, sustained and consistent basis, particularly as regards structural requirements.
To give an example: port states are unlikely to wish to put a passenger or cargo ship into dry dock for inspection, whereas the flag state is required to make an inspection annually under the International Convention for the safety of Life at Sea 1974, to which I referred earlier. We believe that port states can help to maintain standards, not least by confirming that ships' equipment is still in full and effective working order.
It is in this general field that there is scope for regional collaboration. Action on a Community, and indeed on a North Sea, basis is certainly one possibility. The noble Lord, Lord Kennet, and others referred to The Hague Memorandum of Understanding which is intended to facilitate concerted and consistent port state enforcement among the eight North Sea states, and that offers another avenue; and indeed it has the advantage of involving both Norway and Sweden. Our minds are still open to the potential of all these approaches.
I will now try to cover some of the other detailed points raised by noble Lords. I received prior notice of some of the questions noble Lords have raised. My noble friend Lord Buxton mentioned the territorial limits which we in the United Kingdom have. We share the view of our predecessors that maritime problems are best dealt with by international agreement. We hope for agreement at the United Nations Law of the Sea Conference, to which the noble Lord, Lord Ritchie-Calder, referred. We believe there is broad agreement on a draft article which would recognise a territorial sea of 12 miles.
The treaty as a whole is still under negotiation and we have found that there are difficult problems which have yet to be resolved on other parts of that text.

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The Government will keep the case for an extension of our territorial waters under review against the background of that conference and, I am confident, against the background of this evening's debate.
Lord KENNET: My Lords, may I interrupt the noble Lord—
Lord LYELL: I have more to say on that subject, my Lords, and if the noble Lord will be patient he may find that I will cover the point he has in mind. The noble Lord, Lord Kennet, was kind enough to give me some notice of his question about the EEC transport Ministers meeting and of the French Government's memorandum on marine safety and pollution prevention.
Lord KENNET. My Lords, the noble Lord has actually left the point I had in mind and I should be very grateful for an opportunity to interrogate him. He said that the Government believed in proceeding by international agreement in the context of extending the territorial sea from three miles to 12 miles. Can he tell us why the Conservative Opposition were perfectly happy when the Labour Government proceeded without international agreement to take a fisheries protection zone of 200 miles? If I remember rightly, the Tory Opposition were quite pleased about that.
Lord LYELL: My Lords, I do not think that I can deal with that question tonight. Possibly I can deal with it later. I took the noble Lord's point when he was speaking, but this is probably a more detailed point than I am able to answer in the context of this particular Question this evening.
The noble Lord referred to the French Government's memorandum on marine safety and pollution prevention, which was discussed at yesterday's meeting of the Council of Transport Ministers. I have no doubt that the noble Lord, Lord Kennet, will have read in today's issue of Lloyd's List that the Community's transport Ministers supported the French initiative for the holding of an international conference in Paris later this year, and that the United Kingdom Minister responsible, my honourable friend Mr. Norman
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Tebbit, has already emphasised the need for the European maritime states to discuss joint problems of both safety and pollution. My honourable friend stressed the need not to cut across any of the work being done by IMCO, and he hoped that the conference would reinforce this. I hope that your Lordships will agree that this demonstrated a very positive attitude to this initiative on the part of Her Majesty's Government. However, I wish to add one word of caution, which I understand was expressed by my honourable and right honourable colleagues themselves; namely, that the conference should be properly prepared on this matter.
The noble Lord, Lord Tanlaw, mentioned one particular point, in regard to which we were grateful, and indeed it was mentioned by other noble Lords. I think it was mentioned by the noble Lord, Lord Kennet, and by my noble friend Lord Buxton of Alsa. So far as port state enforcement and jurisdiction is concerned, I understand that this, too, was mentioned in the Lloyd's List report of the ministerial meeting in Luxembourg. We believe that port state enforcement is complementary to flag state enforcement, but we welcome this opportunity to discuss the issue with any of our Community partners, and we hope to examine the Commission's latest proposals, which were put before a meeting of the Commission earlier today. I think that that is as far as I can go tonight on the question of port state jurisdiction.
The noble Lord, Lord Tanlaw, mentioned a point about Government marine surveyors, which we were able to take on board. I understand that there is one example of port state jurisdiction that we have ready to hand. It is that last year we carried out 1,195 general inspections in port, including 615 inspections on foreign ships. But how much we can do in this particular area depends on resources available, and indeed the noble Lord, Lord Tanlaw, acknowledged that.
Certainly one indication of the importance that we attach to marine safety and pollution prevention is that we are planning a small increase in our complement of marine surveyors at a time when we are determined substantially to reduce the size of the public sector as a whole.

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This was mentioned by the noble Lord, Lord Kennet. This is one aspect of the matter that we regard as especially important, and we hope that in some way it might compensate for the noble Lord's sadness regarding the Warren Springs research laboratory.
The noble Lord, Lord Ritchie-Calder, raised one especial point about the responsibility and the role of the Department of Trade in regard to maritime matters. I hope that I am not going over what the noble Lord might regard as old ground. I say this because as your Lordships are aware, I am the fresh face in this debate, and looking around the Chamber this evening I am reminded that many of your Lordships are experienced seafarers, at least in this particular matter, and possibly "oilfarers", too, ploughing through the pollution. However, I hope that the noble Lord, Lord Ritchie-Calder, will accept that possibly he has directed himself a little in the wrong direction in regard to the particular role of the Department of Trade. He appears to place emphasis—but we wonder whether he has placed enough emphasis—on the long-standing Department of Trade role in ship safety and in the prevention of pollution from ships. However, most importantly, whatever this Department does either nationally or internationally, it acts in full consultation with all other departments of the Government, and indeed it implements an overall Government policy so far as pollution, shipping trade, and other aspects of trade are concerned.
My noble friend Lord Buxton of Alsa raised in particular a point which I believe was the theme of his contribution to the debate this evening, relating to substandard crews. He spoke of the "rogues". He called them the "L-drivers", rampaging around in an unsupervised fashion. My mind boggles at the thought of unsupervised tanker captains with 50 Deutschemark licences at the helm of what I understand are called very large container carriers—the LCCs. The Government are indeed concerned with the subject of sub-standard crews. We plan to ratify in September 1980 the ILO Minimum Standards for Merchant Ships Convention No. 147, and among its other provisions it will require ratifying states to have laws, regulations, or industrial
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agreements on the standard of crew safety, including standards relating to competency, medical fitness, hours of work, accident prevention, and manning.
Article 4 of this particular convention will allow states to investigate complaints about non-compliance by visiting foreign ships in their ports; and this will be an important addition to port state jurisdiction. It will enable these states to report ships which contravene the convention and rules to the flag states and to the ILO, and, where the deficiency represents a clear hazard to safety or health, to require it to be rectified before the ship in question leaves. I hope that that will go at least a small way towards meeting the particular point raised so graphically by my noble friend in connection with the tanker in the Shetlands on 9th January this year. I believe that that is about as far as I can go this evening in answering any of the major questions raised by your Lordships.
It should be noted that, apart from the regular surveys of our own ships, last year the Department of Trade with its marine surveyors carried out spot checks on nearly 1,200 ships, including over 600 foreign ships. We were able to discover various faults. We aim to continue to make these inspections, as resources permit. We were very pleased last month to act as host to the most recent meeting held under The Hague Memorandum of Understanding, and we look forward to increased collaboration on a regional basis. I was interested to hear of the proposal of the noble Lord, Lord Kennet, for a new secretariat. Was it mentioned that it will be situated behind the Law Courts? That would be a particularly apt place—
Lord KENNET: My Lords, it is not my proposal. It is simply something that I have heard might happen, and I thought it was a good idea.
Lord LYELL: My Lords, I am sorry if I misinterpreted what the noble Lord had said. Perhaps it was not his proposal, but no doubt if such a thing were to come about, we should all be very happy. However, I have certainly heard nothing about it so far. If I receive any news about it, I can let the noble Lord know,

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and I can also make reply to him on his question about the large limits.
My Lords, we in this country do not have an easy task in combating the menace of oil pollution around our shores, but I would take this opportunity to assure my noble friend Lord Buxton that the Government will continue to maintain their efforts to improve international shipping standards in general, and especially, as far as it is feasible, to minimise the risk of environmental damage caused by oil pollution around our coasts. That is as far as I can go.
Lord FERRIER: My Lords, before my noble friend sits down, may I ask him to assure me that he has taken on board my suggestion of contacts with the Worshipful Company of Master Mariners?
Lord LYELL: My Lords, I must apologise to my noble friend for that omission. I had a note from the winged messengers that the Worshipful Company of Master Mariners are consulted, along with a large number of other bodies.

CRIMINAL APPEAL (NORTHERN IRELAND) BILL [H.L.]
Reported from the Joint Committee without amendment and recommitted to a Committee of the Whole House.