Lords Sitting of 6 March 1980

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Carlisle):
The LORD CHANCELLOR on the Woolsack.

THE OLYMPIC GAMES BOYCOTT
Viscount BROOKEBOROUGH: 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 support they have received from our NATO allies and from sporting bodies in the United Kingdom for their policy for a boycott of the Olympic Games in Moscow.
Lord TREFGARNE: My Lords, the Governments of the United States and the Netherlands have publicly supported a boycott of the Olympic Games in Moscow, while a number of other NATO countries, including the Federal Republic of Germany, Norway and Luxembourg, have expressed reservations about their athletes taking part. As regards sporting bodies in the United Kingdom, an increasing number of them seem to be having doubts about the wisdom of going to Moscow.
Viscount BROOKEBOROUGH: My Lords, I thank my noble friend for his reply. Can he tell us what views have been expressed by the Sports Councils of the United Kingdom and, if they have not expressed a corporate view at this stage, some 12 weeks or more after the invasion of Afghanistan, can he press them to do so?—because it seems to me that, as the national bodies representing sport, it is time that they expressed some view. Can he also give an assurance to all the sports which have supported the Government in their appeal to boycott the Olympics that not only will financial support—if it is financial support that the Government are prepared to give them—be given for the staging of world class competitions for the year 1980, but in view of the fact
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that it is a short time in which to organise a world class competition that this support will in fact extend to the year 1981? Lastly, will the noble Lord recognise the patriotism of the national coach, Mr. Watts, in putting his country before himself?
Lord TREFGARNE: Yes, my Lords, I certainly recognise the patriotism of Mr. Watts. As for the corporate view (if that is the right expression) of the various sporting bodies, they really have not come to a corporate view yet. We very much welcome the decision of the British Olympic Association to defer responding to the invitation from the Moscow Organising Committee until a later date: that is consistent with the attitude being adopted by other Western national Olympic Committees and indeed with the advice given to the association by the Government. As for the financial implications of my noble friend's supplementary questions, I cannot give any assurances of particular financial support at this moment.
Lord BLEASE: My Lords, would the Minister agree that the common sense and statesmanlike plan of the Foreign and Commonwealth Secretary, the noble Lord, Lord Carrington, for a neutral Afghanistan is receiving growing and worldwide support? Will he also agree that at the present time the Carrington plan (as it is being called) provides greater hopes for resolving the real issues concerned than any increased pressure for a boycott of the Olympic Games?
Lord TREFGARNE: My Lords, certainly the whole world is recognising the importance and merit of the proposals advanced by my noble friend, but that does not detract from our view that to go to Moscow in the present circumstances would be wholly unacceptable.
Viscount MONCKTON of BRENCHLEY: My Lords, will my noble friend agree that there were some very good athletes who would have won medals in the 1940 and 1944 Olympic Games but who are dead and buried, and would he further agree that that was in part caused by some of us who were stupid enough to go to watch the 1936 Games and by some who took part in them?
Lord TREFGARNE: My Lords, my noble friend is quite right.
Lord WIGG: My Lords, will the noble Lord be good enough to say what is the Government's estimate of the cost of staging worldwide games in 1980 and what he thinks they will cost in 1981 and succeeding years? Also, while I would not press the noble Lord to be specific —that would be asking too much—will he give an indication of, say, a percentage that the Government are prepared to ante up, or can we take it that, like the rest of their policy, it is just that they are concerned with words and not with actions?
Lord TREFGARNE: My Lords, that is not true. We are certainly concerned with actions and it is actions that we are trying to achieve in this matter, not mere words. As for the cost of games this year or next, I am not in a position to answer that question without notice.
The Earl of KIMBERLEY: My Lords, will my noble friend agree that it might be pertinent to ask the Sports Councils of Great Britain to ask their athletes what it will profit a man or a woman to win a gold medal if they lose their soul?
Lord TREFGARNE: That is a very pertinent question, my Lords.
Lord SHINWELL: My Lords, I did not gather from the noble Lord's answer what is the attitude of Her Majesty's Government about this matter. Will he take note—because this has a bearing on the Question on the Order Paper—that the United States has declared that until the Russians vacate Afghanistan they will not agree to their people going to Moscow? What is the Government's attitude to this matter? Have we now reconciled ourselves to the presence of the Russians in Afghanistan and are we taking no further action?
Lord TREFGARNE: Indeed not, my Lords. The Question on the Order Paper, of course, relates to the Olympic Games. Our attitude is closely in line with that of the United States: we strongly advise our athletes, and indeed our spectators, not to go.
The Marquess of EXETER: My Lords, to clear up a misapprehension on the
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first part of the Question, is the noble Lord aware that the Sports Council has no say in this matter at all;it is entirely a matter for the national Olympic Committee, which is controlled by the 28 sports which compete in the Olympic Games. They held a meeting two days ago and they decided that, although they would not send in their official reply, they would go to the Games, and they have not changed their minds up to this stage. So the letter will go out on 25th March. Is the noble Lord aware that that is the body which decides and no other body has a say in this matter?
Lord TREFGARNE: My Lords, I am aware that the position is just as my noble friend describes. As I understand it, the decision of the British Olympic Association was to postpone replying to their invitation. We very much hope that the BOA will in the end accept the Government's further advice not to go to Moscow and will refuse the invitation.
Lord AVEBURY: My Lords, will the noble Lord agree that it is not only the Soviet invasion of Afghanistan which should prompt us to consider declining to attend the Olympic Games in Moscow but also the Soviet assistance to the repressive réegime in Ethiopia, which is murdering and persecuting many thousands of citizens in Eritrea and the Ogaden, and also the intensified persecution of dissenters within the boundaries of the Soviet Union itself? Will the noble Lord not agree therefore that the advice given to the British Olympic Association that they should not take part in the Games would not be rescinded simply as a result of the Soviet Union agreeing to the Carrington plan on Afghanistan? The Soviet Union would have to show willing on these other matters as well.
Lord TREFGARNE: My Lords, a Russian withdrawal from Afghanistan, if it were to take place following acceptance of my noble friend's proposals—or any other—would clearly significantly alter the position, but, as the noble Lord has said, that would not necessarily of itself mean that we would withdraw our objections to the Olympic Games in Moscow.
Lord HARRIS of GREENWICH: My Lords, is the noble Lord aware that many of us warmly welcome the proposal

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of the noble Lord the Foreign Secretary but that at the same time many of us would regard it as deeply reprehensible were British and other athletes from Western Europe to go to Moscow for what in fact is going to be a Soviet propaganda spectacular, at a time when Russian aircraft are bombing Afghan villages?
Lord TREFGARNE: My Lords, I am greatly obliged to the noble Lord for that intervention. It precisely confirms our view.
Lord BLEASE: My Lords, will the noble Lord not agree that that position was known years and years ago? The propaganda aspect of this is nothing new. The new aspect of this is the Afghanistan position and surely we ought to be backing the Foreign Secretary in his proposals. Is that not the contradiction in the whole thing?
Lord TREFGARNE: My Lords, I do not think there is a contradiction at all. Certainly the Russian way of behaving, including the ways referred to by the noble Lord, Lord Avebury, were with us long before Afghanistan, but I think the noble Lord underestimates the enormity of what the Soviets have done in Afghanistan. They have invaded a neighbouring, unaligned and sovereign nation.
Lord GORONWY-ROBERTS: My Lords, may I put two points to the noble Lord? Did I hear him aright to say that even if the Russians were to withdraw from Afghanistan we would still not be advising or allowing our sportsmen to go to Moscow? If that is what is said, it would seem to me to be an imbalance of assessment. Perhaps the noble Lord would clarify that point. The second point is this. The noble Lord said that our Government are advising our sportsmen against going to Moscow. Does that advice apply to the British media, particularly the television medium?
Lord TREFGARNE: My Lords, if the Russians withdraw from Afghanistan that will, of course, fundamentally change the situation, but I would not want in advance to have to say that, if they did that, without any reference to whatever else they might do between now and then, we would automatically lift our objection
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to our athletes going to Moscow. Perhaps the noble Lord would remind me of his second point, which I have forgotten.
Lord GORONWY-ROBERTS: My Lords, my second point was this: Will the Government give the same advice to the British media—particularly the television medium—about going to Moscow as they are now giving to our sportsmen?
Lord TREFGARNE: My Lords, I apologise to the noble Lord for a slip of memory. Yes, indeed, we do give the same advice to the media and to spectators.
Lord SEGAL: My Lords, will the noble Lord say whether the Government intend to take any active steps to discourage British visitors to Moscow during the period of the Games?
Lord TREFGARNE: My Lords, as I have just said, we hope spectators and visitors will take note of our advice not to go.
The Marquess of EXETER: My Lords, may I clear up one extra point? The Olympic Games do not belong to the host country;they belong to the International Olympic Committee. Is the noble Lord aware that the International Olympic Committee take over all the stadiums? That is why when Hitler was there in 1936 all the propaganda was taken down in the stadium, under the instructions of the International Olympic Committee. Is the noble Lord aware that the International Olympic Committee and all the federations which run the technical side of the sports, which are completely worldwide, own the Games? The facilities are provided by the host country, and naturally if they do them well they are proud of them, as all other host countries have been in times past.
Lord TREFGARNE: My Lords, I readily acknowledge the passionate views of my noble friend in this matter and I understand what motivates them;but the fact is, none the less, that if the Games are to continue in Moscow as planned it will be a propaganda coup and triumph of monumental proportions for the Russians.

THE OLYMPIC GAMES BOYCOTT

  MOTOR FUEL: AVGAS 100 L
  3.14 p.m.
  Lord WHADDON: 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 is the difference between Avgas 100 L and four-star motor fuel, and why four-star motor fuel cannot be used in light aircraft which normally require Avgas 100 L.
  Lord TREFGARNE: My Lords, may I apologise briefly for the length and complexity of this Answer, but it is an important matter, so I hope your Lordships will bear with me. Avgas 100 L differs from four-star motor fuel by virtue, inter alia, of its octane characteristics, its vapour pressure, its sulphur content, its aromatic content and its comparative freedom from gum formation. Furthermore, Avgas is manufactured to more stringent specifications, particularly with regard to impurities. The use of four-star motor fuel in light aircraft engines not so approved will lead to shortenened engine life, and increase the risk of engine failure, both because of vapour locks in the fuel system and for other reasons. It also prevents the engine delivering full power at take-off, thus invalidating take-off performance data.
  I wish to emphasise that the use of unapproved fuels in any aircraft invalidates the manufacturer's guarantees, the insurance cover and the certificate of airworthiness. Operators use them, therefore, at grave risk to their aircraft, their passengers and themselves.
  Lord WHADDON: My Lords, does the noble Lord appreciate that, if he insists that there are sound technical reasons for using exclusively 100 L, there is a concomitant duty on the Government to try to ensure adequate supplies? Is he aware of the chronic shortages which have plagued the industry in the last year or two, and that the overall quantity of fuel is negligible to the oil companies but absolutely vital to the vast majority of aircraft on the British register? What action do the
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  Government propose to ensure greater security of supplies in the future?
  Lord TREFGARNE: My Lords, we do recognise that there is a world problem, certainly a European problem, and an acute problem indeed in some parts of the world, regarding this particular product. The oil companies are urgently considering whether they can adjust the manufacture of motor spirit in such a way that it could be used safely in small aircraft engines.
  Lord WYNNE-JONES: My Lords, can the noble Lord tell the House what are the vapour pressures of Avgas 100 L and of ordinary four-star fuel? Can he also tell us what are their relative octane numbers? These are both important parts —in fact, they seem to me to be vital parts —of his Answer.
  Lord TREFGARNE: My Lords, I can give the noble Lord the answer on the octane numbers. Four-star motor spirit has an octane rating of not less than 97 research octane number, whereas 100 L Avgas has a rating of not less than 100 octane performance octane number weak mixture, and not less than 130 performance octane number rich mixture. I am afraid I have not got the vapour figures in front of me.
  Lord WYNNE-JONES: My Lords, will the noble Lord not agree that when he talks about vapour lock in the system, it depends entirely upon the relative vapour pressures of the two, and therefore his answer is, if he will forgive me for saying so, unsatisfactory.
  Lord TREFGARNE: My Lords, I do apologise to the noble Lord.
  Lord GISBOROUGH: My Lords, will the noble Lord accept that the price of Avgas in the United States is only 50p compared with, I think, four times more here, and that as a result of that and other factors the cost of becoming an airline pilot is something like £30,000 here compared to 6,000 dollars in the United States, in addition to which VAT is payable on learning to fly here, unlike any other instructional course? Does not this militate very much against British flying, and can the Government look into this?
  Lord TREFGARNE: My Lords, while there is a significant difference between the prices of gasoline here and in the United States, those are not the only causes for the difference in the costs of learning to fly. A commercial pilot achieving his licence in this country is required to undertake, I believe, at least twice the number of flying hours of his American counterpart.

  DIPLOMATIC PRIVILEGE
  3.18 p.m.
  Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
  The Question was as follows:
  To ask Her Majesty's Government whether they will state how many employees of ambassadors and high commissioners in Great Britain are covered by diplomatic privilege.
  Lord TREFGARNE: My Lords, 5,264 officials of diplomatic missions in London, together with their families, are entitled to full or restricted diplomatic privileges and immunities. A further 846 are entitled to some privileges and immunities under the International Organisations Act 1968, mostly for official acts only.
  Baroness VICKERS: My Lords, may I ask my noble friend whether his attention has been drawn to the case of an employee of one of the embassies who was deemed to be drunk while driving a car and had an accident and killed a woman, the mother of two children, and is now claiming diplomatic immunity? Is there any chance of action being taken and perhaps obtaining compensation for the family concerned?
  Lord TREFGARNE: My Lords, the particular case to which my noble friend refers—and I am obliged to her for giving me notice of her intention to raise it—was an unhappy one indeed. But I should tell the House and my noble friend that the prosecuting authorities decided that the evidence could not support a charge of causing death by reckless driving, and at the inquest the coroner brought in an open verdict. The police are still
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  considering whether lesser charges can be preferred in the light of the evidence. No request for a waiver of immunity in respect of any charge has yet been made, and indeed it cannot be so made unless and until the police decide to prefer charges. If they do, and if it then appears that the case cannot be dealt with in the United Kingdom, the Finnish authorities, with whom we have kept in close touch and who have been very co-operative, have already told us that it will be dealt with by them.
  Lord KINNAIRD: My Lords, can my noble friend say when this accident took place?
  Lord TREFGARNE: Last October, my Lords.
  Lord GORONWY-ROBERTS: My Lords, does the noble Lord agree that our practice in this matter stems fundamentally from our accession to the various Geneva agreements which bind a large number of countries;and secondly, from the obligations we incur, like other signatories, when we accede to protocols to agreements in regard to specific international arrangements? Further, will he confirm my impression—I think it is fairly well-founded, but I should like it confirmed—that this country accords this type of privilege and immunity very much to the same extent and to the same numbers of personnel as comparable countries like, for example, the Republic of France and Western Germany do?
  Lord TREFGARNE: Yes, indeed, my Lords. The privileges which we accord to diplomats in London are in line with those accorded to our own diplomats in almost every country in the world. They stem from the Vienna Convention on Diplomatic Relations of 1961 which was given effect in United Kingdom law by the Diplomatic Privileges Act 1964.
  Lord PAGET of NORTHAMPTON: My Lords, can the noble Lord assure us that our diplomatic corps does not systematically abuse the laws of foreign countries with regard to the parking and driving of motor vehicles? Would he further agree that the diplomatic corps in London—there are, of course, exceptions —has been systematically abusing those laws? Is it not time to say to our diplomatic

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  people that, if they are to have private cars—I am not, of course, referring to ambassadors' cars—they must, in advance, waive their diplomatic privileges as to the utilisation of those cars?
  Lord TREFGARNE: My Lords, it would not be true to say that there is widespread abuse of these arrangements. There are a few well publicised abuses which we do our best to deal with. However, we could not unilaterally restrict the privileges of visiting diplomats without risking the genuine and very necessary privileges accorded to our diplomats overseas.
  Lord DRUMALBYN: My Lords, would my noble friend add to what he said about the Finnish authority's willingness to deal with the matter vis-à-vis the man concerned? Will he also tell us what they would do as regards compensation?
  Lord TREFGARNE: Yes, my Lords, I can readily deal with that matter. The compensation is not affected by diplomatic immunity. Diplomats, like everyone else, are required to have proper insurance arrangements and that is certainly the case with regard to the recent Finnish incident.
  Lord MISHCON: My Lords, does the noble Lord realise the wonderment with which this House is witnessing the number of subjects which he is able to cover? As a result, does he realise that it is leading to the under-employment of his Front Bench? Is that consistent with the Government's general employment policy?
  Lord MONSON: My Lords, reverting to the Question of the noble Baroness, would the noble Lord perhaps agree that diplomatic privilege ought not to extend to exemption from the normal obligation to give evidence at a coroner's inquest?
  Lord TREFGARNE: No, my Lords;I am afraid that I would not agree with that. There are good reasons why that should be the case, and that is why it is provided for in the agreements.
  The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers):
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  My Lords, I wonder whether I might interrupt for a moment because the noble Lord, Lord Mishcon, invited a change of occupant at the Dispatch Box. I wonder whether it might be appropriate to move on to the next Question after the noble Baroness, Lady Wootton of Abinger, has had her go?
  Baroness WOOTTON of ABINGER: My Lords, I am much obliged to the noble Earl. Does the noble Lord regard it as an absurdity that diplomatic privilege has been used to excuse children of 10 and 11 from stealing in London stores?
  Lord TREFGARNE: My Lords, I am not aware that that is the case, but perhaps I can look into it if the noble Baroness will draw my attention to a specific incident. I can only repeat that, if that were so, it would arise from the agreements which we have entered into.

  DEFORESTATION IN LATIN AMERICA
  3.26 p.m.
  Lord VERNON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
  The Question was as follows:
  To ask Her Majesty's Government whether they will consider making representations to the Government of Brazil and appropriate other Latin American countries concerning the alarming rate of the destruction of tropical forest in the Amazon and Orinoco basins.
  Lord MOWBRAY and STOURTON: My Lords, the Governments concerned are aware of the environmental aspects of this problem, on which there is already significant international co-operation. We think that the strengthening of this cooperation—to which the United Kingdom is able to contribute much knowledge—is the best way to make progress towards a solution.
  Lord VERNON: My Lords, is the noble Lord aware that more than half of the remaining area of tropical forest in the world lies within the basins of these

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  two rivers, and that it is being destroyed at the rate of 15 million hectares a year, which is equivalent to an area the size of England and Wales? Is he further aware that leading ecologists believe that that can have a very adverse effect on world climate and that therefore it is a matter that concerns all of us?
  Lord MOWBRAY and STOURTON: My Lords, I was not aware that the rate was actually 15 million hectares a year but, with the approved and the illegal felling, it could be that much;I do not know. I point out to the noble Lord that in that part of Latin America there are some 1,200 million hectares of tropical forest, so there is still a large amount. I think that we must accept that in that region there is an area which is exploitable, but that there will always remain a large area which is unexploitable. It is a problem and we are giving as much help and advice as we can to the relevant bodies.
  Lord VERNON: My Lords, I should like to ask my noble friend one further question. Is this not a suitable matter for the EEC to look into, and is it not something which perhaps the noble Lord's noble friend the Foreign Secretary might raise at the next Council of Ministers, because joint representations from the Community would obviously be more effective?
  Lord MOWBRAY and STOURTON: My Lords, we are dealing with a nation's resources and we do not tell other countries how they should develop or exploit their own resources. Where there is a world scientific problem I take the view that the United Nations is the correct body to deal with such matters.
  Lord GLADWYN: My Lords, are the Government aware that the present issue of The Ecologist magazine has a supplement which makes very compelling reading and should, I think, be read by every Member of your Lordships' House? Is the noble Lord further aware that there is a movement afoot on the part of distinguished scientists and others to make proposals whereby it might be in the interests of the Governments concerned —the owners of the tropical forests —not to cut down these forests?
  Lord MOWBRAY and STOURTON: Yes, my Lords, I am most grateful to the noble Lord, Lord Gladwyn. The contribution which the forests make to the world's ability to convert carbon dioxide into oxygen is a very complicated subject. The noble Lord mentioned The Ecologist. I have a great volume in my hand which is even more erudite and points out that the problem is by no means a simple one. As the noble Lord will be aware, the Governments in Latin America signed a pact in 1978 under the terms of which they have agreed to exchange scientific views and do research on the matter with a view to proper development and exploitation, coupled with proper conservation and, what is most important, the replanting and if possible the natural regeneration of these forests which, as the noble Lord pointed out, is in the interests of those countries.
  Lord WYNNE-JONES: My Lords, no doubt the noble Lord, Lord Mowbray and Stourton, has been acting as a very competent pinch hitter for the noble Lord, Lord Trefgarne, in attempting to deal with this problem, but would he not care to go back to his earlier work with regard to conservation and realise that this is a most important international matter? Would he not agree, therefore, that it is quite urgent that the Govern-ment should use all their influence in order to have the matter dealt with properly? Would he not also agree that it would be quite disastrous if, as a result of deforestation, another part of the world had to demand aid and help?
  Lord MOWBRAY and STOURTON: My Lords, Yes;I appreciate the worries of the noble Lord, who has great scientific knowledge. But our information is that the scientific evidence at present available does not make it a matter of immediate international concern. We think that the short-term and local consequences of deforestation may well be more serious. Nevertheless, the possible global and long-term climatic effects are sufficiently serious to warrant more scientific investigation. We have had British technical co-operation officers serving in Brazil, and the Governments out there are most happy to accept our advice on some of these matters because we have a great deal of experience in the tropical forests and our Commonwealth Forestry Institute

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  officials are very knowledgeable on this matter. It is not as though they do not wish to co-operate;I emphasise that they wish to do everything possible to help.
  Lord SHINWELL: My Lords, does the noble Lord not find it surprising that Her Majesty's Government are asked to intervene in the Amazon and other forests in Brazil, but are not permitted to intervene in the steel strike?
  Lord MOWBRAY and STOURTON: My Lords, our intervention in the Amazon is purely in aid of scientific help and as part of the United Nations organisations. As the noble Lord will be aware, there is the Food and Agriculture Organisation and the United Nations Environmental Programme. Both that organisation and those taking part in that programme are pleased to use scientific advisers from all their Member States. That is the way we help.
  Lord STRABOLGI: My Lords, will the Government also make representations concerning the protection of the Indians living in these forests, whose numbers have been considerably reduced in recent years?
  Lord MOWBRAY and STOURTON: My Lords, yes, the noble Lord is quite right. If all these forests were cut down, there would indeed be serious implications for the natives who live in them. But as I said, there will always be large areas of non-exploitable forest.

  LORDS EXPENSES
  3.32 p.m.
  Earl FERRERS: My Lords, I beg to move the first Motion which stands in my name on the Order Paper. The purpose is to give effect to the secretarial allowance for Ministers and other office holders in your Lordships' House, which was announced in the Statement which my right honourable friend the Chancellor of the Duchy of Lancaster made on 14th February and which I repeated here. The new allowance of up to £1,000 per annum is available only to Ministers and other office-holders in your Lordships' House, and is towards the cost of secretarial
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  assistance which is needed to deal with non-departmental correspondence. Those noble Lords will, however, cease to be eligible for the maximum of £700 per annum of Peers' expenses allowances, which they may currently claim. Ministers in another place are entitled to claim towards the cost of secretarial and research assistance and office expenses incurred on constituency business, and also some of the costs of running a home in their constituency. Apart from the £700 a year which can be claimed against the Peers' expenses allowance, noble Lords who hold official offices do not receive any allowance towards similar expenses.
  These differences in the treatment of Ministers in each House arise largely out of their constituency responsibilities, which are carried out by a Minister in another place. The review body did not feel able to recommend an allowance which would enable office-holders in this House to meet the costs of maintaining a home outside London. But they did recommend that they should receive some financial help towards the cost of secretarial assistance which is needed to deal with non-departmental correspondence.
  The review body, therefore, concluded that expenses up to a maximum of £1,000 a year would be right. I would only re-emphasise that this figure is the maximum against which reimbursement of expenses, which have actually been incurred in employing secretarial assistance to deal with non-departmental correspondence, can be claimed, and that claims against this allowance should be accompanied by receipted vouchers. I beg to move.
  Moved, That this House approves the following proposal with respect to expenses incurred by Lords after 14th February 1980—
  No expenses shall be recoverable under the resolution of 16th July 1979 by any Lord who receives a salary under the Ministerial and other Salaries Act 1975 or by the Chairman or Principal Deputy Chairman of Committees, but every such Lord and the Chairman and Principal Deputy Chairman of Committees shall be enabled to recover expenses not exceeding in any year the sum of £1,000 and certified by him as incurred on secretarial assistance for the performance of his parliamentary duties.—(Earl Ferrers.)
  Lord WELLS-PESTELL: My Lords, I should like to ask the noble Earl the Minister whether he is satisfied that this arrangement, in fact, meets with the approval of the Ministers sitting opposite me at present. Does not it mean that they will lose £700 a year, which did not involve the requirements which the £1,000 will involve? Am I right in thinking that there may be other people in your Lordships' House who are in recept of £700 a year for specific purposes, which they still need, who will not receive one penny under this arrangement?
  Earl FERRERS: My Lords, I accept the concern which the noble Lord, Lord Wells-Pestell, has expressed. The best way in which I can explain this to him is as follows. The £700 expenses allowance, which at the moment is allowed, consists of £100 which is tax-free and the rest which is taxable. However, that is the subject of a separate claim and has to be claimed as an expense. Under this system it will be possible to claim, not £700, but £1,000, and it is not impossible that if these are justifiable expenses, accompanied by vouchers, there would be a larger amount which would be free of tax. But that is, of course, a matter for negotiations with the Treasury. However, the £700 allowance, to which the noble Lord refers, is the subject of a special allowance claim and is not part of the salary.
  Lord WELLS-PESTELL: My Lords, I asked the Minister whether I would be right in thinking that there are some people—not necessarily Ministers—who at present are in receipt of the £700 a year, who will not now receive that. Am right in thinking that that is so?
  Earl FERRERS: My Lords, I am not in a position to know what people claim on their allowance forms. In fact, that which is claimed should be claimed because of expenses undertaken. But I certainly take the noble Lord's point, and if he is concerned about it and wishes to discuss it further, I should be quite happy to discuss it with him.
  On Question, Motion agreed to.

  STANDING ORDERS OF THE HOUSE
  Earl FERRERS: My Lords, I beg to move the second Motion which stands in my name on the Order Paper.
  Moved, That the Standing Orders relating to public business be amended as follows:
  Standing Order No. 61
  After "Procedure Committee" insert "Science and Technology Committee".
  Standing Order No. 62
  In line 3, after "but" insert "he must not attend any meeting while the Committee deliberate, unless invited by the Committee to do so, and". —(Earl Ferrers.)
  On Question, Motion agreed to.

  EEC RURAL AREAS AND AGRICULTURAL STRUCTURES
  3.38 p.m.
  Lord SANDFORD Lord SANDFORD rose to move, That this House takes note of the 27th Report of the European Communities Committee on policies for rural areas in the European Community (H.L. 129) and of the 15th Report of the committee on policy for agricultural structures (H.L. 63). The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I should like to start by recording my thanks to my un-named colleagues on the Select Committee on Community affairs for their help in producing a report for your Lordships to debate. Coupled with that go our thanks to our staff and to our specialist adviser, to our 60 witnesses who were good enough to supply us with evidence, and to our eight embassies, among the other members of the Community, who provided us with views relating to the countries to which they were accredited. I should also like to welcome the distinguished speakers who are participating in this debate and adding their opinions on this matter to those which we have already harvested.
  As a preliminary, perhaps it would be as well for me to say a few words about the nature of this report. Most reports coming from the Select Committee on

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  Europe amount to comments from our Select Committee on a draft proposal which has come from the Commission. Others are very different from that and have served to focus a wide range of opinion on an important and perhaps neglected topic on which the Commission has not pronounced at all or, if it has pronounced, has not pronounced at sufficient depth, range or width. We have produced previous reports of this kind—one on enlargement in March 1978, and another on the relationships between the United Kingdom Parliament and the European Parliament, which was completed in July 1978.
  Ours, which we have nicknamed "Arcadia "—I shall come to that in a minute—is in this latter category. I hope your Lordships will agree that we have at least succeeded in concentrating a wide range of opinion on an area which deserves more attention than it has been getting. We have no doubt that we have done little more than make a start, and we are quite certain that a great deal more work needs to be done. I hope that this debate will have the effect of ensuring that more work is in fact done.
  I said that we code-named this report "Arcadia" and I should like to explain why. Arcadia is in Greece—the next applicant country to joint the Community. Arcadia in present-day reality is an inaccessible, impoverished, upland plateau in the Greek Peloponnese, but in legend and in aspiration it was thought of in Greek classical literature as the ideal rural place in which farming and recreation are delightfully combined, in which shepherds sit playing their pipes, basking in the sunshine among their flocks.
  Enlargement will bring thousands of hectares of countryside like the real Arcadia into the Common Market, and thousands of poor peasant farmers like the Arcadians into the Community. We have to ask ourselves what are the chances of their hopes of a higher quality of life approaching the ideal Arcadia being fulfilled. What hopes are there of their expectations of democracy being met? Will our already over-stretched resources stretch far enough further to meet their basic needs? We have to go on and ask whether the intractable and wasteful Common Agricultural Policy, as it has
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  now become, so direly in need of reform already to serve the needs of the Nine, will have been remoulded by this time next year, when Greece will be in the Community, to deal effectively with the needs of the Ten, and capable of being reshaped further to deal shortly after that with the needs of the Eleven and the needs of the Twelve.
  Another question mark is, will the impending review of the Regional Fund have been carried through in time to cope with the enlargement which will make this Community more rural, more southern than it is now, in the 1981s, 1982s, 1983s? I believe the whole House will agree that it is extremely difficult to be confident about the answers to any of these questions. Perhaps after the debate after this one some of your Lordships will gain confidence on hearing what the Three Wise Men and the Spierenburg Report have to say about the likely capacity of the European institutions to grapple effectively with problems like these.
  So far the only sign of a fresh look at the need for rural policy comes in Directive 5720/79, to which our report refers. That is the only directive so far indicating a fresh approach to rural problems in the Community. This does no more than offer the prospect of three relatively small pilot projects of so-called integrated rural development in the Western Islands of Scotland—I hope that the noble Lord, Lord Mackie, may tell us a little about how that is viewed up there—in the department of Lozère in France (a department which contains the uplands of the Cevennes;Robert Louis Stevenson country), and the Ardennes in Belgium;an area of Belgium rather confusingly called the Province of Luxembourg.
  Side by side with these question marks relating to the whole Community there is an undoubted need, when you look at things nationally, for new departures in rural policy. During the preparation of our report the central Government here have completed the countryside review with five reports: Problems and Policy in the Countryside;Food Production in the Countryside; a report on rural communities;Leisure in the Countryside; and most recently published since we completed our work, Conservation and the Countryside Heritage.
  Before we started the Association of District Councils had expressed their anxieties in a paper they entitled Strategy for Survival. While we were working the Association of County Councils produced theirs called Rural Deprivation, and since we have finished the National Association of Local Councils have produced their further report called Change or Decay. So there is a good deal of interest and anxiety in this country on this topic as well.
  It would be tedious of me to go through the report chapter by chapter, and still more paragraph by paragraph. All I want to do is pick out in my own personal way three themes which, it seems to me, are particularly sharp and calling for attention;broad issues which appear from the evidence given to us. The first is a challenge to the claim that food production is the primary land use of the countryside. That sounds convincing. It may have generally been true, and in some parts of the countryside it still is true. But if the Community is looked at as a whole it cannot be true to say, when we are generating large and expensive surpluses of milk and dairy products, wine, sugar, et cetera, that it is a primary use of all our land to go on generating these surpluses. There must be more useful things which can be done with some of the land in some of the countries in the countryside.
  The problem surely is how and where to stop and curb this wasteful and unnecessary production of food which is not required. It is not as though there were no other strong claims to the use of land in the countryside, and to the use of land in the countryside in this country in particular. I am not a landowner but my understanding is that as well as being one of the best countries in Europe for growing grass we have some of the best conditions for growing timber. It therefore seems to me extremely odd that there should be only one other country in the Community which has a lower proportion of its land dedicated to the growing of trees.
  I should have thought under present circumstances that that is another form of diversification which we ought to be pressing forward with energy. I say no more about that because I believe that there is a debate on forestry before very
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  long in the name of the noble Lord, Lord Dulverton. However, it indicates that we must look less to the exclusive use of rural land for food production and more to the integrated use of rural land for forestry as well as farming, and for amenity and recreation as well. There is an absolute necessity to strike a better balance in the use of rural land.
  The second theme which seems to me to be particularly striking in the evidence which we have had is the view that not all the agricultural technologies now being advocated are as appropriate as they were some years ago. Can it be sensible to be advocating technological advances in agriculture which require more and more use of expensive and rare chemicals which have to be imported, particularly fuel which we need to conserve and of which we know the supply is limited, and at the same time to be adopting argricultural technologies which require less use of labour, and have the effect of forcing young boys and girls to leave the land of their fathers and to add themselves to the thousands of unemployed people who are already in the industrial cities? The Mansholt plan, which had that effect, might have been a good thing 10 years ago, but I very much doubt from the evidence we are getting whether it is a suitable policy to continue to apply so vigorously in present circumstances.
  I would point out as an exemplary exception to this our own upland sheep farmers, who have enormous success over, say, the French, and who achieve it with the consumption of a minimum amount of fuel and the use of a minimum amount of materials, largely by their own skills, the skills of their dogs and the hardiness of themselves, their dogs and their flocks. That seems to be an admirable example of a highly appropriate technology which should be thought about throughout agriculture. Surely, therefore, the trend of professional advice has to change in this field, too.
  The third strange feature which seems to emerge strongly from our evidence is the very high value and esteem set by all our people on our rural heritage in its totality and diversity and the need for the rural communities it keep it all alive. Side by side with that we have the anomaly that this village life is showing every sign of frailty and tendency to break down,

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  and the economy which supports it is getting weaker and weaker and more and more vulnerable. Examples of this come up time and again. Last month it was the threat to rural sub-post offices. Next week, when we are discussing the Education Bill, it will be the threat to rural school buses. But there are also the pubs, churches, village halls and all sorts of other rural institutions which are all highly regarded, esteemed and valued but which are threatened, one after the other, by some development in central or local government policy. The reason is that it is always possible to demonstrate that a particular rural service is uneconomic and therefore should be cut, but it can be done only by neglecting and overlooking the enormous intangible and unmeasurable values and internal resources which are possessed by every village, and we must do more work to ensure that that factor is not so often overlooked.
  We are therefore faced with the need to find ways and means of achieving a more balanced use of rural land and pursuing what the Commission call "integrated rural development", and that seems to lead us to a choice, broadly speaking, between two methods: the first relies on planning and planning control, which farmers like so long as it is used to prevent the loss of agricultural land;on the curbing of afforestation, which amenity lobbies like, so long as it is used to curb the spread of afforestation;and on development control, which nobody likes but in which the planners are nevertheless actively engaged. This way of proceeding, it seems to me, has two major disadvantages: it is all negative and it is impersonal.
  Fortunately, there is a choice. We have the way of proceeding by means of positive management agreements as to the use of rural land, and the Less Favoured Areas Directive for use in those areas provides a good framework for a good deal of this;a way of harnessing farming, conservation, tourism and other rural activities together. The sad irony is that the Ministry of Agriculture in this country makes far too little use of it. The national park management plans now available in all our 10 national parks provide a more detailed framework in which management agreements can be operated, and one hopes that the Countryside Bill, which contains provisions for
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  making management agreements more effective, will not be much further delayed. The great advantage in proceeding in this way is that the energies and enthusiasms of private farmers and landowners can be engaged in a positive way in the development of their own holdings, both to provide their own private objectives and to mix these with other objectives.
  But if this is to be done on any scale, many farmers, and particularly smaller farmers, will need a broader range of professional advice. Fortunately, our own Agricultural Development Advisory Service, and no doubt other extension services elsewhere in Europe, have recently accepted in principle a wider remit, as was recommended by the Strutt Report last summer. But under present circumstances they are most unlikely to be allowed to engage any more members to undertake such a role, and, if the arrangements for administering farm capital grants are developed on the lines about which we were hearing last week, it seems there will be less engagement between the advisory services and the farming community. In those circumstances, it seems that we have to look for supplementary professional advice on multiple land use and to ask from where that will be forthcoming: I shall be interested to hear during the debate how noble Lords think that is going to be provided.
  Finally, I come to our view that for this to proceed we need to have a European statement of objectives for rural land use. It is not fashionable to suggest any change to the Treaty of Rome and we are not proposing one, but we are recommending something of the same size, character and shape as the clause in the Treaty of Rome on which the Common Agricultural Policy is based, and because that is significant I will read the relevant passages. The aims we suggest are:
  " To make the best use of rural land and all its varied potential, and in particular to exploit responsibly the natural resources of the land for the production of food, timber, water and minerals;secondly, to promote the economic prosperity and social wellbeing of the whole rural community, including those not directly dependent on agriculture for their living;thirdly, to conserve the character of the countryside landscape and the wild life within it;and fourthly, to provide all practical access and facilities to the public for tourism, recreation and sport".
  We all appreciate that that is a very tall order, far easier said than done, but we

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  believe it can be done and we have indicated some of the tools of policy by which it can be done. Above all, we believe it is imperative that we do better in fulfilling these aims before the EEC tries to encompass and embrace the countryside and countrymen of Greece, Portugal and Spain. I beg to move.
  Moved, That this House takes note of the 27th Report of the European Communities Committee on policies for rural areas in the European Community (H.L. 129) and of the 15th Report of the committee on policy for agricultural structures (H.L. 63).—(Lord Sandford.)
  3.58 p.m.
  Lord MACKIE of BENSHIE: My Lords, I wish at the outset to congratulate the noble Lord, Lord Sandford, and his committee on the very production of the report. Anyone—and many of your Lordships have—who has sat on an EEC scrutiny committee knows the literally inches or feet of bumf one has to wade through, the many interesting witnesses one has to hear and the enormous amount of sifting one has to do. The production of a report at all is a miracle, and for producing a good one the noble Lord and his committee deserve our congratulations.
  I must disagree with the noble Lord slightly in his strictures on the agricultural policy. He is of course entitled to his view, but he said he was not a landowner or farmer and was therefore slightly ignorant. Nevertheless, it is right and proper that people who are not professionally engaged on the land should look at the land and its problems. I should also like to tell the noble Lord that the picture he painted of a happy Arcadia for our hill shepherds in this country is slightly askew. They depend upon helicopters to spray bracken in order to knock it down. When they roam the hills with their dogs the main instrument they carry is a syringe, in order to interfere with their sheep! Scientists have done enormous good for hill farming by producing vaccines against all kinds of ills. So the Arcadia is helped by the modern world.
  It is very encouraging to see that the EEC realises what it is going to do;and when I say the EEC I mean us—that we realise what we are going to do to the rural areas. The tradition and the pattern are well known. When industrial production
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  is built up and the nation becomes wealthy people leave the land, and at the same time the land is industrialised, and people flock to the towns. If we do not watch out, we shall have 300 million people in places such as Birmingham, London, the Ruhr, and parts of North Italy, and the rest of Europe will be in a sorry state, hardly able to maintain its services. Perhaps there will be a few areas, such as Yorkshire, and so on, which will survive. But, quite seriously, on the whole what happens is that people leave their traditional occupations;there is, for instance, the cobbler in the village who goes to work in a factory which produces shoes which people later throw away.
  Basically the problem is one of people. I recall an interesting point mentioned when I attended—naturally—my father's funeral. Many of his old men were there, and we were reminiscing about old times. One of them said—and I shall not say it in Scots, because a large number of your Lordships would not understand: "There's not the fun on the farms nowadays". A cleverer chap said, "There aren't the folk on the farms nowadays". I believe that that is the basis of what we are discussing—the need to maintain a healthy, virile population, living useful, not ornamental, lives;not Arcadian shepherds, but useful, practical people who like to live in the countryside and can afford the services. I must say that the committee did extraordinarily well in paragraph 53 of their report when they tried to define this point. They acknowledged the central role of agriculture in the economy, but they went on to say:
  " it has become unrealistic to expect the primary land-based industries to sustain rural economies on their own".
  That is absolutely right. We must accept that if we are to maintain enough folk in the countryside, we must, along with agriculture, develop the other uses of land, ranging from forestry to tourism, as well as manufacturing in small or large factories—but factories which are suitable for the area and in which part—time farmers and others can get a living. This is not easy to do—I have had quite a lot of experience of it—but it can be done. It has been done in Germany, and in parts of France. We must look to manufacturing, along with forestry, in order to supply the extra people needed to keep the areas viable and virile.

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  The easiest thing to do is to tackle the natural assets. In other words, I have found that where there is an area of great natural beauty one can put money into tourism and into training for tourism, which is just as important, and one will get an economic reward. I believe that tourism is a natural asset in our country areas, and that it will be needed more and more as people in the towns, in the great areas of the Ruhr, London, and Birmingham, in this apex of industry, increasingly need to go to the countryside. Where there is an enormous area of concentration of power, such as we are moving towards in Europe, one has to look after the periphery;and the periphery is enormously important.
  I do not want to speak for much longer on the general theme. The report makes a number of other excellent suggestions about how we should tackle this subject. There is the central point, as the noble Lord, Lord Sandford, said, where they ask for a definition of rural policy. This is very important, and I believe that we, too, in Britain must define what we mean by a policy for the rural areas. We have done more than many other countries in this regard. I think of the Highlands and Islands Development Board, the Crofters Commission, the various bodies in Wales, the experiments in the Pennines, and many other areas of government and of popular and proper activity.
  We should seize again on the three experiments mentioned in the report, and which are in hand, though they are not progressing very fast. In particular, we should push for the one which is designed to spend a great deal of money and do something for the Western Isles. I know a little about the Western Isles, and this is the ideal area on which to start, although I think that the area should be widened to include the rest of the Highland area on the coast opposite the Western Isles, which might be in more need. That would be a better, larger, and more integrated area with which to start. Somehow or other, the Western Isles has managed to hold on to its population, so there is something which one can preserve, which is much easier than trying to build up again after it has all broken down.
  We have had many experiments in the
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  Western Isles. Lord Lever—not the present one, but the one connected with Unilever—spent an enormous amount of money 50 years ago trying to turn that area into a fishing and packaging centre. Of recent years he failed because the matter fell down over the question of land. When one tackles land as a centre one begins to come to a proper solution, particularly in areas like the Highlands.
  In the Western Isles we had an adviser connected with the agricultural college, Mr. Gillespie, who was a marvellous natural leader. He persuaded many crofters to take advantage of the Government subsidy for the reclamation of land, and they poured, at a 100 per cent. subsidy, the shell sand from the sea shore on to peat and a large amount of the Western Isles which was formerly peat hag was reclaimed into grass. That was most successful. But it is going back now due to the lack of this same lime subsidy.
  I believe that this Government, too, should put up £10 million, as the EEC wish to do;it ought to be matched by us. We should do this, but we should apply the knowledge that we have to the hopes and the kindness of the larger body, the EEC, because to pour £20 million into agriculture in the Western Isles would be ludicrous. The annual budget for the whole of the Crofters Commission is only £1½million. To put £20 million into a small area, in agriculture alone, would be quite wrong. This is precisely what the report talks about—and that is widening the basis. It must go into tourism, agriculture, forestry, land improvement, and transport, too, which is also enormously important.
  Another point made in the report which I consider is very valuable is that we really should not expect Brussels to try to run affairs in the Western Isles. They must put forward the policy, and then it must be administered by the bodies who know something about the area. We really must not in Brussels build a bureaucracy which tries to run the crofters of the Western Isles, because they will not be run in that way. It is difficult enough to run them in any shape or form, but to run them from Brussels would be absolutely impossible. If we can get the money and the spirit organised, and then follow it up ourselves, we can make in the Western Isles a very good experiment

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  which might show us how to handle this problem, which will affect the whole of Europe. I must commend the report.
  4.10 p.m.
  Baroness STEDMAN: My Lords, I should like to associate myself with the noble Lord, Lord Mackie of Benshie, in offering our thanks to the noble Lord, Lord Sandford, for giving us the opportunity to debate this report this afternoon. I should also like to congratulate the noble Lord on his very clear presentation of the report, and his committee on producing such a readable report which we can understand and find so interesting. I want to deal with only two particular aspects, but in rather general terms. For my sins, I happen to be one of the vice-presidents of the Association of District Councils, and they have asked me to say how much they warmly welcome the report because the conclusions which are expressed in it are in accord in so many ways with the views which they expressed in their evidence to the committee. They wanted that to be on record, that they warmly welcome the report of Lord Sandford and his colleagues.
  Like so many other bodies which submitted evidence to this committee, they believe—and I believe the committee have supported their view—that the full potential of the rural areas is going to be realised only when there is a truly comprehensive approach to rural policy which aims to safeguard the future of the rural communities. I accept that there is a considerable variety of types of rural areas within Europe;and, while it may not be realistic to seek a comprehensive rural policy for the whole of the Community, there are a number of areas where there is scope for improvement in policy-making as it applies to the rural areas in this country. Maybe action here and in our partner-States in Europe could be stimulated if we could have more consideration of the relevant issues that occur to all of us at Community level.
  The Association of District Councils is one of those blanket organisations which, through all the district councils, in effect covers the interests of the whole of the rural population of England and Wales;and, like many other organisations and individuals, it is very concerned about rural deprivation and depopulation, and
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  also about the present application of the Common Agricultural Policy. As the noble Lord said in his introduction, the Community is about to be enlarged, and the Common Agricultural Policies have a direct influence on both the general prosperity and the level of employment in agriculture in all the Member States. So far the CAP has been encouraging the movement towards more mechanisation and larger units, and to some of us it would seem that they have not always been completely aware of the impact of their policies on the social and economic conditions in rural areas. If there is to be a positive and co-ordinated approach to the problems, then there must be an increase in the resources at national and local levels, and indeed at European level.
  The ADC believes—and I think, again, this view was shared by the committee—that the major problem is the reliance at this point of time on three separate agricultural, regional and social funds, each working in somewhat watertight compartments and, it would seem, without very much attempt at co-ordination in the way in which they apply and implement their rural policies. As the noble Lord, Lord Sandford, suggested, this lack of coordination, and sometimes conflicting policies, have given momentum to the decline of the rural areas. Agricultural employment goes down, the indigenous country-dwellers have to leave the rural area and go to the urban district to seek work, and their place is taken by retired people and by commuters who move into the country for their place of residence. This is the kind of changeover which upsets the whole basis of our rural society, and generally means an increase in those of the older age groups and a corresponding decrease in the younger age groups within our village communities. These changes in themselves have a very significant effect on employment, on housing, on education, on transport and on all the Community services;and the rural policy of the EEC must be better co-ordinated and integrated if the drift from the rural areas is to be reversed.
  Action is needed to create more employment opportunities on the lines of schemes sponsored by the Development Commission. There must be better housing facilities, with reasonably-priced houses for

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  sale and to rent, and perhaps encouragement to housing associations to do more in our rural areas. There certainly must be better transport and community and social services. I am one of those who regret the present tendency of some of our county councils, in our present economic state, to talk about selling off their smallholding units. The present trend towards larger farms may help to provide a career structure for those who want to help in agriculture, but there are very few opportunities for young people to start farming on their own account;and in many areas the smallholding is the only avenue open to meet a very real and continuing need. I hope that our Government will give positive encouragement to the local authorities to retain their present smallholdings, and indeed to create new and additional ones where possible, and will urge that other countries look at similar sorts of schemes.
  One other aspect I want to put to your Lordships is the impact of EEC policies in rural areas which are not in assisted areas, and where central support from Government is limited. As noble Lords will know, I come from Cambridgeshire, and that county submitted fairly detailed evidence to the committee. In the East and North-East of that county we have the very highly productive Fenland, unlike the wide open spaces, haunted by the shepherds playing their pipes, of the Arcadia described to us by the noble Lord, Lord Sandford. The land is rich and the land is very fertile, and 25 per cent. of the jobs in that area are in agriculture and horticulture. Most of the industrial activities in that area are also concerned with food processing, with packaging, with canning and with agricultural engineering.
  The county council took a long, hard look at Fenland and its problems in relation to its structure plan, and the problems of Fenland must be shared by many other parts of this country and by many other pockets throughout the Member States. The county council found that over the last 15 years there had been very little population change but a very marked decline in the number of jobs available. The area is a remote and scattered one, and rural isolation is one of the biggest problems. A very high (if not the highest) level of unemployment
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  in the county is in Fenland, and there is little or no opportunity for school-leavers. Many of the unemployed are unskilled, and can therefore compete for only a very limited range of jobs;and the deteriorating employment situation both reflects and contributes to the other problems of the area.
  This part of the county is not very accessible, with only the A.47 as the principal link between East Anglia and the Midlands, but it also has an important rail link between the Haven ports and the Midlands and the North. The housing conditions in the area are relatively poor, and a much higher than average proportion of the dwellings lack real basic amenities. Poor accessibility, limited services and facilities, and relatively few skills in the local labour force, all reduce the attraction of the area for future employers, and the county council have accepted that in this case the problems need to be tackled by strengthening the economic base. Here, they are in effect trying their own form of integration, by involving all their departments and some of the central Government departments. They want a major re-orientation of county council road programmes to give improved access into Fenland, so they are pressurising central Government to try to improve the A.47 road. The Development Commission have come to their aid;they have declared Fenland one of the special investment areas, and factory units are being constructed. They have encouraged the district council to build mini-units in the county, and the district council and the county council between them are trying to make available serviced industrial sites for development.
  They have also involved the British Waterways Board, and are jointly investigating with them the potential use of the Wisbech port to handle European traffic;and the Peterborough Development Corporation are offering their services and expertise in helping them with selective industrial promotion and also in preparing a brochure for use by their Members of the European Parliament to press the case. The county council is also planning to strengthen and reorganise their secondary education and have a reprieve from the DHHS to retain their hospital at Wisbech.
  These are some of the things that can be done when people start to work

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  together and to integrate their policies. But, despite all efforts, the areas' problems are still immense. They need the support of a much wider range of public investment bodies and the confidence of private investments. This is where EEC grants and supports would prove invaluable. The present and threatened cuts in public expenditure pose a very real threat to today's level of services and, as the Cambridgeshire report to the committee said—
  " If the present generally depressed level of services, including public transport, education and health, cannot be maintained, even additional employment opportunities will not maintain balanced rural communities, and prevent the area's younger and brighter citizens from drifting away, the downward spiral which is widening the inequality with urban facilities, will not be arrested, but rather could be accelerated".
  The Community funds which are available, the noble Lord, Lord Mackie of Benshie, said, had to be additional to what we put in ourselves and not a substitute for it. In the short term, the efforts of the Community must be concentrated on ensuring that the existing funds arc administered as cost effectively as possible. The current problems that arise from the CAP and the wider question of the Community budget are substantial and very complex, but I feel that this report provides an excellent start for ensuring that the wider questions of the EEC rural policy are given proper consideration in that context.
  4.22 p.m.
  Viscount AMORY: My Lords, I am very glad of the opportunity to follow the noble Baroness, Lady Stedman. She has an excellent knowledge of these difficult problems from the angle of local government. If she will one day do me the honour of coming across to the "Garden of Eden "in Devon—and she can leave all her warm clothes behind her—I hope she will bring with her a few thousand tons of that marvellous black soil from the Fenlands;provided that it does not blow away, as we have quite a wind.
  The report which my noble friend Lord Sandford has introduced so skilfully this afternoon is not only interesting but is a very timely one. The theme, the key, can be found in the first paragraph of the report, in a single sentence which reads:
  " A large proportion of the rural population
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  now earns its living from activities other than agriculture or horticulture".
  That is very true. The structure of agriculture in Northern European countries has changed out of all knowledge over the past 30 or 40 years, and the number of persons directly employed has been enormously reduced. In some countries, that process is not by any means completed and will go a good deal further. Personally, having lived in the country all my life, I deplore the loss of so many agricultural workers who I always thought formed as fine and as wise a section of the community as anyone could know. There is one remark made by an old farm worker that I have always remembered: "Dogs look up to you, cats look down on you, pigs is equal." I think that is one of the shrewdest remarks I have ever heard.
  The Common Agricultural Policy is almost exclusively concerned with agricultural production—a very important facet but not the whole of the problem of rural areas, as my noble friend has clearly outlined. The efforts to safeguard and encourage efficient agricultural production—and when I say "efficient ", I refer to the efforts to increase the volume of agricultural production—have resulted in the currently alarming surpluses. Much of European agriculture is nothing like as efficient as the average level in the United Kingdom. We must also accept that, owing to technical changes in agricultural structures, a satisfactory return to agricultural producers directly benefits fewer persons every year as is mentioned in the report. Having said that, the level of efficient agricultural production and productivity is very important, but is not the whole picture. I am not sure that I will go as far as to say that food production is not the primary use of land, but it is certainly not the only use.
  One question which has to be answered is this. Is there rural deprivation in the United Kingdom? The answer, I am sure, is: yes, there is some. There is a climate of deprivation in some localities and there are elements of deprivation in the lives of some of the rural inhabitants of most areas, particularly perhaps in the case of the elderly. The age of the rural population is higher than the average because of the dearth of employment opportunities for young people in their own villages. I agree entirely with my noble friend Lord Sandford on that and I would invite

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  him to come down again to stay with me one day. He will find me piping among my flocks and we will go around and see a few things;and then I can lend him a spare pipe and we can join in a lament together.
  There are some benefits which those who live in rural areas would agree they enjoy—healthier conditions and a quieter life, for instance. What are the disadvantages? Notably, perhaps, they are disadvantages stemming from geographical remoteness, transportation, in some cases education and fewer public services because they have to be spread more thinly. A survey of the countryside today, I think, might be a little deceptive. On the whole, it looks tidy and well looked after and even prosperous;but, on closer inspection, it will emerge that many villages have completely changed their character over the past 35 years. No longer are they in any sense whatever self-sufficient. They may be dormitory appendages of the local town or city;their houses will have market values as second homes which put them completely out of reach of rural pockets;the employment of the residents, where they have employment, is usually no longer agricultural employment and young people no longer look for employment within their own villages.
  Having said that, I believe that, socially, the gulf between town and country that we used to talk about so much 40 years ago is less wide than it was. The inhabitants have become more accustomed to one another and in one sense lead more the same kind of lives, perhaps brought together by such modern amenities as motor cars and television. The report suggests the desirability of a more comprehensive rural policy for Europe and outlines some of the cogent arguments in favour of that objective. Among others, the report makes a point interesting to me: that in many parts of Europe part-time farming is increasing. The report asks whether this development may make it easier to develop a comprehensive rural policy. That is certainly something I never thought about. One thing, however, that we ought to expect as, hopefully, a more comprehensive policy is developed to deal with the consequences of deprivation, is that, with the access of the new Member States to which my noble friend referred—Greece, Spain, Portugal, et cetera—with needs
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  in this field more obvious than ours, there is likely to be more competition for funds. The share of the United Kingdom in the total allocated may be less. So, in pressing for a more comprehensive approach, unless the total available is increased, may secure no direct advantage. One answer to this may be that if the cost of the CAP is at present about three-quarters of the total EEC expenditure, there is room within that total for some reallocation. I believe, coming back to the United Kingdom, that there are areas here which are crying out for action.
  I had the great pleasure not long ago of staying for a few days with my noble friend Lord Brookeborough, after he "cracked up "Fermanagh in your Lordships' House a little bit before. So off I went, and he took me round that beautiful county. As he will tell us later this evening, there are astonishing differences between one area and another in that extensive county. At present, my Lords, within the United Kingdom the work of the Development Commission is highly to be commended. It is admirable but its resources are limited. The main burden of helping with rural areas falls therefore on local authorities—the noble Baroness, Lady Stedman, implied that in what she said—particularly on the shoulders of county councils. Here again, the problem comes down to the question of resources, and rural services are a great deal more expensive per capita, for obvious reasons, than urban services.
  A study was carried out, as my noble friend Lord Sandford, mentioned, in this past year, under the auspices of the Association of County Councils, called Rural Deprivation. It is quite a mine of information about what is happening, and the difficulties of extending it under present conditions. I hope that the present Government will resist the temptation to which its predecessor succumbed, to raid the grants available for other county councils because of the particular problems of the inner urban areas. The inner urban areas, we all know, have tremendous problems. I suggest it is a pity to reduce services very much required in rural areas because of that, if there is some way of avoiding it.
  I hope from everything that has been said on the part of the present Government, that they have no intention of

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  pursuing that line further. It is as always with government, a question of balance, and in assessing the balance in Europe and the United Kingdom it is right to be reminded, as this report reminds us, that the majority of people living in rural areas no longer earn their living directly in agriculture, though the productivity and prosperity of agriculture is of very great importance to them as the background of their lives in country areas. In what I say in no way do I want to imply that the increasing, efficient production of foodstuffs in this country ought to be stopped or discouraged. The two things can go perfectly satisfactorily together. I thought that this report struck a very moderate, reasonable and excellent balance between the various factors.
  4.35 p.m.
  Baroness ELLIOT of HARWOOD: My Lords, this report is excellent. The noble Lord, Lord Sandford, chaired the committee and although I may have one or two slight criticisms to make, on the whole I agree with every word that has been said by those who have spoken on the report. It is timely, since those of us who live in a rural area know how every day there are temptations for people to leave the rural areas and go into the towns, although at the moment possibly not quite so much because of a certain amount of unemployment. But in my area there is not much unemployment. It is something one continually has to look out for and hopes to be able to prevent.
  The report points out that in the rural areas it is perfectly possible to have small industries, to have other interests and to enlist the support of other organisations. On the whole, we have done it fairly well in this country up to date because of the organisations which we all know very well. The Development Commission, the National Council for Social Service, the Scottish Council for Social Service, the women's institute movement, and many others, have all been pioneers in improving and making the rural communities more varied, to have more interests and attract more people to stay in those areas. I should like to congratulate those organisations and others because they are doing exactly what this report is suggesting might be done on a wider scale.
  Whether or not that type of organisation goes on in Europe, I do not know.
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  Probably there are some comparable organisations, in which case I am sure that they also do help. It is very good to be able to bring about a close cooperation between the variety of different interests that can and do come into the countryside. I live in one of the so-called least favoured areas—never a phrase I would like very much, because I think where I live is far nicer than anywhere else. When people talk about the Highlands or the hillside, the Borders, or Wales, the countryside of Wales or Cumbria, as being "less favoured ", it always gives me a slightly uncomfortable feeling because I think that they are more favoured than any other part of the world, if one likes living there, which many people do.
  I realise that if one lives in such areas one must try to do everything to make life there attractive, not only to those who are engaged in farming but for those who are doing other things. I would say—perhaps it is not necessary because it has been said before—that the primary importance of those areas, as well as areas like the noble Baroness knows so well, the Fen areas, which are some of the richest in the country, the hill lands, Highlands and so on, are still making a very valuable contribution to agriculture. One must not look upon them as a paradise for tourists or anything like that. There is no reason why in the Lake District or the great and attractive parts in Wales and Scotland there should not be tourism;but tourism is not the most important thing. The most important thing is the growth of stock in the hills which then goes down to the country which has rich grazing and is turned into the sheep industry, the beef industry, and so on. Without the hill lands, without the areas where the animals are bred, there would not be great sheep or cattle industries or anything else. It is important to realise that.
  In some way there have been conflicts in the past. I know that, certainly in Scotland, there has been a rather antagonistic feeling between the hill farmer and the tourist industry, because tourism can be harmful if people climb your hills, walk over your land and leave gates open so that sheep and cattle get mixed up and so on. One does not feel too friendly towards those happenings. However, the situation is improving because more and more people are beginning to understand

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  that there are limitations in hill-climbing, walking or other sports when these are done in an area where sheep and cattle are being produced. In this connection, I support many of the recommendations in the report, and the way they have been put. I think that the evidence which has been collected from all the organisations is remarkable. There is not an organisation concerned with the countryside which has not put in a memorandum or contributed to the report, and I think the noble Lord, Lord Sandford, has done marvellously well to get so much information into one report.
  There is one recommendation, however, which I would not support, and that is in paragraph 64, where there is a suggestion of diverting to what I would call nonagricultural aspects of rural areas money which is allocated for agriculture and for the development of agriculture. There is a suggestion of a transfer of existing CAP funds for expenditure directly related to agriculture: in other words, funds for crops, livestock production and other items of expenditure might be diverted to work of a non-agricultural nature. I do not think that is a good idea—I speak, of course, with a certain amount If feeling, since I am one of those who farm in the countryside! I think that money for that kind of thing should really come from the Social Fund or the Regional Fund of the EEC. What is intended for food production and intended to help agriculture obviously must come from the CAP and must go to those things. I am in favour of getting money from the Regional Fund or some other Funds for what we are talking about today, which is the development of other interests among a farming community. I certainly think we should do that. As we all know, we make huge contributions to the CAP. While we do get a lot of money back, we could get more, and I think a good deal of what is wanted here might come from other Funds of the EEC.
  The other important matter is that when these three new countries come in we shall be getting an enormous increase in agricultural population. For example, in Greece, the agricultural population is 35·4 per cent. of the country;in Portugal is is 21·1 per cent.;in Spain it is 22 per cent. The figure for the Community of Nine as it exists now is 8·7 per cent., and if you take
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  our agricultural population, it is only 2·75 per cent., I think. The importance of money being available for agriculture, certainly with the new countries coming in, is going to be very great. That is another reason why I do not think we should encourage the Community to divert CAP funds to other activities of the rural areas. I agree with everything that has been said about this document: it is extremely important, and I hope very much that it will make a big contribution to the policy of the EEC and to those who are conducting these affairs in Brussels.
  4.45 p.m.
  Lord PARRY: My Lords, as Chairman of the Wales Tourist Board and a member of the British. Tourist Authority, it is essential for me to make the usual disclaimer in terms of the Addison Rules and a bow in the direction of the noble Baroness, Lady Elliot of Harwood, who has just spoken. It is also a very great pleasure, and not a duty, to congratulate the noble Lord, Lord Sandford, and his committee, as other speakers have done, on the work which he modestly claims is making little more than a start. I think that we believe it has done much more than that. This report gives us the basis for some really hard thinking about an alternative economic development, which is essential. I put that in parenthesis at the beginning because there are some points I should like to isolate from the report as needing some further thought.
  I would first turn your Lordships' attention to claims which the report makes, and makes fairly, that the rural areas are themselves areas of low income. It does not quite as well make the point that these areas of low income are in fact the country's areas of highest unemployment so that we have a coincidence, in what the noble Baroness has rightly called some of the most attractive areas of Great Britain, of two major weaknesses of the British economy—we have low income and high unemployment coinciding side by side.
  Perhaps I may also point out what I consider to be an omission in the report: the current unemployment figures as at 10th January 1980 for Great Britain show an unemployment figure of 1,404,389, making 5·9 per cent. of the registered employable population, including school-

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  leavers. I make that point simply to say that from there on you have a multiplier effect at work. I have made that point before in this House and I make it again now, because it is very often understated or not stated at all. In Wales, when you have in Great Britain an average unemployment figure of 5·9 per cent., the figures almost always show that doubled. At the moment the figure stands at 8·3 per cent. In Scotland it stands at 8·9 per cent. and in Northern Ireland, with its specific and desperate difficulties, it stands at 11·5 per cent.
  I am not here making a political point but an economic one: in other words, the disposition of the economy of Britain works to the disfavour of the peripheral areas of Britain and therefore it is to those areas that we need to apply ourselves. That is why I welcome this report. That is not to be misunderstood as saying that I disregard the problems of the industrial or urban areas of Great Britain. I give them equal importance in my own mind. I only urge, as this report does, that the Government and others should give equal importance to the position of the rural areas.
  The number employed in agriculture is crucial to the debate and perhaps to some of the statements that will follow during this debate. For example, in Wales in 1974 it was 52,483. That may surprise your Lordships: it surprised me. It was 51,949 in 1975, 56,088 in 1976 and 55,450 in 1977. I quote those figures in order to draw the attention of the House to the point that I wish to make: that in fact, while the Common Agricultural Policy, as has been rightly said in the report and in other speeches, has accelerated the rate at which people leave the land, there is nevertheless an upturn in the number of people employed on the land. In that connection I wish to say that that is because tourism is far more important than the noble Lords sometimes seem to imply. I want to say that in the Spey Valley in Scotland, for example, I recently heard at the Aviemore Conference on Local Government and Tourism a chief officer claim that tourism had all but wiped out unemployment in the Spey Valley and that the only people now unemployed there were people who were physically or mentally unemployable or who were temporarily out of work.
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  If we take that point, it emphasises a very important portion of the report. I am not going to go into the figures that the noble Lord, Lord Sandford, and his committee have quoted. I would, however, particularly draw your Lordships' attention to page xiii:
  " The Directive's opening Article sets out its purpose—' to ensure the continuation of farming, thereby maintaining a minimum population level or conserving the countryside in certain less-favoured areas '."
  Since that statement is there, since the noble Lord, Lord Sandford, isolated it in his report and since he underlined it in his speech, is it necessary for anyone entering the debate subsequently to assume that one is attacking agriculture or farming? We take the point made in evidence, which can be found in the appendices to the report, that it is the aim of all of us to keep the farmer on the land. It is also our aim to see that, in being kept on the land, he is able to employ other people as farm workers and ancillaries to his industry.
  As regards farm tourism in Wales—and I quote these figures because I have them at my fingertips—we have a list in the Wales Tourist Board of 1,200 farms which are not merely subsidised by tourism, but which are turning farming towards tourism as a way of conducting it as an authentic argicultural business, not as ancillary bacon and eggs pocket-money for the wife, but as an agricultural policy which takes into account the fact that our industrial heavy industry is decadent, that our urban economics—because they are dependent on them—are run down and that people want increasingly, anyway, to return to their roots;and the roots of all of us are in agriculture, whether we have been severed from them or whether we enjoy the pleasures of living or working on a farm. I would say to the noble Viscount, Lord Amory, who enjoyed his peregrinations around houses, that I should be happy to accompany him on such a run at any time.
  The point then needs to be made that,
  "…the Government consider the present level of aid to be adequate: and Article 10.2 (which provides for the payment of investment incentives for tourist or craft industry purposes) has not been applied because assistance is already available from the Tourist Boards and the Development Commission".
  Some reference has been made to that. It is absolutely important that I should

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  make reference to it, in view of the fact that the Government are looking at expenditure on all statutory bodies' programmes. We have done very well in tourism. We believe we can claim it was understood by the last Government, and is understood by the present Government, that tourism is at least a basic tool of the economy. Nevertheless, the Government have a mandate for looking for certain cutbacks, and it would be a very bad move if any real spending capacity were cut from development for tourism purposes. In the rural areas, it is essential, where it is possible to fund alternative development of farm buildings, farming stock and farming programmes, in order to get a greater revenue from the attraction of tourism, that that money should be available.
  We have an area called Section 4 in the Development of Tourism Act, which takes account of some of the expenditure. But when we measure it against the claims that are made upon it, we find that we can service only something like 28 per cent. of the demands. So there you see that the present machinery, regardless of politics, is inadequate and any addition to the finance available for this important development is essential to the economy of the country. I should like to draw your Lordships' attention to paragraph 30 on page xiv. I shall not read it out. All I want to say in that context is that in East Anglia there is a massively important rural area, rich in all the things that the noble Baroness rightly identified, and it has no aid at all because there is no industrial basis for it to draw that aid. So it is clear that the report is right and the policy is wrong.
  We have had people talking about the richness of rural life. We have also had some mention of the difficulties of rural life:
  " The Committee would not support any diminution of Community aid to urban areas".
  So there, again, the point has been made. We do not seek to detract from the amount of money available to the urban areas, and problems are especially acute for areas where a declining industry, such as shipbuilding or textiles, has been the major source of employment. I suggest that, far from being a peripheral point in the economy, far from being something that we regard as an interesting addition
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  to our life, tourism and the development of the true resources of Britain, particularly the rural areas, is an alternative economy and should be treated in that serious vein. So I say Amen to the statement there.
  I should like to agree with the noble Lord, Lord Mackie of Benshie, who pointed out that transport is very important. I should like to go further and say that it is crucial, because today there is very real hardship, often quite unrelated to income and position in society, for people who live in the rural areas of the country and who have seen the dismantling of services that has gone on in the last 50 years. I have picked up old-age pensioners in my car and carried them to their local surgery, where they were going to have their prescriptions filled. They have said to me, "Gordon, it was easier to get from Dale to Milford Haven during the Boer War than it is in 1980".
  It is a fact that the young housewife, the young girl who chooses to live in some spot of great importance to her and her husband, can find herself, as her husband is promoted, becoming increasingly cut off and living in a kind of genteel poverty, because there are no services—they perhaps have not reached the stage of the second car—and she is held by small babies. So we have a very real interference with the quality of rural life. In fact, it is deteriorating and we should note it and emphasise it and bring it to the attention of the EEC.
  May I in that connection say that we have not given enough thought to the multiple use of services which already exist? We create at great cost, under separate institutions, things which are of great value to people and then we use them exclusively. This country, under any Government, can never in the future create that kind of resource and use it part of the time. I always wondered why it was that the rural postal vans could not be used as postal buses as they now are, and I was happy to be a part of that initial experiment. I would extend that to service transport. I would extend it to the use by aircraft of service runways. I would extend it to the use of schools in the rural areas which have tarmacadarned areas and very good services, but which are closed during the peak periods of the holidays.

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  Of course, the noble Baroness was right when she talked about the nuisance of tourism. Who would be silly enough to argue that one does not like a deserted beach better than an overcrowded beach? She was indentifying properly one of the problems of the management of tourism, and it seems to me that we are not being fair to the economics of this country, nor to ourselves, if we allow valuable resources to lie under-used in the rural villages of Britain and do not press them into service to relieve the pressures that tourism creates, when we know that tourism is fundamental.
  I realise that time passes quickly and I should like to thank the noble Lord, Lord Sandford, for avoiding a patronising attitude towards tourism in what he had to say. He and I agree that he, in no sense, under-estimates its value or its importance. But I cannot too heavily underline the fact that I believe it is not fully yet understood that this country is passing into a service-based economy, that its heavy industrial period has altered beyond all recognition, and that, therefore we must in future look to the identification of the positive in the service industries;and tourism is among them. I would say with the greatest possible affection to the noble Baroness, Lady Elliot of Harwood, that the only point on which I disagree with her is that it is the most important thing, whereas she does not take it to be. I am an evangelist, at this stage Tourism is not an ancillary, it is not simply a prop;it is a basic industry in its own right. The sooner we realise that and build it into our future programmes for heavy industry, high technology industry and agriculture, the quicker we shall come realistically to grips with our own problems.
  Tourism employs 1,500,000 people in the United Kingdom today—a nice little relationship to that unemployment figure. Last year it recouped £3,500 million of foreign exchange;so it is important and it must be seen as important. And its place is in the rural areas and along the coastal resorts as much as in the overcrowded and overpriced streets of London Town.
  The national parks are themselves contributory to part of the difficulty of planning in the rural areas. That is why I welcome so much the positive emphasis of the evidence given to Lord Sandford
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  by the national parks in general and by my own Snowdonia National Park in particular, which is one of three we have. Young people in the rural areas come up against a plethora of bodies which have responsibilty for planning, and their own life style is often affected by decisions taken by bodies to which they have very difficult access. So I particularly welcome the evidence that the Community's approach should be more comprehensive in scope and should not concentrate merely on agriculture.
  May I draw finally attention to the fact that 25 years ago the Mid-Wales Investigation Report pointed out the development of some of these problems when it recorded the falling-in of so many agricultural holdings. Had those agricultural holdings not fallen in, there would be today available to whatever Government of whatever colour of this nation a tourism stock, a basic industrial stock which would have been equal in value to the factory stock which we are trying desperately to keep going in order to keep our people at work. So there is perhaps too optimistic a statement in that paragraph.
  I should also like to say one word about the evolution of tourism in using the countryside as a theme park. If I may come to the four objectives of the report, I should like to say that objective (b) is very close to me. Objective (c) is equally important but objective (d)—that we should provide all practicable access and facilities to the public for tourism, recreation and sport;that is, the leisure industry—is basic to whatever you wish to do. I am glad that the submissions of the Wales Tourist Board, the Scottish Tourist Board and of all the other bodies were included in this report.
  I made a disclaimer at the beginning of my speech and I make one again at the end. I am not an enthusiastic supporter of the European Economic Community. I fought it tooth and nail from the time that I was a boy and I still am unconvinced that it is the great boon that its adherents believe it to be. I believe the contrary. But here today in this House I welcome the initiative of the European Economic Community, I congratulate Lord Sandford, and I hope that he is as successful as the tourism industry is at this moment.
  5.3 p.m.
  Viscount BROOKEBOROUGH: My Lords, I should like to start by congratulating my noble friend Lord Sandford for his presentation of the report. I know the tremendous trouble he has taken over travelling across Europe to find out what are the policies for rural areas in other countries. It is an advantage to me to be speaking so far down the list in today's debate;so much has already been said that it leaves me with a lot of blue pencil lines through what I was going to say. I support practically everything that has been said. I support in particular what was said by the noble Lord, Lord Mackie of Benshie, about the extension of these experiments in the Western Isles to the Highland areas. I should like there to be an extension of that sort of principle to larger areas in my own country of Northern Ireland.
  When I read these reports I am always absolutely staggered by the way in which the staff of these committees collect together the vast amount of evidence and present it in such an incredibly readable and intelligent way. I feel that this House should never cease to record its gratitude to the staff for their very hard work and for the long hours that they put in.
  May I support the noble Baroness, Lady Elliot of Harwood, in her plea that the money given to other industries, such as tourism, to maintain the rural community should come not from agriculture but from other parts of the Community. In Northern Ireland, we have a greater interest in agriculture than have the people of Great Britain. Agriculture is more important to us by a multiple of about four. Therefore, this debate and report on policies for rural areas in the EEC is especially important. Because we are such a small area we sometimes feel a little bit swamped by the way in which these reports are dealt with and by the way, possibly, the United Kingdom deals with the EEC in relation to our rather smaller area. However, we do agree that there should be a comprehensive policy for the rural areas. That, surely, is the main theme of this debate. There should be a comprehensive policy for the maintenance of rural life in our country.
  As I have said, the maintenance of a rural policy should not fall solely on the
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  CAP. In fact, a large proportion of it should come from national resources, and it must certainly be administered nationally. There has been a lot of publicity of late about our fight to reduce the net effect of our contribution to the EEC—that is, the net deficit that the United Kingdom should get back from the EEC. I believe that when the Government finally end their negotiations on the present EEC proposals they will find that one of the ways of recouping our contribution will be by the extension of special support for the rural policy.
  In particular, may I refer to an experiment, the details of which I have here. It comes from the Irish Republic. I would describe it as "hire purchase forestry." It is being sponsored by an EEC operation in the West of Ireland. In my opinion, our Government should look very quickly at that EEC experiment in the West of Ireland to see whether or not we can learn from it and experiment now so that when the time comes to implement the policy we shall already have a basis upon which to build.
  The principle of this scheme is that the forestry service will go to a farmer—the particular cases involved which I am thinking about are in Leitrim and Sligo;the land there is of very high quality;it goes up to yield class 25 which is the very highest yield class of forestry land—and say to him, "Will you take your land out of forestry for 35 or 40 years? We will plant it for you and then pay you an annuity based on the final crop value. For that you will manage that bit of forestry during the years of maturity." They have worked out figures which show that, in various areas, by taking a particular farmer out of milk production the net return to that particular farmer will be very close to what it is for milk production.
  Tremendous emphasis is placed upon taking farmers out of milk production, which is in surplus, and trying to convince them that they should go into beef production. However, our experience of going into beef production is that automatically it means a lower standard of living because it is not so profitable an industry as milk production. If this experiment could be tried it would maintain the income of these particular areas. It would produce a product which is in deficit. One reads almost every day the

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  projections about the great wood shortage. I believe that we would have a viable alternative and a really stable community, because forestry develops saw milling and the other industries. So in hoping that this report will have some effect on Her Majesty's Government, I should like to ask them urgently to look at this particular scheme.
  The Earl of CAITHNESS: My Lords, we are most grateful to my noble friend Land Sandford for the work that he did as chairman of "Arcadia "and for bringing these two very important matters to your Lordships' attention today. It is difficult to isolate them, and therefore I have found it necessary to take into consideration on an EEC level the Select Committee's report on the Common Agricultural Policy and to go back on a national level to the Strutt Report Agriculture and the Countryside and the Government's publications. They are all part of an interlocking puzzle which I call "rural land".
  However, first I should like to go back to the 1942 Report on the Committee on Land Utilisation in Rural Areas—a Committee chaired by Lord Justice Scott—and to quote from paragraph 14, because the report sums up very concisely what I want to say:
  " The landscape of England and Wales is a striking example of the interdependence between the satisfaction of man's material wants and the creation of beauty. The pattern and the beauty of the countryside as we know them today are largely the work of man during the past few centuries …If land were left uncultivated, if downs and mountains were not grazed by cattle or sheep, the countryside would gradually but inevitably return to its former natural condition of forest in the valleys and on the lower slopes, and a scrub of brambles, thorn bushes and bracken on the higher levels".
  I trust the House will agree that it would not be inappropriate to change the words "England and Wales" to "the EEC".
  Part of the ever increasing cost of the CAP (if I may be permitted to use verbal shorthand) is the maintenance by subsidies of farmers on marginal land or in less favoured areas. This is, of course, of tremendous importance but it is a social and agricultural problem. It is evident that the cost of the EEC budget will soon outstrip the income it generates and as farmers will be the first to suffer so this will affect rural areas. There is therefore
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  a pressing need to do something to secure these rural areas and reduce their dependence on agriculture.
  Professor Dennison in his minority report to the Scott Report in 1942 saw the need then for an integrated approach and therefore the initiative of integrated development programmes for the Western Isles of Scotland, the Lozère in the Massif-Central, and South-Eastern Belgium are to be welcomed and supported. If it is possible to make these schemes work—and I believe it is, with encouragement—then by using agriculture as a base the local economy, which has been contracting, could start to expand in a variety of ways. Part-time farming has been common for many years in these areas and this EEC proposal could inject a level of financial and other resources hitherto too meagre to provide the necessary launching pad to extend the concept of occupational pluralism.
  Alas! we come back to finance, but as the committee has shown a slight change in emphasis in the CAP so that rural areas benefit more from it, this, backed by a more flexible approach by the managers of the European Regional Development Fund and the Social Fund, together with greater inter-departmental co-ordination, could generate some of the funds needed to fulfil the purposes of these schemes. Are we asking too much? To those who say, "Yes "I would ask them to contemplate the horrible alternative if nothing is done to stop the decline in rural areas.
  The three schemes put forward are only a start—the tip of the iceberg—and it is necessary for the EEC and each country to consider further areas which are in the same plight. I am sure the House will agree that, with the accession of Spain, Greece and Portugal the necessity for the integrated approach will become even more acute.
  We should be wrong to rely on the EEC alone to solve all our problems in this field and national Governments must play their part in encouraging this process. The Committee have given examples of the upland management experiments in Annex II of the report, and I should like to mention another scheme, albeit much smaller and one relating to industry, in which I was actively involved for some years and which was carried out with

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  private finance but which could have been a scheme where EEC or national support might be forthcoming.
  Briefly, it is as follows. The area is in the Cotswolds near a village called Blockley, close to Moreton-in-Marsh. One might initially think that this is not a "deprived area "or one needing special attention, but when analysing local population trends and places of work we received some depressing statistics. Nearly everyone commuted to work by car or train and the population was centralising itself in one or two villages.
  On one of the estates that i helped to manage at the time there was a former war-time American hospital which later became a Polish refugee camp. It comprises about 40 acres in the former park to the house, on which were built huts of various sizes up to about 3,500 square feet. In 1970, when the Government returned it to the owner, about one-third of the buildings were converted into a dairy for the home farm. The rest was scheduled for demolition and returned to agriculture. All services were there, the buildings could be refurbished and we believed that they would make good light industrial units. The planners believed otherwise. With the help of the Council for Small Industries in Rural Areas we persevered with the planners and I understand that the disagreements—if that is the right word—are still progressing but we eventually obtained light industrial consent on part. There are now on site metal spinners, a printing works, welders, a plastic model design manufacturer, timber frame building specialists, a fibre glass product manufacturer, a fibre glass boat builder—who incidentally exports 90 per cent. of his boats—and two silkscreen printers, one printing on metal, the other on cloth.
  I should like to extol some of the virtues of this site. It has put employment within bicyling range of the local villagers instead of the necessity to go by car. It has stimulated the local economy. It has helped the infrastructure of the area by offering opportunities to young people to stay in the villages. It has enabled one or two man bands to start up at rentals they can afford and in non-industrial estate type buildings which they seem to prefer. It has also buried the myth that
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  light industry in a rural setting will not work or is unacceptable.
  The planning principles it raises are important. There must be much greater flexibility in the minds of planners and greater liaison between countries where such a scheme is on the boundaries of two councils. During the committee's visit to Brussels it was suggested that it was up to each country to put forward schemes of its own. There is, therefore, a need for a small, central entrepreneurial body that can advise on such schemes and other matters of integration and to put forward such propositions if they fulfil the requirements for some financial aid. I have mentioned one, but there must be many more possibilities in this country, smaller or larger than the one I have mentioned.
  There are many more aspects of these reports on which I should like to comment but time does not permit it. I hope that the EEC integrated proposals will be approved and will work well, and that both this Government and the EEC note and take action on the points the committee raised. I believe that they have extra weight because those who sat on the committee really do care for the wellbeing of the rural community. I started with the Scott Report of 1942 and it is perhaps fair to finish with it as times appear not to change very much. The words I have in mind are:
  " As a nation …our great failures, both in war and in peace, have been due to a failure to think ahead and to make plans in advance".
  My Lords, it is up to this Government and all of us to see that my children do not turn round to me in a few years' time and say, "You saw the problems, you prepared a report, but what did you do about it? "
  5.19 p.m.
  Lord HENLEY: My Lords, I rise this afternoon to make two brief points. First, I wish to draw your Lordships' attention to an excellent booklet entitled Country Workshops;Decay or Development? which has been issued under the auspices of the Somerset Small Industries Committee and is the work of Mr. David Pattern, who is the local Council for Small Industries in Rural Areas organiser and who covers that area of Somerset. It is a very small book, merely a dozen or so

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  pages, with quite a number of photographs, and deals simply with ideas for new uses for old buildings in villages with a view to creating more rural employment. I do not think I need say anything about the desirability of creating more rural employment because it has been dealt with by a great many speakers this afternoon and it is accepted that it is essential to stimulate some rural industry so that the villages do not become mere dormitories for urban workers in nearby large towns or, worse still, if further away, mere ghosts when most of the houses have become what are now termed "second homes".
  In his booklet Mr. Pattern is simply advocating that those derelict buildings which are found quite often in the countryside, such as old railway stations, churches, chapels and, in my opinion, more important, superfluous agricultural buildings, can be put to new uses which can alleviate the problems of rural unemployment. I mention this booklet only so as to recommend it to your Lordships, and to say that should any noble Lord wish to see a copy I can no doubt obtain some more. It mentions in passing the problem to which my noble friend Lord Caithness referred, the effect of planning and highway considerations on development. I do not think I need say anything more, because I think my noble friend Lord Caithness knows far more about this, other than to put in a plea that the planning authorities think much more creatively about this.
  I think one of the problems is user classes, which would cause some small workshop in an old agricultural building to he termed "light industrial". If one hears the words "light industrial "one has pictures of dark satanic mills and so on, which quite obviously need not be the case. The small craft workshop will be no more a blight on the countryside than an efficient working farm;in fact, it would probably create far less traffic. Think of the traffic a dairy farm creates, in terms of at least one tanker a day, as well as other lorries arriving with feedstuiffs. I do not think the highway problem need arise.
  That really leaves me nothing else to say except how much I am in agreement with the noble Baroness, Lady Elliot, and in slight disagreement with the noble Lord, Lord Parry, in asking for slightly less stress on tourism. I know it can create a lot of money, but with oil and petrol
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  prices going up I am not sure that it can be guaranteed to continue to provide a valuable really long-term contribution to the rural economy. I should like to end by expressing my appreciation of the work of such bodies as CoSIRA and the Development Commission, congratulating the Select Committee on this excellent report, which has been aptly called "Arcadian ", and agreeing with all those who have said how eminently readable and sensible it is.
  5.23 p.m.
  Lord INGLEWOOD: My Lords, I must first apologise for not putting my name down until so late in the day. I live in the area of the Eden District Council if not in the area of the East Fellside experiment, so I am to some extent one of the natives about whom this report has been written;and an excellent report it is, and very timely. I was also once Member of Parliament for Westmorland and therefore in contact with Umex 1, 2 and 3, which are also familiar to the noble Lord, Lord Peart, who was a constituency neighbour. We both know the area which has been chosen, and I think it is a very good area for these experiments.
  Further, I am president of the Cumbria Tourist Board and I should like to confirm what was said a few minutes ago about Wales and say what a big contribution the tourist industry can make in these areas. But it goes far beyond bleak promotion and it is wrong to test everything by figures. We often see summaries of tourism figures in the daily Press, but I do not think they tell us the whole story. We must go beyond that.
  This problem which we arc studying today has been very clear over the past few years, tending to get worse over the past 40 or 50 years when small industries were closing down and population was being drawn more and more into the larger towns—possibly because private transport is now so widespread, but there are other reasons too. About 100 to 150 years ago in these areas small industries were scattered right throughout so offering a much wider choice of employment. The managers of the big estates then existing gave a lot of attention to this, if only because it put up the value of the property for which they were responsible. But today few are big

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  enough to achieve very much. So we must all think again and this report is an example of excellent thinking and hard work in this sphere.
  I am not too depressed. Westmorland, the county I represented in the House of Commons for years, was looked on by people who came from the South as an area were the inhabitants were to be pitied: I never quite know why. I looked on Westmorland as a part of England which had much in common with Switzerland, and nobody is going to say that Switzerland is the poorest part of Europe. Perhaps the only advantage that Switzerland has over Westmorland is that it has tax concessions.
  My last point is purely an historic one but is rather amusing, and I hope the noble Baroness, Lady Elliot, will forgive me. Whereas Westmorland was rich in rural industries, which sad to say are now nearly all in ruins, it was the south of the county where they were found spread more densely than in the north. That was partly owing to the more reliable water power, but also it was further away from the Scottish border and further away from the risks of kidnapping and terrorism which existed then just as in other parts of Europe they exist today.
  5.26 p.m.
  Lord PEART: My Lords, may I first congratulate the noble Lord, Lord Sandford, on the way in which he introduced this most interesting report, which I know most noble Lords now in the House must have read carefully, judging by the quality of their speeches—and that is not flattery. I was one of Lord Inglewood's constituents or he was one of mine. The Vane family have always taken a great interest in agriculture in Cumbria, but above all a great interest in forestry, and I thought the noble Lord was going to intervene on that subject.
  Lord INGLEWOOD: My Lords, if the noble Lord will allow me, will he not also mention that we have a very good inn and that he himself has patronised it on a number of occasions?
  Lord PEART: Yes, my Lords, it was in my constituency—the Pheasant Inn. If the noble Lord Viscount, Lord Amory,
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  wants to do a tour he can come North and the noble Lord, Lord Inglewood, and I will take him to the Pheasant. This is one of the rural amenities that I always like and which I consider essential to country life. The noble Lord, Lord Inglewood, is not only a farmer and a forester but also an innkeeper.
  Let me come now to what the noble Lord, Lord Sandford, said. He mentioned the need to have an integrated community, the need to integrate agriculture, forestry and the social needs of the area. I thought he was a little anti-farmer in some ways;perhaps I am wrong. I think the noble Lord, Lord Mackie, sensed that and that was why he made the apt reply that he did. The noble Lord, Lord Sandford, went on to talk about the problems of the EEC. I know they have got their problems. I was once a critic of the EEC and a very strong critic, because I was always afraid that acceptance of the EEC would mean the end of a policy I had supported for a long time, the 1947 Act, assured markets, guaranteed prices, the sort of legislation which I thought did so much not only for farming but also for rural England.
  Good farm policy is good for the area, not just the farmers. I think that point was made by the noble Baroness, Lady Elliot, whose domain I was pleased to see not very long ago when I was in Scotland addressing the Border area of the National Farmers Union. What a lovely place! I should like to go there and be welcomed back, but I am not a socialite in that sense. I should like to see better weather for the farming which I know is so good there.
  I would only say to the noble Lord, Lord Sandford, that I do not think he can really fault the EEC. After all, they have produced very good reports on this matter. Indeed, when I used to go there as the spokesman for the Government it was always one of my great concerns to press the need to have an integrated policy. I always thought that somehow they neglected forestry. I believe that forestry has so much to offer. I do not see forestry as a competitor with general farming in the hill and upland areas or indeed as clashing with tourism. Indeed, my view is rather the contrary.
  The noble Lord, Lord Inglewood, has spoken about his area of Westmorland,

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  which is now in Cumbria, and likened it to Switzerland. It is like Switzerland—it is called "the little Switzerland". Anyone who goes to the Lake District and experiences, all its beauties and then goes to Switzerland, will realise that there is much to be said for that comparison. It is a great upland area which has benefited so much.
  As regards my own old constituency, the 27th Report shows the Upland Management Experiments which are taking place now in the Lake District. They were first established in the Lake District in 1969 in an attempt,
  " to deal with the conflicting purposes of landscape conservation, public access, farming and the economic and social wellbeing of local people in areas of the National Parks".
  It then goes on in great detail to say how important it is that,
  " farmers and self-employed workers living in the dale heads where problems of economic decline [are serious] and lack of employment are endemic were paid to mend stiles, drain footpaths, build bridges, repair walls and maintain other features of the landscape. They repaired visitors' damage, re-routed footpaths "
  and so on. There is another report for the same area.
  I am making the point that there are many factors in the community life in the rural areas, and I would not like to see again the battle of forestry versus farming;sheep versus trees and so on. That is silly. I believe that there should be proper integration in areas where it is necessary. On the other hand, the farming community in rural areas may be in areas where it is essential to have crop farming. That point is well known by the noble Baroness, Lady Elliot of Harwood, who in her own area has animal farming which is so successful.
  There must be the right balance. I hope that there will not be any attitude of "anti-farmer". Even in the Lakeland it is the farmer who protects the hedges and often does so much to improve the amenities for the tourists to enjoy. I am glad to say that Cumbria is now developing tourism in a very forceful, aggressive and good way, showing the people of England and Wales, through advertisig, that it is a lovely spot which should attract tourists and that tourists should see the Lakeland before they go abroad. So I am very proud to have connections with that area, just as I know my noble friend
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  Lord Parry, who made a very eloquent speech, is proud of Wales and my noble friend Lady Stedman is proud of the Fenland and Cambridgeshire and what tourism can give to those areas and how those areas can expand. In the end, in the rural areas, it basically comes down to the farming community.
  I remember that when I heard the noble Lord, Lord Sandford, talk of his Arcadia, I thought of a period when I was chairman of a commission in the Council of Europe. The commission comprised different nationalities. We visited Greece, which the noble Lord mentioned. I can assure him that it is all very well to have the type of life that he envisaged there, but what the Greek farmers wanted was help and aid for good farming, for improving irrigation, for improving stock by better feeding and for the growth of machinery. Indeed, I was surprised to see the development of artificial insemination. In fact, the first experiment that I ever saw was in that country and not in my own. Tom Williams, behind whom I used to sit, was the Minister who introduced the Bill to make that possible.
  All that I am trying to say to the noble Lord is that rural development depends basically on the farming industry in a particular area. I continued my surveys with that commission in not only Greece, but later Italy which I knew much better because I was stationed there for a long time in the Army during the last war. There again it was the farming community that was the strength of the local community. I am not saying that other industries are unimportant. After all, agriculture provides many other ancillary industries—for example, the supplies needed for the industry itself. Therefore, I hope that there will not be this "anti-farmer "attitude in anything that comes out of the Community.
  Again, do not let us condemn the Common Agriculture Policy. Its aims are very similar to those of the Agriculture Act 1947—and I direct that remark to the noble Lord, Lord Parry. I could quote it, but all that I am trying to say is that they have their problems. Of course, they have surpluses, and I should like to see them export those surpluses. They talk about a mountain of butter, but what is the mountain? My friends in the Lake District will know. Is it as big as Skiddaw?

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  I do not think that it is. I think that it is only about two days' supply. So, we must be sensible.
  Too much is made about the CAP creating surpluses. The worry has been about where we have been directing those surpluses. Indeed, there was a Question the other day complaining about selling surplus butter to the Soviet Union. I believe that a French millionaire has the tender and does the trade but that is his business. All I am saying is that if there are surpluses, we should export them or give them for aid in those areas that need them. After all, the United States has great surpluses and relies on getting rid of its surpluses of wheat throughout the world, and even in our own country. Do not let us have any critisicm of the CAP as regards this matter.
  We are now thinking in terms of integration, in terms of the need to attract industry into the rural areas. I am only sorry that one of the schemes which I initiated when I was a Minister fell through. I am referring to the Pennine Rural Development Scheme. I know that the noble Lord, Lord Inglewood, probably did not approve of it in the way that I did, but I can assure him that many of his colleagues in the CLA and the National Farmers Union wished that that scheme had been successful. I set it up and I appointed a very distinguished farmer, a member of the National Farmers Union, as the first chairman. It prepared the way for developments which I thought would be good for the industry, developments which would encourage not only farming, but road development, more electrification of the area and also more tourism, which we now have. What happened? We were defeated and I went out as Minister for Agriculture—as I once said in this House—at a stroke. Mr. Heath and Mr. Prior destroyed it, and many people regret that.
  I also set up a similar scheme in mid-Wales. I am sorry to say that it became ground down in Welsh nationalism, so really they did not deserve it. However, the rural development scheme in Cumberland would have been a success and that is the type of pattern which I still think should operate as regards our approach in that area.
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  I should like to praise those organisations outside Government—and even outside local government—that have done so much for the rural areas. I have here a document from the Development Commission encouraging enterprise in the countryside, which I think has been quoted previously. I wish to pay a tribute to the chairman, the noble Lord, Lord Northfield. Lord Northfield was a member of the committee which also examined the European document and he has done so much as regards the creation of new industries in rural areas. I am sorry that he is not present today, and he has asked me to apologise for his absence. We, and the Community generally, owe him a great deal.
  His report recommends integrated rural revival plans with experiments, including those already started by the Commission beforehand, in those regions which are suffering from decline—in other words, depopulation, which has been mentioned in many areas;bad age structure;high unemployment and absence of alternative work. That, of course, is exactly what the Development Commission was set up to do. I hope that noble Lords who have read the European report will also now read the document, Encouraging Enterprise in the Countryside, which is published by the Development Commission in its 37th Annual Report for 1978–79.
  Therefore, speaking from the Front Bench, I recommend the Commission's work which is so strongly supported on all sides of the House. It operates in three broad ways. They have approved a programme of nearly 1,000 small workshops and factories in key points in all declining rural areas of England, and the programme is a partnership in operation with the local authorities, who assess their own requirements and show us what self-help they will provide. Secondly, they have a subsidiary, the Council for Small Industries in Rural AreasCoSIRAs—which, with a staff of only 300 mainly outposted to the counties, and with advisory committees of businessmen in each country, advises, guides and gives expert management and other training to small businessmen, as well as offering loans. I understand that having lent over 30 million, they have lost only just over £70,000 which is a pretty good record.

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  Thirdly, the Commission supports rural community councils which, in turn, organise self-help activity in order to enliven and support social life and to cure social needs in the rural areas. Therefore, there are these three elements or prongs which will provide aid to the areas which we have mentioned. In the past five years the commission has built up its present strength;for example, five years ago virtually no factories were approved. The Government have commissioned, and have just received, a report by civil servants on the future of the organisation. I have not seen this document, but I hope that help will be given from central Government. I know that in recent years the previous Labour Government more or less trebled the budget. At Government level we appreciated what was being done. I hope that the present Government will carry on with this work. We shall press the Government to produce the report, to institute a review and to make a Statement on it.
  By this debate in this House we can show that we are examining what the Community have offered and what it is doing;and we can link with that the aid which is given by bodies from central Government. I believe that we have had a well worthwhile debate. I have cut my remarks to only 16 minutes. We had a very long debate last night, which went on until nearly midnight. This has been a short, concise debate and it has been all the better for it.
  5.43 p.m.
  Lord MOWBRAY and STOURTON: My Lords, I welcome the raising by my noble friend Lord Sandford of the important issues covered in the report of his sub-committee and of the report on farm structures, which we are also debating. I should like to congratulate him on having set afoot such a very good discussion as we have had, especially with contributions from noble Lords such as the noble Lord, Lord Peart, who was one of the most popular Ministers of Agriculture this country has ever had and who has more knowledge than most of us.
  With your Lordships' permission, I shall concentrate at first on the former report, which concerns policies for rural areas in the European Community. It is now just a year since we last debated the
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  problems of rural areas in this House in the Motion on rural deprivation tabled by the noble Lord, Lord Walston. That dealt, of course, with these problems in a national context;today's debate goes wider and takes in the European Community dimension. I think that the House will agree with me that we owe my noble friend Lord Sandford and his colleagues an immense debt for their pioneering work in what, to all intents and purposes, is a new and untrodden field. I should also like to pay tribute to the thoughtful and wide-ranging speech made by the noble Lord when he spoke earlier this afternoon, and I should like to give him an assurance that we shall take most careful note of the various points he has identified for consideration.
  The report of the sub-committee draws atttention to social and economc changes over the years in the countryside, which have altered the balance of employment opportunities and the social and demographic structure of rural communities. We all know the factors which have contributed to this process. Principal among them is the increased productivity of modern agriculture, and the consequent decline in the workforce. As the noble Lord, Lord Mackie of Benshie, said, "there are not the folk on the farm "these days. With the absence of adequate alternative local employment, people have had increasingly to migrate to the towns to find work, and added to this has been a process of overall centralisation of services, in both the public and the private sector. All of this has led to what I think are termed, in the jargon of the sociologist, "knock-on "effects. For instance—and the noble Baroness Lady Stedman, drew attention to this because she was very worried about it, and so did several other Peers—a decline in rural jobs leads to migration of active people to the towns;such migration weakens the economic basis of village services—shops, transport, schools and, of course, sub-post offices, that centre of village life. There is a loss of facilities and, to some extent, of community spirit;this, in turn, leads to further loss of population. It is a vicious spiral and one which is difficult to arrest.
  As several noble Lords have described, the effect has been the phenomenon now widely termed "rural deprivation". As the sub-committee of my noble friend

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  Lord Sandford has noted, the extent and nature of this process in the United Kingdom is well-documented. For instance, in the last 18 months comprehensive reports have been produced on the subject first, by the Association of District Councils and, subsequently, by the Association of County Councils. These reports and others like them, have been most helpful in highlighting the problems, which are not, of course, unique to this country. Again, the noble Lord, Lord Sandford, has made that clear. But we face them with some severity, partly—and also ironically—for the reason I have just given: as a result of our high rate of agricultural efficiency. I want to emphasise that the Government fully recognise these problems and will do all they can to maintain the economic and social wellbeing of the countryside within, of course, the present constraints of finance and other resources.
  The noble Lord, Lord Mackie highlighted the task and said that it was good sense to tackle and harness the national assets of the countryside, such as tourism, which, as he pointed out, would lead to economic renewal. The noble Lord, Lord Parry, speaking from his experience of the Welsh Tourist Board, also emphasised the importance of tourism. Like the noble Lord, Lord Peart, I too congratulate my noble friend Lord Inglewood on running a good inn, in The Pheasant.
  I should just add that my colleague, the Minister for Local Government and Environmental Services, shortly expects to meet the chairman of the two local authority associations to discuss the reports to which I have already referred, and the views that have been expressed. Naturally we are already giving these most careful consideration.
  My noble friend Lord Sandford, and his colleagues make the point that
  " the diversity of rural areas emphasises the need for flexibility in all policies which affect the countryside".
  I am sure that there is no one rash enough to disagree with that. I am also certain that it has now been widely recognised that it is an over-simplification to refer to the "problem "of rural areas, as was once the fashion. There is on one single problem;there is no one single type of area;instead there is a whole range of rural areas, each with its specific characteristics
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  and experiencing its own blend of problems I should like to join the noble Lord, Lord Parry, in saying to my noble friend Lord Amory, that I, too, should like to savour the problems of Devonshire, and take up the invitation which he specifically issued to the noble Lord, Lord Sandford, and the noble Baroness, Lady Stedman.
  Viscount AMORY: My Lords, I should like a little warning of numbers. If necessary I will hire a coach—I should be perfectly prepared to do that at the right moment. As for the "Vane Inn ", I am a little confused;I have an idea that if I ask for that, I shall ask in vain!
  Lord PEART: My Lords, I hope that the noble Lords will be careful. I once was invited to the noble Lord's residence and he took me to the Devon Show, and I had the biggest protest meeting of farmers I have ever had in my life!
  Lord MOWBRAY and STOURTON: My Lords, the last time I went to the Devon Show the noble Lord, Lord Clifford of Chudleigh, was crowning the Dairy Queen from New Zealand, so I have happy memories of it. Dealing again with the problems we are talking about, at one end of the spectrum we have the more remote parts of the Countryside—notably in the uplands—where there are few countervailing influences working to stem a steady trend of depopulation. In England, this is perhaps best exemplified by the North Pennines which show ed a decline of more than 20 per cent. in population between 1951 and 1971. We shall, of course, have to await the results of the next 1981 Census before any more up-to-date figures are available.
  Then there are village communities which have become popular for retirement, or for weekend homes, or both. Here, although the active workforce has declined, the total population may have stabilised. Parts of South-West England clearly fall in this category. Thirdly, there are those rural areas lying nearer to our conurbations which have largely become, in effect, commuter dormitories. These have suffered, and I use the word advisedly, from the increases in the cost of housing in our towns, particularly over the past 10 years. People earning relatively high wages have looked further afield for their homes with consequent effects on village

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  house values and, sadly, the pricing-out of young local couples. Again there is probably no net depopulation occurring—in fact overall there may even be small increases in the size of villages. But, because this is achieved by an influx of newcomers, these types of area too are affected by basic social change. People who earn their livelihood elsewhere often do not integrate satisfactorily for some years with those whose families have been born and bred in the village for generations.
  My Lords, I now turn to the European Community aspects of these issues;and perhaps first I might comment on the implications for spending patterns of enlargement of the Community, a matter to which reference is made in paragraph 14 of Lord Sandford's report. This states that such enlargement will involve demands for a shift in Community aid towards the southern half of the Community and towards rural areas. My Lords, in terms at least of agricultural expenditure this needs, I think, some qualification. The noble Lord, Lord Sandford, called this his Arcadian point, and I thought that the noble Lord, Lord Peart, talked so wisely and sensibly about the Greek element of this.
  There will naturally be increased expenditure by the Community on Mediterranean produce—such as wine and olive oil. But it is not a foregone conclusion that the Community's agricultural spending will shift very dramatically or rapidly to the South. I hope that this will reassure my noble friend Lord Amory, who also expressed anxiety on this point. There will be a transition stage of some years, and you cannot, for example, store fresh fruit and vegetables in the same way as butter, beef or wheat. Full scale intervention in the traditional sense just is not possible for some Mediterranean produce. The United Kingdom has also consistently resisted firmer protection or price guarantees for Mediterranean produce. It will be some time before the new Member States will be able fully to apply the existing structural directives. Any new programme for improving agriculture structures would have to be shown to be cost-effective before we could agree to it.
  Even so, it is clearly salutary at this time to look in detail, as Lord Sandford
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  and his colleagues have done, at the nature of Community policies for rural areas. His sub-committee have considered a range of options to develop. For instance, they propose that the Community's less favoured areas directive could provide the United Kingdom with "a framework for improved policies".
  My Lords, this directive is, of course, designed to ensure, in its own words,
  " the continuation of farming, thereby maintaining a minimum population level or conserving the countryside in certain less-favoured areas".
  As the committee recognise, the United Kingdom is the major beneficiary under the directive. The few measures not implemented by us would involve very limited aids to investment to a small sector of farms. They would be payable to farmers in respect of improvements and operations on their farms;and, of course, could only bring indirect benefit to the rest of the rural communities. In short, I think scope for further action under, or based on, the directive is limited, but noble Lords will know that the agriculture Ministers are studying the possible extension of our existing less favoured areas to include marginal land outside the hills.
  Lord Sandford has drawn attention to the way the less favoured areas directive is implemented in the United Kingdom and was critical on a number of points, in particular regarding the role of Article 3(5). This provision relates, of course, to areas affected by specific handicaps and, as the report points out, is not at present applied in the United Kingdom. But one must be cautious of reading too much significance in this fact. Most of the areas which could qualify under this category are already designated under the "basic "Article: 3(4). And there is no difference in the aid given to each category. However, we shall continue to keep the application of the directive under review, including the case for promoting designation of certain small areas, not otherwise eligible for aid, under Article 3(5). I cannot say more at this stage.
  The noble Lord, Lord Parry, asked about the application of Article 10(2) of the less favoured areas directive. The assistance available through tourist boards has a higher ceiling, more appropriate to tourism needs, than the directive. If a

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  farmer can qualify for tourist board aid it does not require him to tie himself to a farm development plan, as the directive would do.
  My Lords, fundamental to the future of rural areas is, as Lord Sandford and his colleagues point out, alternative employment to replace jobs lost in farming. At national level they make reference to the very useful work done by the Development Commission in promoting this end. I too should like to add my tribute to the achievements of the Development Commission which has just celebrated its 70th birthday. The noble Lord, Lord Northfield, who was so rightly praised by the noble Lord, Lord Peart, is of course the distinguished chairman of the commission, but unfortunately he is unable to be with us this afternoon. However, he kindly sent me a copy of the annual report for 1978–79, which has just been published. It provides a good account of what the commission has been doing initiating the building of over 250 advance factories and workshops in English villages and small towns since 1975, and it welcomes the increased awareness of rural problems. I trust that my noble friend Lord Henley will not think it is producing dark, satanic mills in so doing.
  The report notes that the commission and its offshoot, the Council for Small Industries in Rural Areas, are being reviewed by the Government and a decision on their future is expected within the next month or two. The noble Lord, Lord Peart, mentioned this review in his speech, and I understand that the noble Lord, Lord Northfield, has said that he is guardedly optimistic about the outcome. All I can add at this stage is that we are giving very careful consideration to the issues and an announcement will be made as soon as possible.
  The report criticises the urban emphasis of the European Regional Development Fund—the ERDF and the Social Fund which they think might be applied more generously to benefit rural areas. As noble Lords will know, however, the ERDF is only available to projects in areas receiving national regional aid. Although in the United Kingdom our assisted areas include some large tracts of countryside, the main thrust of our
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  regional policy is directed towards our older industrial areas which have the greatest concentration of social and economic disadvantages. The Government's revision of the regional aid system and of the assisted areas, which will take its full effect in 1982, will ensure that resources for regional development are concentrated in the areas of most need. It is right that this should be so and that the much smaller resources of the European Regional Development Fund, which are a complement to national aid schemes, should likewise be concentrated, otherwise aid will be too diffuse and thinly spread.
  The noble Baroness, Lady Stedman, stressed the point that Community funds should be regarded as some kind of bonus to be added to the funds available from the Exchequer. The Government take account of receipts from all sources when formulating their expenditure plans. Without a Community contribution, these expenditure plans would be lower.
  As for the non-quota section of the fund, the report points out that that is extremely limited and that the Commission's first proposals have concentrated on some of the most difficult problems of the United Kingdom. Apart from the very special case of Northern Ireland's border area with the Republic, their proposals affecting the United Kingdom are concerned with areas suffering from the effects of steel and shipbuilding industry closures. These problems are severe both in scale and intensity and it is right that the limited resources should be devoted to assisting such areas. Indeed, the Government consider that more aid than the Commission have proposed should be made available to assist with the problems created by these closures.
  We have, of course, noted the point made more generally in the sub-committee's report that rural areas benefit little from non-agricultural spending under the Community budget. None the less, because that budget is so heavily weighted in favour of agricultural spending, this means in practice a flow of resources to many United Kingdom rural areas, though I concede not necessarily to those most in need. At the same time, the resources available from other parts of the budget are very limited. It would be wrong to spread the small benefits which we get from some of those parts even more thinly;it would dissipate what small good they

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  do and perpetuate the fundamental imbalances in Community expenditure. The Government seek, rather, a better balance within the budget as a whole and an agricultural policy more suited to the special needs and problems of the United Kingdom, including those of rural areas which are by their nature predominantly agricultutural.
  A recent positive initiative by the Community has been the concept of "integrated development schemes ", proposed by the Commission in its communication on agricultural structures. The sub-committee have strongly endorsed their implementation and extension. We agree with the sub-committee's view that such schemes, involving the co-ordinated use of agriculture, social and regional funds, could prove a useful pathfinder to better integrated rural policies at Community level. If successful, they could make the agricultural population in certain areas less dependent on agriculture and thus on the support of specially high farm prices.
  However, we must remember that present proposals are merely for pilot schemes. We shall need to ensure that they are properly prepared and integrated, and then fully monitored and evaluated, before committing large funds and efforts on similar schemes in other areas of the Community. As for the areas which the pilot projects should cover, this point is still under consideration. The views of the noble Lord, Lord Mackie of Benshie, will be noted. We agree that such projects should be under local management and not under the Community. I am sure, too, they should not be handed over to Brussels bureaucrats.
  Reference is also made by the sub-committee to Community transport policy;the noble Lord, Lord Parry, and others were worried about that. But as the report points out, this matter is of great importance to those who live in rural areas, especially the more remote parts, and the noble Lord, Lord Sandford, and his colleagues observe that the Community transport policy appears to attach no special importance to the needs of rural areas. That is understandable, and it is appropriate that the transport chapter of the Treaty of Rome should concentrate on the international aspects of transport policy, such as harmonisation of conditions
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  of competition, non-discrimination against other Member States' operators, and consignments. Policies on the provision of transport services in rural areas are determined in the context of national and local needs by the national and local authorities;this is not really a sphere in which a Community transport policy could make a useful contribution, as it requires small-scale improvements, innovative forms of transport and of management and self-help arrangements which can harness volunteer potential and help in recreating a sense of purpose in declining rural areas. There is little or no value in centralised or international planning on these.
  Some points made by the report are ones which relate primarily to the European Commission as an organisation—for instance, the comments made on coordination of policies among the Com-mission's directorates general and the staffing of the environment and consumer protection service. Of course, these are matters essentially for the Commission itself. The recent Spierenburg report on its workings commented on a lack of coordination and made recommendations aimed at improving the position, but the House will know more about that shortly, in the next debate.
  On staffing, we are aware of the comparatively small number of staff in the environment and consumer protection service relative to the tasks it undertakes. But I must point out that bids for increases in Commission staff are treated for budget purposes in total numbers. It is therefore up to the Commission to decide its own priorities for staffing in the light of increases finally agreed. The United Kingdom Government are, of course, bound to look very critically at any proposal to employ more staff at a time when they are seeking to restrain the growth of the Community's budget and, at home, are endeavouring to reduce numbers in the Civil Service.
  Closely related to these matters are the proposals made in the sub-committee's report that the Community should adjust policies to encourage comprehensive rural development;should adopt a statement of objectives for rural policy;and should develop a central organisation to consider such policy and developments. The noble Lord, Lord Sandford, made the important point that policy for rural areas as regards

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  forestry, farming and amenity considerations, should be tackled on a fully comprehensive basis. This is not, of course, in dispute, and I hope that will please the noble Earl, Lord Caithness. And of course, we fully accept that ADAS will have an important involvement. But in present circumstances we must take account of the likelihood that any major development in European Community policy or in central organisation within the Commission, would necessarily result in an increased total budget. Given present disparities between Britain's contributions to the Community and our receipts, this factor must, I would suggest, give us pause.
  For the same reasons, I endorse the sub-committee's present rejection of the concept of a rural fund. In both the short and long-term, the Government's policy is to seek a better balance of expenditure within the budget and to restrain as far as possible the growth of Community expenditure. In that context too, the Government agree with the committee that at present a special community rural fund is not a practical proposition;it would only exacerbate our budgetary difficulties. At the same time, I also take note of the committee's view that:
  " If total expenditure had to remain constant, a transfer of funds from direct agricultural support to other rural area expenditure would be needed".
  This worried my noble friend Lady Elliot of Harwood and the noble Lord, Lord Parry. Noble Lords will readily recognise that such a course of action would raise issues of' wide-ranging significance involving the CAP which lie beyond the scope of this debate. We agree of course that the CAP is in need of some reform, but, that said, noble Lords will, I think, accept the principle that we should not seek improvements in rural areas by lessening our concern to increase the efficiency of agriculture, and I endorse the wise words of the noble Lord, Lord Peart, on that.
  Viscount AMORY: My Lords, I wanted to ask my noble friend before he reaches the end of an extremely interesting speech whether he would agree that when we have said everything about all these measures of diversification, if the day should ever come when efficient agricultural production in this country was no
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  longer remunerative, the whole heart would be taken out of our countryside?
  Lord MOWBRAY and STOURTON: My Lords, I think I would agree with that completely. So far, I have dealt principally with the report of the noble Lord, Lord Sandford, and his colleagues. I want to conclude by making some comments on the report on Farm Structures, with which the sub-committee chaired by the noble Lord, Lord Walston, was involved. We are greatly indebted to the noble Lord, and I am sorry that he is unable to be with us today.
  I shall deal first with over-production. The Government agree with the committee's conclusion that over-production is to a large extent the consequence of too high prices. This is a factor which the Minister of Agriculture, Fisheries, and Food will have very much in mind in the CAP price discussions which are now in progress.
  The views of the committee in paragraphs 9 and 10 of their report are noted, and to a great extent the Government have sympathy with them. As far as aid in the United Kingdon is concerned, tests of eligibility under both the Farm Capital Grant Scheme and the Farm and Horticulture Development Scheme exclude those who are not capable of earning a fair living from their holdings. We do not want to see aid distributed in the Community, except on a cost-effective and sensible basis. In paragraph 11 the committee appear to be speaking of denying aid to farmers because they are on good land. I feel that these thoughts need some clarification.
  There are many factors which need to be taken into account in deciding who shall have, and who shall not have, aid. For example, we have ourselves recently introduced limits to the amount of investment which we will grant-aid. These limits will obviously affect the big investor more than the small man, but we imposed them in the knowledge that those operating large enterprises do not need so much support, because the Chancellor's Budget changes last year have increased substantially the proportion of net income available to these people.
  Regarding the point on interest subsidies in other countries which the committee has made, under the Farm Modernisation

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  Directive those countries are subject to the same limitations as the United Kingdom on total aid, but we prefer to offer similar levels of aid by way of capital grants.
  In paragrpah 13 of their report, the subcommittee comment on the bans on certain investment aids proposed by the Commission. The Government have sympathy for the sub-committee's views, but it has to be remembered that not every Member State is in surplus on production;the United Kingdom and Italy, for example, are in deficit on dairy production. A key factor in the surplus situation is that of prices, and this aspect has to be solved separately. But the proposal for an investment aid ban must be considered further and solved within the context of the structure package as a whole.
  Lastly, the committee, in paragraph 14 of their report, have expressed the belief that the Commission should formulate a long-term plan for structural policy. To an extent the Commission would certainly argue that their package of proposals taken as a whole, and bearing in mind the integrated regional programmes it contains, already represents the makings of such a policy. We do not suggest that the Commission package is without flaws, and the experimental nature of certain of the regional schemes must be emphasised. These particular ideas, of course, highlight the difficulty of trying to deal on a Community-wide basis with all aspects of structural problems. Many of these tend to be particular to individual countries. This points to the need for allowing for some national solutions, at national expense.
  Rightly, the committee underline the importance of processing and marketing. The European Community affords help in these areas under headings other than the structures directives. Again, much must be done and allowed to be done by national actions. My right honourable friend in another place has appointed five eminent and lively marketing minds to seek out innovations and improvements without waiting for a Community Directive to do this for us.
  We have had a full debate on the matters raised by these reports. I am most grateful for the points which speakers have made, and I have tried to comment on as many as I can in the time at my
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  disposal. It is clear that in rural affairs at large the Community has an increasingly important significance. We must do what we can to ensure that this results in a better quality of life for those who live in our countryside. The reports of the noble Lords and their colleagues have served to highlight in a most clear and helpful way the issues and problems concerned. I am sure that I speak for all when I again extend to them my thanks.
  6.14 p.m.
  Lord SANDFORD: My Lords, I am most grateful to the speakers who have taken part in the debate, and I am sure that all my colleagues on the committee will be grateful for the complimentary remarks that have been made. I was particularly glad that the noble Lord, Lord Peart, complimented the noble Lord, Lord Northfield. His contribution to our committee was as valuable and as distinguished as is the contribution of the Development Commission to the countryside. I would have been disappointed and suspicious had we got through the debate without any controversy at all, and therefore I was particularly glad that the noble Lords, Lord Mackie of Benshie and Lord Peart, crossed swords with me, to a very minor degree. Unfortunately, I cannot disagree with the noble Lord, Lord Peart, about farmers, and I am afraid that I am not anti-farmer;I have to agree with him in being very much in their support.
  The point at issue was a rather narrower, though I think nevertheless significant, one;namely, that whereas until perhaps quite recently it has always been possible to say, quite rightly, about almost every bit of the countryside—and Herr Ertl is always saying it about Germany and Bavaria—that if something is good for agriculture, it must he good for the countryside as a whole, my committee received quite a lot of evidence (which I was reporting to your Lordships), to the effect that there are parts of the countryside now where the common agricultural policy, if it is good for agriculture, is not always beneficial to the rest of the rural community. Perhaps we shall continue to disagree about that, but it is a rather different point.
  This brings me to the end of this debate. All that I wish to add is that the next

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  time I shall be discussing these matters will be when I am in Cumbria, at that admirable establishment on the shore of Lake Bassenthwaite, the Pheasant Inn. My Lords, I beg leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  EUROPEAN INSTITUTIONS
  6.17 p.m.
  Baroness WHITE Baroness WHITE rose to move, That this House takes note of the Report on European Institutions (the Three Wise Men) and the Spierenburg Report (9732/79). The noble Baroness said: My Lords, I should like to start by congratulating the noble Lord, Lord Sandford, upon the debate which preceded this one. I think we all agree that he initiated a most interesting and valuable discussion.
  I hope to speak briefly, both out of regard for the noble Lord, Lord Seebohm, whose business follows ours, and also because a clinical thermometer indicates that I perhaps might be better off elsewhere. I speak in this debate with perhaps more diffidence than usual, as it is only a short time since I had the privilege of succeeding the noble Lord, Lord Greenwood of Rossendale, to whose services as Chairman of the Select Committee of the European Communities I would pay a warm tribute. For myself, I know that I still have a great deal to learn.
  The two reports which we wish to draw to the attention of the House are both —I think noble Lords would agree—lucidly and really admirably written, and for this reason, among others, the Select Committee concluded that it was preferable to publish only the evidence taken, without adding a commentary. Those interested would, we thought, do better to consult the original texts. But we were also concerned to provide a fairly early opportunity for Her Majesty's Government to state their views on the two reports and to indicate how far the recommendations fit in with the Government's concept of how Great Britain can best contribute to the work of the European institutions and, in turn, benefit from them.
  The evidence taken by the Select Committee, and contained in the reports
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  which are available to your Lordships, is well worthy of attention, including not only the views of senior United Kingdom officials, but also the testimony of Mr. Edmund Dell, one of the Three Wise Men responsible for the major report on the whole range of Community institutions and their interrelationships, and the testimony of Mr. Dick Taverne, one of the five-member Independent Review Body under the chairmanship of Ambassador Spierenburg, which reported to the Commission on its own particular organisation and effectiveness.
  Coincidentally with these reports there has recently been re-issued an up-dated version of the most illuminating booklet on the European Community and how it works, from the pen of the greatest authority of them all, M. Emile Noel, the Secretary-General, who was good enough to receive us when my colleagues and myself visited Brussels. I would warmly commend this short treatise to all those who perhaps remain somewhat baffled, as I think I still do, by the institutions of the Community and all their works. As M. Noel rightly points out, the Community is unique. It is not supranational;nor is it a federal government;nor simply an intergovernmental organisation. It cannot, indeed, be adequately described in conventional terms.
  Both these reports deal primarily with matters of organisation and of procedure, and also with political or administrative interrelationships. The Three Wise Men are rightly at pains to point out that the concern which is currently widespread as to whether the Community can function adequately in the face of its present problems cannot be met simply by procedural or mechanical adjustments. The gravity of the difficulties likely to face the Community in the economic as well as the political field during the 1980s will defy even major adaptations of machinery. None the less, only harm can ensue from unnecessary frustration and irritation caused by the sometimes ill-adapted procedures of what is surely the most complex political-cum-bureaucratic organisation yet devised by man.
  If one may start at the top, at the European Council, the Three Wise Men recognise the vital political impetus which may flow from meetings of Heads of State and Prime Ministers. But so far in our

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  discussions we have found little support for the major proposition in the report of the Three Wise Men that the European Council should,
  " work out an explicit scheme for Community action in the next few years".
  There seems to be a consensus that this is not the true function of such top political leaders, and that the work which would be involved in preparation for such a task would simply not be worth the candle. On the other hand, there has been much sympathy for the emphasis on the need to improve the working of the Council of Ministers, the membership of which varies, as we know, according to the subject matter under discussion, sometimes with junior Ministers representing their national interests and with agendas containing items of a technical complexity which may make wise judgments extremely difficult, as many of us on the subcommittees of the Select Committee know only too well.
  Suggestions for delegating work now done in the Council to Coreper, the meeting of the permanent presentatives—in other words, the ambassadors of the Member States in Brussels, and their staffs—would of course provide far better continuity, but it would retain the thorny question of voting. Should the unanimity rules be more frequently set aside in favour of decisions by weighted majority? If this is attempted will not the Member States who believe themselves to be disadvantaged resort regularly to the so-called Luxembourg compromise, whereby a State will insist that a vital interest is at stake and reassert the need for unanimity? In the opinion of David Marquand, one-time chef de cabinet to Mr. Roy Jenkins, expressed in his recent book on A Parliament for Europe, the Luxembourg compromise, which was pushed through by General de Gaulle in 1966,
  " destroyed one of the central elements of the Treaty system".
  Admittedly Mr. Marquand writes as an integrationist who accepts the proposition that a prior commitment to putting the Community interest first is necessary for the true health of the organisation. The need to search for solutions which will meet with unanimous approval, however, slows down Community decisions, sometimes almost indefinitely, and always to the pace of the slowest, and it makes the Council of Ministers less of a Community
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  institution than a forum for inter-State haggling and bargaining. I shall be very interested to hear the views on this matter of Members of your Lordships' House who have had much greater experience in Brussels and Strasbourg than I have.
  Consideration is given by the Three Wise Men to the role of the President of the Council. Is it wise that the period of office should be as short as six months? Because no sooner has the person concerned played himself in than he has to be thinking of how to re-establish himself in the politics of his own country, taking his staff and furniture with him from Brussels. The disadvantages of changing from the six months to a longer period seem, nevertheless, to outweigh the benefits;but the consequential changes of staff and committee chairmanships undoubtedly add to the problems of bureaucracy and illustrate vividly how hard it is to reconcile political necessities with efficiency. When one comes to the Commission, as opposed to the European Council and the Council of Ministers, one turns from the Three Wise Men to Spierenburg, as the three sages (as they are called) accept most of the recommendations in the latter report. Here again, the role of the President, this time the President of the Commission, is crucial. Should his powers be increased, in particular in the choice of his fellow Commissioners and in the allocation of their portfolios? Even someone of strong personality and great experience must find it hard to run an efficient team without the kind of power base enjoyed by national Ministers.
  In our consultations we found almost universal agreement with the view that, with the second enlargement of the Community in sight, the number of Commissioners should he diminished rather than increased. We also found, however, much scepticism as to whether this would, in the event, prove possible. As noble Lords will be aware, the larger States in the Community enjoy two Commissioners, which has certain great attractions. So far as the United Kingdom is concerned, it has been the tradition that one Commissioner to whom we are entitled should be from the Government side of the House and the other from the Opposition side, and some

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  of our colleagues in Europe who are accustomed to working with coalitions also find it extremely helpful if they can accommodate more than one party in the coalition by allowing them to represent their country in Brussels. When we discussed this with those who were good enough to receive us in Brussels, the more philosophical observers remarked that, while it would be very difficult in practice to reduce the number of Commissioners—they all agreed, I think, that it would be more efficient—nevertheless they thought there would be plenty of representational opportunities at the European Parliament to keep the Commissioners engaged whenever there might seem to be too little for them to do in Brussels.
  As an army marches on its stomach, so an administration depends on its civil servants. We are reminded in these reports that Brussels, and indeed Strasbourg too, suffer from certain serious staff rigidities. In addition, there are the problems caused by the need to keep an acceptable balance between the staff coming from the different Member States —a balance in which, in some areas, Great Britain does not seem to do too well. It was encouraging, however, to learn that Mr. Roy Jenkins, as President of the Commission, has asked his immediate predecessor as President, now Vice-President Ortoli, to take charge of the implementation of as many as practicable of the Spierenburg recommendations in Part III of their report, concerning staff. There has been considerable tension and dissatisfaction in Brussels on such matters as promotion prospects, and we hope very much that a more satisfactory arrangement can be made.
  A subject on which I think it is fair to say we failed to obtain a satisfyingly coherent reply was the extent to which the Commission was carrying out the proposals agreed on by the Commission itself in 1978 when they considered the matter at Comblain-la-Tour, by which suggestions for harmonisation should be judged by certain criteria to test their importance, and indeed their necessity. I think I am speaking for all Members of the Select Committee and most Members of the Sub-Committee when I say that in our experience nothing causes more irritation or puts the Commission as a whole in a
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  worse light than proposals which do not seem to the ordinary citizen, consumer or industrialist, to make sense;and there are some areas where people feel that they should be allowed to take their own decisions.
  Some of those we consulted said that they had noted a marked decrease in harmonisation proposals at Comblain-la-Tour, but were far less convinced. I cannot pretend that we were in a position to obtain authoritative information on this. Most of us who work on the scrutiny sub-committees would agree, I think, that too many proposals emanate from Brussels. If I may quote Mr Marquand again:
  " Community Europe is overwhelmingly a technocrats' Europe. Brussels seethes with committee meetings, at which civil servants talk to other civil servants about policies suggested by yet more civil servants …When the Commission has finally hammered out its proposals, they are considered at yet more meetings, under the aegis of the Council of Ministers, at which the same national and Commission officials battle formally over the points which they have previously discussed informally".
  To be fair, once it is settled that a proposal is to go forward, much of this is essential if it is to attempt to reconcile as many interests as possible. All the more important, therefore, actively to apply the criteria of necessity laid down at Comblain-la-Tour.
  Finally, over all our discussions and consultations has hung the question mark: How much difference will the elected Parliament make? The rejection of the budget seems to have been accepted philosophically in Brussels;and one very senior official revealed that he was considering taking bets on the likelihood of Parliament using its other major power, that of sacking all the Commissioners. As the Commission will be dissolved anyway at the end of this year, such a gesture would not perhaps be too damaging some time in the autumn, provided that the issue chosen was an appropriate one and not one that would only serve to debase the parliamentary currency.
  But as it is the day-to-day relationship between Council, Commission and Parliament which really matters, and not just the occasional dramatic moves, it is clearly too soon to pass judgment. Nevertheless, the difference between the present Parliament and its non-elected

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  predecessor is surely profound, not least in the United Kingdom, where our Members of the European Parliament have been elected on a constituency basis, not as in most other Member States on the list system, with its much less specific local responsibilities. The Commission admitted that the elected Members at Strasbourg added considerably to the burden of work but also added greatly to its interest.
  My Lords, the two reports we are considering are models of their kind. I hope this brief debate may lead Members of the House who are not on the Select Committee or its sub-committees, as well as those who are, to consider them and so bring about a better understanding of the way in which the organisation to which we belong really moves. We look forward to the Government's response and to the contribution of several speakers with, as I have said, considerably greater personal experience in these matters than that on which I, myself, can draw. I beg to move.
  Moved, That this House takes note of the Report on European Institutions (the Three Wise Men) and the Spierenburg Report (9732/79)—(Baroness White.)
  6.35 p.m.
  Lord GLADWYN: My Lords, the trouble with these splendid reports—and there are not many copies available;this one is very bulky and has been duplicated but not printed—rather like the mountainous productions of Royal Commissions, is that Governments rarely pay much attention to them. In saying this, I am not referring to Spierenburg, the adoption of which (or otherwise) is almost entirely the affair of the Commission itself rather than of Governments, beyond saying that Spierenburg's recommendations, all of them appear to me to be very reasonable and I do not propose (except in one respect) to comment on them further. What normally gives rise to these wide-ranging reports is that Governments —in this case the nine Governments of the Community—get into difficulties. The machine clearly does not work;vital decisions cannot be taken;there is much public disgust about the functioning of the Community as a whole;and the Ministers feel that, by having recourse to a report, they can put off the fatal moment when something really must be done if the Community is not to break up or
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  become a sort of badly-working Customs union.
  The report which appeared before the major one which we are considering today was the work of one man only, M. Tindemans, then and subsequently Prime Minister of Belgium. It was published as long ago as December 1975. It contained a large number of constructive proposals. The most notable of them, I remind your Lordships, were as follows: that co-ordination of external policies should make way gradually for common policies, but the Community should speak with one voice in external affairs. To achieve this, the minority should rally to the views of the majority at the conclusion of the debate. A substantial part of national appropriations for development or co-operation should be transferred gradually to the Community;there should be a greater degree if unanimity in the field of defence supply and in the encouragement of joint and co-ordinated research.
  To this end, there should be periodical meetings of the Community Ministers of Defence. The traditional distinction in ministerial meetings between the Community's foreign policy and related defence questions and economic and development aid relations should end. There should be early adoption of a common economic and monetary policy in the Community and a convergence of economic policies generally. Regional policies should expand in step with progress on economic and monetary union. The European Council, whose president, as the president of the Council of Ministers, should be appointed for one year—and this is Tindemans—should act not only in accordance with the Treaty but take decisions outside the Treaty as well. The president of the Commission should be appointed by the European Council and himself appoint the remaining Commissioners in consultation with the Council. The European Parliament should be able to discuss all questions within the competence of the Union whether or not they are covered by the Treaties.
  Tindemans, himself a convinced federalist, believed that these broad proposals were entirely pragmatical and based simply on what might be done to improve the working of the existing machinery. Nevertheless, as your Lordships will

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  observe, scarcely any of the proposals that I have read out have yet proved to be acceptable to the Ministers. Impressed, no doubt, by the lamentable failure of Tindemans, the report of the Three Wise Men is more pragmatical still. The proposals that they submit represent simply ways and means, all within the existing Treaty obligations, whereby the functioning of the Community machine can be made rather more efficient.
  Thus the European Council—which, of course, operates outside the Treaty of Rome—should adopt before 1981, in collaboration with the Commission, "priorities "for the Community as a whole. This was also something which in principle was favoured by Tindemans. Its president should appear every six months before the European Parliament. For its part the Ministerial Council should lighten its work load and devolve some decision-making from Ministers. The Coreper, the permanent representatives in Brussels, should strengthen its already strong position as a co-ordinating centre. All decisions, save where otherwise provided for in the Treaty, should increasingly be taken by majority vote—and this, of course, is Tindemans in a milder form. The President must define objectives and insist on rules being abided by. The Council's secretariat should, if possible, play a more important part in the organisation of the Council's work and might even assist the European Council. Generally speaking, political co-operation should be intensified which, after Afghanistan, I should have thought was only common sense.
  These and many other pieces of good advice are submitted, and the whole report is full of suggestions which, one might imagine, would be accepted with alacrity in toto by all the nine Governments. But none, save one, is likely, if adopted, to have in itself any very profound effect. For that, as Mr. Dell and his colleagues would be the first to admit, and do admit, there will have to be some major political impulse which still is lacking.
  The one exception is the proposal that, before the arrival of Greece in under a year's time from now the Commission (as regards the reform of which the Three Wise Men agree with Spierenburg)
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  should consist of one Commissioner from each Member country;in other words that, after the Greek accession, it should be reduced from a potential 17 to 10.
  The case for this particular reform, in spite of what we have heard from some witnesses, is unanswerable. The Commission, as opposed to the Council or even the Parliament, is not a body in which national interests should play any part at all. Every member of it has to take an oath to be loyal only to the Community in the sense of not taking any orders or instructions from his own Government. In principle it should not matter where he comes from.
  Apart from that, there would obviously not be sufficient work for 17 portfolios, and some Commissioners would perforce have to play a subordinate role which politically speaking, might be very difficult. Anyway, with all 17 sitting round a table, the whole machine would become top heavy and almost impossible to operate. This is consequently the one major proposal and it will be interesting to see whether the Ministers, including our own Government, accept. All the betting is that French opposition will prevent their doing so. In that case, and if the majority of the other less important suggestions are brushed aside—as is only too likely—we may, indeed, I fear, expect the EEC to become a sort of dinosaur after 1981, a colossal body with the brain the size of an egg.
  This is clearly what the report expects unless its various recommendations are approved and applied within only nine months from now. It appears, for instance, that in such an event tendencies in the directon of a "two-tier "membership—that is, first- and second-class members—will become too strong to be resisted, even though the report believes that this solution—disguised as it might be by the extension of "compensating devices "—should be "rejected outright ", as of course must be all kinds of protectionist measures.
  Then there is the final obstacle of an additional language—and no doubt three additional languages—which may in itself be so formidable as to prevent further progress towards any kind of European political union, which, as Hugh Gaitskell said on a famous occasion—with magnificent meisois—would be a pity.

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  The report is, however, eloquent and convincing in its closing passages on the possibility of arriving at European union and what we might expect from such union, if ever achieved. Convincing, that is, for any intelligent person looking at the problems confronting our nine democracies objectively and, as it were, from the outside looking in. Whether such a formulation will seem convincing to our rulers is quite another matter. They have to cope with the immediate political effects of any step in this direction which may adversely affect particular interests and hence their chances of being returned to Parliament. But perhaps when they contemplate the likely results of any collapse of the EEC they will be able to weather a few political storms.
  The report's final words (in its annexes) on harmonisation and the conciliation procedure for arriving at agreement on the budget between the Ministers and the Parliament are really admirable and, one would have thought, likely to be of real assistance to all the institutions concerned In particular, the conception of "the triangle "—that is, the relationship between Council, Commission and Parliament—as the essential motive force behind the whole Community strikes me as excellent.
  Might I just say in conclusion that since a think-piece by one man is usually, in the nature of things, more immediately impressive than one composed by several persons, I warmly recommend to your Lordships the subsequent lecture by Mr. Edmund Dell delivered at a meeting organised by Mr. Goodison, chairman of the Stock Exchange on 24th January of this year. With your Lordships' leave, I will quote one short extract from the lecture which was illuminating on all aspects of the present situation. After saying that everybody now recognised that the British contribution to the EEC budget constituted a problem, Mr. Dell continued:
  " The other members of the Community are almost certainly prepared to do something effective about the British contribution problem because they realise that politically no British Government can accept the present situation. As, looking to a longer future, they probably still prefer Britain to remain a member, they will be prepared to bend the rules to create a situation which is politically intolerable for British Governments and people. I hope we will not handle this problem in a way which leaves us with exit from the Community as the only dignified step left. We will then look rather stupid when we do not in fact leave".
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  I do not feel that these words of wisdom require comment from anyone who still believes in the necessity of forming some sort of European political community. And lest I should appear unduly pessimistic, let me say in conclusion that I still share such a belief. For it seems to me that the darker the external scene becomes, the more likely we shall arrive at the moment when Governments will have to make the fatal jump—the saltus mortalis—towards a genuine political association in the direction of which we appear to be being pushed still by the logic of history.
  6.48 p.m.
  Lord GORONWY-ROBERTS: My Lords, the House will be grateful to my noble friend Lady White for the admirable way in which she initiated this useful and timely debate. We also are very well aware of the fact that, although she has not been in the chair of the Select Committee for a very long time, she has already given ample evidence of her great capabilities. Today's speech—like its predecessor—was an example of what I mean.
  It is obvious that at this stage none of us would wish to press the Government to be at all conclusive about the tentative proposals contained in either report. The status of both reports, I take it, is that Governments are busily considering their recommendations—including our own—and that the European Council will, as soon as possible, deliberate over them. It was hoped—was it not?—that the Council might consider them at the February meeting, but that proved impracticable. Perhaps the Minister can tell us whether they look like being discussed at the next meeting, which I believe will be in May or June. These are both very important reports and need fairly urgent consideration by Governments so that the needed reforms and restructuring can proceed. The independent review body, as we have heard, was asked to examine how the Commission's work could best be organised to meet future needs, and a large part of the future is on our doorstep already, with the imminent expansion of membership to 10 and its expansion to 12 by 1983, with the accession of Spain and Portugal;so there is not much time to be lost before considering the major point raised by both these reports.

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  May I make one firm basic comment at this point? It is absolutely imperative that, whatever proposals are accepted, the essential paramountcy of the Council of Ministers should be retained on all matters relating to policy as well as on questions of structure and of staff which are not clearly for internal decision by the Commission itself. I will return to that matter later because I feel we have not as yet given sufficient attention to the chain of authority and the clarity of the operation of the Community. In seeking such clarity, which will commend the Community more and more to public opinion, I think the role of the Council of Ministers, as the paramount authority on policy making, must be clearly accepted and retained.
  The expansion of which I spoke will indeed present the Commission and the Community with new challenges in, I would have thought, at least three ways;and both reports refer to this. First, the workload itself will naturally increase;secondly, the need to make the best use of staff will become more urgent and, as we heard from my noble friend Lady White, this urgency is being increasingly felt and voiced in Brussels these days. It refers to career structure, to frustration arising from the difficulty of effective interchange of view and the concerting of action, and it is an important aspect of the Spierenburg Report, and almost as much so of the report of the Three Wise Men. Thirdly, the organisation of the Commission will become more difficult as a result of expansion in respect of this thorny problem on the distribution and number of Commissionerships.
  My first comment, therefore, will be on the extremely difficult question of the Commissionerships and, related to it, of the Directorates General—what is called in the reports, "the imbalance of portfolios". By "portfolio "is meant an area of departmental activity, and we in this country would probably use the word "department". This problem will certainly not become smaller as membership expands. The Spierenburg Report proposes that the number of vertical, that is departmental, Commissionerships should be increased to eight, plus, of course, the Presidency and the single Vice-Presidency. That is essentially 10;and suggests they are looking to the
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  possibility of giving one Commissioner-ship, in one way or another or of one sort or another, to each of the Member States.
  Similarly, as the expansion proceeds to 12 Member States, so it is more than the implication of both reports that the number of commissionerships, inclusive again of the Presidency and the single Vice-Presidency, which is proposed, will be 12. We all know what the pressures of nationalism can be but I think that, while a readjustment of administrative areas is from time to time necessary and beneficial, nevertheless the operation must be carried on for the right reasons;that is, improved administrative and executive efficiency. But one wonders sometimes whether the proposals of either report in regard to the Commissionerships are based on the right reasons or whether they are still wedded to the assumption that everyone must have a prize and that if at all possible each country shall boast a commissionership, even if no country may boast two any more.
  I am sure that in a Community of nation-States, which is what we have and what we are likely to have for some considerable time, the political direction of the Commission's work must rest in the Council of Ministers on the principle of "one country, one Member". No matter how many Members there may prove to be in five, 10 or 15 years, it is perfectly possible to give them all an equal voice in the political gathering, in the Council of Ministers. The principle fits the purpose and that surely defers sufficiently and effectively to both national pride and national interest, and at the appropriate level.
  But is it necessary to apply the same procedure to the fields of administrative and executive action? That is, after all, what the Commissionerships are about. There are, of course, persistent attempts to make them into quasi-ministerial functions, but I do not think that is part of our purpose in the Community. There would be confusion and an absence of hierarchical clarity—an absence of the chain of authority without which a mature democracy like ours and that of others will be lost for ever in Europe. Possibly, too, Europe will be lost with it, because there is not this emergence of clarity of the chain of authority based on the vital

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  distinction between ministerial and administrative functions. To put it in another way, while the principle of automatic unit representation in the Council is politically appropriate, and it works, give or take some argument about the majority rule question, which is negotiable—it has proved to be negotiable and has been amended and there is no reason why there should not be more talk about it and an expansion of the toleration or liberalisation we have already achieved—does it apply to appointments to administrative posts?
  Once more I agree that the pressures of nationalism and national interest are very great indeed, but surely the Council is the proper and adequate response to them. Can we get the best administrative and executive officers, including the Commissioners themselves and the Directors-General, on such a basis? I think you can get the right Ministers by political criteria, but there is very grave danger when you appoint executives on political criteria. That seems to me to be a dichotomy of movement from the very beginning of the Community.
  The report itself confirms to some extent what I have just said, at least in relation to the staff. I have no time to quote from paragraph 64 of the Spierenburg Report, but I do commend it to your Lordships because it says there that the staff—presumably everybody below the levels I have just described—should of course be recruited on a broad geographical basis of balance, but that this should not be the finally deciding principle. I think that the same view should be taken of all appointments, from the very top downwards. It would enable the Community to recruit across the board for these vital administrative and executive functions, without constantly having a quick think about, "What will happen if we appoint him and do not appoint anybody from that country? "This has no place in administration. It has a place in political guidance, but not in administrative and executive appointments.
  I stop at that point to ask: are the two reports on this question of the organisation of the Commissionerships in danger of tying the Community up in a too rigid way, looking to the future? I think it is paragraph 46 which states that the arrangement which they propose first as to 10 and
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  then, presumably, as to a maximum of 12 "must be permanent". I believe that those are the words used. What happens if the Community, as so very many of us hope will happen, expands further northward, southward and possibly eastward? "Must be permanent "is far too permanent a phrase to use in that connection.
  It may well be, of course, that they have in mind the possibility of an enlarged membership beyond 1983 and beyond the number of 12, but retaining a maximum of 12 portfolios which will then be operated by whatever number of member countries there may be. That is going to be a very difficult business to arrange. Far better, I think, to emphasise the political basis of the Council of Europe and the Parliament and to cut loose and try to achieve a non-political, non-national basis of recruitment for all members of staff from the top downwards.
  I hurry on, because there are a number of noble Lords whom I wish to hear on these questions. I have referred to the question of majority rule, which my noble friend raised. I see no reason why constant discussion as to the amendment of this rule should not proceed, so that in an orderly fashion categories of subjects can be advanced into the majority section, as it were, while care is taken that we do not overdo it too quickly, and arouse profound and proper national apprehensions about the future of interests vital to them.
  A further point which I should like to make is this. I have referred to the need for a definition of the chain of authority, with a clearer picture of how the whole thing works. My noble friend was so right when she said that this must be the most complex governmental organisation ever invented by man. I thought that she put it in that way with a faint implicaton that no woman would ever have invented it. I rather think that she was right. There is a case for being simplistic about the processes of government, so that those who are governed can see how the thing works.
  Part of the reason why democracy in some parts of the world and to some extent in our country, has lost ground in the hearts of the people is that they cannot see a simple logicality, but only the

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  machinery. "Whom do we see? There is nobody when you ring them up. "This is the beginning of it. No system will survive a lack of clarity. Indeed, democracy must proceed by faith, hope and clarity—above all, this new form of democracy in Europe.
  I hope that the very brilliant minds which have contributed so sincerely to both these reports, and which have worked so hard on both of them, will go on to a further examination which is necessary;that is, examination of the hierarchy of power and also the vitality of the institutions. There are a number of institutions in Europe—a number of communities—one of which is the European Court. In any democracy, the validity of its court is fundamental to that democracy's health. I should like to see an examinaton of the working of the several institutions, including, as I have said, the European Court.
  I do not want to raise again the question of British lamb, but it is very important indeed that we in this country and our partners understand that the continued flouting of the very purpose and spirit of the Treaty of Rome and the Community, and, indeed, defiance of its own courts in this instance—and it is not the only instance—must lead to a deterioration in the respect of everybody for that institution and, indeed, for the parent institution itself.
  Like a great many in this House, in the other place and indeed in the country, I have always been a federalist. I know that we are in a substantial minority. I want to see us moving in Europe—or, I hope, in a still wider area—to very close union indeed, primarily for political reasons. The great prize is, of course, stability and peace. To achieve that, it is right that we should fashion economic structures, but the purpose is political. Peace is the great prize. It is a greater prize than the achievement of a high standard of living. Any standard of life is more important than any standard of living.
  The political purpose of peace was really the inducement for many people like me to support what we regarded as somewhat doubtful economic contrivances. But we swallowed our objections, as many noble Lords know, in order to go after the
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  political union. But there is no hope for political union in Europe, or beyond Europe, unless the economics and the governmental arrangements behind it make sense to the people. It is important, therefore, that we should negotiate a better economic system and, also, a firmer system of legal sanctions in Europe. Some things must be negotiated. I freely agree with the Prime Minister and the Foreign Minister that what we contribute is a matter for negotiation. There is no rule, tariff or schedule about that. It is a matter of argument, and I very much hope that we will carry our partners with us. But other matters are for legal rulings and legal injunctions, which are not only laid down but obeyed. Otherwise, there is no real future for the Community.
  I was glad that my noble friend Lord Gladwyn mentioned what to some people may be a minor problem;namely, languages—the burden of babble which threatens to clog up the channels of communication and negotiation. We have at the moment nine Member States and six languages. Soon we shall have 12, and nine languages. One of the reports tells us that the Commission employs, apart from its research staff, 8,300 people—not excessive, having regard to governmental organisations both nationally and internationally. But the extraordinary fact is that fully 40 per cent. of that 8,300, working in Brussels, is engaged directly or indirectly on linguistic activity—essential, of course. I spoke of having clarity, and language should be a means of clarity. But in the further examination of the various institutions and of their unity, I think there should be room for a special look at this question of language.
  Language, of course, is sensitive. No one knows that better than 1, and my noble friend. And perhaps it would come better from a Welsh speaking Welshman, who is at the moment speaking a language which is not entirely native to him, to make the suggestion that the people of Europe, who have magnificent languages and literatures, should agree that for the purpose of the governmental business of Europe they should choose one, possibly two, perhaps three languages so that the task of translation and of negotiating translation is made easier. How often have I spent hours negotiating the translation into some other language of a document which had been agreed, say,

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  in English or perhaps in French! It is going to be extremely difficult, but I think it is worth while starting to get our European partners thinking along these lines. It would make a certain contribution to the effectiveness and clarity of which I have spoken.
  I join with my noble friend Lord Gladwyn and my noble friend Lady White in thanking those who arc responsible for these two reports for their work. I would also suggest that we should not relinquish these two teams too soon but should ask either one or possibly both of them to look a bit further, and perhaps a little bit deeper, into the implications for the future.
  Lord MORRIS: My Lords, before the noble Lord sits down may I ask him, with respect, whether he has any sympathy for the device which they enjoy at the Council of Europe, in which there are 21 nation-States but only two official languages;namely, English and French? Bearing in mind that the Council of Europe has been in existence—and highly succesfully—since 1949, does he not think that due consideration should be given to this particular point by the European Economic Community?
  Lord GORONWY-ROBERTS: My Lords, the noble Lord has quoted what was on the tip of my tongue to quote, but one does not want to put one organisation against another. However, it is perfectly true. Many members in the middle echelons of the Commission, I am sure, because I know a few who have said this to me point to that example. It works extremely well. Those of us who deal with documentation either in Government or in Opposition know that it works. Indeed, with a few more languages—I believe four—the United Nations Organisation has shown that it can get along with fewer than nine. I am most grateful to the noble Lord.
  7.15 p.m.
  Lord CAMPBELL of CROY: My Lords, many subjects are discussed in the two reports which we are considering today and the noble Baroness, Lady White, has with clarity extracted from the reports the most important points from what are long documents. The House is indebted to her.
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  I will concentrate on a few of the principal points concerning the EEC Commission, after a word or two of comment on the Council of Ministers. This will supplement the subjects which have been raised by previous speakers. The noble Lord, Lord Gladwyn, has raised interesting matters on other subjects. On the one subject upon which I shall be overlapping with him, I agree wholeheartedly with him on the future size of the Commission.
  On the Council of Ministers, which of course is dealt with in the report of the Three Wise Men, I think the suggestion that there should be less separation of the Councils working on different subjects is one that should be seriously considered by Governments. For example, the Agriculture Ministers hold their meetings, apparently quite separately, and without co-ordination with Ministers of Finance. There are other examples. I give that example because those who participated in one way or another in our domestic price reviews of the kind which we used to have before we became members of the EEC will remember that the Chancellors of the Exchequer had just as much say (if not more) about what was done as the Agriculture Ministers. This is one of the troubles which the EEC has been running into.
  Another recommendation is that there should be more delegation of activity from the Council elsewhere. I would support that recommendation and suggest that more could be delegated to the permanent representatives, to Coreper. That course is the one which is most likely to contribute to improvement. When say "the permanent representatives "of countries, under their supervision a number of technical subjects could be dealt with. This would mean that more of the important political issues could be handled by the Council of Ministers. They would be dealing with them and would be less bogged down with other matters.
  Before coming to the Commission, I would draw attention to the recommendations of the Three Wise Men, that the Commission's performance would benefit if there were more general guidance and outline planning of subjects to be tackled over future periods—indicating priorities, if possible—from the European Council and from the Council of Foreign Ministers. Such authoritative direction

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  certainly would help the Commission in planning and organising its activities.
  The Committee, chaired by Ambassador Spierenburg, which submitted the report on the EEC Commission only, has made some valuable recommendations. The principal ones were endorsed by the Three Wise Men in their report which was published a few weeks later. I should like to draw attention to the criticism which the Spierenburg Report makes of the Commission. It is summarised in paragraph 16 of the report where they say that they found a certain lack of cohesion in the College of Commissioners, an imbalance between portfolios, insufficient co-ordination among senior officials, a maldistribution of staff between departments and shortcomings in the career structure of the civil servants of the Commission. That is a summary and it sounds highly critical. The rest of the report indicates that they do not recommend drastic changes in the structure, but they are blunt in that criticism.
  Perhaps the most important recommendation, and at the same time the most difficult one to carry out, is the one which has already been raised about reducing the number of commissioners. This requires a concession to be made by the United Kingdom, France, Germany and Italy because the obvious way of doing it would be for the countries which have two commissioners at present—the larger countries—to dispense with one, otherwise when the three applicant nations join, as is expected during the next five years, there will be 16 or indeed 17 commissioners. Seventeen are expected because at the present time it is anticipated that Spain would have two. The Spierenburg Report suggests that from 1st January—in less than 10 months' time, when Greece is due to join—there should be 12 members of the Commission, and the four Members of the Community who now have two commissioners should have only one. This is the most urgent of the recommendations because the most practical time to make the change will be on 1st January when the new Commission is appointed for four years and when Greece joins the Community.
  It is of course linked to portfolios, as the noble Lord, Lord Goronwy-Roberts, pointed out. It is linked to the division
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  of subjects. If there are to be 16 or 17 commissioners in the future the Member countries would be artificially separating subjects or searching for additional ones and looking for extra activities for the commissioners. I agree with what has been said earlier, that no doubt activity could be found for the commissioners, in accordance with Parkinson's Law hut, it is inimical to good co-ordination in the departments of the Commission—an area in which both reports state that improvement is required. In the event some of the commissioners would probably have to double up, one acting as a deputy for another in handling a portfolio. To manufacture four additional portfolios simply to reflect the size and prestige of the larger countries would be a formula for inefficiency. So if in practice there is to be a "second eleven of commissioners then why not dispense with the "second eleven ", as proposed in both reports?
  The internal weaknesses which are described in the reports and which I summarised just now will not he put right if the Commission itself is top-heavy and inefficient in the arrangements at commissioner level, patently pandering to certain national claims. The commissioners are not representatives. During their four years they serve the EEC as a whole and there is no doubt that their allegiance is to the best interests of the EEC. Hitherto the record in this respect has been a reassuring one. So I urge the British Government to make a supreme effort to persuade the other countries concerned—especially France and Italy—to agree to a reduction in the numbers of the Commission in future.
  The noble Lord, Lord Goronwy-Roberts, went further, following up the point I made about the commissioners not being representatives of their countries but being international while they are doing the job. I agree with him and I hope that in days to come a country would be happy not to have a commissioner of their own nationality at all. But I think that is in the future, and I would suggest that for the moment we must take this one step at a time. Clearly if one is going to make progress in this direction, with good organisation, the first step is that the second commissioners should be dropped.
  It is not a surprise, when we come to the shortcomings reported in the Spierenburg

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  Report of the Commission, to read that the workload is unevenly spread. Nor is it news to some of us that the initiation of schemes, draft directives and regulations is somewhat haphazard. We have been aware of some proposals from the Commission which did not appear necessary or of value to Members or to the Community as a whole. Much time and energy have been expended on such schemes of harmonisation where there was no reason to change a system which was already operating successfully and in harmony and was not in need of confusing or disruptive changes.
  To improve the internal working I support the suggestion that more must be expected of the President of the Commission. It does not seem that any change in the Treaty of Rome is required for this. One of the recommendations which has been mentioned is that there should he a single vice-president to assist him in these particular functions. Together they would promote internal co-ordination and better distribution of work.
  It has been suggested that in future the President should be appointed six months before what was the normal time in the past. Whether or not that finds favour, the proposal that he should be more closely involved in choosing the rest of the team of commissioners has much to commend it. After all, he has to combine the qualities of a chief executive and the conductor of an orchestra and he ought to be given the chance to choose his team and then the authority to improve the efficiency of the Commission as a whole. I believe that improvement in the organisation and methods of working will best be carried out by the Commission itself and not by some outside body. Of course, the Commission can call in consultants, and indeed that is really what it has done in commissioning the Spierenburg Report. I believe that the most effective improvements will be made if the Commission can do the job itself. So that means that this is a task which should be given to the new President when he starts in January 1981 and he must have the necessary authority and support. However, this is not a blank cheque for increasing staff and I agree with the reports that there must be a safeguard against expanding bureaucracy, and that where that is proposed, then it must be considered from outside the Commission.
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  There is one last point I should like to make, arising from the language point which has been raised by the two previous speakers. It has been pointed out that 40 per cent. of the staff of the Commission are involved, directly or indirectly, in language work. When the enlargement is completed there will be three more new languages. There must be some rationalisation and I support those proposals, but I should like to put in a word of caution. My noble friend Lord Morris mentioned the similar situation of the Council of Europe but I think there is a difference because the EEC has to consider, amend, approve, publish and then apply direct, regulations in the Member countries and a regulation which has to apply as law in one of the Member countries must be in the language of that country. It must also be expertly drafted. I will not go into the work of the Council of Europe. It has drawn up various declarations and international documents, but I do not think it has the same problem of having to produce documents which have direct legal application in the Member countries. So I think there is no short cut to economy there, but it is clearly something that must he looked at very carefully.
  Baroness WHITE: My Lords, I am sorry to interrupt the noble Lord, but would he not perhaps agree that the distinction between an official language and a working language is a valid one? We might get by with two or maybe three working languages, but of course the documentation must be in all the official languages.
  Lord CAMPBELL of CROY: My Lords indeed I do, and that of course is the way in which the United Nations operates because there are so many languages there: a number of working languages and a number of official languages: and there have been a number of arguments about that. I sat behind the noble Lord, Lord Gladwyn, 30 years ago in the Security Council when I was a diplomat—we were dealing with Korea in 1950. The problems of language were arising then because there were only about 50 members of the United Nations at that time, whereas my latest count is nearly 160 now. They have been through all this, but again they do not have the problems of legal application in Member countries.

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  My Lords, I was just concluding by saying that I believe the two reports are helpful and can be useful because they are practical. I hope the Government will consider the recommendations in them, not only with care but also with some urgency, because some of them will need to be carried out and agreed this year if they are to be effective when the new Commission is appointed.
  7.30 p.m.
  Lord WOLFENDEN: My Lords, I have very little right to be imposing myself on your Lordships this evening. I am, I think, the newest member of the Select Committee and I think the most recently appointed chairman of a sub-committee. I am, therefore, and I know it, an utter novice. As part of my education or initiation or indoctrination or whatever, I had the privilege and pleasure—and it was, I assure your Lordships, both—of accompanying the noble Baroness, Lady White, on a one-day visit to Brussels just a fortnight ago. It was a very full day, in the course of which we had five conversations with different groups or individuals, and I should like, if your Lordships will allow me, to report very briefly indeed my first virginal impressions. Without exception of any kind, all those whom we saw were friendly, welcoming and forthcoming, and they ranged across the board from a vice-president and other high officials of the Commission to a couple of our own United Kingdom representatives. Nowhere was there any sign of holding hack or keeping us at a distance. Further, without exception of any kind, they struck me, at least, as being, all of them in their various ways, able, hardworking, thoughtful and anxious to make the whole thing work. So far as the personnel of the Commission are concerned my impression was wholly favourable.
  What was not so favourable, my Lords, was my first naive impression of the machine which these first-rate people have to work. Put as briefly as possible, the input of high-powered time and thought is considerably greater than the outcome. Put another way, the system of checks and balances, which would delight the heart of a Bagehot, seems to me to he in such beautiful equilibrium that momentum, impetus, results, if so crude a word may be allowed, tend to get lost on the
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  way. I do not mean that the Brussels staff are idle, far from it. There is an endless flow of documents, briefs, appreciations, drafts. We all know how many draft directives reach our own long-suffering, sub-committees in the course of a year. But what, in the end, does it all add up to or result in?
  I must not attribute opinions to those who talked to us, but my own impression was that many of them felt frustrated and even discouraged—" disillusioned "I think would be too strong a word—by their inability to make the impact, "punch "is perhaps too crude a word, that they would wish to make within their own various spheres of activity, and that is sad. This sort of thing is, if I understand them, the kind of thing the two reports we are considering this evening would wish to cure or at least to alleviate. These reports come from people deeply experienced in the ways of Brussels and familiar with all the procedures of its constituent instruments and elements. My own knowledge is by contrast ludicrously inexpert.
  I can only say that, on the basis of this one-day visit, I would plead with Her Majesty's Government to do everything in their power to support and reinforce the positive, constructive, productive measures which these reports propose. I would make that plea, first, for the sake of an appropriately forceful impact by the Communities on the problems our world faces;secondly, for the sake of the men and women who are working so hard to bring this about: and even, thirdly, for the sake of our own Select Committee and its subcommittees so that we may all make our modest contributions to the final outcome.
  7.35 p.m.
  Lord ARDWICK: My Lords. I am sorry that this debate is taking place on a Thursday night, when it is not very usual for us to have a full House here. should have liked to see a bigger attendance. Although we have got three of the old guard from Brussels here, it would have been nice if some of the new Members of the European Parliament who are also Members of this House had been able to come to this debate tonight.
  I hope. my Lords, that this report will be studied and discussed by all Members of this House, but particularly by those Members who opted for British membership

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  of the Community some years ago but have since become disillusioned because the results, far from living up to the expectations of the most ardent Europhiles, have been bitterly disappointing. The situation, as the disillusioned see it, is that we are compelled to bear an unfair share of the costs of running the Community, and we are not able to enjoy full industrial reward as predicted, simply because businessmen across the Channel find it easier to sell their goods to us than we do to sell our goods to them.
  I share that disappointment. I share the resentment at the gross unfairness which the financial arrangements have proved unexpectedly to have. But I do not share the disillusionment and despair. I still have faith that the European experiment will succeed, and I still hold the belief that it must succeed.
  The four years that I spent in the European Parliament, four years discussing the problems of Europe and the world with men and women of eight other nations, gave me a rather different perspective from that of my colleagues who were pro-European but who did not share that experience. As I go around today I meet a good deal of rather small-minded nationalism. I find one-time Europeans, former Europeanists, who fulminate about fish or utter lamentations about lamb or get apoplectic at the thought of Bolsheviks gorging themselves on subsidised Community butter. These complaints are often just. But the critics of these inequities give them, I think, far too much importance, and fail to give the thought that is needed to the much deeper problems which afflict Europe and indeed the Western World today.
  I would hope, my Lords, that the disillusioned will study particularly the opening and closing pages of this report. It is not an onerous task, for it is written with grace and clarity, and the recommendations of the Three Wise Men are indeed full of conspicuous wisdom. As they point out, their brief was a narrow one;to consider adjustments to the machinery and procedures of the Community institutions. But they have in their wisdom permitted themselves some wider reflections. And they say at the outset that the concern which is felt about he slowness of progress towards the
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  European goal and about the failures and inadequacies of the Community performance is because they are not due, as the noble Baroness pointed out, to mechanical or procedural faults but to deeper causes. All the Community can do by correcting the mechanics is to remove one gratuitous obstacle to progress. That obstacle is perhaps bigger than it appears. To make progress the Community must command goodwill among the citizens and some enthusiasm among the leaders of public opinion, and it cannot do that if people suspect bureacratic ineptitude, or are aware of a Commission which lacks the collegiate spirit, a Council of Ministers to which senior Ministers do not always turn up, or a European Council of Heads of State and Government which issues perfunctory, hasty, rather ill-written communiques. I think that perceived inefficiency can easily sap political will.
  The analysis that the committee of three make of the shortcomings of the institutions, and the remedies they propose, strike me as accurate and sensible when they are dealing with things that I was able to observe from my ringside seat in Brussels, Strasbourg and Luxembourg. Perhaps they do not give enough credit to members of the Commission for their long and frequent appearances before the Parliament's committees.
  In the Economic Committee, for example, I found Messrs. Ortoli and Davignan unsparing of their time and even of their patience with Members who had clearly not read their papers, and perhaps with the majority of us who were never able to penetrate fully the mysteries of the EMS. But, for most of us, I think, the body of the report serves mainly to show how difficult it is to run this kind of organisation with Ministers from nine countries, heavily burdened by their duties in the departments and parliaments of their national States and often preoccupied by a national, political or economic crisis.
  The report does a useful service when, in dealing with the state of the Community, it presents the positive side. "A major new entity "they remind us "has taken its place on the world negotiating scene". Indeed, outside the confines of a national State no comparable attempt has been made to establish a homogeneous economic area with uniform conditions for competition.

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  With all its imperfections the Community has become one of the most important single trading blocs in the world. I do not think that we have to resent the mass of paper work that the achievements of such a trading bloc must generate.
  Perhaps the most important boast the Community could make in the 1970s was that it survived. It was plunged into a world economic crisis of great severity before it had evolved a common economic or monetary system on which to base a united European front. And at that moment it had the additional task of absorbing three new Member States. Of course, in the 1960s, when Europe was being built, there was sustained economic growth and stable money. In those days Governments were able to make some sacrifice for the common good and Governments were strong because their countries were doing pretty well. But, in the 1970s slow growth and monetary disturbance have made the Member States defensive and reluctant to experiment. Governments have often been insecure, based on fragile coalitions with very small majorities and very often lacking in authority. It is not remarkable that the tempo of the European construction has slowed down;rather it is a wonder that the Nine have stayed together and resisted the temptation to adopt any really significant protectionism.
  But what about the future? The task of the European Council is now, as this Committee sees it, to lay down the priorities for advance. I cannot see why there is so much objection to that;I cannot see from where else the initiative could come. The Commission does not have the type of status today to do it and the Council is, after all, a rather ragged body. What the Commission could do, would be to inspire the European Council with some rough outline of the sensible priorities that the Community could decide to follow in the forthcoming years.
  Of course, Britain had the ill luck to join the Community in 1973, the very year, as the committee points out, which saw the end of a 25-year epoch of growth and relative monetary stability. The committee believe that in the foreseeable future we shall not see a return of those conditions. Even the hopes which I remember were engendered in 1978 by
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  M. Ortoli with his plan for concerted growth, investment in new industries and the reconstruction of the old ones, can no longer be sustained, at least not for the short term. As the committee see it, several years must pass before inflationary expectations are effectively discouraged, and not until price rises slow down considerably is there real hope of substantially speeding up economic growth in Europe.
  There is also the terrible question of energy. Last year we experienced the second oil crisis in a decade and that is not the last crisis of its kind that we shall see, given the precarious balance of supply and demand. So, the Community must face more difficult years, particularly as an increasing work population struggles for jobs in a period of low growth. It will be a period of severe competition among exporters and the Community will face the danger of protectionist measures—measures which, of course, could threaten its very basis. What the Community does about its relations with developing countries striving to be industrial would be another important question. What will the Community do about the problems of adjustment as these Mediterranean countries are recruited? And what of the continuing problem of the dollar?
  So, as far as the Three Wise Men—and not they alone—see it, the Community's first problem will be to keep what, we learned when we were in Europe to call the acquis—to keep its heritage, to keep its achievement. But, keeping its achievement does not mean that the CAP, for example, is not in dire need of reform. That must be carried out. Most of the great problems that the European Community will have to face are world problems and they will require negotiation at world level or with other great economic units throughout the world. So, the continued unity of the Community will be essential—this is the message of the Three Wise Men—and nothing will be more essential than political co-operation, for the economic problems are inseparable from the political ones. I think that in a way the Three Wise Men have shown infinite wisdom not by following M. Tindemans, who presented not what was possible but what he wanted and hoped to have but by presenting what is possible —the way the Community can go forward. They see union not as a federal goal, nor

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  as a nothing, as some people imagine union to be, but as a process of working together whenever it is possible to work together and that is particularly true of political co-operation. The current crisis over Afghanistan reveals the need for Europe, whenever it can, to speak with one firm voice and to be, as M. Genscher put it, not standing between the United States and the Soviet Union, but standing side by side with the United States.
  7.49 p.m.
  The Earl of BESSBOROUGH: My Lords, I am very happy to follow my colleague the noble Lord, Lord Ardwick. He was a very good companion during the four years that we served together in the European Parliament. I should like to say that I think he is the only Member of your Lordships' House who can write verse in French in the style of almost any famous French poet. That relieved the situation after perhaps a modest dinner in Brussels. They were arduous years, but he made them a little less arduous.
  I should like, too, to thank the noble Baroness, Lady White, for having introduced this debate. We are all so very happy that she should be our new chairman. I congratulate her on the appointment. It is an excellent appointment and it is a very good idea to have in some "new boys ", like my old friend the noble Lord, Lord Wolfenden, to give a new picture because first impressions are so often right. I very much agreed with what he said about the frustration that exists among officials, whether national or international, and also even among Ministers, which I think is distressing, but which I noticed very clearly in the relations that I have had with some of them and which I still have with them.
  In view of the time, I should like to confine my brief remarks to the importance of strengthening political co-operation. Therefore, these remarks arise more from the report of the Three Wise Men than from that of Ambassador Dirk Spierenburg, who confined himself to the Commission. With others, I think that both reports are excellent and most useful, and I hope that the Government will look at them with very great care. I very much agree with what the noble Lord, Lord Gladwyn, said about the admirable recommendations of Prime Minister
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  Tindemans and how sad it is that these have not been realised.
  However, the importance of strengthening political co-operation is stated very clearly on page 106 of the Wise Men's report, where they say that all the great problems facing a united Europe today—and the noble Lord, Lord Ardwick, mentioned this—whether it is monetary stability, energy supplies or the new international division of labour, are world problems which frequently require negotiations and agreements at world level, or with particular economic units outside the Community—United States, Japan, EFTA, Eastern Asia, the oil producers and the non-oil producing developing countries. In these cases I am glad to see that the Wise Men consider it desirable that the Community and the Nine should, in these various relationships, act as a united body, and I assume, of course, that that applies in such dire situations as the invasion of Afghanistan.
  The question is: how should, or can, the elaborate machinery for the Foreign Ministers acting in political co-operation—perhaps outside the Council and the Treaties—be effectively strengthened. That is the main question which I put to my noble friend this evening who will answer on behalf of my noble friend the Foreign Secretary. How can this machinery be effectively strengthened?
  According to Mr. Arrigo Levi's article published in The Times on 28th February, the Foreign Secretary is reported to have suggested a significant improvement in this mechanism in a case of emergency, and that COREU—that is to say, the assistants of the political directors in the Member States who are described as "European correspondents "and who are in constant direct communication with each other, but, not through embassies—has been asked to produce a report on the matter. I hope that that is true, and that it produces some useful suggestions.
  I recognise that from the start political co-operation was founded on consensus, which means that each one of the Nine maintains a veto power. It would be most interesting if my noble friend was able to elaborate or comment on that article by Mr. Levi, especially when he speaks of Britain now setting up what is described as some "unclenching

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  mechanism" which would automatically lead to a meeting of the Nine in a crisis, so that they might produce a common reaction.
  I was glad to read Mr. Edmund Dell's answer to a question which I put to him in the Select Committee—it is page 30 of the Minutes of Evidence—where he agreed that the political co-operation machinery ought to be strengthened. It will be seen, too, that Mr. Hannay of the Foreign and Commonwealth Office agreed that there was a feeling that at least some modest improvements ought to be made to ensure that the conclusions of the European Council should be rapidly known and worked on. But when I mentioned to Mr. Dell the idea of establishing a permanent, international political secretariat—an idea which the noble Lord, Lord Gladwyn, and I know was much talked about some years ago—Mr. Dell said that the word "secretariat "had, for certain historical reasons, got a bad name and he did not, therefore, think it desirable to use that expression. But he did think that if political co-operation was to be developed more fully, some machinery would be necessary to do it—more effective machinery than can be provided by the individual Member State during its six months' tenure of the presidency.
  I believe that I may be right in saying that some strengthening has come about by allowing members of the secretariats of the previous and following Member States which held and will hold the presidency, to overlap to a certain extent. I was interested to learn that the other day, and it is certainly a step in the right direction. However, I should be grateful if my noble friend could comment on this whole question.
  I think that it is excellent that the Nine Foreign Ministers should meet formally in political co-operation four times a year;that is to say, twice in every presidency. It is also excellent that a political committee exists which is composed of the "political directors "of the Nine or their equivalents. I am glad, too, to learn that a considerable number of ad hoc working groups on specific subjects outside the Treaties have been established, and what an important role the European
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  correspondents, as they are called, themselves play.
  However, all this machinery seems to me to be somewhat heavy and unwieldy. As the noble Baroness, Lady White, indicated in perhaps a somewhat different context, as soon as the Nine seem to get together, they must have a great deal of very heavy machinery around them, which does not always advance decisions. I hope that my noble friend the Foreign Secretary is successful in persuading his eight colleagues that the mechanism needs improving, especially in cases of dire emergency.
  I recognise, of course, that whatever the machinery, differences of national pride, even on questions in which the common interest is obvious, can be very deep-seated, and that whereas the adoption of a common attitude may often be achieved, agreement on common action is a very different matter. However, I am glad to learn that even if political cooperation is still in a fairly primitive stage, none the less it seems to have been considerably successful in the General Assembly of the United Nations, where a high percentage of issues have achieved common votes.
  Taking into account the somewhat unwieldy existing machinery, it is certainly a great achievement that the Nine have been able to stand together so continuously on so many issues. However, I hope that my noble friend will say that he believes that, specifically for political co-operation, the presidency of the Council should be strengthened by the establishment of a permanent international political staff which would be able to act more effectively than would the secretariat of the Council in Brussels, whose activities are technically circumscribed by the treaties, or the secretariats of individual Member States which change with the six-month presidency, even if—as I say—some beneficial, if minimal, secretarial overlapping has now been decided upon.
  All this may well involve formal institutional development, and I believe that only thus will a common foreign policy over a larger number of issues be achieved. It may well be that only a major world crisis will compel the Nine—and soon the Twelve—to consolidate more effectively in this way. However, I should hope that the machinery might

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  be improved before we have to face another world crisis.
  I was very interested to re-read an article on strengthening the presidency which appeared in the New Europe in 1976. It was written by a group of European officials of different nationalities and emphasised the fact that it is the president-in-office of the Council who is at any given time the single most important and influential person in the Community and who wields, in effect, more responsibility for the running of the Community on a day-to-day basis than anyone else, even the president of the Commission, or the president of the Parliament—whose influence I think is increasing. I might note here in regard to the Parliament that it never did, nor does it now, confine itself to dealing with questions arising purely from the treaties. As the noble Lord, Lord Gladwyn, knows, they concern themselves with all matters of foreign and defence policy.
  I was looking back at the Fouchet proposals, initiated by the French Government in 1961 and 1962. They envisaged the creation of a European political union. I was glad to hear the noble Lord, Lord Goronwy-Roberts, speak about this and speak about this ultimate aim in sympathetic terms. Those Fouchet proposals envisaged the creation of this European political union which would be serviced by a political secretariat. However, as the New Europe article points out, the creation of a political secretariat in the near future seems no more likely now perhaps than in the 1960s in view of the wrangling over its site, competences, and institutional role. But, in my view, possibly a small secretariat, a kind of "think-tank ", could he created—and, speaking entirely personally, I wonder why this should not be in Paris which, especially in view of enlargement, would be geographically an appropriate site. This "think-tank "would provide the presidency with policy input studies and prepare background papers for following presidencies.
  I was also interested to note the recent proposal of the German Minister of State for ForeignAffairs, Dr. von Dohnanyi. He suggested that the role—this is just a suggestion on which I should be interested to hear my noble friend's comments;I am not certain whether it is a good
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  suggestion or not—of the Secretary General of the Council of Ministers might be upgraded and that he might take the chair at some meetings of the Council, in the same way as the Secretary General of NATO does. As I say, I should be glad to know the views of my noble friend on these various proposals. I hope that the Government will press hard for an improvement in present procedures.
  Just one word about languages. I agreed very much with what my noble friend Lord Campbell of Croy said on this. It is going to be difficult to reduce the number of languages in the European Parliament, for example, because that is a directly elected body. Even with the delegated body, the indirectly elected body, of which some of us were members, it was noticeable that if a Danish farmer has been delegated by the Danish Parliament to go to the European Parliament, he might not necessarily speak any other language, and so Danish was always insisted on. I remember many occasions when the Danes walked out if there was not a Danish interpreter there.
  It is going to be extremely difficult with a directly elected Parliament, with people who have not been brought up in the ambience of the Foreign and Commonwealth Office or as delegates to the United Nations. They are different kinds of people. But when they are directly elected I think they more often like to speak their own language. That is all I have to say, except again to congratulate the authors of the report and to hope that the Government will take them seriously.
  8.5 p.m.
  Lord GREENHILL of HARROW: My Lords, like the noble Lord, Lord Wolfenden, I am a new member of the noble Baroness's committee, and I look forward to working under her chairmanship. I enjoyed working with her in the Foreign Office a few years ago, and I am sure this pleasure will be continued. I am not going to detain your Lordships more than a few moments. In my opinion the report of the Three Wise Men and the Spierenburg Report reveal a disturbing and disappointing state of affairs. It is no good denying that. A state of affairs in great contrast to the expectations which were raised at the time of the

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  referendum. The fact that both reports were so well written softened the blow but did not entirely eliminate it.
  I asked a friend of mine who was familiar with the workings of Brussels—not himself a strong European—what he thought about the recommendations of the reports. He replied that in his view they had merely tried to part the hair on the head of the corpse. That of course is a harsh judgment, but there is an element of truth in it. Multilateral diplomacy, even among friends, is a difficult job. If the impetus and political will is lacking, as it now is in Brussels, no amount of tinkering with procedures, however sensible, is going to revive the corpse. Not only is multilateral diplomacy difficult but international bureaucracies, like the Commission's staff, have never in my experience been other than hard to organise and hard to manage. The staff of the United Nations is the supreme example, as the noble Lords, Lord Gladwyn and Lord Campbell of Croy, know. Promotion often goes by nationality rather than by merit, and there is an endless attempt to manipulate the service on the basis of national loyalties. Things are of course much better in Brussels than they are in New York, but there are many of the same inherent difficulties, and we must take realistic account of them.
  I understand that there is every indication that the Commission intends to take the Spierenburg Report seriously. It is in my view Her Majesty's Government's duty to encourage them to put their house in order, especially with the complicating prospects of enlargement and the emergence of the Parliament as a stronger factor. Clearly one of the greatest weaknesses is the lack of co-ordination, and the reports' proposals for improving this need sympathetic endorsement. It would involve a special vice-president with a co-ordinating responsibility. That seems right to me.
  I do not feel able to express a view on some of the more detailed recommendations of the Spierenburg Report, but on the question of the commissioners I have no doubt in my own mind that a reduction would be desirable. But I do not believe that it is politically possible to make any significant reduction in the numbers when the Commission, or when the Community,
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  is enlarged. I have been disturbed by the reports of hostility between the Commission and Parliament. Speaking to some foreign members of the European Parliament I have noticed their anxiety and willingness to enter into conflict with the Commission. I hope that our own Members of the European Parliament will use their influence to try to prevent this wrangle developing to the detriment of the progress of the whole Community.
  I revert briefly to a few of the other observations of the Three Wise Men. As has been pointed out, their most striking suggestion is that the European Council should set the course for the Community by stating clearly, annually I believe, priorities and objectives. This has of course a compelling logic, but at the moment I believe it is beyond the wit of the members of the council to do so. As an experiment, I tried to draft such a document myself and found it was either immediately unacceptable politically or what I believe the present Prime Minister would call "wet". Mr. Dell, in the evidence he gave, was more optimistic, but I do not think his optimism is sufficiently justified.
  As has been rightly pointed out, the Council of Ministers is the key body in the Community set-up and the report's proposals for the improvement of it are very straightforward. They amount really to urging people to accept responsibility at the lowest practical level, thereby keeping from the council itself the vast volume of business which presently overwhelms it. This is a very elementary system of administration which is as valuable in business as it is in the Civil Service, and if all the members of the organisations in Brussels just observed the simple rule of taking responsibility when they could, a great leap forward would have been made.
  There is an interesting section in the report on the responsibility of national capitals. Do they prepare adequately for the council meetings, are Ministers properly briefed, are national departments adequately co-ordinated? From all the inquiries I have made, I believe our people in Whitehall come out very well in this, and that is something to be applauded.
  The Three Wise Men attempt at the end of their report to comment on the

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  outlook from 1980 to 1985. They are not encouraging. Inter alia, they emphasise strongly the need for a Community energy policy. We know how difficult this is, and I believe we shall be debating it shortly in this House. There is one thing however, that we could do now, and I cannot understand why we do not proceed to do it at once, and that is to increase the rate of exploration in the North Sea. I emphasise "exploration", not necessarily development. Let us first find out what our potential resources are, and then we can see if they can be fitted into the very difficult equation which is manifestly coming up in Brussels about an energy policy.
  8.13 p.m.
  Lord TREFGARNE: My Lords, I welcome the opportunity to debate these two reports, and once again your Lordships are in debt to the Select Committee on the European Communities, under the chairmanship of the noble Baroness, for undertaking this study. The committee has produced a number of notable reports in the past. The Government will want to take account of views expressed in this debate and of any conclusions that the Select Committee may reach on these matters.
  As several noble Lords' have observed, there is an important distinction between the two reports we are now considering. The report of the Wise Men, which originated in an initiative by the French President, who was concerned that the Community should be properly equipped to meet the challenge of enlargement, was commissioned by the European Council in December 1978. Its terms of reference embraced all the institutions of the Community. The European Council was looking for practical ways of improving the operation of the Community rather than wholesale reform;Treaty amendment was ruled out.
  The origins of the Spierenburg Report are rather different. Following their informal meeting at Comblain-la-Tour in September 1978, the Commission invited a group of five independent experts to examine how the Commission's organisation and staff resources could best be adjusted to meet future needs. The Speirenburg Review Body was thus concerned with the internal workings of the
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  Commission rather than with the operation of the Community as a whole. The initiative came from the Commission itself and its recommendations are, therefore, for the Commission alone.
  The Community was fortunate in being able to call on Mr. Barendt Biesheuvel from the Netherlands, Mr. Robert Marjolin from France, and Mr. Edmund Dell from this country, to be the Wise Men. Each member of the committee was of course a most distinguished person in his own right. Their report was submitted to the European Council in November last year. The Commission Review Body was appointed in January 1979 under the chairmanship of Ambassador Spierenburg and, as several noble Lords have mentioned, Mr. Dick Taverne was one of the members. They presented their report to the Commission last September and it was made public at the same time.
  I will deal with each report in turn. The House will wish me to say a word first on the timing of consideration of the Wise Men's Report, which was mentioned by the noble Lord, Lord Goronwy-Roberts. At its meeting in Dublin, the European Council agreed that Foreign Ministers should examine the report with a view to preparing discussion at the next European Council. An informal meeting of Ministers was held at Varese in Italy on 8th February and there may be another informal meeting before the European Council at present planned for the end of March. It seems possible, however—perhaps it is more probable than possible—that substantive decisions may have to wait for the June European Council. I should emphasise here that it will of course be for the members of the European Council to take the final decisions.
  I come to the Government's general approach to the Wise Men's Report. In their introduction the Wise Men expressed the hope that the European Community will be able to deepen and extend cooperation among its members. The Government's wholehearted commitment to the Community means that we share this hope. And it follows from this approach that we should like to see the institutions of the Community working as efficiently as possible. We accept that the Community's shortcomings cannot

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  be rectified by mere improvements to its institutions and machinery. We also believe, however, that there is scope for useful procedural improvements. We believe that the report contains valuable suggestions on which we hope action will be taken. It is important that it should not be allowed to gather dust or get lost in the Brussels machinery, and the same is true of the Spierenburg Report.
  So much for the Government's general approach. As far as the Wise Men's specific proposals are concerned, the Government have not yet reached final conclusions. The vast majority we broadly welcome as being thoroughly practical and workmanlike suggestions. On a few, however, we have some reservations, and I shall come to them shortly. But we certainly have not yet reached the point of finally turning down any of the recommendations. We want to see what our partners think, for example, before coming to any definite conclusion. It may well be possible to resolve some of our doubts in the course of discussion. We shall also want to consider what has been said in your Lordhsips' House this evening and to hear whatever may be said in due course in another place. I am, therefore, not in a position to do more now than to give your Lordships an account of the Government's preliminary views.
  The Wise Men make a number of specific proposals affecting the European Council. For example, they recommend limited agendas, limited attendance, careful preparation and follow up, early circulatiion of documents, and clear presidency responsibility for drafting conclusions. Their two most important proposals are that the Council should, in collaboration with the Commission, adopt a master plan of priorities for the Community as a whole;and that the President of the European Council should appear once every six months before the Parliament so as to achieve a direct dialogue at the highest level.
  It must of course be for the Members of the European Council themselves, in our case of course my right honourable friend the Prime Minister, to make up their minds on how they wish to organise their own meetings and to give effect, if at all, to the recommendations of the Wise Men in this area. The Government
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  certainly agree in general on the advantages of a clear definition of priorities for Community work. But there may be dangers in seeking agreement on too rigid a plan. Equally, if the plan is too flexible, it may be so generalised as to be meaningless.
  The Government also agree on the need to establish a constructive relationship between the Council of Ministers and the European Parliament. The appearance of the President at the Parliament might be one way of furthering that objective. But I cannot anticipate what decision the European Council will take on this question. As far as the Wise Men's procedural recommendations are concerned, many of them are little more than recommendations for the implementation of what has already been agreed in the past.
  The Wise Men have made a number of valuable proposals affecting the Council of Ministers, which they believe produces too few results for too much work. This point has been referred to more than once already this evening. There is obviously much to be said for the clearer definition and the more efficient execution of the responsibilities of the presidency. Much of course depends on the attitude of the presidency itself. Here again, whatever rules are agreed will have little value unless the presidency is in practice guided by them. The Wise Men have drawn attention to the value of the presidency informing the Parliament of its objectives at the beginning of its term of office, and of presenting an "end of term report." This would strengthen the dialogue between the institutions, and act as a useful discipline in the presidency's monitoring of its own progress. The Government see considerable attraction in these proposals.
  On the other hand, we have some reservation about the proposal that the presidency should have discretion to share its burdens with other Member States: for example, the preceding presidency. This, we believe, could lead to confusion, if different Member States were handling overlapping dossiers. We believe that the advantages of unity of control should not lightly be set aside. We certainly do not want to rule the idea out entirely, however. One possibility might be to decide each case on its merits. But we believe that a better way to lighten the President's burden

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  would be to implement another of the Wise Men's proposals;namely, that the resources of the Council secretariat should be more fully and regularly used.
  The Wise Men argue that the Council must be free to concentrate on genuinely political issues. They therefore recommend making wider use of delegation to the Commission, and giving more room for manoeuvre to the Committee of Permanent Representatives—COREPER—and the lower level bodies. The Wise Men's objective is clearly right. It may, however, be difficult to decide on criteria that should govern the delegation of work to the Commission. One possibility would simply be to reach agreement on a case by case basis on issues related to accepted areas of Community activity.
  The Government are also prepared to consider sympathetically the Wise Men's recommendation that more use should be made in practice of majority voting where the Treaty of Rome provides for it, it being understood that this would represent no departure from existing principles and would not affect Member States' ability in the last resort to insist on a decision being reached by unanimity where their own vital interests are concerned. But it could considerably speed and simplify the decision taking process.
  I come now to a proposal made both by the Wise Men and the Commission Review Body. Indeed, it is perhaps the single most important specific proposal to emerge. I refer to the reduction in the size of the Commission to one per Member State. I should like to say a word about the Government's attitude to this recommendation. We recognise the case for one commissioner per Member State on grounds of efficiency. Particularly after enlargement, this change could substantially facilitate the day-to-day work of the Commission. On the other hand, the ability of the larger Member States to appoint two commissioners has enabled the larger countries, ourselves included, to appoint commissioners from different parties—an arrangement which they have found valuable. It is of course also the case that the present arrangement reflects to some extent the relative weight of Members States in the Community. On the other hand, the Treaty of Rome itself guarantees that the members of the Commission shall, in the general interest
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  of the Communities, be completely independent in the performance of their duties. These are the various factors which will determine the Government's final view on this recommendation in due course;but we have not yet come to a decision.
  The Wise Men and the Spierenburg Committee have also made parallel proposals on the appointment of the President of the Commission and other members of the Commission. Both recommend that the President should be named six months before he takes office and should he consulted on the latter's appointment by the Member States. The Wise Men further recommend that the President should have the last word on the allocation of portfolios. This is clearly a sensitive subject. The Government are not likely to have any difficulty with the principle of the early appointment of the President, nor in giving him the right to be consulted over other Commission nominations. But there are clear difficulties for Governments about giving the President the last word over such nominations or in the allocation of portfolios.
  The Wise Men rightly attach importance to relations between the Parliament and the other institutions. So far as relations with the Council are concerned, the Government agree that the Council should take Parliament's resolutions seriously and are ready to play their part in working out practical improvements to tackle the difficulties arising in the implementation of the "conciliation "procedure.
  May I now turn to some of the points specifically put to me this evening. The noble Lord, Lord Goronwy-Roberts, first of all asked about the paramountcy of the Council. If the proposals in the Wise Men's report are adopted, they will make no difference to the institutional balance within the Community. The Council of Ministers will continue to have the last word on all Community legislation, working under the political guidance of the Heads of State or the Heads of Government in the European Council.
  My noble friend Lord Campbell of Croy asked me about the Commission's proposal for harmonisation and some of the difficulties that we have had there. May I say that my right honourable

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  friend the Prime Minister has emphasised that we will support only harmonisation proposals which are really necessary to improve the functioning of the Common Market. Many of the directives which have been implemented under Article 100 have been useful in reducing barriers to trade, and the Government intend to ensure that all future proposals meet this criteria.
  I wish to return now to the speech of the noble Lord, Lord Goronwy-Roberts;and I am sorry that I am taking these points a little out of sequence, but perhaps they are better dealt with this way. The noble Lord made a number of points, and he referred especially and most importantly, to the need for respect particularly for the decisions of the European Court and the other institutions, with particular reference to the vexed sheep meat problem, which has been so long before us.
  It is for the Commission, as guardians of the Treaties, to bring to an end this illegal situation—which is what it is. They obtained the original judgment from the European Court of Justice in September last year. They initiated a second case against French quantitative restrictions on 14th January, and I am glad to see that they have now decided to lay a third case before the court against the levy and licensing system which the French have imposed, and are imposing, at various times;and they—that is the Commission—will apply simultaneously for an interim injunction in both these cases. So your Lordships will appreciate that the Commission is not allowing the grass to grow under its feet.
  Lord GORONWY-ROBERTS: My Lords, will all this get us anywhere? Do we go on having these injunctions, these judgments, with nothing at all, in effect, happening?
  Lord TREFGARNE: My Lords, I cannot hide from your Lordships our regret that, so far, that seems to be the case. However, we have high hopes that the French will comply with the forthcoming judgments when and if we get them, as I believe we shall, and perhaps then this unhappy matter can be brought to a close.
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  My Lords, the noble Lord, Lord Goronwy-Roberts, my noble friend Lord Campbell of Croy, the noble Lord, Lord Gladwyn, and indeed my noble friend Lord Morris raised the question of languages, and I think that at least one other noble Lord did as well. Since Community legislation is directly applicable in Member States, it is inconceivable that each Member State should not be able to read it in the Official Journal in his own language. But, that said, a large part of the financial and administrative burden of the proliferation of languages is incurred by the need for interpretation at meetings—and this point has been made by several noble Lords, including my noble friend Lord Bessborough. We hope it will be possible for pragmatic solutions, already much practised, to be extended.
  I think it was my noble friend Lord Bessborough who raised the remarks of the German junior Foreign Minister about the need for a powerful political Secretary-General (if that is the right word) to the Council of Ministers, who might, for example, take the chair at meetings of the committee of permanent representatives. We have much sympathy with the Wise Men's view that an effective and efficient Council secretariat can play a part in support of the presidency and in the handling of Community business. Strengthening of the role of the Secretary-General could be one way of doing this, and will be one of the considerations we shall take into account in reaching our conclusion.
  Finally, now, the important point raised by my noble friend Lord Bessborough about political co-operation. The esssence of political co-operation is well expressed, I think, in the words of my noble friend the Foreign Secretary,
  " It is better to sing in harmony than in unison".
  Divergence among the Nine is a source of democratic strength, perhaps, though it is often represented as a weakness. My noble friend Lord Bessborough referred to the machinery of political co-operation as elaborate and unwieldy. It is in fact quite simple, and provides a maximum direct contact between Ministers and officials at all levels with a minimum of bureaucracy. On the need for an emergency procedure, referred to by my noble friend, the machinery of political co-operation

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  is certainly under constant review, and, indeed, the invasion of Afghanistan has highlighted the need to look in particular at mechanisms for organising urgent meetings. If political co-operation is to develop further, it will require stronger administrative back-up, and the United Kingdom is therefore prepared to consider anything practical upon which the Nine can agree.
  A system of secondments from past and future presidencies was initiated by the United Kingdom in 1977, and has proved a useful way of providing experienced staff for the presidency. The current system is not too expensive, it has no inordinate international administration, and it provides valuable direct contact at all levels. Furthermore, it provides what is referred to as a renewal of enthusiasm every six months. A new and special secretariat might prove to be very expensive, and might indeed be at risk of losing touch with political opinion within the Nine. But, having said that, we do not wish to be inflexible in these matters, and will keep any sensible proposal under careful consideration.
  May I now say just a few words about the Spierenburg Report. I have already explained that it is for the Commission itself rather than the Council to decide on the handling of this report. I gather that the Commission has already put in considerable work, although they have not yet formally announced any internal reforms, nor made any proposals to the Council concerning those recommendations which would require approval of the budgetary authority. At a Press conference which he gave in October, the President of the Commission, Mr. Jenkins, said that the Commission welcomed the report and had decided to deal urgently with the detailed proposals on staffing changes, which they had already broadly endorsed. They also set in motion a major review of the basic administrative units of the Commission's services, possibly leading to a reduction in their numbers.
  Against this background, it is not for Her Majesty's Government to take any decisions at this stage. We have nevertheless studied the report with great interest, and consider that it is an excellent analysis with a number of very sensible proposals. The Commission has an important role defined under the treaties. It
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  is in the Community's interest, and therefore in our interest, that the Commission should operate as efficiently and effectively as possible. Taken as a whole, the Spierenburg proposals, if adopted, would make a useful contribution to this. We await with interest an indication of what specific action the Commission will take or propose. We have naturally discussed this question informally with the Commission, who are aware of our broad views.
  I have dealt earlier with the question of a reduction in the size of the Commission. Whether or not this is eventually agreed, I think many of the Spierenburg recommendations can stand on their own merits, and would lead to an improvement in the operational effectiveness of the Commission. For example, Spierenburg pointed out the need for greater coordination of policy proposals. This is right. It would be an even more pertinent recommendation if it were decided to retain a large Commission. Increased mobility of staff is another factor which, in our view, will contribute to an improved morale of the personnel and an improved capability for the Commission to respond flexibly to changing policy priorities. Finally, I should like to suggest that the Spierenburg recommendations for reducing the number of Directorates General and rejuggling the composition of portfolios is not one which is ineluctably dependent on reducing the size of the Commission itself. After 20 years of Community activity, it is natural that the focus of policy priorities will have shifted, and some recognition that the structure of the organisation should follow these changes seems to me both self-evident and necessary.
  In conclusion, I should like to leave your Lordships with two thoughts. The first is the Government's belief that the functions of the Community's institutions depend not only on the right procedures but on the right attitude of mind at every level in the Community. The Government hope that firm decisions will be taken on both the Wise Men's report and the report of the Commission Review Body to provide the right procedural and organisational framework. But if those decisions are ever to be translated effectively into action, it is vital that all concerned, both Ministers and officials, should

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  bear in mind that in the last resort institutions and procedures are only as effective as the men who operate them. Rules alone are not enough: they must be observed.
  The second thought with which I should like to leave your Lordships comes from the final chapter of the Wise Men's report, which speaks of two unwritten Community rules of an importance comparable with that of the Treaties themselves. The Wise Men define the first rule as follows:
  " If a Member State finds itself in serious difficulty, whether as a result of circumstances, or of the application of certain Community rules, or of its own mistakes, it is a question both of duty and of self-interest for the other Community countries to help it find solutions or to give assistance, by all the means in their power, within a programme aimed at correcting the situation".
  The second rule is defined as follows:
  " Every Member State should refrain, so far as is at all possible, from any act which might directly or indirectly make life more difficult for other Member States and for the Community as a whole …Every Member State should bear in mind, in all its important decisions, the possible consequences of its actions for the Community and the other Member States".
  The Wise Men call these rules the rules of active and passive solidarity. Her Majesty's Government believe that the healthy development of the Community, in which we firmly believe, does indeed depend upon the observance by all the Member States of these two rules.
  8.40 p.m.
  Baroness WHITE: My Lords, my sympathy for the noble Lord, Lord Seebohm, and his team has been mounting. This is no reflection whatsoever on any noble Lords who have taken part in this debate, for every speech tonight has been extremely constructive. We also are grateful to the Minister for having given us such a careful and detailed reply—better than I expected, frankly;and, of course, needless to say,.I mean the details. We are very grateful. It only remains for me once again to thank all noble Lords who have taken part, and to thank noble Lords for some generous references to myself: they are deeply appreciated. As all that we are doing in this Motion is to ask noble Lords to "take note "of two significant and interesting reports, I have no wish to withdraw the Motion;and I hope that it will be accepted.
  On Question, Motion agreed to.

  WORLD COMMODITIES CENTRE
  8.40 p.m.
  Lord SEEBOHM Lord SEEBOHM rose to ask Her Majesty's Government whether they are fully aware of the great benefits to the United Kingdom' which could accrue from establishing a world commodities centre in London;whether they have taken into account the finance which the City have already pledged to the setting up of such a centre;and whether they will give further consideration to the proposal. The noble Lord said: My Lords, noble Lords are all aware, that the proposal to set up a world commodities centre in London with Government assistance has been turned down. The Question I wish to ask the Government therefore is this: Are the Government fully aware of the great benefits to the United Kingdom which could accrue from establishing a world commodity centre in London? Have they taken into account the finance which the City have already pledged to the setting up of such a centre;and will they give further consideration to the proposal?
  The World Commodities Centre Committee was convened by the noble Lord, Lord Wade, on behalf of the Parliamentary Group for World Government, as long ago as December 1975. There were then, and still are, five International Commodity Councils. These are the Cocoa, Coffee, Sugar, Tin and Wheat Councils and several study groups, increased recently by Lead and Zinc Groups which have arrived here;and very large funds are and will be based in London if these ICOs and groups can be pursuaded to stay. In recent years, London has become one of the largest dealers in non-American oil. I believe it has now increased to nearly 30 per cent. of the world trade outside America and is mounting to over £250 millions a day. I give these figures to show that it would be a great pity if anything was done to destroy London as a centre of commodity dealing, with the enormous invisible exports now involved.
  The essential function of these groups is to administer international commodity agreements, which are likely to grow rather than shrink. Several other Governments are also members of these groups and arc aware of the financial and diplomatic advantages of having all or any of them in

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  their own countries. As an example of the international implications, there are 29 member-countries in the Tin Agreement alone;so that, far from Her Majesty's Government not being able to offer financial assistance, it is our contention that they cannot afford not to do so. Vast invisible earnings are at stake.
  Now what is this financial commitment? In another place, figures were given which I do not understand and which I consider to be completely incorrect. The original estimated cost of a suitable conference/office complex, in 1975 terms, was about £12 million. Now, it is probably in excess of £20 million. The City, at its first financial facilities meeting, which I chaired last year, agreed to a figure of between £2 million and £3 million;but I should like to say that this was only the first meeting and there was not a very large attendance.
  I think it is also extremely important to point out that the potential finance of future buffer stock, administration of the common fund and the transfer of additional ICOs to this country all depend on appropriate accommodation. Therefore, it is worrying to know that Austria, Belgium, the Netherlands, Switzerland and West Germany are all angling for this prize fish and that most, if not all, are offering very favourable terms from Government sources. This is one reason why the problem cannot simply be passed on to the private sector.
  My Lords, I would stress again on the financial front that a large amount of money will not be required at once as it will take several years to build and, with the contribution from the City in the form of equity at the top and some loan money at the bottom, the Government outlay is unlikely to exceed 50 per cent. of the cost and could be very much less if the City and business come up with more money. Inflation is likely to let them off the hook altogether before long. But I cannot stress too strongly—and I have said this ever since I became involved over four years ago—that this centre could be a forum for important international discussion of a very high level and a location where important North/South discussions could take place.
  We made promises of help to the developing countries at the Kingston Conference a year or two ago;and what
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  have we done? Here is a chance to provide many of them, at relatively little cost, with something that they want. It would be a gesture which would bring goodwill into an atmosphere of frustration and disillusion. This is another reason why Government participation seems highly politically desirable. Let us not forget that the viability of these countries depends on orderly and efficient commodity markets. For some, commodity sales are their only source of income. I cannot help wondering, therefore, whether these important points have all been given proper consideration.
  The letter to me dated 30th January from the Minister concerned referred solely to the immediate cuts in Government expenditure, with no reference whatever to the long-term financial employment and diplomatic gains;and it caused surprise and offence to those to whom the letter, when copied, was distributed. The last Government had agreed to support the project. Your Lordships can imagine our disappointment after four or five years of hard work to receive such a rebuff in such terms so soon from this Government. I read today that the Chancellor is asking for ideas on how to use North Sea oil profits. I hand him this suggestion on a plate. I could speak much longer since I feel so strongly about this matter;but the hour is late and there are other speakers with considerable contributions to make. So I end by most seriously urging Her Majesty's Government to think again.
  8.47 p.m.
  Lord SHACKLETON: My Lords, I am very glad to support the noble Lord, Lord Seebohm, and I should like first to stress that this is not a party issue, except that this Government have taken a wrong decision. It took us quite a long time to educate the previous Government;and at that time I was a member of the British Overseas Trade Board and we had to work very hard to do so. We are glad that the noble and learned Lord the Lord Advocate, with his legal background, is replying to this debate because I hope that he will listen carefully—as I am sure he will—to some of the financial and other arguments. May I say that it is very satisfactory that the noble Lord, Lord Wade, has been involved, and my old friend Lord Davies of Leek, who was

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  a Member of the House of Lords Committee on Commodities, and the noble Lord, Lord Kissin, who has probably got commodities running out of his ears so much does he know about this subject.
  To many this is a very esoteric subject and it is an area which is exceedingly difficult. If I may, without being patronising, I would say that I have sympathy for Ministers pursuing a policy on cuts —and I am not querying the policy;not tonight, anyway—being faced with some additional expenditure. I want to support the noble Lord, Lord Seebohm, in arguing that the figures which were put before the Government are not sound. I would first start by expressing my sympathy to the Property Services Agency. As a former Minister for the Civil Service, I know something of their problems. But they burned their fingers over the IMCO building and are, quite properly, being very cautious. But I think that the advice that may be coming to the Government is unsound;because I think the figures, for safety purposes, have been exaggerated, and I should like to show in what they have been so. The new figures are attributed to the sponsors of the scheme;and the judgment of those of us who have looked at this—and the Government have looked at this—is that these figures are far too high for the Government to consider seriously at this difficult time.
  May I go into some detail, and then I will have a suggestion, which I think may be of help to the Government, as to how to process this further. The PSA estimate of Scheme 1 to cover the facilities for seven international commodity organisations is put at £20 million. I am sure even at present rates of inflation—but then they all go up together—this is too high. However, accepting this figure, half could be raised from the market in a normal way on the strength of the rents coming in mainly from the office accommodation. As the noble Lord, Lord Seebohm, has said, the City has already promised £2·7 million, mostly in the form of equity, leaving around £8 million to be found by the Government over the four years during construction.
  May I at this point say that my own company has been willing to put up £50,000 towards the equity. I am not
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  declaring an interest because I do not believe that we have a financial interest that we do not share with our fellow men. The case for this is that it is in the national interest to do this. The PSA figures—and I should like to put this argument—depend to some extent on the technical understanding of the nature of the site. A site could be offered free since undoubtedly the value of the surrounding land would immediately be raised owing to the presence of the world commodity centre. Indeed, a greater contribution than £250,000 might be forthcoming from the GLC if the building were on the edge of what we now call the new riverside area. This factor alone would bring the total cost down to £16 million, and there are other provisions in the PSA specification which we are inclined to think are excessive, and the total might in fact be no more than £15 million, which would leave only £2 million for the Government to find over the four-year period. There is of course inflation;but leaving that aside, I am reasonably satisfied with the broad figures. I have discussed them with expert economists who are familiar with this.
  Now let me come on to running costs. The shortfall calculated is just under £1 million per annum. This is arguably too high a figure for the Government to meet. The calculation is based on an enormous figure for rates which are charged to the project and then partly recovered. I think it is something like £1½million. This item swamps anything else under the running costs, being nearly five times the total for such things as maintenance, lighting, heating and cleaning. There is again the question of amortisation, which I acknowledge. We believe that this can be dealt with by ordinary market ways.
  All these costs, apart from the rates, can be met by the revenue of the tenants, so that apart from the rates no contribution for running costs need be required from the Government. This to some extent will depend upon the location of the building. Obviously, following the IMCO example, some revenue for this purpose would come from the new organisation to meet part of the charge. But it is one that could well be met, and my noble friend Lord Seebohm indicated the Austrian attitude. The way that the municipality there have dealt with the matter is that so far from charging

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  anything at all for rates, they do not even charge rent to international organisations. If this was in the new riverside area close to the new Sheraton Hotel, where a theatre and park are planned, then many of these operating costs would be significantly reduced.
  The noble Lord, Lord Seebohm, made the next point very strongly. I should like to reiterate—it is the urgency of the matter—that some feel that because certain markets, like the London Metal Exchange, have been established for so long in London, any new international commodity organisation will be drawn here, and that neither the international commodity organisations nor the markets themselves will ever leave London. However, that is simply not the case. That is where the urgency comes in. A number have gone: rubber, cotton and tea. They are leaving or have already gone. With modern communications and cities throughout the world competing, it is perfectly possible for them to do, as with bauxite in Jamaica, copper in Paris, tungsten in Brussels and rubber in Kuala Lumpur. Nothing is more certain if we do not take this initiative that commodity associations and inter-governmental organisations will drift away.
  It is difficult for us to understand—this is a measure of some of our failures nationally—some of these international questions. We have relied for so long on the skill of the City and the energy of our manufacturing industry. But we now know that we are under great pressure. Commodities are not a single subject;each one is unique. Zinc is different even from lead, even though they may be found together. Therefore it is very necessary and helpful for the Government and the City to have this information on their doorstep. There is no limit to the number that one could have. I am surprised that we have not a market in frankincense or a spot market in myrrh. Perhaps we have. This is the natural thing to have in this country.
  The development of this and of its value to Government, to the City and to this country cannot be overestimated, and it can be developed more effectively if the experts—the producers, the marketmen, the shippers, the consumers, the trade associations and the bankers—can all be consulted in one centre. It is difficult
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  for many of us to understand that commodities are the foundation of the international trading structure. Therefore, whether it is gold or bulk ethylene, this is where we nationally want this.
  There is however the international case to which the noble Lord, Lord Seebohm, referred. It is worth noting that UNCTAD and the ILO are in Geneva. The FAO is in Rome;the international court is in The Hague, and this is where a lot of people would like them to be. We should like to put the international commodity organisations in one building. Let me give one or two figures. It has been calculated that one of the many series of UNCTAD meetings in Geneva over a period of four years has brought in about £2 million for Geneva and yet this excludes the cost of the hotel and other expenditure. A Swiss official has estimated that the economic benefit of expenditure by inter-governmental organisations in 1977 was £606 million, of which 60 per cent. or £363 million went to Geneva. It is no wonder that everybody is rushing for this.
  I will not develop the wider figures of the value of this trade to the British;but what is so surprising—and I am quite sure that the Department of Trade and their Ministers will now be aware of this —is that the Government do not appreciate this. I very much dislike, on general economic grounds, hypothecating North Sea oil, as I am sure that the noble Lord, Lord Seebohm does, but, since the Government did ask for suggestions, this is one. There is the international point. We have not done enough since Kingston. We are going to have to contribute something like £500 million to the European Development Fund. This is where some of the money could be spent. We are contributing to Lomé. This could be of importance to the developing countries.
  I end on this point, my Lords. There are two matters at issue. One is Government policy on public expenditure. We accept that they have a policy and that they are seeking in hard times to carry it through. The facts here have not been appreciated. I wonder whether the noble and learned Lord, the Lord Advocate, would consider either setting up an inquiry or possibly even a Select Committee of your Lordships' House. This is something that could be done very quickly

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  in order to sort out the figures, in order to ascertain whether the figures the noble Lord, Lord Seebohm, has given are right or wrong, and then they will have the facts on which to argue with their colleagues. I seriously ask the noble and learned Lord to consider that recommendation.
  9 p.m.
  Lord WADE: My Lords, I am very glad to have this opportunity of expressing my support for the case put forward by the noble Lord, Lord Seebohm: namely, the setting up of this world commodities centre in London. We are indebted to the noble Lord, Lord Seebohm, for raising this subject in this House, and I think I can safely say that the whole House is also indebted to the noble Lord, Lord Shackelton, for taking part. We always give great weight to his remarks, and I am sure that the Government will take very seriously what he has said.
  The noble Lords, Lord Seebohm and Lord Shackleton, have explained the nature of the proposal we are discussing tonight. In my view, it certainly deserves support and, I think, support without delay. Moreover, as I think both noble Lords have pointed out, it relates to the bringing together of inter-governmental organisations. Some evidence, therefore, is necessary of the British Government's willingness to assist. It is because of this inter-governmental aspect that the British Government's attitude is so important even though, as the noble Lord, Lord Shackleton, has shown, the major part of the cost would in all probability be borne by non-governmental sources. But our own Government's desire to welcome it, as the Government of the host country, must in my view be shown if it is to be taken seriously by bodies from overseas. I am not going to enter into the legal niceties of the obligations that already exist on the part of the British Government in relation to existing organisations here in London, because we are looking ahead and this is really a policy decision.
  Before proceeding further in commendation of the plea that has been put forward by the noble Lord, Lord Seebohm, and the noble Lord, Lord Shackleton, I should perhaps explain how I personally come to be involved. As your Lordships
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  know, there is an all-party body, with members in both Houses, which is known as the Parliamentary Group for World Government. It has been in existence for over 30 years. As the name implies, it has long-term aims of an idealistic nature—none the worse for that. I have been impressed by the fact that this group has always been ready to initiate and sponsor projects of immediate practical importance. I think that is one of the merits of this group to which I have the honour to belong. It is therefore understandable that the group became concerned in subjects such as basic raw materials, the chaos that might result from widely fluctuating prices and the need for co-operation on a world scale. I think it is fair to say that these intergovernmental commodity organisations, while they cannot solve all the world's problems, have as one of their objects the stabilising of world prices. Therefore the link between the Parliamentary group to which I have referred and the proposal which we are discussing tonight is understandable: it is a natural one.
  My name has been mentioned. I would merely say that a few years ago there was a meeting upstairs which was organised by the group to which I have referred, and I happened to be in the chair at that time. It soon became obvious to me that this was a matter of world interest, and also one of very real interest to Britain and the City of London. I do not think there is any need to apologise for the fact that those two interests seem to me to coincide. I am very glad to do anything I can to help the interests of my own country, and I am very well aware of the valuable role played by those who work in the City of London. But it was clear to me at that meeting that Britain would benefit from this proposal and it was equally clear that the matter was urgent. I agree with the observations of the noble Lord, Lord Shackleton, not only that it is urgent but it is really vitally important that the opportunity now presented to us is not missed—and it may well be missed if we let the chances pass by.
  The noble Lord, Lord Shackleton, has explained what he means about the very real danger of the extremely valuable business in the City being lost through lack of evidence of support from the Government. The large attendance of experts at the

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  meeting upstairs that I have referred to made clear to me that there were many who realised where the future lay if we did not act speedily. Therefore a campaign committee was set up under the chairmanship of Mr. David Knox, M.P. For my part, I am glad to have played any small part, hut it is the issue that really matters.
  The idea did not originate from that meeting. I think that credit for putting forward the idea goes to Mr. Harold Allen of Australia. He was the executive head of the International Tin Council and is now their special adviser. It was he who advocated the idea as far back as the autumn of 1975. Since then, there have been long discussions about the practical details and, as your Lordships are aware, there have been negotiations with the Government and, for the moment—and I hope that it is only for the moment—there has been a disappointing reply from the present Government.
  One should appreciate that there is an issue of principle involved here. It is a very important matter of principle, and that really is the main contribution that I wish to make to this short debate. The principle that I see is the distinction between, on the one hand, cutting current expenditure on consumables and services which arguably might be postponed and, on the other hand, capital expenditure of a now-or-never character. I shall not enter into the question of whether or not there should be cuts, or what kind of cuts there should be. We have already had plenty of argument about that, and there will he further argument about it. The point I am making is that we are now considering capital expenditure which will, undoubtedly, bring in future income which may he considerable. This is a question of investment for the future requiring a quick decision. It is no good saying "At the present time, we cannot afford it. We cannot afford this just now, however worthy it may be". Later will, in my view, be too late and we really cannot afford not to afford it.
  That leads me to say that the only explanation for not affording it is a lack of faith in the future. I should not like to suggest that that faith is lacking, but alas, I am already aware that some observers overseas are coming to the conclusion that Britain has no faith in the future, as a consequence of the attitude
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  to this proposal. Of course, I hope it is not true that that faith is lacking, but it is relevant to the issue that we are discussing tonight. The attitude of the Government has, most unfortunately, been regarded as due to a lack of faith and the sooner we put that right the better.
  As to where the money should come from, I am very interested in this suggestion that there should be money from North Sea oil. That is a useful illustration of the point that I am endeavouring to make, because North Sea oil should be regarded as a capital asset and if it is disposed of we should reinvest the proceeds in other kinds of capital project which will bring in income for the future. It should he used as an investment with potential income in the days to come, particularly, in this case, in the form of invisible earnings. So that the reference to oil is very relevant.
  But time is not on our side. I believe that rejection of the proposal which has been advocated this evening would be very damaging psychologically, and would certainly he shortsighted. I am not one who is given to exaggeration, but to reject the appeal that has been put forward might have very unfortunate consequences and would he a grave error. Therefore, I hope that the noble and learned Lord who is to reply will be empowered to give a favourable answer.
  9.13 p.m.
  Lord ARDWICK: My Lords, the Minister's reply in another place was not merely disappointing to those who had worked on this project for some years and thought they were on the verge of success. It was also deeply unsatisfactory. But now, I think that the Government themselves are learning that it is not good enough, whenever an expenditure is to he cut or a proposed expenditure is to be turned down, for a Minister to shelter behind a few well-chosen words about the need for financial stringency. We all know that there is such a need. We all accept that the need for stringency is real.
  But as parliamentarians we must be vigilant to see that in matters of saving and spending the Government get their priorities right. One day, for example, they must prove to us that charging pupils for school buses is one of the better ways of spending money on education. This evening they are asked to show us,

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  in rejecting financial support for a World Commodities Centre in its natural habitat, namely, London, that they are resisting an unjustifiable extravagance and are not, as some of us here this evening would suggest, throwing away a golden opportunity. Indeed, as we have heard, it is an opportunity that some other countries—most of them not very big countries—are anxious to seize. In fact, the scale of expenditure is small by any standard. It is a project which would increase our invisible earnings, add another gleam to the brilliant lustre of the City of London and serve an international social purpose, for the management of commodities is of crucial importance to the developing as well as to the developed countries.
  This is one of those projects—not rare, yet not too common—in which expediency and self-interest are also right. My right honourable friend Mr. John Silkin, as chairman of the Parliamentary Group for World Government, has already warned Ministers that its decision may have prejudiced those Governments which are members of the international commodity organisations against supporting the location of the Common Fund in London, a rejection which surely this Government would regret, even if by their actions they had invited it. Mr. Silkin pointed out that capital expenditure on the scale which has been outlined today by the noble Lord, Lord Shackleton, and the noble Lord, Lord Seebohm, would he putting to fruitful use a tiny fraction of the revenues from North Sea oil, that precious commodity revealed to us by divine Providence at a moment in our economic history when we stood desperately in need of a miracle.
  Of course, within the first month or two of their life this Government, through the voice of the Financial Secretary to the Treasury, refused to use this rich bounty for specific purposes. The battle against hypothecation was won in the days when pioneer motorists naively believed that the proceeds of what the Government called the road fund licence should be used to fund road building. Nevertheless, it seems that the Government are at least coming along with ideas about fruitfully using the wealth that is steadily accruing to us from the North Sea companies which in a few years' time, when the exploration and development allowances are used up,
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  should amount to an annual revenue of, I think, £5 billion—moreover, at 1978 prices, too.
  The Minister's reply in another place on 4th February has been criticised for its harsh tone and its narrow view. Can we hope for a reply tonight that is both broader and more gracious, a reply which indicates that the Government have not yet pronounced their final dismissal of the project and that they are aware of the financial and moral importance of maintaining London as the commodities centre of the world?
  9.17 p.m.
  Lord KISSIN: My Lords, I rise with some hesitation because the noble Lord, Lord Seebohm, the noble Lord, Lord Shackleton, and the other speakers have made most of the arguments that refer to the proposal which is before your Lordships. I want in the first place to thank the noble Lord, Lord Seebohm, for once more drawing our attention to what I consider to be this most important project. I have lived my life to a very large extent in the commodity field, as the noble Lord, Lord Shackleton, was kind enough to say. I am proud that the City of London, the commodity community of London and the commodity markets in London have achieved a leading position in the world. Perhaps we are the leading commodity market today.
  London started as an entrepot port, but the facilities and services that we have developed over the years are unique and are constantly expanding. Today a number of the producer countries have become independent. This will change the pattern of trade. They are desirous of taking control and of directing and expanding their commodity marketing operation. There is equally a desire on the part of the consumers to find a platform for negotiation and discussion with the producers in order that the relative interests of both parties can be adequately protected.
  The World Commodities Centre, as proposed by the noble Lord, Lord Seebohm, is not primarily, or I think at all, intended to give office space to commodity traders and dealers. It is intended as a centre for all the commodity government agencies of producer and consumer countries, and their joint bodies, which they

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  have established for many years, and as a place to locate them in one building, the City of London is unique. To date, London's tradition as a commodity centre has attracted some six or seven international commodity bodies and a great number of Government commodity agencies have chosen to make their headquarters in our city. I see this desire for closer co-operation between producer and trader and consumer growing and I can see the absolute necessity for providing the kind of environment that the noble Lord, Lord Seebohm, has advocated in a world commodities centre in London.
  It is bound to happen. The need to create facilities where the various Government agencies and the international commodity bodies and organisations and the trading community can meet at commercial and diplomatic level is becoming increasingly urgent. We have about 20 commodity markets operating in London and more than half a dozen international bodies are located here. To give them the kind of facilities that the noble Lord, Lord Seebohm, has advocated, in one building, would create a permanent —and I repeat, a permanent—seat for these organisations and would promote a trend for new organisations to come to London and centre their functions and create contact with our trade and our commercial organisations here.
  What concerns me is that the previous Government had given promises of assistance for the creation of a world commodities centre in London. The rejection of that project by the present Government could be highly prejudicial to the status of London as a commodity centre. The involvement of the Government in this project is essential and it is not only the money that is essential. That is perhaps not the essential part at all. The important element is that the bodies concerned with world commodity trade should see that the Government of this country are desirous of supporting and maintaining the position of London as a principal centre, as it stands today and in the next phase of development.
  At the moment it is estimated that the commodity markets alone arc contributing to the invisible earnings of this country to the tune of some £200 million and the buffer stocks bring in another £100 million. These figures will increase materially as
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  more Government agencies concerned with commodity trade are set up in London and the service operations which are part of the commodity trading activities will increasingly benefit. It would make London the obvious location for the new UN common buffer stock which will no doubt need a large bureaucracy to administer 750 million dollars under its control. London-based banks tend to get the lion's share of the deposit and loan business arising from buffer stocks of cocoa and tin and the new UN fund, and possibly others, will add to these earnings.
  What are the figures which the noble Lord, Lord Shackleton, quoted as costs against the income that is at stake? Having previously taken a positive attitude to the creation of the centre, its rejection, as I have said, could be misinterpreted by the community concerned with commodity distribution. Instead of creating a kind of UN secretariat for commodities, creating bodies that would regulate the commodity trade, we are turning away the opportunity to other countries and we are offering something that is within our grasp to countries that have never been concerned with the kind of development in the commercial trade that we are involved in. From Kuala Lumpur to Vienna efforts are being made to move the world commodity centres away from here. If this were to happen the influx of foreign officials representing the producer and consumer countries, the influx of new trading organisations and banks which hope to benefit from this trade which comes from buffer stocks and other elements of the commodity trade, would come to an end. We are likely to lose some of the organisations that have been established here over the last few years, and we might create competitive areas which would have serious repercussions on the close co-operation existing between trade and international commodity organisations that are situated at the moment in London.
  My Lords, this is a short debate and I hope I have kept myself fairly short on this subject. But the issue is a vital one. When our Government forecast a bleak economic outlook for the next few years, and reduction in our export of manufactured goods, I think it is advisable to state once more the benefits that can accrue to this country from the project which has been advocated tonight. I am not one of

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  its authors, but I should like to go on record that I am one of its keenest supporters. I would beg the Government to consider the representations that have been made tonight and the consequences that might result from the rejection of this project at this very moment.
  9.27 p.m.
  Lord DAVIES of LEEK: My Lords, I shall try not to reiterate the points that have already been made. Noble Lords have had a busy day and there is a busy week ahead. Consequently, there would be no purpose in repeating the cogent arguments that have been put forward. First of all, may I say how grateful I am and we are to the noble Lord, Lord Seebohm, for raising this matter? The length of the speeches is incommensurate with the value of the speeches;in other words, the value of the speeches is much greater than their length. As a matter of fact I want this debate to be an example of brevity but of common sense to the House.
  I would say straight away to my noble friend Lord Shackleton that I support 100 per cent. the idea of this Select Committee quickly drawn together to reassess the position, a Select Committee in relation to a commodity centre. The noble Lord, Lord Kissin, took care to clarify the minds of people who may think this is an esoteric subject, to show what the commodity centre actually is. There would be diplomatic privileges, but there would be conference rooms, opportunities for discussion on the commodity basis and on the country basis. Britain is cramping itself with fear. In some cases articles, and economists, are talking us into the ground and over-emphasising in a frightening way the dangers and the rocks that are ahead for us.
  I do hope that we shall take the same courageous approach as was taken to one of the greatest crises in London, in 1666. If you read the diary of Pepys you will know more about it than I do. There you will see that when the whole of London was burned down London did not weep about it but courageously went into rebuilding itself, at £12 million in those days. If noble Lords would go down to the World Trade Centre at St. Katharine's Dock there they would see
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  a flourishing development of international trade. Already we are opening up the river with a hydrofoil that is daily making a trip to Ostend, a 3½-hour trip. Here is the possibility, where there is already an active centre, of building up something like a world commodity centre. The jetfoil started its first trip on 29th February. I would say, like the World Trade News, that up to a point Britain is fettered a little by its own successful history.
  A brief analysis of the past 300 years is sufficient to show that we are all rather ill-equipped, even for the present, and surely that is where the London Trade Centre holds, at this moment, an important position. I should like to see the idea of a world commodities centre developed, because in this country we have central banking which began in the 17th century, with know-how integrity second to nothing in the world and, despite the politics of any nation whether Marxist or Socialist, invisible incomes and services have to be used even in the Soviet Union. They have to develop these things. We cannot afford to throw away 300 years of development, banking and marine insurance right from the Elizabethan days up to today. Consequently, the world that we knew yesterday is disappearing. Simplicity has gone. The latter years of the 20th century are destined for professionals. Sterling is no longer a reserve currency. We have to understand world currency "sell in terms of other people's money and use forward exchange markets. Half of our overseas trade is no longer with the Commonwealth, but with Europe. The situation has changed. We must not allow London to disappear in the maw of this change without deciding to rebuild it.
  I was delighted when, before the Select Committee—and all of the Members here made a contribution to the Select Committee on Commodity Prices which your Lordships suggested—we were given the benefit of the long know-how of the noble Lord, Lord Seebohm, in the area of insurance, marine banking, and industry;you name it and the noble Lord has practised in it. I remember him coming to us and saying:
  " Finally, another thing I just wanted to mention—I did happen to mention it in the House of Lords, I do not know if it comes into your brief at all—"—
  unfortunately it did not—
  " is the formation of a world commodity centre in the UK. There are a lot of reasons for this;

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  obviously it would be to the benefit to this country if we had a world centre here. I do believe the problem we are talking about is not going to be solved easily or quickly. It is going to take a very long time, but if we did have a world commodity centre here and most of the Commodity Associations were based in London we would have an automatic forum "—
  this is the point which the noble Lord, Lord Kissin, emphasized—
  " in London where these things could be discussed in a country which is basically very interested for all sorts of reasons, not only its own economic reasons".
  The chairman of the committee was the distinguished noble Lord, Lord Roberthall, and the report goes on to point out the invisible earnings that our commodities are making. Up to now they are earning somewhere in the region of £200 million a year. I shall not bore the House—I have already spoken for seven minutes—by going through the matter in detail, but, I have taken the trouble to find out what, in the last 200 years, has earned Britain's bread and butter. Strangely enough, on only about five or six occasions in the last 200 years has the export of goods paid for the things we needed.
  Let me make the position clear so that it is on the record and everybody will understand what I am talking about. The goods that we have sold have never made Britain solvent. I have the figures for the period of the Battle of Waterloo. For example, in 1816 the visible balance was plus £4·1 million. Invisible earnings were £15·5 million—over three times more for banking, insurance, shipping and even cotton than we were buying and selling. I shall not bore the House by going down the list;noble Lords must take my word for it. Had time been on my side, I should like to have quoted a number of those interesting figures. The man in the street must be aware that the commodity markets: insurance, banking and shipping, are not robbing him, but are helping him to put butter on his bread. We ask: Has the House considered in depth what it would mean to allow London, as a world commodities centre, to lose the grip and the know-how that it has had since Elizabethan times?
  What do we ask tonight? The Unstarred Question of the noble Lord, Lord Seebohm, is:
  " To ask Her Majesty's Government whether they arc fully aware of the great benefits to the United Kingdom which could accrue from establishing a world commodities centre in
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  London;whether they have taken into account the finance which the City have already pledged to the setting up of such a centre;and whether they will give further consideration to the proposal".
  That anchors me to the first-class suggestion of my noble friend Lord Shackleton, which was supported by other speakers, that we might have a Select Committee of informed people to go into the issue of commodities centres.
  I want to keep within 12 minutes if possible, so I shall raise just one other matter. Despite the Brandt Report, this commodities centre would have a constructive link with the whole theory of that report. Let me leave the matter with that one sentence, which is not arid, but which well-informed noble Lords, as you all arc here, will be able to follow. I shall point out something that is not so clear. I have knocked around the world. I am interested in Korea, Japan and the Far East. Let us not regard Korea as a Third World country with the rags on its behind beating its brains out, to use a Welsh colloquialism. Its shipbuilding industry, its lorry- and car-manufacturing industries, and its know-how are on a par with those of most of the developed countries of the world. That is also true of some parts of South-East Asia, and certainly of Hong Kong. I am not wearing my Hong Kong Stock Exchange tie today, but they can teach some members of our Stock Exchange lessons now. I am interested in Malaysia, which has been mentioned in the debate, and Singapore, which is offering people comfort, succour and cheap rents to develop world centres down there, and in particular Taiwan. The figures are interesting.
  We are apt to forget that over these past 20 years the world has seen a dynamic switch in the money going to the Third World;it is moving away from Government aid and going more and more into private aid. Private aid has increased from 40 per cent. in 1960 to more than 66⅔per cent. last year. In other words, there is now a greater tendency for private enterprise to develop and help developing areas. Strangely enough, that could be increased through the development of a commodities centre.
  Although I should like to go further into this, I shall make just one more suggestion in passing. If we get this commodities centre, I hope that more appreciation will

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  be expressed for the work done by insurance, banking and invisible earners. Some years ago I had a little directorship in a firm that won the Queen's Award. I suppose I should declare an interest in commodities because I am linked with a platinum outfit and it was my outfit that helped to introduce the hallmarking of platinum a few years ago.
  Ultimately I should like to see recognition by the British Government—which-ever party is in power—of the value to the nation of invisible earnings. I believe that a Queen's Award could well have been devised for the invisible marketeers some years ago. I have been speaking for 13 minutes. Noble Lords have had a hard day. I do not want to reiterate what has been said. However, I beg the noble and learned Lord the Lord Advocate to take note of this important little debate and see whether he cannot accept the suggestion that this matter be looked into in greater depth.
  9.40 p.m.
  The LORD ADVOCATE (Lord Mackay of Clashfern): My Lords, I should like to begin by thanking the noble Lord, Lord Seebohm, for bringing this matter to our attention, and also all of your Lordships who have participated in all that has been said in the light of a great variety—and I acknowledge this freely—of experience that is relevant to the matter. Perhaps I should also join with my celtic predecessor in commending the brevity with which these points have been made.
  I sympathise with a great deal of what has been said today about the desirability of setting up a world commodities centre. On 21st May last year my right honourable friend the Secretary of State for Trade said in another place that the Government were keen on the idea and would like to see such a centre in London. I am sure that he had in mind many of the matters that your Lordships have mentioned tonight, but he added an important qualification. He said:
  " We must try to find a way of making such a centre self-financing, without resort to the Exchequer".
  The reasons for this were clear. When the Government came to power, we inherited a public sector borrowing requirement which was too large and a public
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  expenditure programme which was out of control. Our major priority since then has been to put matters right. We have had to take some difficult decisions. Last year saw one round of cuts in public expenditure, and the general economic situation is such that we are now having to consider yet further reductions. It is against this difficult background—and this has been acknowledged more than once in the speeches we have heard—that we have had to weigh the costs and benefits of the proposal for a world commodities centre.
  I should like first to say something about the costs, to which the noble Lord, Lord Shackleton, referred. After the general election the campaign committee for a world commodities centre put a concrete proposal to the Government. They said that a suitable centre could be built for £15 million. This would be made up of approximately £3 million each from the City and the Government, with a balance of £9 million met through a market loan. Thereafter, by implication, the centre would be self-financing on the basis of rent paid by the seven international commodity organisations which would occupy it.
  The Government looked at this proposal very carefully. We carried out a detailed assessment (and some reference has been made to that already) in consultation with the City interests concerned and with the staffs of the ICOs themselves. But I am bound to say that the results were disappointing. Our revised estimates, which I understand were broadly accepted by the City people and the ICOs, showed that the centre would in fact cost £20 million. The equal capital contributions required from the City and the Government would be between £5 million and £6 million. The centre would in addition run an annual deficit on its running costs—mainly rates—of over £1 million.
  This was not the full extent of the problems which these more detailed calculations revealed. One assumption involved was that the ICOs would be willing to pay rent at a level a good deal higher than they pay for their present accommodation;and I understand that it is a point on which they expressed some reservations. Moreover, all the estimates, as has been mentioned, were at current prices and made no allowance for inevitable cost increases

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  due to inflation before and during the construction period.
  In sum, the project turned out to require Government assistance on a significantly larger and more uncertain scale than had been originally estimated, and on a continuing basis. It is important in this context to be clear that even expenditure of this significant order, as I understand, would have provided a centre for only the seven ICOs already based in London. A project which went further by making provision for the accommodation needs of future ICOs coming to London, and of the Common Fund, would have cost considerably more;on our estimates at least £27 million. So the figures that have been discussed so far are not referring to the sort of project with which many of your Lordships have been dealing.
  I am not saying that in ordinary circumstances we would have regarded the outcome of this more considered work as necessarily ruling a scheme out completely. We might very well, for example, have wished to have further discussions with the City to see if some rather more modest scheme could be evolved or one for which the City would put up a larger proportion of the money involved. At a time, however, when we are being compelled to consider a further round of cuts in Government expenditure in what we all recognise are difficult and sensitive areas, my right honourable friend had reluctantly to come to the conclusion that it was not right for public money to be made available at this time for this project. I have sensed from the debate—indeed, your Lordships have made it very clear —that there is much disappointment at this decision, and I personally share that disappointment, but in hard times unfortunately hard decisions cannot be escaped.
  Lord DAVIES of LEEK: My Lords, I accept what the Minister says about giving out money at this time, but may I ask him whether, when the statistics were worked out, the return on that money, including the invisible return on it, was taken into account? Is he aware that it is not just a question of giving money with no return?
  Lord MACKAY of CLASHFERN: As I said at the outset, my Lords, in welcoming
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  the idea of a centre, I feel certain that my right honourable friend the Secretary of State for Trade was considering that very matter, along with many others, including the more general international and political matters to which reference has been made. I hope that nothing I have said suggests that we are in any way lacking in our appreciation of the presence of the ICOs in London. They complement and enhance London's major role in world commodity trading. They provide a concentration of expertise in international commodity matters, and they bring us direct benefits through the money which they and their staffs spend here.
  Some alarming words have been spoken in the debate about the danger that, if the world commodities centre project does not go ahead, bad results will follow for London as a commodity centre. We do not see a basis for such a fear. The fact is that just as the ICOs bring great advantages to London, London we believe has great advantages for them. With major commodity markets here and an unrivalled concentration of financial institutions, London is a natural centre for ICOs. They also receive an important measure of Exchequer assistance, with a major proportion of their rate bill being paid by the Treasury. I am confident they will see it in their interest to remain here. I hope and believe that new ICOs, and the Common Fund when that is established, will see the advantages of a London centre also.
  In summing up, I will follow the example of speakers who preceded me in their brevity, by answering the Question in the name of the noble Lord, Lord Seebohm, in specific terms. The Government have weighed very carefully the costs and benefits of providing finance for a world commodities centre. We have taken full account of the finance pledged to it by the City, but we have decided, with regret, that, worthwhile as the project is and however much we welcome it, we simply cannot in present circumstances afford to support it financially.

  SLAUGHTER OF ANIMALS (SCOTLAND) BILL [H.L.]
  Returned from the Commons agreed to.
  RESERVE FORCES BILL [H.L.]
  Returned from the Commons agreed to with amendments. The said amendments to be printed.
  COMPANIES BILL [H.L.]
  Returned from the Commons agreed to with amendments. The said amendments to be printed.