Lords Sitting of 24 February 1981

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

Lord Swann
Sir Michael Meredith Swann, Knight, having been created Baron Swann, of Coln St. Denys in the County of Gloucestershire, for life—Was, in his robes, introduced between the Lord Aldington and the Lord Hill of Luton.

H.R.H. The Prince of Wales: Engagement to the Lady Diana Spencer
2.46 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, in the absence of my noble friend the Lord President, I am very much pleased to be able to report to the House the announcement, which I am sure many of your Lordships will already have heard, of the engagement of His Royal Highness the Prince of Wales to the Lady Diana Spencer. I am sure the House will wish to have an opportunity in due course to convey a more formal message to Her Majesty the Queen. In the meantime, your Lordships will, I know, wish to join with me in conveying our heartfelt congratulations and every good wish to His Royal Highness Prince Charles and the Lady Diana.
Lord Peart: My Lords, the House will be most grateful to the noble and learned Lord the Lord Chancellor for his announcement to us of this happy news. I know the whole House will join with him in the warmest congratulations to His Royal Highness and the Lady Diana Spencer.
Lord Byers: My Lords, from these Benches we would also wish to be associated in full with the congratulations and good wishes expressed by the noble and learned Lord the Lord Chancellor to His Royal Highness the Prince of Wales and the Lady Diana.
Baroness Hylton-Foster: My Lords, I feel sure that this is an occasion when the Cross-Bench Peers would also like to be associated with the good wishes and congratulations from this House to His Royal Highness the Prince of Wales on this happy occasion of his engagement to the Lady Diana Spencer.
The Lord Bishop of Salisbury: My Lords, we on these Benches shall continue to pray that God's guidance and richest blessing may attend His Royal Highness and the Lady Diana Spencer to the end of their days.

Local Authorities' Expenditure 1980–81
2.48 p.m.
Lord Monk Bretton: 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 how many local authorities in England and Wales have satisfied the Government's expenditure targets for 1980–81.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I am not yet in a position to say what the out-turn figures for local authorities' expenditure in 1980–81 will be. We will have a preliminary indication for local government as a whole when the provisional returns are available in the spring, but a firmer indication will have to await examination of the revenue out-turn returns later in the year.
Lord Monk Bretton: My Lords, while thanking my noble friend for that reply, may I ask him whether he can enlarge on it a little by simply saying whether he considers the position to be satisfactory?
Lord Bellwin: I can only refer to the budgets as such, my Lords, and say that our call for revised budgets led to savings of some £390 million. I hope the remaining excess from the £740 million will be substantially or completely eliminated at the out-turn, but we shall have to await the actual out-turn figures before we know.
Lord Orr-Ewing: My Lords, can my noble friend say what proposals he has for dealing with overspending authorities? Can he assure us that the formula for fixing the rates with local councils will be carefully considered and possibly readjusted next year?—since at present it seems that those councils which are lavish in spending taxpayers' and ratepayers' money benefit, while those councils which are excessively prudent are disadvantaged, and this is not the object of the formula.
Lord Bellwin: My Lords, as my noble friend will surely know, under the arrangements as they have applied for the year 1980–81 the Secretary of State had no powers to be selective in the way that I think my noble friend would like. The position for 1981–82 is different, now that we have the new Act, and the Secretary of State will be able to be selective. Indeed, the new grant system affords certain opportunities, of which I am sure my noble friend is aware.
Lord Davies of Leek: My Lords, is the noble Lord aware that while none of us would condone excessive expenditure, there comes a point when savings by local authorities on road cleaning and collection of rubbish could become a disadvantage to the country in terms of attracting tourists? Today, parts of Britain look like slums due to underspending on street cleaning.
Lord Bellwin: My Lords, it is for each individual authority to answer for the position in its area. Each authority will decide its spending priorities. It is for each authority to decide whether road cleaning should be one of its priorities.
Lord Blyton: My Lords, does not the noble Lord consider that the Conservative Party should now stop lambasting local authorities? Local authorities have a job to do. The cuts are only reducing the social services to the working class people and the old age pensioners.
Lord Bellwin: No, my Lords, I do not accept that for one moment; nor do I accept that either the Conservative Party or the Government are lambasting local authorities as such. We are concerned to ensure that whatever money is spent we get the very best value. That has not always been the case, nor is it always the case. Secondly, we want to ensure that the amount that we spend is in keeping with what we can afford, both as a country as a whole and as individual areas.
Lord Mackie of Benshie: My Lords, does not the noble Lord agree that half the trouble arises from the fact that the rating system is now so unjust and so inequitable that we need a totally new system of collecting local taxes, so that democracy can be shown to be working and that the people who pay for it have some control over what goes on?
Lord Bellwin: My Lords, that point is well away from the original Question. I should dearly love to cross swords with the noble Lord on the issue of the rating system as such, but this is not the occasion upon which to do so.
Baroness Gaitskell: My Lords, does not the Minister agree that even if in certain places the cuts are necessary, they always hurt people who are most vulnerable and who are usually the poorest members of the community?
Lord Bellwin: My Lords, I think I should say immediately that when we talk of cuts we usually mean cuts in the rate of growth and expansion, but in any case it is for each authority itself to decide what its priorities should be. If an authority has to reduce some of its spending, I would hope that the reduction would be in an area where it would have the least possible adverse effect on the citizens concerned. There are many opportunities with regard to spending if those who are concerned will take them.
Lord Heycock: My Lords, as one who has spent 42 years in local government, may I ask the Minister to tell us what is good value for money in local government?
Lord Bellwin: My Lords, that is what happens when we deviate as far from the Question as we seem to be doing. I would merely say that in considering what is good value we should try to ensure that in all spending there is a pound-for-pound return. If the noble Lord has been in local government as long as he says he has, he will know better than most people that that rarely happens.
Lord Monk Bretton: My Lords, does my noble friend still see room for economies if private enterprise is permitted to carry out more local authority services, which in America has been done both more economically and more efficiently?
Lord Bellwin: My Lords, that point relates to one of the opportunities that every authority should be concerned about. Local authorities should be looking at the best way of doing things, whether through the private sector or in any other way. I should have thought that those who are concerned with these matters would be looking at the kind of arrangement that my noble friend suggests.

Local Authority Staff Reductions
2.55 p.m.
Baroness Elliot of Harwoodhad given notice of her intention to ask the following Question:
To ask Her Majesty's Government what progress is being made by local authorities in England, Wales and Scotland to reduce staff numbers.
Baroness Elliot of Harwood: My Lords, all that remains in regard to my Question is to ask this of the noble Lord, who has already answered the Question most admirably: Can he tell us anything about the position in Scotland?
Lord Bellwin: My Lords, the same applies in that until we have actual out-turn figures, I am not in a position to say exactly what has transpired in Scotland. So I am very much in the same position as I was in answering my noble friend as regards England and Wales.
Lord Taylor of Gryfe: My Lords, will the noble Lord confirm whether the Government at present have powers to intervene in Scotland, or whether additional legislation is required to exercise the same kind of intervention as applies in England?
Lord Bellwin: My Lords, at present the Secretary of State has powers only to reduce grants to individual authorities whose out-turn is excessive. In the Bill currently before Parliament he is taking powers to make similar reductions where there are excessive and unreasonable budgets.
Lord Cledwyn of Penrhos: My Lords, would not the noble Lord agree that the role of the local authorities in providing employment through the building of houses and roads and through infrastructure work generally, is absolutely crucial in areas of high unemployment, such as those in Wales? Is he aware that the situation in, for example, Gwynedd, in North Wales, is approaching disaster? Does he not believe that the Government should now change their policies and encourage local authorities to carry out essential work, so as to reduce the unemployment figures?
Lord Bellwin: My Lords, what is essential in each separate area is that the individual authority should

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decide in accordance with its problems. We must face the fact that over the country as a whole we must spend only what we can afford. In the past it has been the spending of money that we could not afford that has led us to the present position.
Lord Ponsonby of Shulbrede: My Lords, can the noble Lord inform the House whether any accompanying reduction in services is being monitored as a result of the cuts?
Lord Bellwin: My Lords, it is not a question of monitoring reductions in services, or indeed increases, if it comes to that. It is not the function of Government to do that. It is the function of Government to decide what we can afford to spend by way of grant, and it is then for each authority itself, in the light of its own individual situation, to decide which services it can or cannot increase and which services it can or cannot decrease.
Lord Mackie of Benshie: My Lords, will the noble Lord please tell us which Question he is answering? I understand that the noble Baroness, Lady Elliot of Harwood, was called.
Lord Bellwin: My Lords, I am answering the Question of my noble friend Lord Monk Bretton—
Several Noble Lords: No, Lady Elliot.
Lord Bellwin: Well, my Lords, I did not know that that Question had been called, but I hope that your Lordships will feel that in any event my responses are most apposite.

The Falkland Islands: Economic Situation
2.59 p.m.
Baroness Elles: 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 there might be any improvement in the economic situation of the Falkland Islands as a result of the decision of the Council of Ministers of the European Community of 16th December 1980.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, the decision, which succeeds an earlier decision of 29th June 1976, extends to the dependencies of member states treatment similar to that accorded to the ACP countries under the terms of the second Lomé Convention. While welcome, the benefits accruing from these arrangements are unlikely to have a major impact on the Falklands' economy.
Baroness Elles: My Lords, I thank the Minister for that reply. Will he confirm that the way in which the sums are allocated to different dependencies is at the moment based on a per capita division? Would he
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agree that in view of the political and strategic importance of the Falkland Islands, a different kind of assessment should be made, bearing in mind the urgent economic help that these people need in order to encourage settlers to join them on the islands?
Lord Trefgarne: My Lords, the provisions to which I have referred apply to the dependencies of all the member countries of the European Community, and it would be difficult, I think, to apply different criteria to one dependency of one member state as compared with another dependency of another member state. But I can confirm to my noble friend that, broadly speaking, the allocation is dependent upon population and GNP per capita.
Baroness Elles: My Lords, could my noble friend say roughly what kind of sum the Falkland Islands will receive, when they are likely to receive it and whether there will be sufficient to meet some of the expense of purchasing the Roy Cove Farm, which I believe is very helpful in getting new settlers to go to the Falkland Islands?
Lord Trefgarne: My Lords, I cannot say whether the funds will be used for the specific purpose to which my noble friend refers, but I can say that under the previous decision, in 1976, the sum which the Falkland Islands received was 21,000 currency units, which was then equivalent to about £12,000, and I imagine that the allocation under this latest decision will be of the same order.
The Earl of Lauderdale: My Lords, could my noble friend say whether there have been encouraging discoveries of hydro-carbons on the continental shelf around the Falkland Islands and whether that, if it is true, may not have a beneficial effect upon the economy of this dependency?
Lord Trefgarne: My Lords, that supplementary question falls slightly wide of the Question on the Order Paper, but certainly my noble friend is correct in saying that if such discoveries have been made—and I know that the auguries are good—then of course that would have a most beneficial effect on the economic position of the Falkland Islands; but it would be difficult to realise and appreciate that advantage, and gain the benefits of it, while the present dispute with the Argentinians continues.
Lord Goronwy-Roberts: My Lords, would the Minister, however, look at that answer again in the light of what the noble Earl has suggested to him? The dispute with the Argentine might very well be more quickly solved if there were between us and the Argentine (or, better still, between the Community and the Argentine) a "get-together" under the aegis of this decision of the Council of Ministers, to see what can be done not only in but around the Falkland Islands in view of the undisputed fact that very valuable hydro-carbon deposits, and also sea food, are apparently in plenitude in that area.
Lord Trefgarne: My Lords, as the noble Lord will appreciate, the dispute, of course, is one between the

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United Kingdom Government and the Government of the Argentine over the sovereignty of the Falkland Islands. I can tell the noble Lord that discussions aimed at solving that dispute are in progress this very day in New York—no; to be precise it was yesterday, and I think they are continuing today—when my honourable friend the Minister of State, Mr. Ridley, is having discussions with an Argentinian delegation, at which discussions Falkland Island councillors are also present.
Lord Avebury: My Lords, does the Minister not realise that, in the meanwhile, the Argentine Government is purporting to license companies to drill on our side of what would be the median line between the Falkland Islands and Argentina in the Magellane Este Block, and that the noble Lord the Foreign Secretary has already said that if companies take up these licences protests will be made? How can the noble Lord say, therefore, that any benefit will accrue to the economy of the Falkland Islands when we continue to claim only the resources out to the three-mile limit?
Lord Trefgarne: My Lords, as I have endeavoured to make clear not only today but on earlier occasions when noble Lords have asked me about these matters, the solutions to the economic problems which beset the Falkland Islands are to be found in an agreement with the Argentinians when the various threats which have been uttered by both sides and, indeed, the islanders themselves are brought to an end, and all the resources around the islands, including the oil resources, if there are any, and of course the fish resources, to which the noble Lord, Lord Shackleton, has drawn attention on several occasions, can be developed and used to the benefit of all concerned.
Lord Morris: My Lords, may I ask my noble friend the Minister whether he can assure your Lordships' House that any potential or current economic benefit in the light of the considerable hydro-carbon discoveries in that particular area will not be eroded in any way by a trade-off with the Argentinian Government?—and when I refer to potential benefits I mean benefits not only to the Falkland Islands but to this country itself.
Lord Trefgarne: My Lords, what I cannot do is prejudge the outcome of the negotiations between the United Kingdom Government and the Argentinian Government in this matter, except to say that those negotiations are being conducted with the knowledge and agreement of the Falkland islanders themselves.
The Earl of Lauderdale: My Lords, would my noble friend confirm categorically that the United Kingdom Government alone are the licensing authority for that part of the continental shelf around the Falkland Islands which leads up to the median line?
Lord Trefgarne: My Lords, I speak without a specific note on that point but as I understand it that is the present position.
Baroness Elles: My Lords, would my noble friend please confirm that, unless something is done by this Government and by the Community to assist in improving the economic situation of the Falkland islanders, the future of the present population is at risk?
Lord Trefgarne: My Lords, as I have repeatedly said, and as I say again now, the long-term solution to the economic problems of the Falkland islanders is the resolution of the dispute with the Argentinian Government, and that we are working to achieve.
Lord Goronwy-Roberts: My Lords, with the indulgence of the House, may I press this point? While the question of the sovereignty of the islands is not a matter of dispute within this country or in the Falkland Islands, nevertheless one of the two working parties which are now negotiating ways and means of cooperation between the Falklands and the Argentine should surely be looking into the possibilities mentioned by the noble Earl, Lord Lauderdale, among which are the distinct possibilities of very big finds in hydro-carbon oils, and also an extensive area of sea food in that general maritime region.
Lord Trefgarne: My Lords, that, of course, is correct; what the noble Lord has mentioned are important elements in the equation which we hope will in due course lead to a solution to this matter. But, in the meantime, as I have repeatedly said and as I say again, the position is that a solution must be found to our dispute with the Argentinians if a way forward for the long term is to be found.

Blood Products: Imports
3.7 p.m.
Lord De Freyne: 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 steps are taken at present to see that blood products imported into Britain are completely free from infection.
Lord Cullen of Ashbourne: My Lords, blood products which are imported for medicinal purposes are subject to licensing under the Medicines Act. The controls over manufacturing and distribution (including import) include provision for checks on the selection of blood donors and the facilities used for collection of the blood, the in-process manufacturing controls and testing of the final product before release.
Lord De Freyne: My Lords, I thank my noble friend for that reply. Can my noble friend tell me how much was spent last year on imported blood products, and the country or countries of origin? May I also ask how he can be sure that these imported blood products are completely free of infection?
Lord Cullen of Ashbourne: My Lords, blood products are not purchased centrally—they are purchased by health authorities—and I regret that up-to-date information on the expenditure on imported products is not available. The country from which these products come is mainly the United States, and some also come from Austria and one or two other European countries. So far as concerns making sure that these products are free from infection, undoubtedly the careful checks which are made at all stages are extremely effective for all except a very few products, one of which is used in the case of haemophiliacs. There is a danger that Factor VIII, which has to be injected into haemophiliacs, can have in it a strain of hepatitis, and at the moment there is no way of testing for these strains. That is the one product as to whose freedom from infection we cannot be absolutely certain. However, every effort is made to see that it is not infected and, although occasionally something may happen, it is not of a serious nature.
Lord Wells-Pestell: My Lords, may I ask the Minister whether the House is really to understand that the Government do not know how much money is spent on importing blood into this country when it seems to be fairly common knowledge that the amount we spend per year is something like £10 million? Are the Government aware that a lot of this blood is bought from people in poor countries where there is a high incidence of blood-transmitted disease and, furthermore, that blood in some countries is obtained from junkies and alcoholics and others who have nothing to sell other than their blood?—and they sell it. Therefore, we have embarked on a very dangerous undertaking.
Lord Cullen of Ashbourne: My Lords, I am sure that that undertaking was embarked upon before this Government came into power and that the noble Lord knows a great deal about this matter. There is no doubt that much of the material which comes to us comes from areas—some, I believe, comes from Mexico—which occasion the making of the most careful checks. I am sure that the noble Lord knows very well how these arrangements are made. It must have been exactly the same in his time.
Lord Avebury: My Lords, why do the Government refuse to sanction the capital expenditure on blood transfusion laboratories in this country which will enable us to meet our own requirements from domestic sources?
Lord Cullen of Ashbourne: My Lords, the long-term aim is that we should be self sufficient in blood products. At the moment, we import less than half of what is needed in the country. The main laboratory is at Elstree and it is now being upgraded. By the end of next year there will be a doubling of the production there.
Lord Auckland: My Lords, can my noble friend give the figures as to the amount of blood products imported in the last 12 months, what they are used for and whether, when they arrive in this country, there is the absolute minimum of delay in the checking of these samples?
Lord Cullen of Ashbourne: My Lords, I do not think that I can answer that very fully but, certainly, immediately anything comes into the country it is checked at all stages. I should come back to the point raised by the noble Lord, Lord Wells-Pestell, where he said that I should know the actual total expenditure on blood products. I cannot give an accurate figure but I would think that it is something of the order of £5 million to £6 million—but that is only an estimate.
Lord Wells-Pestell: My Lords, may I ask whether it is true that the Government have decided to spend in the region of £1⅓ million to extend the laboratory at Elstree, where, if the laboratory was completely upgraded, I accept that it would cost something like £30 million? But once the laboratory had been completely upgraded and that amount had been spent, it would make it unnecessary for us to buy blood from abroad and we should recover that £30 million within three years as a result.
Lord Cullen of Ashbourne: My Lords, as I have said, we are anxious to get to the point where we are independent of supplies from abroad. As the noble Lord said, we are spending about £1¼ million to upgrade Elstree, and that will be completed by the end of next year. We should very much like to be able to spend the £30 million or whatever is needed completely to rebuild or hugely to expand Elstree; but at the moment (for reasons which the noble Lord will understand, since we have met these reasons before now) we are not anxious to do so.
Lord Mackie of Benshie: My Lords, does the noble Lord not agree that it is very important for this House to know whether there are sufficient supplies of blue blood available?

BSC Corporate Plan
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Gowrie will, with leave of the House, repeat a Statement to be made in another place on the British Steel Corporation Corporate Plan.

Iron and Steel (Borrowing Powers) Bill
3.15 p.m.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, I beg to move, that the Bill now be read a second time. A Second Reading of an Iron and Steel (Borrowing Powers) Bill would normally afford to the Government spokesman an opportunity to review the wider issues affecting the corporation and the steel industry generally. I hope that your Lordships will forgive me if I do not take that opportunity. There are good reasons why I should not do so. The Government are now in a position to announce their decisions on the British Steel Corporation's corporate plan. I shall be repeating a Statement which is to be made by my right honourable friend the Secretary of State for Industry in another place later this afternoon. That Statement will deal with the

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situation facing the steel industry, the Government's attitude towards the corporate plan and the future financing of the corporation as well as the problems of competition between the private and public sectors of the industry. Shortly afterwards, my right honourable friend the Secretary of State will introduce in another place an Iron and Steel Bill which will facilitate the policies outlined in that Statement.
Therefore, this present Bill is an essentially interim measure which must be enacted quickly. Its sole purpose is to enable the British Steel Corporation to continue in operation while the House gives its due consideration to the proposals arising out of the review of the corporate plan. The need to proceed in this way arises because the corporation's essential requirements for further finance will shortly take it over its present borrowing limit. I might remind the House that, while this present Bill is a Money Bill, the Iron and Steel Bill is not a Money Bill and we shall have opportunities to debate it in full, to amend it or to do whatever is necessary.
The present Bill will raise from £5,500 million to £6,000 million the statutory limit of the amount of finance which the British Steel Corporation and its wholly-owned subsidiaries can raise by borrowing and by receipt of sums paid by the Secretary of State. Under the Bill, the corporation will be permitted, therefore, to take up an additional £500 million of finance. There is also a provision for the limit to be raised by a further £1,000 million. I hope, however, that it will not be necessary to make use of that provision. This is because the Bill which is to be introduced in another place this afternoon will seek to write off a substantial amount of BSC's capital which presently counts towards the limit which is being raised by the Bill presently before this House. If this capital is written off, the limit of £6,000 million provided for in this Bill will afford more than enough headroom to finance the British Steel Corporation for the foreseeable future. The further Bill will therefore contain a clause reducing the borrowing limit so that the BSC cannot accumulate an excessive amount of new borrowing without Parliament being given the opportunity to debate the issues. In these circumstances, and provided that Royal Assent to the further Bill is given in good time, it will not be necessary to take up the provision in this Bill further to increase the borrowing limit.
On a technical point, nothing in the Bill empowers the Government to give or lend the British Steel Corporation any more money. That will require the new external financing limits for the corporation which are being set and announced by my right honourable friend in another place. This Bill is an essential first step in the process of providing finance to the British Steel Corporation, but its immediate effect will be simply to permit the corporation to continue its short-term commercial borrowings from the banks and other financial institutions within the limits that are set for it.
The Statement later this afternoon on the Corporate Plan will rightly be regarded, in my view, as more important than this interim or holding piece of legislation and renders inappropriate any attempts by me to put this present holding Bill in the broader context
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of the difficulties faced by the British Steel Corporation or of events in the steel industry generally. The provisions of this Bill will be short-lived, overtaken inevitably by an enactment of the further Bill. It might even be described as an unwanted Bill since it would have been preferable to deal in the further Bill with the problems of BSC running up against its borrowing limits. However in one respect, even if unwanted in this way, it is a most important and essential measure. It will avoid a position where the British Steel Corporation simply runs out of money. In so doing, it will also allow the House to examine the broader proposals contained in the further Bill without being under threat of the imminent deadline that that would otherwise have imposed. It is in that light therefore that I ask the House to give a Second Reading to the Bill.
Moved, That the Bill be now read 2a.—(The Earl of Gowrie.)
3.21 p.m.
Lord Wallace of Coslany: My Lords, first, I should like to thank the noble Earl, Lord Gowrie, for his clear—if somewhat brief—explanation of the Bill's provisions. I must say that, speaking from these Benches, it makes our job extremely difficult to deal with this Bill when in point of fact we are getting a Statement shortly afterwards and probably as I sit down. In addition, we are also told now that another Bill is likely to be on the way in the not too distant future. So it makes life difficult for those of us who are not (shall we say?) in possession of the same facilities as the Government Front Bench.
Compared to some Bills that we have had before us, the paper content of this Bill is minute. But the purpose of it is of vital importance to the British Steel Corporation and, above all, to the steel industry's workforce, interim or not as it may be. I note the Bill does not deal with the private sector of the steel industry. Both public and private sectors of the industry have been damaged by the Government's economic policies. Last year we had a 16 per cent. slump in manufacturing industry, a massive rundown in building and construction, harsh cash limits on fuel industries, railways and others, and a collapse of manufacturing investment in Britain.
All this has seriously damaged both public and private sectors of the steel industry. Both need and deserve help. Harsh penalties are imposed upon the steel industry because of the costs of some of its facilities of production; notably, fuel and the pricing policies imposed on the nationalised industries. Perhaps the most outstanding problem facing the industry is that of energy costs. So far as energy is concerned, electricity and gas are being used at the moment as instruments for raising taxes. Gas is a particular case where consumers are facing a further steep increase when the industry already shows a handsome profit (I believe of some £440 million) and it is expected to show a further considerably increased profit this year. This policy of the Government places an intolerable burden on industries such as steel.

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I should like to quote from the First Report from the Industry and Trade Committee of another place. In paragraph 71 the report says:
"In respect of Europe the British Steel Corporation (BSC) acknowledged that the comparison of energy costs was a complex matter, but submitted to us a copy of a study they had produced jointly with the British Independent Steel Producers' Association (BISPA). The conclusion of that study was that in the United Kingdom the monopoly position of the energy supply utilities has effectively made it possible for Government to impose on them pricing policies unrelated to the requirements of the market place with detrimental and near disastrous consequences to manufacturing industry. The British steel industry is being increasingly handicapped vis-à-vis its competitors as a result of UK energy policies".
Then the committee itself in the final section of paragraph 71 says this:
"Nevertheless when bodies as important as BSC and BISPA reach the conclusions we have quoted we believe they should not be lightly dismissed. Their argument has recently been reinforced by those of the Chemical Industries Association and the CBI. Whatever fluctuations there may be in energy prices, it is in our view essential that United Kingdom industry must not continue to be placed at a disadvantage compared with other countries over energy prices, especially when those prices are within the control of HMG.".
The steel industry is in an entirely different position compared with the generality of British industry where energy costs are only about 5 to 6 per cent. of costs as a whole. There is definitely a case for the Government, ii they meet the request of industry to look at energy costs, to treat British Steel and private steel separately from the rest of industry when they look at the problem of energy costs. This is a Money Bill; no more, no less. It is about borrowing but not about commercial borrowing. To a great extent it is about a borrowing situation forced upon the industry. Nevertheless, we on this side welcome the Bill as essential. We trust that the private sector will also receive consideration and assistance. Powers already exist for this to be done. I would add that yesterday's news about the Duport closures—a firm with a fine record—can only but serve as a warning to the Government.
In conclusion, I must mention the human factor that lies behind legislation of this kind. It poses the question of employment or unemployment. Thousands of steel workers are now unemployed or facing the loss of their jobs. Some of them are aged between 35 to 40 years. They face the fact that most probably they never will work again because there are no jobs to go to. These are highly skilled men who face the dole for the rest of their lives. Some areas are becoming ghost towns with the life drained from them. Surely, no Government can tolerate that situation. This may be a Money Bill conferring borrowing powers, but we must never forget the human factors that lie behind it. It is in that spirit that we on this side approach the Bill and indeed give it our blessing.
3.28 p.m.
Baroness Seear: My Lords, we on these Benches also thank the Minister for introducing the Bill. But it seems somewhat unreal to be discussing this in the light of the Statement that is to be made in a few minutes' time and the Bill that that Statement heralds. I shall be very brief indeed. Reluctantly we accept that this Bill must go through because it appears to be the case that, if it does not, the British Steel Corpora-
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tion will run out of money and not be able to pay its labour force and keep going. It is obvious that, since Mr. MacGregor has been put in charge and he has developed a plan for steel, it would be ridiculous to let the steel industry get into this condition at this time. Surely this underlines the importance of getting on with the MacGregor plan. We understand that the Macgregor plan was formulated some time ago and we should be interested to know what holds up its implementation. Maybe we are going to be told in the Statement.
We also say that, while we accept that this is necessary to be done because we must have a steel industry, we do not want to have a steel industry run in an extremely uncompetitive and inefficient fashion. It seems lamentable that the more efficient and profitable section of the industry, the independent section, is also going out of business and is maintaining that it is getting unfair competition from the British Steel Corporation. We should like to know from the Minister what answer he has to the accusation from the free steel manufacturers that the competition from BSC is undercutting them in a way which is quite unwarranted and which we certainly could not accept if it is done on the basis of support from taxpayers' money for the British Steel Corporation, which has a consequence of undermining the private sector.
We would also ask the Minister: what is the position with regard to imported steel? A great deal is being said about the difficulty of the British Steel Corporation maintaining its position in relation to imported steel; but after reading the account of a debate in another place in connection with this Bill, one was left wondering whether there were inefficiencies in the British Steel Corporation which justified the fact that imported steel has been used. For instance, there was an astonishing remark—and perhaps there is an explanation for it—that Shotton has been using imports of essential raw materials from Holland because Ravenscraig had delay in getting going after Christmas in order to produce the requirements of Shotton. Is the reason why we are having to import from other countries because our own producers in fact cannot get going again after a public holiday in order to produce the goods that are needed? We should like some comments from the Minister as to why the imports have been necessary; why we have failed to produce the requirements for our own industry and whether this is a matter of gross inefficiency on the part of steel producers in this country.
Finally, I would simply say that it seems plain that if the steel industry is to warrant support of this kind the whole problem of its future has to be looked at again, and looked at in the context of the EEC. I will stop on that point now, because this is surely something we shall have to take up in the light of the new Bill.
3.32 p.m.
The Earl of Gowrie: My Lords, I agree with the noble Baroness and with the noble Lord, Lord Wallace of Coslany, and I am grateful in the main for their response to this short Bill. It is a curious situation in that a Government spokesman is winding up a debate on the Second Reading of this Bill, having just received advice from his Chief Whip that the substantive issue,

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which is the Corporate Plan, has just been cleared in another place for announcement. That means that if your Lordships give the Bill a Second Reading I shall then be able to get down to the "nitty gritty". But I think it is understood that it is in the nature of nationalised industries as such that the Government are their bankers; and since Governments have to behave constitutionally they have to come before Parliament in order to be able to make these financial decisions which have to be made and which cannot pre-empt the other discussions which must take place in Parliament with much more appropriate deliberation. I am simply in the nature of an executive in a bank who is having to O.K. a particular piece of financing for a limited period of time.
That said, I would refer to the remarks of the noble Lord, Lord Wallace of Coslany. He said in his normally good-humoured way, but with quite a sting in the tail, that it was only because of the Government's imposition on the British Steel Corporation of harsh cash limits and the rest that it had got into this position in the first place. My Lords, that simply is not borne out by the table of losses which I have before me in relation to British Steel dating from 1975. It has been a continuous process under successive Governments, and one of the reasons why the borrowing requirement and the financing requirement have gone up under the present Government is simply that this is the first Government that has had the "guts", if I may put it that way, to face the overmanning and the necessary de-manning in this industry, which has caused it so much damage for so long. If we, as a nation, had taken sensible and phased decisions on manning in this industry we would not be having to go down this road with rather an ugly rush at a peculiarly difficult time for the industry, not only domestically but also internationally.
The noble Lord, Lord Wallace of Coslany, talked about the burdens which the Government's pricing economic policies in the energy field imposed upon the industry, and he then talked about consumers facing an increase in gas prices. One of the reasons why there are burdens on industry is that consumers are not—and I sympathise with them, as a consumer myself—yet paying anything like the market clearing prices for gas. You do not get a free ride, and that means that somebody else will be paying nearer the market clearing prices for gas, gas being a very expensive and very finite resource. That is indeed one of the burdens imposed on the steel industry, but it is in a sense the consumer who is posing the burden rather than the Government. I welcome the views on the private sector side of the steel industry which came from the noble Lord, Lord Wallace, and I think that the Statement I am about to repeat will perhaps make clear some of our views in that area.
The noble Baroness, Lady Seear, put her finger on the facts of the matter when she implied that the Government had the choice of either backing Mr. MacGregor or not backing him. That is effectively what is being done. On the issue of imports, I think the big rise in imports was probably mainly due to the very damaging and debilitating steel strike. The consumers and the customers of steel had to survive and function; therefore they necessarily had to go outside for their require-
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ments. I hope that now all is much better in the steel industry, in industrial relations terms, that situation will no longer continue.
The noble Baroness, as an uncompromising European, will be well aware that it would be quite illegal for us to impose import bans on European steel, which is where the bulk of our overseas steel comes from. That being said, I find myself in considerable agreement with her that one of the problems facing the European Community is that it has not over time, as it should have done, worked out a sensible common steel policy which is very necessary in view of the enormous capital costs which are involved. We could all enjoy the most lively competition with each other without necessarily having to compete in this damaging and expensive area of basic material supply; so, speaking for myself, I would certainly take the noble Baroness's view about that.
As I said, I welcome the very responsible way in which the House has received an essentially holding, interim measure, and if the House will give this Bill a Second Reading, I can then let the House know about the substantive measures the Government are taking in respect of the industry generally. I beg to move.
On Question, Bill read 2a; Committee negatived.

BSC Corporate Plan
3.39 p.m.
The Earl of Gowrie: My Lords, it may be for the convenience of the House if, at this point, I repeat a Statement which has been made in another place by my right honourable friend the Secretary of State for Industry on the steel industry. My right honourable friend's Statement reads as follows:
1. "With permission, I will make a Statement about the steel industry.
2. "No one in the House can welcome the position in which much of the steel industry finds itself. It has been nationalised, denationalised and then renationalised. It has been encouraged by Governments to carry out unrealistic investment programmes. The party opposite refused to allow BSC to close surplus steel capacity. Its workforce went on a three months' long strike. Now the market has collapsed and the high value of sterling has created serious difficulties for private and public steel firms alike—here and in Europe.
3. "BSC, which should have been allowed to contract gradually by the last Labour Government, cut manned steelmaking capacity from 21½ million tonnes of liquid steel to 15 million and shed 50,000 jobs in 1980. Works were closed and manning levels slimmed to raise productivity.
4. "A report by BSC on its plans has been placed in the Library of the House and in the Vote Office. The aim is for BSC to become internationally competitive. Mr. MacGregor has reorganised the corporation into separate businesses, each responsible for the production and marketing of a specific product range. He is planning a manned capacity of 14·4 million tonnes of liquid steel annually but is committed, if the assumptions behind the plan are not sustained, to reduce the corporation to a size

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that can in fact make a profit. BSC's results will depend not only on its own performance but on factors such as exchange rates, the European market and any upturn in steel ordering in the United Kingdom. Mr. MacGregor admits that his plan is optimistic and I think he is right. He has made it clear to Government and to the managers and workforce of the corporation that there will be no future for any operations that are not competitive.
5. "BSC has asked the Government for an extra £150 million in 1980–81 bringing the total external finance requirement to £1,121 million and for £730 million in 1981–82.
6. "This is huge money for taxpayers to find, particularly when unsubsidised private sector steel companies, some in competition with BSC, face extreme difficulties. The Government are greatly concerned about the impact of the European steel recession plus BSC's vigorous marketing on private firms. I therefore recently authorised BSC to negotiate viable joint private companies with those firms whose operations overlapped its own. Agreement on one such company, Allied Steel and Wire, was announced on Friday. Transitional arrangements for some of the assets of Duport Steel were announced yesterday.
7. "Setting up more joint companies takes time and will not entirely deal with the problem of competition between BSC and the private sector. I have stressed to Mr. MacGregor that BSC must compete fairly with private firms and have pointed to widespread complaints that BSC is unfairly undercutting private firms. He replies that BSC and private firms' prices have increasingly been undercut by other EEC producers. The corporation has therefore had to price down. The private sector has had to do the same. He has assured me that it is not BSC's policy to sell its steel more cheaply than imports, but only to match the prices charged for them.
8. "Mr. MacGregor has further undertaken personally to investigate any specific allegations of unfair pricing that are put to him by companies or by honourable Members. I have asked my honourable friend the Parliamentary Under-Secretary of State to monitor these complaints and to report to me.
9. "And, in order to make BSC's operations more transparent, and to pave the way for further privatisation, Mr. MacGregor has agreed to consider placing those BSC businesses which are in competition with the private sector in separate Companies Act companies.
10. "Mr. MacGregor has said that by all normal commercial criteria BSC is bankrupt. Because BSC is a statutory body it cannot be liquidated like a private sector company and the Government and taxpayers cannot therefore at present escape from funding BSC. Recognising therefore that the BSC plan is optimistic, but recognising also that BSC should be given a last chance to cease to burden the taxpayer by becoming profitable, the Government are prepared, on condition that the corporation behaves responsibily towards the unsubsidised private steel makers, to approve BSC's Corporate Plan and to provide the finance needed to implement it.
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BSC's target is to reduce its loss before interest from an estimated £480 million in 1980–81 to £225 million in 1981–82 and to achieve breakeven in 1982–83. We shall increase BSC's external financial limit for 1980–81 to £1,121 million and have set its external financing limit for 1981–82 at £730 million. These large figures reflect BSC's substantial though reduced losses, but also provide for heavy redundancy and closure costs and a limited programme of essential capital expenditure.
11. "I must also emphasise that, if Mr. MacGregor's optimism is not justified, further closures and redundancies may be necessary. The Government will monitor progress closely in each of BSC's businesses. Mr. MacGregor will give us his assessment of progress by July.
12. "To implement these decisions some changes in the law are needed and I have today published the Iron and Steel Bill 1981. This amends the Iron and Steel Act 1975 to ease the transfer of businesses to the private sector and to permit an extensive rundown of the corporation if that proves necessary. The Bill will write off some £3,500 million of BSC's capital immediately, will provide a power to write off a further £1,000 million later and will make consequential adjustments to the corporation's borrowing limit. This does not represent the commitment of additional funds; it marks the huge cost to the taxpayer of over-ambitious, centrally directed investments and the uncompetitive use of many of them.
13. "The plans involve job losses in areas where unemployment is above the national average but which are already Assisted Areas, so considerable support is already available to encourage new investment and to help the jobless to find work. The Government do not intend to alter the Assisted Area status of any steel closure area at this time but we do not underestimate the problems for the communities and people concerned. I shall, if necessary, consider whether any regrading would be appropriate.
14. "We shall also seek to ensure that market conditions in Europe are improved. The production quotas imposed under Article 58 of the Treaty of Paris expire on 30th June and we are already discussing with our Community partners the measures to replace them. We intend to ensure that reductions in capacity are equitably shared among the members of the Community and that, so far as possible, short-term market conditions do not invalidate long-term commercial objectives.
15. "The financial provision we propose will require approval from the European Commission.
16. "The Government may have had to spend taxpayers' money this time, but we are seeking powers to relieve the taxpayer of the inescapable obligation to fund BSC indefinitely. The Government intend the competition the private sector faces from BSC to be fair and we expect more public/private steel firms to be created which will be in the private sector. It is a tough time for all who work in the steel industry. There can be no guarantee of survival. But for those who are or who become competitive there is far more hope of a secure and

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prosperous future than for those who do not become competitive".
My Lords, that ends my right honourable friend's Statement.
3.48 p.m.
Lord Beswick: My Lords, the noble Earl has made a very important Statement and we thank him for making it. There will, as indicated in the Statement, need to be legislation and the opportunity for deeper discussion will come later. I should like to say at this point that we should all have a certain amount of sympathy, and the maximum amount of understanding and tolerance, for those responsible for making major decisions in this industry. It is easier to criticise others than to reach conclusions oneself which stand up to later events.
But having said that, I must say that I regret some of the language of this Statement and the repeated attempt to pose the problem as one between the private sector and the public sector and, indeed, as between the British Steel Corporation and the taxpayer. In paragraph 10 of this Statement, it is said that this is the last chance for the British Steel Corporation "to cease to burden the taxpayer". But let us be certain of this point. If the biggest steel industry in Britain goes bankrupt the taxpayer, the citizen of Britain, will be in a much worse position than under the provisions of this Statement. So let us not look at it in the sense of the taxpayer versus the British Steel Corporation. It is a question of Britain and British citizens endeavouring to stake out a claim to remain in the steel industry of the world.
I am sure, however, of one thing: that it is right to write off the amounts stated here—£3,500 million with the possibility of £1,000 million later on. But it is said in the Statement that this is writing off the capital. Would the noble Earl be good enough to say what exactly is meant by "capital"? Are we quite certain that it is the capital of BSC, or are we talking about some of the accumulated loans? And having written off this amount of money, can the noble Earl say what the working capital of BSC will be after this operation has been put into effect?
I should also like to ask about the 14·4 million tonnes target. May I be allowed to remind the House that, although the Statement tends to put a lot of the blame on the last Labour Government, this programme springs from the 10-year plan of a Conservative Government. I do not criticise them, but that is a matter of fact. It was the 1973 White Paper which laid down target of 36 to 38 million tonnes by the mid-1980s. In the review for which I was responsible I came to the conclusion that probably 37 million tonnes was a credible target, although there were many who urged me to plan on the basis of 40 and, indeed, 42 million tonnes. But we came down to 37 million tonnes. The White Paper described this 10-year plan, involving £3,000 million investment—at 1972 prices, I might say—as:
"a bold, high investment course".
This was the original plan from which a lot of our later difficulties have stemmed.
Having got that as a background—36 to 38 million
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tonnes by the middle 1980s is what the Conservative White Paper set out as a reasonable target—we are now told that the target is to be 14·4 million tonnes. I should like the noble Earl to give us a little more assurance that we are seeking to get a fair share of the European steel industry when we fix a target of 14·4 million tonnes. Let me say, in all this welter of words regarding the taxpayer and the public and the private sector, that we are talking now to a large extent about the national willpower. In the case of some of these other European countries, they are going to get their target through sheer national willpower. I should like to think that this 14·4 million tonnes represents our fair share and that the nation really is going to be behind the achievement of that target.
May I also ask, as this is 14·4 million tonnes of crude steel, what of the profitable end of the business in the finished products? There is very little information here as to how much of the money which will be made available will go into the production of steel and how much into the finishing end. I should like to ask the noble Earl how the amount of money that is being made available is being allocated as between the production of crude steel and modernising the finishing end of the business. I ask him that question particularly when I see that paragraph 9 of the Statement reads:
"Mr. MacGregor has agreed to consider placing those BSC businesses which are in competition with the private sector in separate Companies Act companies".
That is to pave the way for further privatisation. Do we understand from that that the profitable parts of the steel industry are going to be made into companies and will then be privatised, to use this wretched word, thus leaving the public sector with the less profitable production of crude steel?
Baroness Seear: My Lords, from these Benches I wish to thank the Minister for repeating the Statement. I am afraid I cannot entirely go along with the noble Lord, Lord Beswick, when he refers to the £1,121 million as a welter of words about the taxpayer. It seems to me that this is £200 per head per person in this country, which is something rather different from a welter of words. May I ask the Minister how much collaboration there has been with the trade unions in working out these new plans and what commitments have come from the unions about ensuring that in fact everything possible will be done to see that this industry—an essential industry, granted—does not lose any more of the taxpayers' money? If I may revert to the discussion we had previously on the Bill, may I ask the noble Earl to comment on Ravenscraig and why it was impossible to get the supplies through to Shotton? This highlights the kind of problem which taxpayers need to understand when they are asked to finance an industry to this extent.
We welcome the development of new forms of collaboration between the public and the private sector. We believe, not as a matter of dogma but on past experience of this industry, that if more of the industry moves into the private sector it is likely that the industry will be more successful and that the loss to the taxpayer will be reduced. When we look at the taxpayers' position, what could we not do with £1,121

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million in terms of the development of the railways, in terms of new roads, in terms of better training?
While I am on the subject of better training, it was previously said that steelmen in their forties—skilled men—were becoming unemployed for the rest of their lives. Surely in this plan there can be a plan to ensure that these skilled steelmen—high quality people—are converted to other skilled jobs: retrained into them and made use of. It is perfectly ridiculous to suggest that because they are no longer wanted in the steel industry there is no future for them.
Finally, we come back to the question—here I think we agree with what was said by the Labour Front Bench—that this is essentially an issue which must be seen in the context of the European Economic Community. We need an agreed EEC plan for steel. I would add—here we are perhaps not in agreement with the speaker on the Labour Front Bench—that this is likely to happen only if people believe that we are in earnest about EEC plans, and indeed about the EEC.
3.59 p.m.
The Earl of Gowrie: My Lords, not for the first time the noble Baroness, Lady Seear, has made my task easier by delivering a robust answer to some of the points raised by the Opposition Front Bench. Of course it is true, and it remains true when one is discussing the share of private or public capacity in the steel industry, that this is an enormous burden on central Government financing and that this burden can be shouldered—as the Government are indeed, for the reasons I have given, shouldering it—but doing so inevitably means that the burden will be suffered somewhere else. There are plenty of opportunities in this economy for the expenditure of over £1 billion, whether in social programmes, reinvestment programmes or restructuring programmes, which I think all of us would welcome, on whichever side of the House we happen to sit.
That said, I am grateful to the noble Lord, Lord Beswick—in what I suspect is in sharp contrast to his honourable friends and perhaps a few of mine in another place—for saying that it is easier to criticise others than to make these decisions oneself. The noble Lord, Lord Beswick, seemed to think that we were seeking to blame the Labour Government. I think that he was perhaps in on the end of a comment I made in response to the noble Lord, Lord Wallace of Coslany. In respect of the earlier Statement, the noble Lord, Lord Wallace, was saying that British Steel was in a pickle as a result of present central Government policy and I was trying to show that under successive Governments this problem has been accumulating, and that if I, as a not uninterested party, were to condemn a particular political party it would be the party opposite for, when in Government, postponing the necessary decisions on de-manning.
The noble Lord, Lord Beswick, said "Well, this is all very fine, but the European Community has the national willpower"—that was the phrase he used—" to back its steel industry", and either we are not doing so (although I think I have demonstrated that we are) or it is necessary to do so. I think that is again the same point, answered by the noble Baroness,
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Lady Seear. In the main, steelworkers are well paid. Steel redundancy payments are, in the main, very good and competitive relatively, and the noble Baroness raised the issue of skill retraining. My department—the Department of Employment—spends considerable amounts of public money in the retraining area. I myself have had the great interest of visiting skill centres in Port Talbot and elsewhere, which are coping admirably with this and have been very well responded to by their customers, and what is being done is appreciated in that light. But national willpower is at the expense, of course, of national willpower in some other area of activity, and that we have to take on board.
Two specific points were put by the noble Lord, Lord Beswick. The Bill will write off all the loans from Government in toto: £509 million current expenditure, as it were and £3,000 million capital. Working capital is financed out of the external finance limit generally—the cash limit—and I understand that about £180 million of next year's £730 million will be for increased working capital. I say particularly to any of my noble friends on this side of the House that they must recognise that a great deal of this expenditure is of course—not to put too fine a point on it—for the buying out of surplus labour in this industry. That, therefore, is the task that we have undertaken—with some responsibility and some courage—and, whatever views there may be about that, certainly I think most would agree that this task is long overdue.
Lord Boyd-Carpenter: My Lords, may I ask my noble friend to answer a little more fully the very cogent point that was put by the noble Baroness, Lady Seear; namely, what assurances have been obtained from the trade unions concerned that if the Government put this very large sum of taxpayers' money into this industry there will be full co-operation in the re-organisation, no repetition of the disastrous strike of last year and an effort to improve productivity?
The Earl of Gowrie: My Lords, I am grateful to my noble friend for reminding me of the point raised by the noble Baroness, Lady Seear. One of the difficulties of the opening statements is that they can raise a number of issues and I should have picked up that point. I do not think that any such assurances can come from central Government. Again, not to put too fine a point on it, central Government is backing the management of this crucial national industry. It is confident in this management and it is going to allow this management the necessary funds for it to try to get the steel industry into operable condition at a very difficult time.
As my right honourable friend's Statement said, Mr. MacGregor has acknowledged that there is an element of optimism in his commitment. Therefore, the Government have approached it with a responsible scepticism. But the alternatives to not allowing this new and slimmer steel industry to "have a go" would not only be very expensive in public expenditure terms—as the noble Lord, Lord Beswick, pointed out and which I am glad to confirm—but also would negate the commitment that we have always had to a domestic steel industry so long as it put its house in order in the way it has indicated that it is determined to do

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under Mr. MacGregor and for which it needs our finance in order to have any chance of succeeding. If my noble friend turns to Hansard tomorrow, he will see that it is no starry-eyed statement so far as the Government are concerned, and it was given with some scepticism and we shall have to "watch this space".
Lord Byers: My Lords, this is not a question of asking for an assurance from the Government at all. The question put by my noble friend Lady Seear was what undertakings or commitments were given by the trade union movement so that the corporate plan of the British Steel Corporation would have a chance of succeeding. In the Statement there is no reference whatever to consultation or to commitments undertaken, not by the Government but by the unions.
The Earl of Gowrie: I have to rest on my answer. As noble Lords would expect from someone in my department, obviously I think it crucial that there should be the closest co-operation and consultation between managers and unions as to how to make their practices viable and how to justify these large expenditures of public money. But we rest very firmly—recent events in another industry have in no sense altered this—on the necessity for allowing the managers and the unions to do this together. I do not think it would be very productive for me to repeat assurances that might have taken place between unions and Mr. MacGregor to the House, and which, in the light of later events, I could not justify if they do not come off; but I repeat—I emphasise this—our confidence, illustrated by the Statement of my right honourable friend, that this industry, its management and its unions are now in line to "have a go", and that is really what we are backing them to do.
Lord Elwyn-Jones: My Lords, is the noble Earl aware that the announcement of the closure of the Duport steel works in Llanelli will have a devastating effect on my native town? There is already a current unemployment rate of 15 per cent., and it is expected that this will be raised to 20 per cent. as local suppliers are hit. Does the noble Earl now think that the Government's decision last year to withdraw the town's development status as part of their cuts in regional aid was a grievous error? Is it not quite inadequate to deal with it, as the Statement says:
"The Government does nor intend to alter the assisted area status of any steel closure area at this time but we do not underestimate the problems for the communities and people concerned."?
Fine words butter no parsnips. The need of this town is urgent and immediate, and I hope we shall get an immediate announcement to deal with this part of the problem.
On the position of that private steel company itself, is it not the case that it is regarded as being one of the most efficient in Europe, that it cut down its labour force by 50 per cent. and is not at any rate part of the trouble here due to Government policy? First, there are the energy costs related to the two electric arc furnaces which are used in the factory; energy costs which are now higher than the wages bill of the factory and 30 per cent. higher than that element in the costs
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of Duport's competitors on the Continent and elsewhere. Then there is the recurring problem of high interest rates on bank overdrafts, which has run the company into this grave situation, and then there is the exchange rate itself. In this situation, where so much—or at any rate some—of the fault is the fault of the Government, at least can they make some amends to the people of Llanelli?
The Earl of Gowrie: My Lords, I of course recognise the experience and knowledge, and, if I may say so, the very legitimate human concern of the noble and learned Lord for the workforce in Llanelli. It is of great importance and concern to any Government when closures take place and people are made redundant. Not only is it a human and political concern, but, as the noble and learned Lord is well aware, a very expensive matter for Governments. But in a way, though I recognise that the noble and learned Lord is talking about the private steel industry, his comments do illustrate the dilemma in which these large primary producing industries find themselves. In order to have a chance of being competitive they have to de-man, and the noble and learned Lord recognised that this had taken place; that is an expensive business for central Government if they de-man privately, and it is also an expensive business when nationalised industries de-man. But it is an essential and necessary business if competitiveness is to take place.
In the area of high energy costs, I think there is a case for saying that there was a time when the pricing policy of Her Majesty's Government reacted swiftly, and I would have thought very defensively, to the new energy situation in the world, more swiftly than our competitors had done. I really do not think that that is any longer the case. I think if the noble and learned Lord investigates the current energy pricing in the European Community countries, who are our principal competitors where steel is concerned, he will find that these prices have now come into line. NEDO has a working party on this and the CBI have investigated this, and the Government are in no sense doctrinaire about this. We will consider any evidence about pricing which makes the situation difficult for these large contractors. Also, the noble and learned Lord will be aware that they are able, as jumbo customers, to negotiate individual tariffs with the generating and gas boards respectively. So of course that will be taken into account.
4.12 p.m.
Lord Shinwell: My Lords, may I ask the noble Earl whether he is aware that despite the very important questions addressed to him by my noble friend Lord Beswick and by the noble Baroness, Lady Seear, it is doubtful whether Members of your Lordships' House feel fully informed on this subject? Certainly I confess that I am unable to follow much of what we have heard this afternoon, for the simple reason that there appear to be so many contradictions. I want to make it clear that I understand that we on the Back-Benches can do no more than ask a few questions; we have not the privilege that is available to those on the Front Bench. I want to make it quite clear that sooner or later, but sooner rather than later, Members of your Lordships' House will have the right to demand that there should

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be a full-fledged debate so that we can be fully informed. But I leave that to those concerned, the Chief Whip on the Government side and the Chief Whip on the Opposition side.
When the noble Earl says that he is unable to furnish assurances, then it is a matter for whom? After all is said and done, the Government, rightly or wrongly, depending on the point of view—and, I should say in the circumstances, rightly—have accepted the burden involved, with all the financial implications. In the long run that burden is going to be transferred to the taxpayers of the country; there is no question about that. The human element is going to be left to those who have lost employment, have received some redundancy payments but have a very bleak future confronting them. That is the situation. There is one question I want to ask, because I confess I do not understand much of what has been said. We are told that the target of production is to be 14·4 million tonnes—if I stand to be corrected, I should like it to be at once. That is the national target of production; there may be some additional targets. But leaving that aside, can we be informed what that is going to cost the British Steel Corporation, and what is it going to cost the Government and ultimately the British taxpayer over a period of years? My further question is this: How many steel workers and ancillary workers are likely to be employed in consequence? We are entitled to know.
I have many more questions in my head but I will leave the matter there. My final question is this: When we have been told—not in your Lordships' House, but as a result of debates and questions asked in another place and some items in the national press—about the Government taking all possible measures to ensure that those who have been dispossessed of employment will be looked after, with the provision of investment in certain parts of the country, can we have some information about that? How far have they got? How far have they proceeded? Are any factories already at their disposal? Have they been taken over by any business element? Of course, the answer is, no. We are entitled to have this information. I want to ask, this further question before I sit down. The Government have a responsibility, and having a responsibility they must inform both Houses of Parliament and the public in this country of all the facts that are involved.
The Earl of Gowrie: My Lords, on the last point which the noble Lord raised, about the joint ventures between BSC and the private steel sector, he will be aware that BSC and Guest Keen Nettlefold announced last Friday the formation of Allied Steel and Wire Limited, a joint public/private venture to rationalise certain of the rod, wire and bar interests in Scunthorpe and South Wales. We would hope to see an increase in these kind of arrangements. If the noble Lord will kindly look at what I said in the Statement I repeated, about the predictions for the private sector and their participation, I think he will find some assurances there.
I cannot accept that anything is being hidden from the noble Lord or from the House. I think this issue is a fairly clear one if you go back to first principles. All of the United Kingdom, and indeed all of the European, steel industries are in severe difficulties due
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to structural and technological changes, but also a deep recession in demand. The task before the Government is how to distinguish between expenditure granted for the restructuring, which I think most people accept is necessary while they regret the displacement of labour concerned, and money which is tiding a great and crucial industry over a conspicuous international slump in demand. Those are difficult and nice judgments as regards what monies one should ascribe to each component. Nevertheless, I do not think there is anything complicated or hidden about the need.
On the specific question the noble Lord asked me, the plan is for 14·4 million tonnes per annum capacity for British Steel Corporation only; and I mentioned that the private sector has a role in collaborative as well as independent activities on top of that. But, of course, production and the meeting of these targets will depend on demand.
Finally, I recognise that the House likes more in the way of assurances from Ministers, but when we are dealing with markets and with demand it is rather hard to give assurances. My own intimations and hunches are reasonably optimistic. I do see the de-stocking process throughout the Western world beginning to end now and I should have thought that demand, even if it is a rather fragile flower, will start poking its head above the surface once more. But one cannot, as it were, guarantee when spring will arrive; one is simply fairly certain that it will come.
Lord Denham: My Lords, we are getting very—
Lord Elwyn-Jones: My Lords, the noble Lord, Lord Orr-Ewing, has been trying on three occasions to ask a question.
Lord Denham: My Lords, I know that my noble friend has been trying to speak, but we have taken nearly three-quarters of an hour on this Statement. I know it is a very important Statement, but the House might feel, when my noble friend has asked his question and my noble friend the Minister has replied to it, that we should then go on to the other business.
Lord Orr-Ewing: My Lords, in his initial statement my noble friend said that he had had the assurance of Mr. MacGregor that they would behave responsibly towards the private sector, meaning private sector producers. Does that also apply to the steel stockholding private sector? Currently BSC's stockholding, which they have acquired and bought with taxpayers' money, is radically undercutting the private sector because the public sector is propped up with Government funds.
The Earl of Gowrie: My Lords, I recognise and the Statement recognises that where, for I think sound reasons—and reasons that my noble friend with his experience would on the whole share—public monies for capital, for redundancy and the rest are put into an industry, it is absolutely essential that the industry does not use its provision of that kind and on that scale to undercut the private sector. Yet at the same time we in Government ask, of course, that the managements of these industries behave competitively, and

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they will sometimes exercise that remit with an eye to the main chance to the interests of their industries—and who is to blame them? That is why my right honourable friend has asked Mr. MacGregor to take this into account and has designated a junior Minister to monitor whether this is taking place. As regards the question which my noble friend raised of the subsidiaries of British Steel, I shall draw that in the initial stages to my right honourable friend's attention and see that it is part of his monitoring process.
Lord Beswick: My Lords, I know that the Chief Whip wants to get on, but I did not get an answer to my question about the working capital that remains. I wonder whether the noble Earl would be good enough to write to me? I asked, when the redundancy payments and so on had been made, what working capital remained for BSC and what proportion would be employed on the finishing end of the business. May I also ask—and this will assist the noble Baroness—whether the answer to the question about assurances from the steel workers and the fact that there is no mention of it in this Statement, is that the unions have not been consulted about the Statement?
The Earl of Gowrie: My Lords, on the question of the figures I thought that I had answered the matter, but perhaps I did not break it down in sufficient detail. Of the next year's external financing limit, the cash limit, which is £730 million altogether, £180 million is budgeted for redundancies and closure costs and £200 million for capital expenditure. I think that that meets the noble Lord's point. I shall return briefly to the subject of the unions. The unions were consulted closely on the Corporate Plan and the majority of the unions have, as it were, put their names to it. I was simply reluctant to give assurances from this Dispatch Box about how the future would turn out, because as I said in my previous answer I remain guardedly optimistic.
Baroness Llewelyn-Davies of Hastoe: My Lords, I think that the House will as always accept the advice of the noble Lord the Chief Whip. However, I think that the Government perhaps ought to realise that this kind of Statement, this extraordinary Statement in every sense of the word, requires proper debate. I think that the whole House, even those relatively silent Members on the Benches opposite, will wish to discuss the Statement at some time perhaps before the Bill is taken.
Lord Home of the Hirsel: My Lords, following the point raised by the noble Baroness and recognising the importance of this Statement, I must say that it has occurred to me in the last 18 months or so that Statements have got out of hand. There are a great many of them. The responses from the two Front Benches are very long and the Back Benches, following what the noble Lord, Lord Shinwell, said, do their best. But, even so, the whole matter is prolonged for a great deal of time. I wonder whether the Leader of the House, the Leader of the Opposition and the usual channels could get together and give us some advice because I really think that it is required.
Lord Denham: My Lords, I am most grateful to my noble friend and perhaps we can take up his suggestion and discuss it through the usual channels. I, of course, can only interpret the feeling of the House on a particular occasion, and if I have erred on this occasion I can only say that I am sorry. My instinct was that three-quarters of an hour was probably enough.

Matrimonial Homes (Family Protection) (Scotland) Bill [H.L.]
4.25 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I beg to move that this Bill be now read a second time. The Bill, which extends to Scotland only, has two principal objects: first, to recognise that both parties to a marriage should have rights of occupancy in the matrimonial home, and, secondly, to provide protection to a spouse or to children who are at risk of physical or mental injury as a result of the conduct of the other spouse. Although the Bill is drafted in terms which apply equally in favour of a husband or wife, it is expected that the chief beneficiaries will be wives.
During the past decade or so there has been widespread concern about the plight of battered wives. Domestic violence has almost certainly been a longstanding phenomenon but only recently has its extent begun to be more fully recognised. It is undoubtedly an evil which has tainted family life for many years. In the past the financial superiority of the husband as the breadwinner carried with it a degree of authority in the home which is no longer acceptable. There was a time when the authority of the husband over his wife was regarded as equivalent to the authority of a parent over a child—and included the right of moderate chastisement for any failings. Most men have discarded such attitudes but for some—perhaps when they have been drinking—they still remain. Only comparatively recently have women come to openly express their resentment at the violent exercise of that former authority. They no longer regard it as something which is an unavoidable hazard of marriage; it is rather seen as behaviour from which they should be spared.
There are no accurate figures of the extent of wife-battering in our society but it is almost certainly very much higher than the number of reported cases. Research into the incidence of domestic violence in Edinburgh and Glasgow in 1974 indicated that over 70 per cent. of violent offences involving family members were of wife assault; only—and it is a comparative "only"—10 per cent. were for assaulting children. I am sure that a significant factor in the emergence of wife-battering as an acknowledged social problem has been the changing role of women in society as a whole. More women are fending for themselves without support of a husband; many more make an important contribution to the family income. Sometimes women may still feel a sense of shame if they have a violent husband—as if it represents a personal failure on their part. But in other situations where violence has always been more apparent in the neighbourhood in one form or another, I am bound

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to say that the problem has not been one of self-reproach but of resignation to the ways of menfolk. However, women who might once have tolerated violent husbands are now unwilling to do so. This change in the way women see their predicament may account for the greater public awareness of wife-battering over the past decade.
I am sure that your Lordships will share the Government's view that wherever possible domestic violence must be prevented. Where it does occur, the existing criminal law may be brought to bear. In practice, this may not always be enough. The Bill provides the support of Scots civil law to the criminal code so that a spouse who is at risk of violence can take steps to protect herself from assault or molestation by the other spouse. Where a wife who is being ill-treated by her husband wants to leave him she may be deterred from doing so by the fear of becoming homeless. If there are children, she may decide to put up with the violence so that they can have a roof over their heads.
In that kind of situation this Bill will help a wife in two distinct ways. It gives her a right to occupy the family home, even where her husband is the owner or tenant; and it enables her to seek a court order excluding her husband from the home because of the risk of violence to her or the children. These civil remedies in no way alter the criminal sanctions which apply to domestic violence, but it is hoped that they will help to avert violence and thus reduce the need for criminal proceedings.
The provisions of the Bill are based on the draft Bill appended to the Scottish Law Commission Report on Occupancy Rights in the Matrimonial Home and Domestic Violence, which was published in July 1980. The commission had been requested to examine this area of the law in 1976 by the Secretary of State and Lord Advocate in the previous Administration. The commission was able to have regard to the experience of the working of comparable legislation in England and Wales. The Government are glad to have been able to bring forward legislation on this important subject so soon after publication of the report.
Clause 1 of the Bill is fundamental since it confers a right of occupancy in the matrimonial home on a spouse who is neither the owner nor the tenant. This right will become an automatic incident of marriage, unless it is specifically renounced in writing. The Bill is at pains to avoid any sex discrimination and refers to the partners of the marriage in an entirely neutral way—as the "titled spouse", who is usually the husband, and the "non-titled spouse", who is normally the wife. Clause 2 makes the occupancy right effective by entitling the non-titled spouse to make any necessary payments and carry out repairs to the matrimonial home. It also empowers the court to apportion certain expenditure between the spouses. Clause 3 gives the court powers to regulate the occupancy rights of either spouse, to safeguard their use of furniture and plenishings in the matrimonial home and to order compensation to be paid by the titled spouse in certain circumstances.
Clause 4 provides the court with a new power to enforce the occupancy right. It can make exclusion orders which suspend the right of occupancy of either spouse in order to protect the physical or mental health of the other spouse or any children. Provision is made
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for attaching certain interdicts to these exclusion orders; for example, prohibiting the offending spouse from entering the matrimonial home. There is, however, the safeguard that the offending spouse may satisfy the court that the interdicts are not required. Clause 5 sets out the circumstances in which orders regulating the occupancy rights, the use of furniture in the matrimonial home and exclusion orders will cease to have effect, for example, on the termination of the marriage, such as by the death of a spouse or on a divorce.
Parts of the Bill are of a technical nature. Clause 6 protects the non-titled spouse's occupancy rights against any dealings by the other spouse. Normally the consent of the non-titled spouse will be needed. Clause 7 sets out the circumstances in which the court may dispense with that consent, for instance, if it is unreasonably withheld.
If the titled spouse unfortunately happens to get into debt, the occupancy rights of the other spouse cannot prevent a creditor from obtaining payment even if that requires the sale of the matrimonial home or some of its furniture. However, if the titled spouse deliberately gets into debt in order to spite the other spouse, Clauses 9 to 11 provide protection for the other spouse against contrived arrangements which are intended to defeat the rights created by the Bill.
Clause 12 will have an important effect upon marriages of couples living in rented housing, including Scotland's many council house tenants. It gives the court the power to transfer the tenancy from one spouse to another and allows this power to be exercised by the Court of Session on granting a decree of divorce. The clause makes provision for the landlord to be informed of any application for the transfer of the tenancy and to be given an opportunity, if he wishes it, of being heard by the court in considering whether or not to grant the transfer. The Bill also provides for the situation where the matrimonial home is jointly owned or rented by both spouses.
Clause 13 defines the term "matrimonial interdict" as embracing any interdict regulating the conduct of one spouse towards the other—or towards any children—or excluding a spouse from the matrimonial home or a specified area in which the home is situated. It therefore covers not only interdicts provided for in the Bill, but others which do not arise from problems of occupancy rights.
Clause 14 makes matrimonial interdicts an effective protection by attaching to them a power of arrest exercisable without warrant by a police constable where he suspects that there has been a breach of the interdict. Such a power will be automatic for interdicts ancillary to an exclusion order. Where the matrimonial interdict is granted separately the non-applicant spouse—normally the husband—must have the opportunity to convince the court that such a power is not necessary in his case. Wherever the court is satisfied that no interdict need be attached to the exclusion order, as I mentioned in the context of Clause 4, the question of a power of arrest under this clause would not arise.
Clause 15 sets out the procedures to be followed after an arrest for a breach of a matrimonial interdict, where criminal proceedings are not to be brought, and I would emphasise that qualification. In the majority

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of cases I would expect a criminal offence to be involved—even if only for breach of the peace. Nevertheless, provision is necessary where the procurator fiscal decides that criminal proceedings shall not be brought and yet the breach of interdict represents a contempt of the court. In these circumstances it is right that the original court should consider any resultant action of breach of interdict. The clause provides for this to proceed without placing the applicant spouse at further risk from the spouse who breached the interdict. This involves being brought before the sheriff at the first opportunity; he may—on a petition from the procurator fiscal presenting the facts known to him—order a further period of detention not exceeding two days, in which the applicant spouse can bring an action of breach of interdict before the court which granted the original interdict.
Clause 16 accepts the need to provide limited occupancy rights for unmarried cohabiting couples, but departs slightly from the Scottish Law Commission's recommendation on this point. The Bill reflects the full rights granted to married couples but gives the court a greater degree of discretion to extend the duration of the limited occupany rights. The Scottish Law Commission report proposed a maximum of six months; the Bill provides for an element of flexibility in the form of extensions of up to six months to the initial period. This should be useful where hardship for the family might result from too short a duration of the limited occupancy rights.
In Clause 20 I would draw your Lordships' attention to the sensibly broad definition of "matrimonial home", which includes caravans and houseboats. Indeed, I understand that some 10,000 people live in mobile homes on licensed caravan sites in Scotland and it is only right that they should enjoy the benefits provided by the Bill.
The Bill, I believe, strikes a fair balance between the just occupancy rights of both spouses and the possibly conflicting interests of such third parties as creditors. In my view it achieves a sound framework in what is a difficult area of law. I am confident that this measure will be widely welcomed in Scotland and I commend it to your Lordships' House. I beg to move.
Moved, That the Bill be now read 2a—(The Earl of Mansfield.)
4.39 p.m.
Lord Ross of Marnock: My Lords, in many ways this Bill is a courageous measure and, indeed, a wise one. I have more than a passing interest in it. It comes from the Law Commission and I was Secretary of State when the Law Commission was set up. The origin of its work stems from 1968, when the Law Commission put forward its second programme of reform and included that aim of reforming Scottish family law. It had already started on reforming Scottish family law before considerable prominence was given to the problem of violence in marriage by the Select Committee report of another place.
It was in 1976—and, surprise, surprise, I was still Secretary of State—that I suggested that the Law Commission should look at the whole question of violence in marriage, and at the same time at the
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question of spouse occupation. I think I should congratulate the Law Commission for their tireless work in bringing Scottish law up to date, and also the Government. It is not very often that we have a report—in this case published in July 1980—translated into law eight or nine months later. The only thing I slightly regret is that in the Bill there is a considerable departure from the report and from the draft Bill appended to the report, and we have never discussed that report.
I have been in this House only a relatively short time, about 18 months or so, but what surprises me is that I do not know how many times I have heard EEC proposals, directives, and such things reported here, and yet here is a matter which I am sure has not been discussed by either House. There seems to me to be a gap. There should be almost automatic consideration of reports from the Law Commission. There should be automatic right of debate, and we should pay as much attention to these things as we do to things that come from Brussels.
It had already started its work. I say it is wise, because one of the first things it had to appreciate was that although violence in the home is something that, as the Minister of State said, is not a new phenomenon—it has been there for generations or centuries, probably since men and women tied themselves together in marriage—the attitudes have considerably changed. Not least of the changes has been the greater equality that has been claimed and granted to women, and the change in respect of the economic circumstances where more and more women—and sadly in many cases—are earners, and certainly in many cases the sole earners. We have just had the latest unemployment statistics for Scotland today; 288,000. The greater part of those concerned are men. That means that in more and more homes the women are the sole wage-earners.
That creates problems and difficulties. But then you add to that that Scottish law—and I do not say it is unique, but it is fairly unique in respect of the Continent and even of England and Wales—gives no right of occupancy of the matrimonial home to the wife unless that wife (and it is in very unusual circumstances) actually owns the home, or is the tenant. This situation of course is historic too. Tenancies were entered in the husband's name. The same thing is often true in respect of owner occupation, although more and more it has come about, I am glad to say, that there is joint ownership by enlightened people. Certainly local authorities in Scotland today are more and more providing joint tenancies for husbands and wives.
When they looked into their remit, the Scottish Law Commission discovered that there was an interrelationship between this question of occupancy and the question of violence. It virtually invited violence where the wife could not leave the home, or could not readily get the husband out even though he was behaving in a way that was injurious to her, or the children's, physical and mental health. Very often a wife, instead of going back to her mother—that is often the only place wives could go, if they could be taken back—just had to stay and suffer. So the position in relation to occupancy led almost to inviting the continuation of violence. Now, we do not remedy this, and I think

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the Minister was wrong in using the word "remedy". What we do is give to all married couples a new right; a right of occupancy. It becomes their statutory right. I hope that every man in Scotland will appreciate that, whether he thinks he is providing a home or not, for the first time all couples will have equal rights of occupancy of the family home.
The Law Commission went a bit further than that, and I do not know whether the Minister of State can answer this point when he winds up. The Scottish Law Commission said that even if there were two matrimonial homes—in other words, there was a holiday cottage, or a caravan somewhere in a park—the right of the wife to occupancy, if she did not have any legal right hitherto, should apply to both. That is not entirely clear to me in reading the Bill, but there for the first time we have a new right. I was impressed by the extent to which the Law Commission in its report followed that through.
The right of occupancy is nothing if all you have is a roof over your head and you have not access to a kitchen, or you cannot meet the obligations or have the legal right to meet the obligations, or cannot get things done that should be done. But the follow through in Clause 2 of the subsidiary aids to occupancy is splendid. They have specified what is wanted, and said what can be done without recourse to law. It is only when you step outside the rights that are those of the person with title that the court is brought in, and brought in on the application of the untitled spouse.
I noticed with a certain amount of amusement in paragraph 1.13 of the report that the Law Commission tried to get away from confusing and conflicting titles.
"In order to avoid phrases such as 'the entitled spouse' for the spouse who has the legal right or permission to occupy a matrimonial home and the converse 'the non-titled spouse'"
they take it for granted, although it is not really the case, that the one with permission is the husband.
"This assumption also eliminates the need for phrases such as 'he or she', 'him or her' and 'his or hers'".
Well, let us have a look at Clause 3. In Clause 3 we get not entitled but the "titled spouse" and the "non-titled spouse". Presumably this is why the matter has come to the House of Lords before another place. It is going to be confusing. Then in the same clause there is reference to the case where recourse is had to law by one of the spouses, be they titled or non-titled, and then they change their designation; they become "applicant spouses" and "non-applicant spouses". It can be complicated, and I hope, as this is far-reaching, that an explanation will be made in fairly simple form to the public affected, because the good that this Bill will do will be measured by the extent to which people understand it and know that this new right exists.
Of course, it comes too to the point where there can be an exclusion. First of all it applies to this right, because not everyone can get this right of occupancy. It does not apply to an agricultural holding, a tied cottage; it does not apply to a service cottage. Well, it might not. They are virtually excluded by reference to what the court has to take into consideration regarding the consequences of the exclusion of a man who has a contract with, say, a farmer, or who is a janitor of a school or something of that nature and cannot
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fulfil his contract if not living in the particular place. The weakness of that, in my view, stems not from the weakness of the law on occupation but the weakness of the law on tied houses, and if there were no tied houses by law, this problem would not exist.
That applies equally to the exclusion order and the change of tenancy power, a subject which I do not think the Minister mentioned. This power is given to the court and applies not only in relation to this Bill and this new right but also to the court dealing with the divorce proceedings; the court now has the right, as well as making financial provision and dealing, with the other matters covered in the first part of the Law Commission's report, to act on tenancy. However, it cannot change the tenancy (as it can in every other case) on tied houses or service occupancy. But the basic right of occupancy and the follow-up of subsidiary rights, which are defined, represent a considerable advance in the status of the hitherto untitled spouse.
Apart from any marital dispute concerning occupancy where the two spouses are living there and wish to share expenditures, the court can allocate expenditure to each of them in respect of the costs of the matrimonial home. There are certain matters which should be made absolutely clear. First, while a certain amount of courage must be shown by cohabiting couples, the same kind of right is not given to them. There is a limited right: on recourse to the court, the right of occupancy is limited in the first instance to three months with a possible extension for another three months. We must of course accept that public attitudes have changed on this matter. There was a time when cohabiting couples were "married". All you had to do in Scotland was to proclaim before witnesses that you were married and you were, and it was legal. Many people did cohabit and they were "married", so long as there was no bar to marriage. It was simply that couples cohabiting in that way never got round to getting married, although they were married in the eyes of the Scottish law.
As I recollect, the Law Commission suggested that they wanted this provision included for unmarried couples. I thought at the time that it was difficult to understand what they really meant. For example, does this provision refer to couples who are not married but for whom there exist no bar to marriage? They may not be married to one another but they could be married to others. They may be separated but not divorced, or they could even be divorced and still married. Will this provision apply in those circumstances, or will it be left to the courts to judge whether it be right or wrong for them to have this form of occupancy?
There is also no question raised about how long they have been cohabiting. I feel that if a couple have been cohabiting, including perhaps raising a family, for, say, 20 years or some other such reasonable period, their rights should not be construed like those of a couple who have been together for a month or two. This way of dealing with the problem, giving occupancy to the untitled spouse for three months to enable arrangements to be made, may not be all that generous in the circumstances, and we shall have to give close consideration to this at a later stage of the Bill.

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I should like to know if the Government have had any discussions with the Law Commission since they received the report in July. I ask that because they do not follow in some important regards the recommendations of the Law Commission—for example, in respect of registration of occupancy and perhaps in relation to dealings with third parties. For instance, if the husband is titled, somebody may want to buy the house and the usual searches will be made as to ownership and so on. The Law Commission felt that it would be only right that the information concerning occupancy—the right on the part of the wife—should actually be registered. There were forms for notifying that; in a tenancy it was intimation to the landlord, providing matrimonial home intimation notices, registration notices and various other forms. All that has gone, yet the Law Commission seemed to place a great deal of importance on it.
I agree that the matter is very complex, but the Law Commission seemed to think that it was absolutely necessary to tidy the whole thing up. I should therefore like to know why the Government did not include it in the Bill. Or was it, remembering that the Scottish Law Commission's deliberations are continuing—this is not the end of their work so far as family law is concerned; they are presently considering title—that the Government, in discussion with the Law Commission, considered that this aspect would be more relevant when dealing with title to property? I should be obliged if we could be given some information about that.
There is then the question of guidelines for the court. In Clause 3 the guidelines are laid down very clearly concerning court orders on declaring, enforcing, restricting and protecting the rights of the applicant, the spouse, and the procedures are laid down for regulating and exercising the occupation rights of the non-applicant spouse. However, what do we find when we come to the question of the procedure after arrest? As to arrest, there was a certain measure of doubt and some controversy in the discussions that went on before the Law Commission. First, they wanted to retain as much as possible within the civil court. Regarding the police being brought in, making arrests and so on, they thought it would not be the best way to proceed to jump from that to the criminal court, although, as the Minister said, it is about the only remedy there is. So far as the police coming in is concerned, it will remain in the case of criminal charges and assault on the part of the husband—or, for that matter, by the wife against the husband—perhaps affecting the family too.
On the procedure after arrest, they suggested that it should be left to the court to draw up rules. Instead, we have the rules laid down here. That may have resulted from the kind of discussion we had on a Bill during the last Session—now the Scottish Criminal Justice Act—when it was decided to include it in the measure. It means that the arrested spouse, if an arrest takes place, must be brought before the court within 24 hours, as is the case in England. It is true to say, however, that, as in England, they are reluctant to give power of arrest. In this Bill, however, it is mandatory; the power of arrest is included, although when it is exercised will be a matter for the police. Why did the
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Government decide to put it in the Bill? If a provision is in a Bill, it then becomes much more inflexible. If it is in Rules of Court—and the Rules of Court could have been published before the Bill was issued—it is much more flexible and can be changed to suit prevailing circumstances.
The exclusion order is important and will give a measure of reassurance and protection to the families affected. Clause 1 gives a new right to the wife or non-titled spouse to occupy the matrimonial home. Bearing in mind that there is here a background concerning the dangers of violence, I wonder whether it was wise to include subsection (5). The subsection states:
"A non-titled spouse may renounce in writing his or her …".
It is interesting to note there the use of the phrase "his or her", since earlier in the clause reference is to an individual and an individual is a male; there is no "his or her" in relation to an individual. Subsection (5) states that a non-titled spouse may renounce in writing his or her occupancy rights, and so if the rights are renounced in writing, then they are gone. Bearing in mind the context of violence in the home, it seems that there is no protection whereby the courts should be able to examine whether the renunciation was made under duress or violence. I should like the Government to look at that point and consider whether they should include a measure of protection against violence overriding the whole new right that is being given.
There is another point regarding the matrimonial interdict orders, in that the Law Commission suggested that it might be helpful and might avoid trouble if the offending or non-applicant spouse were made responsible for finding caution in respect of any action. I should like to know exactly why the Government did not accept that particular point.
This is a fascinating Bill; there is no doubt at all about that. Perhaps we shall spend long hours going over it, and I feel sure that if the Minister of State, bearing in mind the care that he usually gives to these matters, has not already read the Law Commission's report, he will do so. The Bill is complicated, but it is essential, and it brings Scottish law up-to-date. It is only part of the family law reform to which the Law Commission has applied itself, but it certainly deserves the consideration and the support of this House.
5.3 p.m.
Lord Mackie of Benshie: My Lords, speaking both personally and on behalf of noble Lords on these Benches, I can welcome the intent and the purpose of the Bill. Clearly it follows the English Bill quite closely, and it ought to have taken into account experiences in England. I would go farther than the Minister of State and say that perhaps the protection was needed long ago, even before the climate of opinion among women changed regarding acceptance of violence. In days gone by the only protection that a woman, indeed a girl, had against violence in the home was where she had parents who were sufficiently wealthy to have enough room to take her back into their home without her having to endure worse conditions than she endured with a violent husband. I think it right and proper, indeed essential, that Scots law should come into line on this matter.

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All of us can imagine situations which are totally intolerable, and we know that in the long run it cannot be good for a wife, or indeed for the children, to endure such conditions. I should say that in most cases women remain with husbands who are wholly unsatisfactory, whether on grounds of violence or for other reasons, simply because of the children, but in the long run that is not good for the children. I am perfectly certain that the Bill is right in providing in cases involving violence that the wife has an alternative to leaving home or to subjecting her family to even worse conditions.
I welcome the Bill. It is perhaps part of the march of feminine progress, but it is much more part of the march of humane progress, leading to a better understanding all round of a proper sense of family, instead of a sense of male superiority, often unthinking, and based more on physical characteristics than on any mental or moral superiority. However, I believe that we must use some care in looking at the Bill and the exceptions that will arise. The noble Earl the Minister of State spoke on the Second Reading of the English Bill, and he expressed some very practical misgivings about its effect in law. I have consulted some of my legal friends on this matter and they have some interesting observations to make. I shall repeat those observations and ask the Minister to give his views on whether safeguards have been taken.
First, a distinguished Scottish lawyer said that the Bill is a substantial innovation regarding the property rights of individuals; and obviously this is so. He went on to criticise a number of points, including the rights for cohabitees, and he said, quite simply,
"If one is going to accept the existence of the rights of cohabitees at all, then it hardly seems logical that these should be more limited than the rights which husbands and wives have".
He then went on to criticise specifically Clause 17. He stated that:
"Clause 17 allows the court in such an action to refuse to grant a decree or to postpone it for such period as it considers reasonable".
Then he said that the effect of Clause 17 may be to give the wife not only her share of the matrimonial home, but in addition the right to prevent her husband from realising his share.
Another lawyer was rather more forthright in his criticism of some points of the Bill—not of the Bill as a whole. He said:
"Any woman who inveigles a man into marrying her"—
I do not accept all his sentiments in this regard—
"can torment him until he raises his hand to her and then she can have him put out of his house and can go on living in it rent free for the rest of her natural life".
I accept that that situation may be somewhat unusual, but I do not see in the Bill—though I may have missed it—any right of appeal. It is possible that a husband, quite rightly, may be put out of the house that he owns, and then the circumstances can change entirely. The family grow up, and the wife is in possession of the house which was originally the husband's, and for which he had paid. Can he then appeal to the courts to get his house back? I think that such cases may well arise, and they exercise the minds of lawyers in Scotland whom I have consulted.
The noble Earl the Minister expressed some concern about these matters and he must have thought about
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them. I presume that in England the Act came in in 1977, though I am subject to correction, and so there must be some English experience to go on. However, I hope that the Law Commission in Scotland investigated the English situation, though perhaps they did so a little too early; I do not know. Perhaps the Minister can enlighten us on the various snags and the injustice that might arise from correcting certain past injustice towards the wives of violent husbands. I should like to stress that despite the exceptions that I have talked about, we regard the Bill as wholly essential and beneficial, though I should like to ensure that correcting the injustice that we know of it does not give rise to further injustice.
5.10 p.m.
The Earl of Mansfield: My Lords, I must thank both noble Lords for the welcome which they gave to this Bill—a qualified welcome, I think, in each case, and, certainly in respect of the noble Lord, Lord Mackie, a welcome which was tempered by the legal advice which he had apparently received. I do not know from which country the advice emanated, but the source was almost certainly male and—dare I say?—chauvinist. The chipping away (if that is not an improper phrase) of husbands' and male rights in respect of property has been a continuing process now for a great number of years. It may be that in the United Kingdom—and I use those two words advisedly—we have been rather slow to give women the rights which for tens of years now have been accepted without question, certainly on the Continent of Europe and more especially in the United States. But I think that we are coming round, partly by statute and partly by the way in which the courts interpret both the law and their duties to administer it in an equitable fashion, to giving to women rights which, as the noble Lord, Lord Mackie, said, were inconceivable only 30 or 40 years ago but which nowadays are regarded as the acceptable norm in a civilised and advanced Western democracy.
The noble Lord, Lord Ross, is of course quite right. I think that Scotland, if it is not the only country is one of the very few countries in Europe where women have not enjoyed this right. The Bill which gave rather similar rights to wives in England and Wales was one which was introduced into this House as a Private Member's measure by his noble friend Lady Phillips in 1976. I talked about it from the position which the noble Lord himself occupies today, and I expressed a considerable number of reservations about it. Speaking personally for a moment, and not as a Minister, I think the Scottish Bill is very much superior in many ways to the Bill which was then introduced into your Lordships' House; but there are a lot of matters of detail which we can, and no doubt will, go into in Committee if noble Lords so wish. I hope that what the noble Lord said as to hours of debate was not a threat so much as a promise, but no doubt we can do it.
If I may respond to just one or two of the matters which were raised, the first matter which the noble Lord, Lord Ross, brought up concerned, I think, second homes. What Clause 1 of the Bill says is "a matrimonial home", and that means any number of matrimonial homes. So if there is a second home then it will be in order for the non-titled spouse to

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acquire, in fact, all the rights which he or she can acquire in respect of the main matrimonial home or any other matrimonial home.
Then, I think, the noble Lord regretted that agricultural and tied houses generally—that is, houses subject to a service occupancy—were excluded from the Bill. Of course, with respect, they would have to be. The law can give the court power to do only what a court has power to do. If a tenancy, as in the case of a service tenancy, is dependent upon, for instance, a contract of employment, it is no use the court giving rights to a spouse unless it is also in a position to ensure that it cannot be frustrated in the order that it makes. The noble Lord may not agree with the concept of service tenancies at all—and we know from the Tenants' Rights, Etc. (Scotland) Act, which we discussed last Session, that he does not—but, so long as those obtain, it is no use trying to make this kind of order in respect of them.
Then the noble Lord asked me about cohabiting couples. Rightly or wrongly, in Clause 16 the Bill does not go in for judgments of the kind which the noble Lord was apparently inviting it to do. The clause states that it applies,
"If a man and a woman are living with each other as if they were man and wife".
Now, they may be merely committing fornication, or they may be in some kind of adulterous relationship. The noble Lord, I know, will recall that not so long ago, in such circumstances, the injured spouse could bring an action alleging what in Scotland was called "criminal conversation". That has now been swept away, but the fact of the matter is that under Clause 16 the law is not concerned to delve into the particular marital status, or lack of it, of either of them; it is simply interested in whether they are in fact living as man and wife.
Of course, the phrase "common law marriage" has had an honourable status in Scotland for many years. It is fashionable, I think, particularly in England, for a man to describe his mistress as a common law wife; but that, of course, is something which has really no basis in law, and certainly degrades the name of a totally honourable institution which has obtained in Scotland for many centuries, and indeed still does.
The next question which the noble Lord asked me was: how long do the couple have to cohabit in order to, as it were, bring Clause 16 into operation? Of course, that is a matter for the discretion of the court. The noble Lord will see that under Clause 16 the court "may" grant occupancy rights, and obviously it would depend on the evidence which was given to the court as to what view it took about the family situation, and whether such an order should be made.
The noble Lord asked about the guidelines in, I believe, Clause 3. I think that is a matter which we could return to at Committee stage. But what he did ask, and what I think I should answer, is this, in effect. "Why insert in Clause 14 a mandatory interdict?" Of course, the noble Lord will recollect that in Clause 4(4) there is a discretion given to the court not to attach an interdict, and therefore a power of arrest, if it thinks that that is a just course. In other words, what I am trying to say to the noble Lord is that in fact the court
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is not fettered in the somewhat cumbersome manner which I believe the noble Lord thinks it is.
Then, another point with which I think I should deal is the matter of renunciation. That, no doubt, we shall wish to consider—it is Clause 1(5)—in Committee. The noble Lord asked whether in fact renunciation would, as it were, be valid if it had been obtained by the spouse—probably the husband—either by violence or in some way under duress. The answer is that no court would make the non-titled spouse suffer if such an agreement—because it has to be an agreement—is obtained in any way improperly. So I hope that the noble Lord is reassured by that.
I should also have said that one of the matters which the noble Lord asked about is whether the Government, as it were, consulted or discussed matters with the Scottish Law Commission since the publication of their report and before the Bill was published. The answer to that is, yes. There have been consultations and I understand that, in general, the Scottish Law Commission are satisfied with the proposals in the Bill.
If I may turn for a moment to the points made by the noble Lord, Lord Mackie of Benshie, he produced a piece of paper on which were typed various comments from certain lawyers. I think that I have dealt with that to the extent that, as I have said—and rightly in my opinion—the rights of spouses, particularly as they regard property, have become very much more a matter of equitable jurisdiction in the courts of law in this country than they have ever been before. This Bill extends that philosophy to a certain degree. But if the noble Lord wishes to challenge it in Committee, I am sure he can; and no doubt we shall pay attention if he suggests that the Bill goes too far and that there should be safeguards written in. The noble Lord asked whether, in effect, such a right, an occupancy right, given by the court to the non-titled spouse could be varied if the conditions changed. In other words, as he put it, could the husband—because it is probably going to be the husband—come back to the court on a later occasion and ask, "Can I have my house back?" The answer is that, under Clause 5, he can. The court may on the application of either spouse vary or recall any order made by it under Clauses 2, 3 and 4 of this Bill. Of course, if the spouse in whose favour the order has been made is divorced, if the marriage is terminated or if various other circumstances, as described in Clause 5, come into play, then the order will cease to have effect.
Lord Mackie of Benshie: My Lords, I merely want to make it clear that I accepted completely the necessary change in the laws of property and that my legal friend, who is a Scot, was pointing out that it makes a great change—and this he was doing for my benefit—and that we are accepting completely that it is right and proper that the laws of property change to the extent where there is violence in the home.
The Earl of Mansfield: Yes, my Lords, I am glad that the noble Lord agrees with the philosophy underlying the Bill. I think that I should say in conclusion that this is really not so much a Bill which interferes with or changes the law of property. What it does is to give rights to people, spouses of either sex, who previously have not enjoyed them, but, more especially

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in the later Parts of the Bill, I believe it enables a spouse who, because of violent and totally unjustified conduct on the part of the husband or wife, has not enjoyed peace of mind, at least to go to court and say, "This has been the treatment meted out to me. Can I have a roof over my head?" That is a great advance, which will be welcomed and certainly has already been welcomed throughout Scotland and, I imagine, in all parts of your Lordships' House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Museums (Northern Ireland) Order 1981
5.25 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Elton): My Lords, I beg to move that the draft Museums (Northern Ireland) Order 1981 which was laid before this House on 3rd February be approved. The Museums Order which I bring before the House today pulls together Northern Ireland law on museums and art galleries and brings it up to date. It re-enacts with some amendments the statutes under which the Ulster Museum and the Ulster Folk and Transport Museum—which are Northern Ireland's two national museums exist. It replaces the legislation under which district councils may provide and maintain museums and art galleries. This legislation is much fragmented and some of it dates back to the mid-19th century. There has again been need for some amendment.
The museums code in Northern Ireland is not voluminous but the need to tidy it up has been clear for some time. There is also in Northern Ireland, as elsewhere in the United Kingdom, an increasing interest in museum matters, and in the preservation of the heritage. We are proud of both our national museums in Northern Ireland and with good reason. The Ulster Museum is a traditional museum. By that, I do not mean that it is not forward-looking or active. It has a very forward-looking and active body of trustees to ensure that it is. I use the phrase only to distinguish it from the Ulster Folk and Transport Museum to which I shall return. The Ulster Museum houses the Province's principal art gallery, and it has departments also in local history, botany and zoology, antiquities, geology and industrial archaeology. It came into being in 1831 as the collection of the Belfast Natural History Society. It later merged with the municipal Museum and Art Gallery, and in 1961 it became by statute the Ulster Museum under the management of trustees. A major extension was completed in the early 1970s.
Although the Ulster Museum is much the older institution, the Ulster Folk and Transport Museum pre-dates it as a national museum by three years. In 1958, there was formed by statute an Ulster Folk Museum under trustees, for the purpose of illustrating the way of life of the people of Northern Ireland, past and present, and their traditions. It was a good idea, the timing was right, and it was successful from the start. A Folk Park was created at Cultra on the shores of Belfast Lough in the early 1960s. Its terms of reference were sufficiently wide to enable the Belfast
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Corporation's Transport Museum to be amalgamated with it by amending statute in 1967 and the title was then changed to the Ulster Folk and Transport Museum.
In the short period of its history the Ulster Folk and Transport Museum has established itself as one of the leading museums of its type in Europe. It occupies an extensive and very attractive site in which are reconstructed many old buildings from different parts of the Province. These buildings, extensively equipped with contemporary furniture and artefacts, illustrate many facets of different periods and different occupations of their original inhabitants. In some of them, traditional crafts are still carried on and visitors can discuss with their practitioners all that is germane to them. Like the Ulster Museum, it has strong research and educational functions.
The Ulster Museum and the Ulster Folk and Transport Museum, then, are both trustee museums of national status, substantial institutions, creatures of statute, drawing their financial aid directly from central Government. The appreciation of the Northern Ireland public of their two national museums is shown by the fact that between them last year they attracted over 350,000 visitors.
Part II of the draft order concerns these two national museums. Articles 3 and 4 confirm the continued existence of the two trustee bodies, and also detail the composition of these two bodies and define their duties. The only change of any consequence is to make some adjustments to the make-up of the two trustee bodies in the light of representations made during the consultation period. A trustee to each institution may now be appointed by the Ulster Polytechnic. In the case of the Ulster Museum, the right to make appointments to the trustee body has been given to district councils in addition to Belfast City Council; as a consequence, the number of trustees appointed by the Minister has been reduced.
Article 5 also largely re-enacts existing law. It does so by drawing together the separate but very similar provisions in the existing statutes each of the two national museums. There are two minor changes: the Ulster Folk and Transport Musuem no longer needs the power to establish a reserve or sinking fund, and this is removed; the level of fines for infringement of museum by-laws is increased to a level more realistic in the present day.
Article 6 re-enacts without amendment the requirement on the trustees to appoint a director. Article 7 empowers the Department of Education to provide financial support to the two museums and requires the trustees to seek departmental approval if they wish to borrow or invest money. Annual reports must be prepared by the trustees under Article 8 and copies sent to the department; and the same article also obliges the trustees to keep accounts upon which the Comptroller and Auditor-General will report. These articles merely recapitulate existing provisions in a more convenient form.
So much the code for the national museums. Part III of the order is concerned with the local museums code, with museums and art galleries provided by district councils. The powers of district councils for these purposes rest on statutes as old as 1855 and 1891. The statutory provision in England and Wales was updated

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some years ago, and we are now doing the same for Northern Ireland.
Article 9 empowers a district council to provide museums and art galleries. As a result of comments received during the consultation period, it has been decided that district councils need not seek the department's approval to make provision except where they are seeking grant-aid. The same article, in its second paragraph, permits district councils to acquire land compulsorily for museum purposes. In the remainder of Article 9, power is given to a district council to contribute to a museum or art gallery provided by another district council or to one provided by any other person.
Article 10 re-enacts the existing provisions about by-laws. These attract the general provisions for by-laws in the 1972 Local Government Act. Among other things, this means that any by-laws must be approved by the Department of Education. Hitherto, in the existing legislation, central Government have not been given a power to make grants towards provision of museums and art galleries by district councils. Article 11 confers such a power on the Department of Education, and while this is an important new provision, I must regretfully say that the payment of such grants cannot be contemplated in the immediate future.
The first schedule sets out the provisions applying to the trustees of the two national museums; this represents almost a complete restatement of existing provisions. The minor amendments which have been made are for the sake of bringing the two sets of largely similar provisions into conformity. The remainder of the order, which consists of Articles 12 and 13 and the second schedule, is concerned with the repeal of legislation which is obsolete or unnecessary, with a minor amendment, and with the repeals consequent on the enactment of this piece of legislation. I commend the order to the house for approval.
Moved, That the draft order laid before the House on 3rd February be approved.—(Lord Elton.)
Lord Boston of Faversham: My Lords, I should like to thank the noble Lord, Lord Elton, for explaining the purposes of the order. I hesitate to intervene in a Northern Ireland matter but I am comforted by the thought that my noble friend Lord Blease would be happy for me to join in commending the order to your Lordships. I have not had the pleasure of visiting the two institutions which the noble Lord, Lord Elton, described at the beginning of his remarks. They are quite clearly admirable institutions and among those who speak highly of them is my noble friend Lord Donaldson of Kingsbridge who, as your Lordships will know, until quite recently had responsibilities as Minister for the Arts. So it is with pleasure that I join in supporting this order.
Lord Hampton: My Lords, I too should like to thank the noble Lord, Lord Elton, for explaining so fully the statement, and I too should like to commend the order. I wonder whether I might ask the Minister this: Am I right in believing that the museums in Northern Ireland will be receiving no additional funds from Government sources but at the same time no less? Am I right that any increase in funds is to be left opti-
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mistically in the present economic climate to local resources?
Lord Elton: My Lords, I should like to thank both noble Lords who have spoken for their kind welcome to this order. I am very glad to see the noble Lord, Lord Boston of Faversham, taking an interest in our affairs. He has candidly revealed that he has visited neither of our institutions. I warmly recommend him to do so as soon as possible. It is something that I do on a number of occasions. I find it always gratifying, and I am much impressed by what I find going on there. It is also a pleasure to see the noble Lord, Lord Donaldson of Kingsbridge, in his place for this order. I know with what a kindly and effective interest he pursued the fates of the museums.
The noble Lord, Lord Hampton, was also kind enough to welcome the order and asked me, if I understood him aright, whether I was able to predict the level of support which museums might expect to receive from central Government funds. It is not in my power to predict what may be contained in the Budget which will be announced next month, nor indeed to order the priorities which my right honourable friend the Secretary of State may accord to different projects in the years that lie ahead. I can however assure him that although, like all other institutions without exception in the Province, the museums have had to bear their share of the hardships forced upon us by economic recession and rising fuel prices which has struck us worldwide, none the less, both my right honourable friend and I are impressed by the work being done in the museums and will certainly do what we can to protect it in the future.
On Question, Motion agreed to.

Agricultural Trust (Abolition) (Northern Ireland) Order 1981
5.37 p.m.
Lord Elton Lord Elton rose to move, That the draft order laid before the House on 3rd February be approved.
The noble Lord said: The order seeks to abolish the Northern Ireland Agricultural Trust by repealing the Agricultural Trust Act (Northern Ireland) 1966. The decision to abolish the Agricultural Trust was taken by the Government because opportunities for the trust to pioneer new developments in agricultural production and processing had declined significantly in recent years; and duplication of effort would be minimised, with a consequent lowering of administration costs. The decision is also in line with Government policy to reduce the number of Quangos where possible.
The Agricultural Trust was set up in 1967 in order to pioneer commercial developments in the production and processing of agricultural produce. The trust also assumed a major role in the marketing of such produce. During the period of its existence the trust has been involved in a wide range of agricultural activities; some of them have been fairly ambitious such as grass drying, the growing and processing of flax, and gravel tunnel drainage. Others have had limited objectives and application (such as potato processing,

1017
apple processing and intensive lamb production). In marketing, the role of the trust has been to identify and promote opportunities for Northern Ireland food processors both in Great Britain and elsewhere.
The trust has done this by encouraging participation in marketing seminars, food fairs and trade promotions. The Government are satisfied that the abolition of the trust will not mean that its more important activities will cease. At farm level, the education and advisory services of the Department of Agriculture will continue to be available to help farmers, and food processors will be able to use continuing aids to industrial development. The Central Council for Agricultural and Horticultural Co-operation will continue to encourage the formation of agricultural co-operatives, while participation at international food fairs will continue abroad under the aegis of the British Food Export Council and in Great Britain with the assistance of the Department of Commerce and the Ulster Office. In this respect, steps have already been taken to bring the various bodies together. Both the British Growers LookAhead National Exhibition at Harrogate this week and the International Food Exhibition at Olympia next week will have stands sponsored under the new arrangement.
The trust consists of nine members appointed by the Department of Agriculture for Northern Ireland, four of whom were nominated by the Ulster Farmers' Union. The trust employed up to 15 staff and it is anticipated that the saving will be some £400,000 per annum. The order seeks to effect the dissolution of the trust by repealing the Agricultural Trust Act (Northern Ireland) 1966 under which it operates and by providing for the repeals to take effect from an appointed day to be determined by order. The order will vest in the department all outstanding rights and obligations of the trust, including the payment of compensation to staff for loss of employment. This is in order to ensure that the affairs of the trust may be completely and properly wound up. The order does not transfer the trust's statutory function to the department, only residual rights and obligations. I should not like to conclude this brief introduction to the order without a word of thanks to the trustees themselves. Many people apart from myself are grateful to them for their services and I therefore endorse wholeheartedly the remarks made by my honourable friend Mr. Goodhart in another place on 7th May 1980. I commend this order to your Lordships.
Moved, That the draft order laid before the House on 3rd February be approved.—(Lord Elton).
Lord Donaldson of Kingsbridge: My Lords, on behalf of my noble friend, having been for a brief two years in charge, in an indirect sense, of agriculture in Northern Ireland, I should like to ask a couple of questions. The first is: What is the attitude of the Northern Ireland Farmers' Union towards this? They were, I thought, a very fine body of men whose interests were not only in favour of their own pockets but of the whole country. I should be very interested to know what kind of reaction they gave. Perhaps the noble Lord could tell us that.
Lord Elton: My Lords, I welcome the intervention by the noble Lord, Lord Donaldson. Having already
1018
said how glad I was to see him in his place for the Museums Order, I am also glad to see him on this order too. It is a pleasure to have someone with us with such direct experience of the matters we are discussing. I share his admiration for the Ulster Farmers' Union. They did indeed make representations on this order to my honourable friend, but they decided that, in a climate in which economic savings were necessary, this was one of the least painful savings that could be made. Therefore, they did not produce strenuous opposition to this order.
Lord Donaldson of Kingsbridge: My Lords, I should like also to refer to exports. I once had the honour to chair a breakfast in Paris for Northern Ireland foods, and it was a great success once we got the wireless turned off. I believe the firms taking part found that this was a very useful exercise. From what the noble Lord has said, I understand that this sort of thing will go on.
The Duke of Abercorn: My Lords, since this is the first opportunity I have had to congratulate my noble friend Lord Elton on taking over the portfolio of agriculture in the Northern Ireland Office, I should like to wish him all possible success in his mission. Perhaps I need hardly remind him that agriculture is still our biggest and most important industry in Northern Ireland. Its health has a direct effect on the wellbeing and prosperity of a rural community.
I regret the demise of the Agricultural Trust and I doubt if a Government could have foreseen the extent of the recession hitting the agricultural industry at the present time, whether the trust would have been wound up, since it was widely recognised as being cost-effective, efficient and providing very considerable assistance in marketing of agricultural, fisheries and horticultural products. Frankly, I am not convinced by my noble friend's explanation that the substitute marketing facilities will in any way fill this vacuum since the disappearance of the trust clearly leaves a vacuum in marketing assistance at the worst possible economic time. It should be only too obvious to the Northern Ireland Office that practical and constructive marketing assistance is of vital importance for agricultural products—in fact, of parallel importance to marketing assistance for small and medium-sized firms. Surely, therefore, the time is not only opportune but vital to reassess the need for a marketing body for Northern Ireland goods which could be grafted on to either the Department of Commerce or the Northern Ireland Development Agency. Can the Government reassure this House that the Northern Ireland Office are prepared to reassess this necessity, since the survival of so many small firms depends directly on being able to find an alternative market literally overnight in order to survive at the present time?
Lord Elton: My Lords, may I now conclude my reply to the noble Lord, Lord Donaldson? I apologise the the House for having got to my feet prematurely in response to his first question. I will now reply to his second question, which relates closely to that raised by my noble friend the Duke of Abercorn. They were both concerned with sales. I do not know of the circumstances which the noble Lord described in Paris,

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particularly as I do not know what was on the wireless before it was turned off or whether these are typical of the promotional efforts which we undertake, but this is a very serious matter and I am fairly well seized of it, having been professionally engaged in international trade fairs before being appointed to the present Government. Therefore I sympathise very much with the motivation of both the noble Lord, Lord Donaldson, and my noble friend the Duke of Abercorn, whose good wishes I gratefully acknowledge in this task.
I accept that the marketing is of great importance. It is no good producing the stuff if you cannot get rid of it, to put it crudely. We have certain advantages and, I think, considerable disadvantages in driving our trade where we do in the Province, and it is no good if we handicap ourselves by not being able to sell in the best circumstances. I can assure the House that I regard this as a matter of some priority and I am already looking very closely at the existing arrangements for the marketing of agricultural produce. It is a large and complex subject in itself. As soon as I feel myself the master of that I shall be doing the same thing with my colleagues in the context of other products of the Province to see what assistance we can give to industry by organisation, advice, or in whatever other way may suggest itself, to enable the products of the Province—principally agricultural, so far as I am concerned, but there are other products as well—to be on the best footing they can in all the markets which are open to them, in spite of any handicaps that may exist. I cannot be more precise than that, but I assure noble Lords that I share their anxiety and also their assessment of the problem. In due course, I hope to come to a conclusion which may be helpful. I beg to move.
On Question, Motion agreed to.

Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1981
5.49 p.m.
Viscount Long: My Lords, I beg to move that the Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1981, which was laid before the House in draft on 19th January, be approved. For the convenience of your Lordships, I should like to point out that my remarks on the technical aspects of this order apply equally to the order which my noble friend Lord Elton will move later. The shipbuilding redundancy schemes in Great Britain and Northern Ireland are identical in substance, as are the amendment orders we shall be looking at this afternoon.
Because of the continuing uncertainty about the future of the industry we announced last November that we propose to prolong for a further two years the Shipbuilding Redundancy Payments Scheme which is due to expire in the middle of this year. Enabling powers are being taken in the Industry Bill, which has recently had its Second Reading in this House. In due course, it is hoped to lay before Parliament the necessary order to prolong the scheme to the end of June 1983. The amendment order now before you should therefore be considered on the basis that, provided Parliament approves, the Scheme will not expire in the middle of this year, but that new redundancies
1020
over the next 2½ years will be eligible for scheme benefits and that, because benefits can continue for up to 2 years after redundancy, payments under the scheme will be made over a period of 4½ years from now. The Joint Committee on Statutory Instruments considered these orders and have reported to the House. The committee was concerned that the definition of an unemployed person should be made clear and I shall come to this in a moment.
The amendments in the order deal with three points. The first will be familiar: that is, the increase in the "previous earnings limit" from £120 to £130 per week. This is dealt with in Article 4 of the amendment order. The "previous earnings limit", which is the maximum of an individual's pay which may be taken into account in calculating his redundancy benefit, has been raised on two previous occasions in the life of the scheme exactly in step with the increase in the previous earnings limit in the general state redundancy scheme. The most recent increase in the previous earnings limit in the general scheme, from £120 to £130 per week with effect from 1st February 1981, was debated and approved in December and the purpose of this amendment is to keep the shipbuilding scheme in step.
The other two amendments are new and both are of a technical nature. Article 2(1) retrospectively changes the definition of a "qualifying company". This retrospective element, though unusual, is needed to put right a situation in which certain employees of British Shipbuilders have been inadvertently excluded from eligibility under the scheme. To be eligible for redundancy payments, a beneficiary must, among other things, have been employed by a qualifying company for at least one year.
In April last year, British Shipbuilders, in reorganising its engine building sector, reactivated a dormant subsidiary, Clark Hawthorn Limited, and transferred employees to it. As the scheme stands at present, Clark Hawthorn Limited is not a qualifying company, even though it is now carrying on qualifying activities, because it was dormant and thus not a qualifying company on 1st July 1977. The employees of Clark Hawthorn Limited have thus been made ineligible for benefits under the scheme as a result of their transfer. It would not be possible to bring them back into eligibility by transferring them back to their original subsidiaries because, as I have said, to be eligible they have to be employed by a qualifying company for 12 months. This situation is clearly inequitable and the amendment in the order now before your Lordships is intended to remedy it by widening the definition of a qualifying company to include companies which have, at any time since vesting day, been engaged wholly or mainly in qualifying activities. It also gives British Shipbuilders flexibility in organising its corporate structure.
The third amendment is dealt with in Article 2(2) and is the most complex of the three in its drafting. The policy, however, is comparatively simple. About half of the redundancy benefit of beneficiaries aged over 40 is paid weekly over a period of up to two years. Certain criteria have to be met each week if the beneficiary is to continue to be eligible for these periodic payments; he—or she—must, among other things, be unemployed, or be undergoing approved training,

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or be employed or self-employed but receiving less than 90 per cent. of his or her previous earnings in British Shipbuilders. At present, "unemployed" in this context is defined in the original order setting up the scheme as meaning "unemployed and registered for employment". The underlying policy is that an unemployed beneficiary should be actively seeking, and available for, new employment. The same policy underlies one of the criteria for receiving unemployment benefit. Problems can arise, however, when someone remains registered for employment when he is not, in practice, available for work.
Last year, the Manpower Services Commission adopted a more flexible attitude towards its employment register, widening the circumstances in which someone could remain registered for employment despite, for example, absence abroad. There is, as a result, a potential for anomalies to arise when unemployment benefit is withheld but registration for employment is retained, and the present criterion of unemployed and registered for employment has become difficult to administer fairly. In order to clarify the situation, and to ensure that the original intention of the scheme is maintained, I have decided that a direct link with entitlement to receipt of unemployment benefit, subject to some modification to which I shall come, would be fairer and avoid doubt. No beneficiary will have his redundancy benefit clawed back as a result of the change. The link to receipt of unemployment benefit already exists for similar purposes, for both the Iron and Steel Employees Re-adaptation Benefits Scheme and the Redundant Mineworkers Scheme.
The modifications to the unemployment benefit criterion are contained in Articles 2(b) and (c). These are necessary to deal with circumstances in which unemployment benefit is withheld for reasons other than that the beneficiary is not actively seeking and available for work. This brings back within the scheme those who do not receive unemployment benefit because of sickness or injury, or who are ineligible for it—for example, married women who pay reduced rate contributions. This list is designed so that the new link to unemployment benefit does not disentitle anyone who would otherwise have normally been entitled to receive scheme benefits. The final subparagraph (d) of Article 2(2) simply restates the present position of the beneficiary who undergoes training.
The cost of the amendments in the order before your Lordships today is not significant. The number of beneficiaries affected by the previous earnings limit is very small; the qualifying company amendment brings back into the scheme employees who were once in its scope but were inadvertently removed and to whom British Shipbuilders is making the equivalent of scheme payments. This amendment will, therefore, not lead to any increase in the net Government funding of the shipbuilding industry. The third amendment clarifies the circumstances in which periodic benefit is paid and will have virtually no effect on scheme financing. The scheme has been effective in easing the hardship caused by redundancy and facilitating the restructuring of British Shipbuilders. From time to time, its complex structure needs amending to reflect changing circumstances and I commend to your Lordships the present amendments.
Moved, That the draft order laid before the House on 19th January be approved.—(Viscount Long.)
Lord Boston of Faversham: My Lords, your Lordships will be grateful to the noble Viscount, Lord Long, for having explained the purposes of these orders. In the circumstances that he has described, the changes proposed are clearly desirable ones. I should perhaps mention to your Lordships that I have had the benefit of the advice of my noble friends who are most closely concerned in these matters, including the noble Lord, Lord Blease, and they are content that I should join in supporting these orders. So it only remains for me to commend them to your Lordships as the Minister has done.
Viscount Long: My Lords, I am most grateful to the noble Lord, Lord Boston. I hope that the House is able to understand this extremely technical order. I am most grateful for your Lordships' patience.
On Question, Motion agreed to.

Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1981
Lord Elton Lord Elton rose to move, That the draft order laid before the House on 20th January be approved.
The noble Lord said: My Lords, as my noble friend Lord Long has explained, the amendments made to the Northern Ireland scheme by this order are exactly the same in substance as those which he described in introducing the previous order. I do not think therefore that it would profit the House if I recapitulated what he has already so ably said. I commend the order to the House and beg to move.
On Question, Motion agreed to.

Pet Animals Act 1951 (Amendment) Bill [H.L.]
6.1 p.m.
Lord Houghton of Sowerby: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Houghton of Sowerby.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord Drumalbyn in the Chair.]
Clause 1 [Amendment of 1951 Act]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Beaumont of Whitley: I understand, by a rather circuitous route, that there is some slight doubt as to whether my amendments, to both of which I propose to speak together, are completely in order. I can

1023
honestly say I have done my best to see that they are. I can reassure the Committee that I shall not detain it for long; I do not propose to speak on these two amendments for more than five minutes.
I shall not press the amendments, partly because I know that the noble Lord, Lord Houghton of Sowerby, feels that his Bill, which I heartily support, needs to go through unamended, and partly because there is this doubt about the amendments. All I ask is that when the Government reply to the amendments—I know that the noble Lord, Lord Houghton of Sowerby, will reply with sympathy—they should comment on the situation which is dealt with in these amendments in a way which is geared not entirely to whether my amendment is in or out of order but to what they would propose to do if they were concerned with this situation.
The sale of animals we quite rightly control, but there is a form of sale of animals which is under very little control—that is, sales through lottery or competition where people pay money and get, as a result, not necessarily an animal itself but the chance of winning an animal. The most obvious and the most widespread of these occasions is, I suppose, the winning of goldfish at fairs. I must confess to a certain guilt, if it is guilt, in that I regularly restock my own very small pond from the goldfish which my children win at fairs.
Although the Showmens' Guild has entered into an agreement to try to observe certain basic conditions for looking after these pets, the fact remains that the giving away, or the winning, or the buying of goldfish like this must result, and does result, in a great deal of unintentional cruelty through the fish being kept in inadequate containers and sometimes merely being thrown away. We find it very difficult to get het up about the sufferings of goldfish—probably wrongly, but that is natural. It becomes more to the point when we visualise some of the trouble that comes from animals being offered in a raffle or as a prize. In the old days, bowling for a pig at the village fair was natural, for everybody in the village probably had their own pig at the back of their cottage for fattening. This was one way of getting yourself started off. Anybody who won the pig would know how to look after it and would realise what a valuable source of food it was.
In these days, if puppies, kittens, or in some cases ponies are put up as prizes, it is obviously a tremendous temptation to children to urge their parents to buy tickets for the raffle, or whatever it is. Then, as often as not, the proud winners have not the faintest idea how to look after the animal and do not have the resources for looking after it. A great deal of cruelty again occurs.
There is a horrifying story in the Horse and Hound of 6th February of this year about a nine-month old pony foal which was rescued, after being prepared for the knackers' yard in order to be made into dog meat or some kind of animal food like that, and put up for a raffle. It was finally won, in a very inadequate condition, and taken home. The story has a happy ending in that case, because the animal was taken over by somebody who looked after it. But it does not always happen like that. There are a great many
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really nasty stories. The RSPCA have been doing the best they can to deal with this very real problem.
As I have said, although I do not propose to press my amendment to the Bill, I look forward very much to the Government telling me what they think can be done about an extremely distressing situation.
Lord Houghton of Sowerby: I am very grateful to the noble Lord, Lord Beaumont of Whitley, for saying that he will not press his amendment. It does not lie within the scope either of the original Act or of the amending Bill. The amendment deals with the recipient of an animal. It says that it should be unlawful for an animal to be given away as a prize in a lottery or competition. No legislation at the moment deals with the giving away of animals.
I was pressed at an earlier stage to look at one or two other matters that might arise on the principal Act of 1951. Section 3 of the principal Act deals with the age of the recipient and makes it unlawful to sell to a child under 12 years of age. That is the only reference to a recipient in the principal Act.
I should hope that the giving of animals as prizes in lotteries or compeitions is a diminishing irresponsibility. Welfare organisations as well as the greater awareness and wider commonsense of people about these matters would discourage the practice of giving animals as prizes. If it were intended to make it unlawful in this Bill it might be necessary to expand a little on the provisions that the noble Lord wishes to introduce. I have rarely found that a new clause consisting of two lines is a complete version of what the law requires to make it watertight and to overcome difficulties of interpretation and of application.
In my Second Reading speech (at col. 874) on the 29th January I mentioned that the pet trade associations were conducting discussions with the authorities on a number of matters which in their experience arise on the principal Act and they hoped that I would not find it necessary to deal with anything beyond the sale of animals in open-air markets in this amending Bill. In regard to the other matters they thought it was probably more appropriate for the discussions that they wished to have with the authorities to proceed, so that if the principal Act is to be reviewed it could be done more comprehensively and take these other matters in its stride.
A further consideration is that I am most anxious that Members of another place should have the opportunity of considering this Bill. I think it is better that the Bill should remain in its original state; in other words, in the condition in which it was introduced on three previous occasions in another place and in which it is now before the Committee in your Lordships' House. The Bill therefore would deal solely with that issue and would have no "sideshows" of any kind that might impede its progress through another place. Therefore, I sincerely hope that the noble Lord will feel that, while this is not an inconsiderable matter, it would be better left until the more comprehensive review of the principal Act is completed.
Lord de Clifford: I am afraid I have a rather nasty mind. If I were in an open air or a permanent market and was selling a dog, for instance, a collie, a terrier or any form of gun dog, and I was told that I could

1025
not sell it as a pet, I would say: "I am not doing so. I am selling it as a working dog". I would open my remarks by saying: "This is a very good working dog but it will make a good pet as well". I have a feeling—always coming back again to the country—that where I have seen dogs offered for sale in permanent markets, the let-out would be so quick: "This is a good working dog; it comes from a good working strain".
This Bill deals with pet animals, but there could be a very fast avoidance by saying: "This is not a pet animal; this comes from a good working strain and will make a good working dog, and I am selling it to you as a working dog and not as a pet". I would not under any circumstances stop this Bill from going through, but I should like to raise that point as a matter of interest.
Lord Somers: I am sorry to differ from the noble Lord, Lord Houghton of Sowerby, but I am inclined to support the amendment. The noble Lord says that the Bill deals with the recipients of animals. To take that a little further, presumably it deals with the kind of home that they are going to have, and certainly animals which are offered as prizes in lotteries are, in 99 cases out of a hundred, going to get extremely poor homes. Therefore I cannot see that an amendment such as this would be is out of place in a Bill such as this, and I hope personally that the Committee will accept it.
Lord Boston of Faversham: Like the noble Lord, Lord Beaumont of Whitley, I look forward to hearing what the noble Lord, Lord Belstead, has to say about the points which have been raised. I think many people will be in sympathy with the purposes of the amendments which the noble Lord, Lord Beaumont, has tabled. They have been put forward clearly, with wholly praiseworthy and beneficial intentions. However my fear, when I saw that they had been tabled, was that they might perhaps jeopardise the chances of the Bill if it passed through your Lordshps' House and went to another place.
I have been very much persuaded by the advice given to your Lordships this afternoon by my noble friend Lord Houghton. So, while I sympathise with the purposes of the amendments I, too, fear that they might have some effect on the chances of the Bill finally passing if we were to extend it in this fairly considerable way. Therefore I hope that the noble Lord, Lord Beaumont, will, as indeed he has been kind enough to indicate to your Lordships, feel able not to press these amendments.
6.15 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): While I appreciate the objective of the amendment I am a little sceptical about the value which it would have if it were to be written into the Bill and I can quite understand the reasons which prompt the noble Lord, Lord Houghton, to say that he does not wish to see the Bill amended. Indeed, I think probably all of us who are taking part in this Committee stage on the Bill would agree, and I note that the noble Lord, Lord Beaumont, has said that he will not press the amendments.
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The reason why I say to the noble Lord that I am a little sceptical about the value of the amendments is that, while the Home Office has received a number of representations about irresponsible pet ownership, complaints about the giving away of pets as prizes in lotteries are very rare. I quailed a little when I heard the noble Lord talking about the different animals which can be given away as prizes, because one of the animals which he selected was the goldfish, and that reminded me that many years ago at a fair one night I won a pair of goldfish in a plastic bag. After I had received my prize for whatever it was that I did at the fair, I really felt rather ashamed. All I can say is that I gave them care and attention and, I think, a good home, and I do not think that perhaps on that occasion any sanction should have been forthcoming against me. That leads me to say that there appears to be no sanction, so far as I can see, relating to the amendment. Therefore, if the amendment were to have been pressed I think it would have missed its aim in that respect.
The only other thing I should like to say is that the remarks of my noble friend Lord de Clifford were drawn rather more widely than the terms of the amendment tabled by the noble Lord, Lord Beaumont. In fact my noble friend was really questioning whether the objective of the Bill would be achieved if it were to pass into law, and that is something which on this occasion I can have the luxury—as I generally have to answer questions—of saying that it is the noble Lord, Lord Houghton, who must answer my noble friend's question.
Lord Beaumont of Whitley: I thank noble Lords for their interest in the amendments and I am particularly grateful for the support of the noble Lord, Lord Somers, urging me on. I do think something ought to be done about this. The Government say there are not very many examples of it happening, apart from goldfish. I think there probably are quite a few. The RSPCA certainly seems to think it is a problem which ought to be dealt with. I do not think it necessarily needs sanctions; I do not think that would be a fault in the amendments. I think very often in these matters all you need to do is to go along to the promoter of the lottery and say, "Look, this is against the law". I do not think you need any sanctions: they would immediately withdraw it, whereas it is a bit more difficult to go and argue the ethical toss when they say, "children in this part of the world know how to look after their pets", et cetera. It gives added strength to be able to say that it is against the law. I think it is something which ought to be dealt with and something the Home Office ought to have in mind. At the moment we are discussing the Question, That Clause 1 stand part. Well, I am all for Clause 1 standing part, and I shall not be moving my amendments.
6.21 p.m.
Lord Houghton of Sowerby: On the Question, That the Clause stand part, I would say this. At the conclusion of the Second Reading debate I felt that the noble Lord, Lord Belstead, was still an agnostic about this Bill. One can read about his agnosticism in cols. 882 and 883 of the Official Report of 29th January. It seemed to me it would be a great pity if this Bill went on its way to another place with an uncon-

1027
verted Minister in your Lordships' House. So I made it my business to ask for the maximum co-operation of the RSPCA to find out more about the matters which were troubling the noble Lord at the time of the Second Reading. I ask the forgiveness of the Committee for the time I feel I have to take to deal with some of those major questions that the noble Lord asked towards the end of his remarks.
One of the points that he made was that this Bill would hit far more than its target. He said that the focal point of the discontent and anxiety on this subject was the open air market in Club Row in Tower Hamlets; why not, then, deal with the Club Row market and leave the others alone, rather than trying to bring all the open-air markets within the purpose of this Bill in order to clean up one of them? That I think suggests that we should find out how big is the target. If this Bill would hit far more than its target, what is the size of the target? I wish to thank the RSPCA most warmly for the excellent job they have done in scouring the country for open-air markets where animals are regularly sold and in reporting upon their size and upon the conditions that obtain in them.
The RSPCA are aware of 23 street markets at which animals are sold regularly from stalls or barrows. In those 23 markets there exist a total of 57 licensed stalls or pitches. A pitch in a market place is where the stallholder has a right to be. There are 57 licensed pitches in the 23 open-air markets; 33 of those are within the London borough of Tower Hamlets and 28 are licensed and registered as being within the Club Row market itself. So Tower Hamlets has more than one half of all the pitches known to the RSPCA throughout England and Wales, and Club Row contains nearly one-third of them; that is, nearly one-third of the total pitches in the country are at Club Row. Although, therefore, the target is larger than the bull, if we hit the bull we gain 30 per cent. of the total score. That, I suggest, means that the bull is a substantial part of the target and that we are not really hitting far off its target if we pass a Bill dealing with them all. If we include Watney Street and Wentworth Street markets, both in East London, these three London markets comprise over one half of the total target. By far the greatest concentration of licensed street traders in the country is at Club Row, so it is not surprising that that market has received so much attention.
I have a list of all these markets but I am not going to trouble the Committee with them. They are pretty widely scattered. They are in 20 towns outside London. What the RSPCA survey on them all shows—and I quote from the report they have given to me—is that,
"Exactly the same sort of animal welfare and disease problems are to be found wherever animals are sold in street markets".
I have received from a veterinary surgeon some adverse comments about Newcastle Quayside and also South Shields, but it is clear that wherever these markets are similar problems arise.
The next point the Minister made was about the conditions of granting licences, and the rules about animal welfare which are made under the authority of the 1951 Act. I think I have proved that the Bill is not hitting too wide of the target as regards the size of the problem. The question is whether it is hitting
1028
too wide of the target so far as conditions in the markets are concerned. Is the Bill taking a sledge hammer to crack a nut, even though it is a hard nut? The answer is that the RSPCA find that the most commonly reported problems involve overcrowding, the housing of animals in cages of inadequate size, disease, sickness, neglect and the sale of unweaned animals. It is also clear that such markets attract a percentage of unlicensed traders. So the RSPCA report to me. And they say that it is not solely a matter of cats and dogs. Their survey of all these markets reveals hamsters, mice, tortoises, terrapins, snakes, spiders, guinea pigs, rabbits, poultry, fish, goats, ferrets, rats, gerbils, wild birds and even monkeys being offered for sale.
I think that, if we are satisfied from this report that all is not well in the open-market trade, we can pass to the apparent belief of the Minister that the 1951 Act lays down conditions which can be applied to stalls and barrows in open markets, quite apart from the difficulties of enforcing them. The RSPCA report to me confirms the doubt that I expressed myself on this matter at Second Reading. It says:
"Lord Belstead emphasised during his speech that the regulations which apply to pet shops apply equally to markets. In practical terms this is simply not the case. The provisions of the 1951 Act were clearly drafted with pet shops in mind. Section 1(3) of the Act, for instance, states that in considering an application for a licence a local authority shall have regard among other things for securing, '(a) that animals will at all times be kept in accommodation suitable as respects size, temperature, lighting, ventilation and cleanliness; … (e) that appropriate steps will be taken in case of fire and other emergency'. So both these paragraphs were clearly drafted with shop premises in mind. Moreover the specific requirements of paragraph (a) simply cannot be adequately met because of the necessarily temporary nature of market stalls. It is simply not practicable to satisfy the requirements for adequate heating on a cold winter's morning in the open air".
Last Sunday morning was a good example of the type of weather that the open-air market might encounter.
The Minister referred to the new and tighter conditions to be attached to licences granted by the Tower Hamlets Authority as from 1st January 1981. I ought to point out that the new conditions apply only to licences newly applied for or renewed after 1st January 1981 and do not apply to licences current at that time until they have to be renewed. Looking at them, and I have studied them most carefully, it is quite clear that these conditions really relate to pet shops where the conditions can be satisfied, but certainly not to an open air market. It was reported to me that last Sunday morning at Club Row tarpaulins were blowing about in the snow and wind, and it was quite impossible to satisfy the conditions laid down on one of the coldest mornings of the winter.
The fact is that so far as the 1951 Act is concerned stalls in open markets were and are a thing apart. At a meeting between officials of the Tower Hamlets Borough Council, the City of London Veterinary Department and the RSPCA inspectors held on 17th May 1980, an officer of the City of London Veterinary Department stated that his department considered that the application of the provisions of the 1951 Act had to be more liberal to pet stalls than to pet shops. When asked what authority he had for that in the Act, he admitted that there was none.
That is the root of the matter. The truth is that conditions laid down in the Act can rarely be fully

1029
complied with in open-air markets. Indeed, that was one of the weaknesses of Sir Ronald Russell's Bill. He received no help from the Government of the day in 1951 to remedy that weakness. My strong belief is that Sir Ronald realised very fully as the years went by that he had failed to deal adequately with the sale of animals in open-air markets and sought on three occasions, unsuccessfully each time, to introduce the very Bill that is before the Committee today. The Government of the day were unmoved each time and they are unmoved today. The fact is that no Government have ever been moved to introduce the original legislation, so why do we expect them to be moved to introduce or support an amendment?
Not only are adequate welfare conditions difficult to define—they are difficult to comply with and difficult to enforce. Although the Minister acknowledged the difficulties of enforcement, I wonder whether he realises the diffusion of responsibility in a market such as Club Row. Enforcement appears to be shared between the Environmental Health Department of the local authority and the City of London Veterinary Department. The City of London Veterinary Department supplements the resources of other local boroughs in this particular respect. But the City of London Veterinary Department has staffing difficulties of its own and it can attend Club Row only one Sunday a month. The Environmental Health Department of Tower Hamlets has said that it cannot ensure attendance every Sunday and it has no regular roster.
Last Sunday two officers of the Environmental Health Department of the Tower Hamlets Authority were in the market, but they were not looking at the enforcement of the conditions for the welfare of the animals; they were trying to silence a demonstration. They were seeking out persons on whom they could serve an order under Section 58 of the Control of Pollution Act 1974, having already served five similar notices upon societies which are alleged by them to be responsible for the emission of the noise in the demonstrations on Sunday mornings. The police are there every Sunday to keep the demonstrators in order and they are not normally there as enforcement officers under the 1951 Act because that really rests with the two other authorities. However, the RSPCA fills the gap—as the noble Lord the Minister, acknowledged—as it so frequently does when the statutory duty of the responsible authorities falls short of what is required.
Incidentally, I think that I should mention that the Automobile Association, who publishes a book called The London Book, apparently thinks that Club Row is a suitable tourist attraction and it mentions in that book that RSPCA officials are present. It says:
"Resident RSPCA officials are on hand to give assessments of animals before they are purchased".
That must be denied absolutely and the RSPCA have remonstrated with the AA for including such a reference to them in a book without any consultation whatever. The RSPCA officials are not there to vet the animals for intended purchasers: they are there to watch the administration and application of the 1951 Act. The AA has promised that it will attend to the matter in the next edition. I think it unfortunate if people are to rely on the RSPCA as a vetting authority in buying animals in a market like that.
1030
There have been 56 convictions during the past seven years, which suggests that there have been quite a lot of misdemeanours from time to time. Suggestions made by the RSPCA for imposing far stricter safeguards against health hazards in the conditions of the licences have not been adopted. For example, they have put forward the requirement that each stallholder should provide a veterinary certificate of good health and a certificate of vaccination against canine distemper or infectious gastro-enteritis in cats, but no such safeguards has been adopted. But through the good offices of the Euro-group for Animal Welfare—a new body of observers and lobbyists in Brussels—I have seen the draft decree of the Netherlands Government on the boarding and selling of cats and dogs. It makes our own provisions look primitive. All cats and dogs in Holland involved in commercial transactions of buying, selling, taking into care, training and so on, will require a passport, and that will have to show essential particulars about origin, health, vaccination and registration. So dogs and cats in Holland will have a new legitimacy or at least an identity with all the pedigree attached. That will be a new feature in the commercial life of Holland. As for street selling—it simply is not on. They recognise, as we should now, that no satisfactory conditions are attainable in open markets.
Finally, I want to deal as briefly as possible with another concern of the Minister—and it is right and proper that he should have this concern; namely, would the Bill in total, in making the sale of animals in open markets unlawful, unduly harm those engaged in this trade? Would there be perfectly law-abiding and respectable traders who would be adversely affected and suffer loss? Even if we are expected to put commercial interests before welfare and humane treatment of animals, which I do not accept, there are still no serious grounds for concern. The reason, as I suggested on Second Reading, is that most of the market trade is also involved in the pet shop trade. In fact, much of the market trade is on sale or return from pet shops.
There was a very full description of the fascinating background to these commercial activities in Club Row in a book by Norman Comben, BSc, MRCVS, published in 1955 called Dogs, Cats and People—a Vet's Eye View. One sees there the ramifications of this trade in the markets in London. The RSPCA has carried out a detailed census of 16 stallholders at Club Row. It shows how closely interconnected are those traders. Three families—and I could give their names—in their several inter-relationships have the bulk of the trade at Club Row. The RSPCA has also carried out a most complete census of who's who at Club Row, and I am bound to acknowledge with thanks that the stallholders themselves have provided most of the information. No one is making a living out of selling animals in Club Row only on Sunday mornings. They all have other activities and sources of income. Some have stalls and no longer use them, but perhaps that helps those who retain them, and sometimes they are members of the same family. The fact that some of the stallholders are occupied in another trade during the week I think suggests that they do not rely on their business at Club Row on a Sunday morning.

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I do not think that the Minister has any grounds for serious concern about the ill-effects upon the commercial interests of those engaged in this trade. It is true that many of them have been in the market for a very long time. These three families under different names have controlled the business in Club Row for a great many years. They are also actively concerned in other activities.
I conclude by apologising for keeping the Committee so long on the Motion that the clause shall stand part, but it is in the hope that I have given the Committee and the Minister additional information which may at least bring him to believe that the Bill has greater merits than perhaps he understood at the conclusion of the Second Reading debate. My final sentence is this. Members of another place await this Bill and will put their efforts behind it; I should add that the honourable Member for the constituency in which Club Row is situated, Mr. Ian Mikado, has stated quite voluntarily that he will give this Bill his fullest support, if and when it arrives in another place.
Lord Belstead: In his remarks on Clause 1 stand part the noble Lord, Lord Houghton, took up the point which I sought to make on Second Reading, that if this Bill were to pass into law, it is arguable that it would hit far more than its target. When I said that I had in mind the requirements in the 1951 Act for the holding of a licence and during Second Reading I gave some details of those requirements. I reminded your Lordships then of the existence of the Protection of Animals Act 1911 and of the Abandonment of Animals Act 1960. I had that legislation in mind when I spoke. I went on to refer to the way in which the Tower Hamlets Borough Council environmental health department had strengthened its requirements for the holding of a licence under the 1951 Act. Thus, in saying that the Bill would hit more than its target, I meant—and, indeed, I think I said—that it would affect markets where traders are conforming to the conditions of their licences. I said this also in the context of the strengthening of the licence requirements by the Tower Hamlets environmental health department.
Therefore, with that statutory base, we must look at the evidence before the Government could possibly bring forward a public Bill. Although I appreciate the noble Lord's concern, which he has repeated this evening, and although the Home Office always takes seriously any comments from the RSPCA, I must tell your Lordships this evening that since the Second Reading the Home Office has written to five district councils, which were selected at random. So far we have received two replies and both—from Harlow and from South Tyneside—have told us that there are no problems in their street markets.
It is for those reasons that I said on Second Reading, and I repeat this evening, that the Government have no plans for introducing legislation. However, the noble Lord has done so, although on the fairly limited basis of the present Bill. I would simply say that the Government are not opposing the provisions of this Bill as it passes through its Committee stage in your Lordships' House.
Clause 1 agreed to.
[Amendment No. 1 not moved.]
Clause 2 agreed to.
[Amendment No. 2 not moved.]
House resumed: Bill reported without amendment; Report received.

Hong Kong
6.49 p.m.
Lord Brockway Lord Brockway rose to ask Her Majesty's Government whether they will appoint a Royal Commission to survey the unique social and political problems of Hong Kong and to make recommendations regarding its future.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I must acknowledge that I have never been to Hong Kong. Yet I feel that I know it as well as I know London. That is because for over 15 years I have had continuous correspondence with knowledgeable people there, not only those engaged in politics, but in the social life of the people; for I have received many communications from different organisations, have met their deputations when they have come to this country, and have learned much from the official reports which the Hong Kong Government have issued. I pay my tribute to their factual information.
My purpose tonight is not to criticise those who are responsible for conducting the administration in Hong Kong. I do not know in any country so many difficulties and complexities as they have to face. What I am seeking to do is to suggest that those problems are so great that we should ask the highest advisory authority in our constitution to consider them and to advise us.
In my Question I describe the social and political problems of Hong Kong as unique. I think I shall be able to show that they are. They are due to the fact that Hong Kong is poised in a situation of relationship with China and uncertainties about its own future. After the two opium wars in 1840 and 1860 treaties were signed which designated Hong Kong in perpetuity to Britain. China declares that they are invalid because they were imposed in those circumstances. I think it undoubted that, if that issue went to The Hague Court of International Justice, the court would agree, because of precedents which have occurred, that those treaties are invalid.
But the situation in Hong Kong does not rest merely on those treaties. In 1898 Britain leased from China the great area of New Territories, and that lease ends in 1997. I think it is generally acknowledged that Hong Kong could not be maintained without those New Territories. Therefore, in 16 years at most the momentous decision has to be taken whether Hong Kong is handed back to China or whether it remains in British occupation. Sixteen years is a short time for the conditions which would arise in either case. A decision cannot be delayed because of the consequences for the population of Hong Kong and its economy. The Financial Times has suggested that a decision should be made by 1985—four years away. The Executive Director of the Hong Kong Chamber of Commerce, Mr. J. McGregor, says that a decision must be made by 1982 at the latest. He points out that

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unless there is an early decision there will be a reduction of foreign investments into Hong Kong and there will be an outflow from Hong Kong of capital and expertise.
I want to look for a moment at the alternatives when a decision is reached. Is it to be a reversion to China of Hong Kong? If so, there will be immense problems of economic transference in handing over the great businesses in Hong Kong to a Communist régime where control would be so different. And there will be not merely the problems of the economic conditions but of the population. A large part of the population would not wish to pass into Communist China. A very large proportion of the population are British citizens with British passports. Where are they to go? These are problems on which we want the greatest investigation, consideration and advice.
The second alternative is that British occupation of Hong Kong should be maintained. When we consider that, we have to appreciate that China does not recognise Hong Kong as a British colony. It is their view that it is an integral part of China and that it will be taken back "when the time is ripe". I appreciate that recently there has been a statement from Peking that Britain and China, "must maintain the status quo to their mutual benefit". Clearly Hong Kong under its present administration is advantageous to China; first, because many external relations are conducted through Hong Kong and, secondly, because it is the means of acquiring foreign exchange with which to purchase goods.
But I want to ask this: if Britain is to maintain its occupation of Hong Kong does "status quo" as used by the Chinese mean that the present régime in Hong Kong is to be maintained? I want to suggest that the closest possible inquiry should be made to discover whether that is possible and whether it is desirable. Because of our relations with China, in Hong Kong there is no democratic self-government. If it had been a normal colony, its people would have had self-governing independence 20 years ago. But because of the relationship to China and the undemocratic system that there is in China conditions in Hong Kong deny the very beginnings of democratic self-government.
Let us just look at the administration. At the top there is a Governor with a legislative council and executive, and with advisory committees to make recommendations. Not one member of those bodies is an elected person; they are either civil servants or nominees of the Government, and perhaps it is inevitable that in Hong Kong the nominees should be a privileged élite—businessmen and landlords—and that in the advisory committee they should be lawyers and professionals. It is impossible to describe the gulf between those who are responsible for the administration of Hong Kong and the people themselves. All of those in the legislative council and the advisory committees are supporters of the Administration. No critics are permitted to enter them. There is nothing of the kind of democratic discussion which there is in the parliaments of democratic countries.
Below that top level is the urban council with 12 elected and 12 nominated persons. The franchise is ridiculously small, representing only 10 per cent. of the population, and the jurisdiction of the urban council is no greater than that of a parish council in
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this country. It is limited to recreation and culture and to very restricted aspects of health. I recognise there is now a proposal for district boards with a wider franchise. That will allow a marginal unofficial majority after 1982, the first occasion when there will ever have been an unofficial majority on any administrative body. But that recognised, the whole structure of Hong Kong denies democracy in the determination of the status and conditions of life of the people.
Inevitably there has grown up in Hong Kong a large number of pressure groups demanding change; there are community associations, professional organisations, Christian committees, conservation associations and students' unions. The present Government of Hong Kong have just had an inquiry made by the Standing Committee on Pressure Groups. I have asked the noble Lord, Lord Trefgarne, for a copy of its report, but he has courteously replied that it is not possible for me to see it because it is classified. Nevertheless it has been leaked and I have seen its contents, and large extracts have been published in this country in the New Statesman and in many papers in Hong Kong.
The report denounces the leading pressure groups, including the Hong Kong Christian Industrial Committee, and calls for Government action, expressing fear of "Communist infiltration", a phrase which amuses me when Hong Kong is so much dependent on Communist China. This suggests that there is not only an absence of democracy in the Administration but an actual discouragement of democratic expression by the people. That is the heart of the problem—the gulf between the Administration and the people—and the Administration is manned by a distant privileged élite with no contact with the masses of the people. The people live in a different world. That applies not only to the governmental administration but to the judiciary. Hence we have the helplessness of so many of the bewildered people who are charged, and I have had particulars of many cases.
So much for the Administration. The political conditions are paralleled by the social conditions; the crowded conditions of this restricted island, made more difficult by the illegal immigrants from China and the boat people from Vietnam, mean great problems. There has been a very ambitious housing programme, with tall buildings in which thousands have been housed. I recognise that, but I am receiving reports of serious, sometimes inhuman, overcrowding in the small rooms of those great mansions, and there is now widespread recourse to ramshackle huts and squatters groups are growing.
The Government, to raise revenue, are now selling land at thousands of dollars per square foot, leading to the eviction of people from their homes and small businesses. Speculators are buying and rents are increasing, so that neither people in their homes nor small businesses can possibly afford them. Taxation is low for the higher income brackets; but the salaries tax begins at a low level, so that even married labourers have to pay tax. There are no unemployment benefits, although the number of unemployed is growing and is now estimated at 200,000. Labour laws in Hong Kong have lagged behind international standards for 30 years, and even when laws are passed the departments lack the personnel to enforce them; the prohibition of child labour and safety regulations in industry and

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construction are an example. Human rights are denied, as a report to the Human Rights Committee of the United Nations by distinguished citizens showed. There is an agreement with the Chinese to control illegal immigration, but what is to happen to the 22,000 boat people from Vietnam who are now living in camps and who are allowed six-and-a-half square feet of space per person?
Those are some of the many problems in undemocratic Hong Kong. Some are outside internal responsibility; most are the consequence of an undemocratic society, which is maintained because of the different régime in China. I do not base my indictment on criticism of those responsible for the Administration, but on the undemocratic system of administration itself. And I seriously ask whether we should continue to be responsible for conditions which deny all our values of liberty, as we shall be compelled to do if we maintain the status quo, the present relationship, with China.
Therefore I suggest that this colossal dilemma requires immediate consideration by the best minds at our disposal. Do we withdraw in 1997, or should we maintain a régime which is alien to all our conceptions of liberty? It is an immense issue, but we are rich in ability and in experience, and we have in our present Foreign Secretary, the noble Lord, Lord Carrington, a man of reconciliatory and constructive approach.
We recently sent to Hong Kong 14 parliamentary representatives to investigate the operations and living conditions of the armed forces garrisoned there. That was to be welcomed, but as I have indicated, there are much more formidable issues to be resolved. I suggest a high-powered Royal Commission to advise what should be done. I hope that the Government will accept that suggestion.
7.13 p.m.
Lord Goronwy-Roberts: My Lords, we are all very grateful to my noble friend Lord Brockway for raising this Question. This is a matter not only of importance to the wellbeing of the people of Hong Kong, but also of far-reaching importance to the relations between this country and the People's Republic of China, and therefore to the whole balance of future relations between the West and China. So whatever we say or do about Hong Kong has an impact beyond the Crown Colony itself. I am bound to say that while I sympathise very strongly, as I always do, with my noble friend's passionate convictions about the need to improve the lot of the people in our few remaining dependencies, frankly in what he said I did not recognise a complete and true picture of what Hong Kong is like today. I was the Minister responsible for our relations with China and with Hong Kong, and as my noble friend Lord Rhodes—who has worked so hard and contributed so much to Anglo-Chinese understanding—will readily agree, it is impossible to talk about Hong Kong without weighing very carefully the facts, the figures and the reality of what has been done in Hong Kong, what is being done in Hong Kong, and what needs to be done in Hong Kong.
We could all agree that much remains to be done in Hong Kong, as indeed in a great many parts of Europe
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and beyond the Urals, but in all fairness we must also agree that a tremendous amount has already been done in Hong Kong, especially during the last crucial decade. I pay tribute at once to that great Pro-Consul, Sir Murray MacLehose, whose leadership and wisdom have stood the people of Hong Kong in great stead, and whose action has always been dictated by the need to maintain a balance of understanding, indefinable but real, between us and the People's Republic.
The story of Hong Kong is in fact one of unique achievement, especially in the four major social areas: improving social conditions, in particular in housing—and I propose to give a few details about what has been done regarding housing in Hong Kong; improving labour conditions; maintaining and expanding employment; and eradicating corruption. All of that has been achieved despite the extraordinary difficulties which face its people and its Government My noble friend was fair enough to refer to those difficulties, and indeed they are mountainous.
Of course, the basic problem has always been that of a rapidly rising population in a tiny land area, with today over 5 million people occupying only 400 square miles. It is almost as though the population of Scotland were crammed into the county of Surrey. In fact Hong Kong is one of the most densely populated territories in the world, if not the most densely populated territory among the other most densely populated territories. Moreover, what land there is is unproductive mountain land. Only a tenth of it is farmed, or is capable of being farmed, and its mineral wealth is almost negligible.
Nevertheless the present Government in Hong Kong, the present system in Hong Kong, has assembled a workforce numbering 2¼ million people. Its unemployment is actually lower than that of most of the developed countries of the West. It may be rising, but in what country is it not rising during a period of deep recession? Its gross domestic product, its fixed capital formation, its attraction of investment, its overseas trade, its wage levels, and its social services have shown substantial increases over the testing years of the past decade. We should always remember—and here again my noble friend was fair enough to draw our attention to the point—that Hong Kong has had to cope not only with a rapidly rising population, but also with large-scale incursions of illegal immigrants. I recall dealing with this problem when I was a Minister. In one year it reached the figure of 100,000; the adding of 100,000 new mouths to feed, new hands to employ, new persons to house, to an already burgeoning population; but the Government, I believe, coped extremely well with that terribly difficult situation.
Government expenditure in the four key areas of social services—education, medical and health services, social welfare and labour—has increased more than fivefold in the past 10 years. Of what other country in the world can that be said? Whatever may be the system of taxation in Hong Kong, in the past 10 years they have contrived to spend five times more on those things that I and my noble friend hold most dear: education, medical and health services, social welfare and labour.
As I saw for myself when I visited Hong Kong more than once, the progress made in housing and rehousing the teeming millions has been nothing less than spec-

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tacular. Of course, with their increase in population, natural and incursive, however fast you build you are going to find families living on top of each other. We have that in this country, especially under this Government. But I repeat that the progress has been spectacular. The Hong Kong housing authority is the world's largest landlord. More than 40 per cent. of its people now live in public housing, and by the end of the 'eighties this figure will have reached 60 per cent. The rents are low, usually rather less than 10 per cent. of income.
In the field of education—and I was delighted to be part of this movement forward in the years between 1974 and 1979—free compulsory education has been extended to all children up to their 15th birthday. How recently was it that compulsory education up to the age of 15 was enacted in this country? It was not so very long ago. Technical and university education is increasing steadily. As to health care, the expectation of life in Hong Kong is about the same as in the United Kingdom. Its infant mortality rate is now a little lower than ours. These are not the results of a repressive, illiberal, anti-social Government: these are the results of humane, wise and dedicated devotion to the interests of the people of Hong Kong.
Provision for old age and unemployment still remains uninsured, and here I will join hands with my noble friend and say that it is time that social benefits of that kind were in fact nationalised. There is no ideology in this. Unless you have a system of insured social security, you are hound to have the dreaded and hated means test. I commend the point once more to the Government, as I commended it to the Hong Kong Government more than once during my tenure of office.
As to labour legislation (my noble friend was very critical of this, and I was surprised to hear him being quite so critical) 42 of the International Labour Organisation conventions have been applied to Hong Kong. This is a record which compares very favourably with that of any other neighbouring Asian country, including Japan, which has notched up not 42 but 36. So Hong Kong is leading the league in its attempt to apply International Labour Organisation standards to the treatment of its labour force. There have been very marked advances, as I have seen, in the control of employment of young children, which in the past was a dreadful blot on the life and system of the colony; in improving maternity leave benefits; and in improving employment safety regulations. A good deal remains to be done, of course, but let us remember that against a mass of difficulties—of unique difficulties—a tremendous lot has been achieved. In another important field—that of the eradication of corruption—it is now generally recognised that the back of syndicated corruption has been broken. The independent commission against corruption has done magnificent work under the inspiration of the Governor and the courageous leadership of Sir Jack Cater, the present Chief Secretary. This should be placed on the record, too.
On democratisation (or, as our Chinese friends in Hong Kong and on the mainland would say, on participation), on the question of democratic participation, I agree with my noble friend that progress has been too slow. I was continually pressing for stronger and quicker action in this direction, but always mindful
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of the fact that our Chinese friends see democracy in a rather different light from ours. They are more concerned with participation. There are their mutual aid committees. I sat in on the meeting of one of these excellent local committees. As to freedom of expression, really, with a free press and complete freedom of expression within those local communities and wherever I went, I really do not recognise the picture that my noble friend has painted.
Now they believe in participation; that is, in people coming together and discussing. The formalities that we have recently grown up with—the ballot paper, the secret ballot and so on—are recent graces in the democratic life of this country. It was non-existent up to 1832; it only really got going in 1885; and women were shut right out of it up till 1918, and were let in only by a kind of odious age selection after that. That is only 60 years ago. The Chinese approach this rather differently from ourselves. That does not excuse any unwillingness by the present Government in Flong Kong to extend the opportunity of participation, so that the Chinese majority are increasingly drawn into the institutions of government and administration. I believe they are, but far too slowly.
There has been progress at all levels, from the legislative and executive councils down to the district councils. More and more Chinese have been brought in; and certainly it is of importance that the Chinese who are brought in at various levels are properly qualified to do the work, because it is very hard work, very responsible work, that they do. We have the White Paper of January of this year, proposing directly-elected members of the urban district boards, and our own Home Office, I understand, is advising on electoral procedures. I put in the caveat once more that, while Home Office electoral procedures in the United Kingdom may in our eyes be perfect, or capable of perfection, by the time they are applied in Hong Kong, or indeed in Africa, they may need to be modified somewhat without impairing their essential, democratic purpose.
The reasons for all this progress—and it is real progress—are not far to see. I have mentioned the wise and humane leadership of Sir Murray MacLehose, who, against his own inclinations of comfort and interest, has twice agreed to extend his period of governorship. He has been aided by some remarkable men and women, British and Chinese, and indeed he and his assistants have identified the targets of opportunity. For instance, although it is physically impossible for this colony to feed more than a very tiny proportion of its population, its fishing industry, with 5,500 boats employing 36,000 people, meets more than 90 per cent. of its local fishing needs.
Where it is to be got, this colony (with very few resources) goes out and gets it. They make the best of what they have. Of course, it has major assets in its sheltered harbour, the only developed deepwater port on the Chinese coast and for a long time its main activity as a colony was trade. But, as that ceased to be its major occupation, the present Government and their immediate predecessors saw to it that not only service industries and tourism were rapidly developed but that manufacturing industry, which depends almost exclusively on the attraction of investment—and I want to make a point about investment in Hong

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Kong in a moment—should be developed. Today 45 per cent. of the activity of Hong Kong is in manufacturing—and in the manufacture of goods of a very high quality and not so cheap either. The old legend, "Made in Hong Kong", representing, therefore, shoddy and cheap, has disappeared. This is now a major manufacturing country producing goods which compete with the best in the rest of the world.
All this progress depends upon investment and investment depends upon stability. Stability and confidence in the future are the essential needs of Hong Kong—not just for its well-being but for its survival. Here my noble friend is absolutely right. We should, with due expedition, proceed to talk to our friends in Peking of the future, beyond 1997, when the present constitutional arrangement—if they will permit me to call it so—ends. It is essential that a feeling of stability and of confidence for the future should be sustained by friendly talks conducted, without a sense of strain and, certainly, without a sense of hostility, over the next few years. I do not share my noble friend's feeling that it is quite as chronologically urgent as he puts it; but that is a matter of opinion. I think there is time so that we do not have to rush things. This is not the Chinese way. They are, above all, a patient people. They wait and think so that their actions at the end of their thinking are all the more effective. We should emulate them in this—we are quite capable of doing it—and talk to them gently and gradually without rushing things as to the future; so that investment can see the possibility of increase without the possibility of failure after commitment.
Stability, in part, depends upon the wisdom and ability of the Hong Kong Government and, indeed, of the leadership in Hong Kong generally, which is both Chinese and British. I am thinking of the trade union movement, the great mass of which is led by Chinese and without the goodwill of whom you can do nothing. In part, it depends upon the wisdom and ability of its own leadership and in part on the continuation of the constructive understanding that marks the attitude of the People's Republic of China. It is very difficult to define this understanding but it is a practical fact and it is sustained—if I may repeat this; and I hope my noble friend will acquit me of presumption when I say this—by the highly intelligent visits which are paid by eminent parliamentarians and businessmen from this country to Peking and the talks that then take place between the two sides. My noble friend Lord Rhodes has so far led three such delegations—
Lord Rhodes: My Lords, it is two, going on for a third.
Lord Goronwy-Roberts: My Lords, I know the results of those and so, I believe, does the present Foreign Secretary. We owe a great deal of gratitude to my noble friend Lord Rhodes for the practical efforts he has made to sustain this precious understanding between us and the vast and potentially powerful People's Republic of China.
Both as a former Minister and now speaking from this Bench, I would not wish to define the under-
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standing. It is, as I have said, a practical fact which in word and deed we all have a duty to sustain. If we do so, the future of Hong Kong and the wellbeing of its people will be assured whatever form of government may evolve. But, even more important than that, the excellent relations which are now growing between this country and China and which have implications of growing hope and strength for Western democracy will also be strengthened. I end as I begin. In considering Hong Kong, we must consider the Chinese dimension at all levels. I hope that this debate, for which we are grateful to my noble friend for inaugurating, will help to remind us of that extremely important fact.
7.37 p.m.
Lord Campbell of Croy: My Lords, we are grateful to the noble Lord, Lord Brockway, for giving us this opportunity to discuss Hong Kong and, of course, as the noble Lord, Lord Goronwy-Roberts, has said, our relations with China, which inevitably arise on that subject. The noble Lord, Lord Brockway, gave us his sincere impressions from correspondence over years with residents in Hong Kong. He spoke of a gulf between the Hong Kong administration and the people. I wish that he had visited Hong Kong—he told us that he never has—because I think lie would have formed a somewhat different view and that he would accept the astonishing achievements of the Hong Kong community, administration and people, against a background of pressing problems caused by hosts of refugees and the density of the population.
How and why Hong Kong exists and flourishes is often a puzzle to observers. It is a world phenomenon. It is the product of a century and a half of trading, of British administration and pressures from and within China. People who have never been to Hong Kong often ask: how can over five million people live in such a small area and flourish? And that area is largely swamp and steep hillside. The fact that they do flourish is a triumph of determination, enterprise and hard work. Another question which is asked is this. At a time when most colonies in the world have disappeared, how is it that Hong Kong still has colonial status although it is a flourishing, successful, up-to-date community? My answer to that would be that there is quiet agreement among those most concerned to preserve stability. The Chinese Government in Peking would view with some concern a third Chinese Government in the Far East—for that is what Hong Kong would produce if it became self-governing. And, of course, the second Chinese Government is in Taiwan. There is also the lease of the New Territories to be considered; so that we have the paradox of a colonial system when the United Kingdom is handing over independence to colonies and keen to hand over to other dependencies when they are ripe for it. It is a paradox because Communist governments do not normally favour the continuation of colonial régimes.
However, clearly the Peking Government does acquiesce in the situation. The present constitutional arrangements seem the best to meet the interests of the Government of China, the United Kingdom Government and the population of Hong Kong. Indeed Peking would be disquieted—even alarmed—if the British Government were to initiate steps towards a

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new independent state. So, Hong Kong continues as a Crown Colony with a governor and council. I think the noble Lord, Lord Brockway, accepted the reasons for this as I have described them. I think I detected that he understood that.
Within that system there is the urban council dealing with local district affairs and recently there have been two White Papers, to which I draw attention, on proposals for improving local district administration. The fact remains, though, that Hong Kong has colonial status and a non-elected Government. It is the relationship with China which is the prime factor. For years, Hong Kong has provided important services for China, for example in trade and foreign currency. In return, Hong Kong buys water and other supplies from China. In the past five years, as relations between China and the Soviet Union have worsened, Hong Kong's role has become even more important to China. The help and advice of industrialised countries in the West is needed too. Hong Kong is the natural channel for such services and it is also a vital source of entrepreneurs' skills. More than ever the interests of China and her improving relations with the West converge with the economic well-being of Hong Kong. China increasingly needs the services which Hong Kong can provide.
In recent weeks it has become apparent that the Chinese Government are feeling the effects of the world recession and that they may have been trying to do too much too quickly. Retrenchment has therefore been announced in Peking where some of their projects for the future are concerned. Bonds none the less continue to be forged with Western countries. That is good news for Hong Kong. For its part, Hong Kong seems able to meet increasing activity and demands for services. That is good news for China. The Government in Peking have been turning to the West for technical expertise and, within present economic constraints, would like to order plant and equipment for projects from the West. Here are opportunities both for Britain and for Hong Kong. As a result of recent and new contacts with Westen countries, the Peking Government are aware that numbers of English-speaking visitors have been coming to their country. These visits are likely to be mutually beneficial. This is where I have been involved in a very small way, and I shall outline how because it is a good illustration of the trend which I am describing.
The Chinese Government have requested the Thomson Foundation to be consultants in starting a new English language daily newspaper in Peking. I am a trustee of the Thomson Foundation. I would point out that it is distinct from the Thomson Organisation. The Foundation was established by the late Lord Thomson (Roy Thomson as many of us knew him) about 16 years ago. Its purpose is training and education in journalism and television for countries which can benefit. The Chinese appear to have made their request because the Chinese Government feel the lack of a daily newspaper in the English language. I have a quotation from the Minister responsible in the Chinese Government. What he has said about this is:
"We hope to make the English language paper a success, so that our friends abroad will better understand China and China's views about major world issues".
Our team went to Peking last month and they have
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started an editorial training course there. I saw two of them in Hong Kong when I was there before Christmas. They were instructing at a course for Hong Kong journalists. The first issue of the new newspaper is expected early in May. I have in my hand the first dummy of the paper, which will be called the China Daily. That is a very tangible new link between China and the West.
In the relationship between China and Hong Kong we have to take into account the difficult matter of illegal immigrants. Hong Kong has absorbed huge numbers of refugees, including a considerable number of Vietnamese boat people. But there is a limit to the numbers that can be absorbed. There is a real danger that this small area could be swamped by refugees and illegal immigrants. The British armed forces, including the Gurkhas, have had the unenviable task of catching intruders—mostly at night—with very long and uncomfortable hours. The soldiers who have been carrying out that task have done so with fortitude and good humour. I hope that I shall not be regarded as partisan in saying that, because the British battalion doing the two year tour of service there now with the Gurkhas is the regiment from northern Scotland where my home is, the Queen's Own Highlanders. That job has fortunately become less arduous recently because of the change of policy last October, when the Government in Hong Kong decided to drop the principle known as "touch base". That is to say, if an illegal immigrant were to become established in a household with an address, he could then be issued with an identity card. Now illegal immigrants will be returned when apprehended, even if they have found themselves an address in Hong Kong.
I am told that the result is that before October the average of illegal immigrants being caught was about 260 a day; it is now about 20 a day. This is important because it is an example of the armed forces of Britain working with the Chinese border forces, mainly in the interests of Hong Kong—because it is Hong Kong which will suffer if swamped by refugees. I should like to join with the noble Lord, Lord Goronwy-Roberts, in paying tribute to Sir Murray MacLehose, the present governor. I point out that not only has he been asked to extend his term there but his predecessor, Sir David Trench (and I remember visiting Hong Kong when he was in office) also had his term of office extended as a result of pressure within Hong Kong. On the occasions when I have been in Hong Kong under both governors it has been the Chinese, not in the Administration, but the Chinese people living there—and I address this particularly to the noble Lord, Lord Brockway—who have been saying to me: "We want the governor to stay on, and we hope his term will be extended". That is hardly the kind of request one would get from people one met casually if there was this great gulf between Administration and the people, despite the anomalous colonial status.
I have described the developing co-operation between China, Hong Kong and Britain. Of course, the question of what is to happen in about 16 years' time, when the lease of the New Territories is due to end, is a very important matter. But neither on this nor on the conditions, social, welfare and housing, in Hong Kong can I agree that a Royal Commission would be appropriate. A Royal Commission would

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take at least three years to report, and probably more; and the situation is continually changing. The United Kingdom Government, in close concert with the Hong Kong Government, should, in my view, seek at a time of its own , to reach an understanding with China on the of Hong Kong. The prospects are good because China and Hong Kong need each other as partners. The prospects are good because relations between all three are improving. The fostering of good relations and the recognition of the joint interest of the three parties is the principal task ahead and not the panoply and procedure of a Royal Commission. While, therefore, I acknowledge the concern of the noble Lord, Lord Brockway, and his very sincere feelings about the conditions that have occurred in Hong Kong from time to time because of the impossible numbers of refugees who have arrived, I cannot support his proposal for a Royal Commission.
7.51 p.m.
Lord Rhodes: My Lords, I welcome this debate and I congratulate the noble Lord, Lord Brockway, for having initiated it. I am only sorry on one point, and that is that I never asked him to go with me to China and Hong Kong in 1979 or 1978, and in April this year when I am asked by the People's Republic of China to go again.
Sometimes I think we are an arrogant lot to think, as we have done, that we can take our Westminster form of government all over the world to other colours and other cultures—one of the biggest myths that has ever been exploded in this century. I remember going with the right honourable Walter Elliot on a mission to Africa to present a mace on the hottest, most sweltering day I have ever known, with the Speaker and all the ancillary workers, with full-bottomed wigs, sweating it out. Where is the mace today? Nobody knows. And that has happened on so many occasions. Sometimes we get pontifical about the way in which other people should run their affairs; and this is one.
In my opinion there are three factors affecting Hong Kong: first, Hong Kong's relations with China, and particularly with the Kwangtung province which is contiguous to it; secondly, Hong Kong's relations with the United Kingdom; and, thirdly, Hong Kong's ability to cope with the requirements of and to provide employment for a younger, better educated and more sophisticated generation.
To understand the problem and the importance of strong and friendly ties with China, which has been so persuasively argued by participators in this debate, I think one must just look at the past and weight it up. We in Britain hold that the few square miles of Hong Kong were ceded to us in perpetuity by China under the Treaty of Nanking in 1842. A further few square miles of the Kowloon peninsula on the mainland of China were conceded as a colony in the Convention of Peking in 1860. In 1898 an additional 365 miles of the mainland and some 230 contiguous islands, constituting the New Territories, were leased by China to the United Kingdom for 99 years. So we contend that we have Hong Kong Island, a bit of the Kowloon peninsula in perpetuity, and that China holds the remainder of the colony but will not exercise effective
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sovereignty over it until the New Territories' lease expires on 1st July 1997.
But China takes a different view. China says that the agreements were made under duress when China was unable to defend herself. This came out clearly at the United Nations in 1972 when Mr. Huang Hua, the present Foreign Secretary in Peking, was permanent representative of the People's Republic of China at the United Nations. He said this—and it is as well for everybody to get it right into their heads:
"Hong Kong and Macau are part of Chinese territory occupied by the British and Portuguese authorities. The settlement of the questions of Hong Kong and Macau is entirely within China's sovereign right"—
you will notice there was no mention of a Royal Commission—
"and does not at all fall under the ordinary category of 'colonial territories'. … The United Nations has no right to discuss these questions.
"For the above reasons, the Chinese delegation is opposed to including Hong Kong and Macau in the list of colonial territories covered by the declaration and requests that the erroneous wording that Hong Kong and Macau fall under the category of so called colonial territories 'be immediately removed from the documents of the Special Committee and all other United Nations documents".
That needs to be remembered when we talk about future policy for Hong Kong. I reiterate what other people have said about the necessity for goodwill and the building up of a friendship which the Chinese will reciprocate. Sir Murray MacLehose will go down in history as one of the men who have done more than anybody else to facilitate that very fact.
We made a journey to Peking at the invitation of the Chinese Government; and, do you know, they issued that invitation to His Excellency, in his official position as governor of Hong Kong. That ought not to be overlooked, because it indicates the consent to Hong Kong's status by the Chinese. In discussing the future, the governor was asked by Senior Vice Premier Teng to tell the investors in Hong Kong to put their hearts at ease. So it is working.
Hong Kong is a neutral point of contact in Asia. It has earned the reputation of being a free zone of China managed by the British. A change has come over events during the last three years. There is now a through train service between Kowloon and Canton, a daily air service between the two cities, operated by the Civil Aviation Administration of China, and there is a hovercraft service operated by a Hong Kong-based firm. It is reported that a 200-kilometre four-lane highway is to link Kowloon with Canton by 1982. In addition, a regular supply of electricity from the China Light and Power Company to the Guangdong Electric Company was successfully negotiated and connected in 1979.
What I am coming to is the interesting development that has taken place, and is taking place. How can you have a Royal Commission for a territory which is fast changing its nature? I ask your Lordships to tell me how. It is called a "rapidly vanishing border" between the New Territories and the adjoining Po-On district of Guangdong province. Whether we like it or not, this interlocking will go on and on. In fact, you will have difficulty in unscrambling it now.
How important is Hong Kong to Britain? The answer is that we have a unique position. As manager

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of China's free zone in the Far East, we control an important gateway to China. We have every reason to be proud of our stewardship. There is no doubt that China intends to use to the fullest advantage the facilities and expertise which are available in Hong Kong. Perhaps the most spectacular of the 1979 events were the financial arrangements that were made for a three-cornered deal involving Great Britain, Hong Kong and China. Under its terms, the British will sell mining equipment to China. The Chinese will mine coal which they will then sell to the China Light and Power Company. The coal will be used to power a new facilitity, purchased from British suppliers, that China Light is building at a cost of 1·8 billion Hong Kong dollars to generate electricity. This is only one of many schemes.
Is it generally realised that we sell more to Hong Kong than we do to India and other countries in the Far East, with the exception of Japan. That has a population of 100 million people, and yet we sell to Hong Kong two-thirds the volume of what we sell to Japan. That is no small beer. We have good friends in Hong Kong, Anglophiles in Hong Kong, who are keeping skilled craftsmen going in this country, and preserving the know-how which has been top in this country and which has produced employment for many years. I am referring to the electricity generating industry. It it were not for the orders which we now have from Hong Kong, there would be 2,000 men out of work who are, at the moment, doing a wonderful job with their own craft.
It is the easiest thing in the world to criticise and it is sometimes a good thing that criticism is focused on injustice and on government which borders on tyranny. Hong Kong was devastated and looted almost to the point of extinction, when the war finished. It still plays the traditional role of providing refuge for hundreds of thousands of refugees. When all the countries in the Pacific area said No to Vietnam refugees, who said Yes? Hong Kong saddled, as it was with scores of thousands from the mainland, took 50,000. I sometimes think that it would have been a good relief to Hong Kong if a thousand or two of those refugees could have been landed in Jersey—that haven of the taxpayer, not the refugee. Hong Kong's record is one of continual progress. The accommodation that has been provided in Hong Kong is phenomenal. There is not another place in the world that can touch it, for either the speed at which people work or the way in which they do it. So it goes on.
A Royal Commission would take several years to come to conclusions. There is already much anxiety in Hong Kong about the length of leases, and whether it is possible to be effective and economic—I ask your Lordships to weigh my words carefully—before 1997. So anything which would cause the Chinese to delay making their position clear about their policy towards Hong Kong would be detrimental and, in my opinion, dangerous to our interests in the Far East. We have going there a momentum of goodwill and friendliness which the Chinese will honour.
8.7 p.m.
Viscount Hanworth: My Lords, I apologise for intervening without having put my name down, but what I have to say will not take very long. I was
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stationed in Hong Kong for two years and I still have connections with it. That is the reason why, having listened to the speech of the noble Lord, Lord Brockway, I feel I must postpone my journey home.
One of the important and worthwhile traditions of this House is the moderation of noble Lords' speeches, as well as not castigating other speakers, but I am afraid that on this occasion I shall push very near the borders of what I think this House should accept. Frankly, and with all due respect to the noble Lord who asked this Question, I must say that, in my view, his speech was far from helpful or useful. Whatever one's views, one must admire the idealist approach of the noble Lord, Lord Brockway. Personally, however, I find idealists who have no regard to the hard facts of life, and the imperfections of human nature, very hard to live with. I am concerned with the quality of life and, in view of the extraordinary circumstances in Hong Kong, I should think that a benevolent autocracy was the best answer. I believe that, unfortunately, the same could well apply to other developing countries and I suggest to the noble Lord, Lord Brockway, that he might look at some of them and decide how far his brand of democracy is likely to work to the benefit of the citizens, which is what really matters.
I think that I have said enough on that point. But just sitting here, with Western spectacles, is not satisfactory. I think it would behove the noble Lord, Lord Brockway, to go out to Hong Kong before he starts to make the kind of speech which he has made this evening. What really makes me surprised is that he talks about accommodation problems there. The population has increased and increased. The Hong Kong Government have made immense efforts on rehousing, but the flood over the border swamped it all. The shanty towns have been removed time and again, but what happens? They fill up again. So you have to look at this, not through the eyes of people in this country, not through the eyes of people who complain, but through the eyes of those who see what is practical in that very well run colony.
Finally, as regards the question of the future I can very well understand the wish of Hong Kong to have a firm future but I think it should be pointed out that throughout Hong Kong's history, until perhaps a few years ago, there has been the threat of China walking in at any time. Militarily they could do so. There never has been a garrison which was sufficient to deter even a two division attack on Hong Kong. But China had not even got to do that. All they had to do was to push a lot of people over the border; the situation would then become intolerable. So for many years the people in Hong Kong have lived with complete uncertainty.
The future is something which we could well leave to our diplomats, with all the goodwill that we now have with China. I think it is the greatest mistake that Lord Brockway has again taken up this issue. Despite all the admiration for some of his idealist approaches, I suggest that he could well leave Hong Kong alone, or else go out there and see for himself.
8.12 p.m.
Lord Trefgarne: My Lords, Hong Kong is frequently described as unique. It has been said tonight, and so

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it is. Despite the many problems that it has had to face since the Second World War, it has adapted to ever changing circumstances and has now, through the diligence of its people and the good sense of its Government, established a strong political, economic and social base on which it can build with confidence.
Hong Kong is also very fortunate in that our commitment to the territory is complemented by China's attitude to it. Our relations with China have never been better. This applies particularly to Hong Kong. Hong Kong's relations with China have indeed become much closer in recent years. In 1979, the governor, Sir Murray MacLehose, went to Peking at the invitation of the Chinese Government. While there he saw Vice-Premier Deng Xiaoping, who stressed that those who were putting their faith in the future of Hong Kong need not worry. Indeed, as the noble Lord, Lord Rhodes, reminded us, he specifically asked the governor to tell investors in Hong Kong "to put their hearts at ease". This point has been repeated by other Chinese leaders. There can be no doubt that the significance of these assurances has not been lost upon those who live and work in Hong Kong, thus boosting confidence in Hong Kong's stability. This is demonstrated by the territory's continued prosperity and the very high levels of long-term investment in industry and other forms of development.
One or two of your Lordships have referred to the uncertainty about Hong Kong's future. Of course Her Majesty's Government recognise that there are legal problems connected with the end of New Territories' lease in 1997, but these are points which can best be met by reliance on the helpful attitude of the Government of the People's Republic of China, to which I have already referred. We have an interest with China in the stability and prosperity of Hong Kong, and it is on this that we must build.
One aspect of Hong Kong's success is the continued and growing strength of its economy. Hong Kong industry, although hit by the last recession in world trade, adapted to it with great resourcefulness and emerged into a period of remarkable growth in the later 1970s, averaging 12.4 per cent. per annum. The world, including Hong Kong, is now facing another recession, but again Hong Kong is setting an example of adaptability and enterprise. I am therefore confident that as world trade picks up, Hong Kong will again be ready to meet new challenges as they emerge.
We in Britain of course have a stake in Hong Kong's prosperity. Apart from our responsibility for the territory, it offers striking opportunities to our industrialists and traders. It is a matter of particular satisfaction to Her Majesty's Government that the Hong Kong Government's commonsense economic policy has been so successful. We greatly welcome the challenge this poses for British enterprise. The opportunities are certainly there and we hope we shall improve our share of this expanding market both in trade, in goods and in major project work. I should mention that Hong Kong is already Britain's second largest market in Asia. I doubt whether Hong Kong's success would have been possible without the free trade principles which are so fervently adhered to there. Hong Kong sets a useful example to others and we applaud them for this.
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Against this background, the ties between Britain and Hong Kong have matured and become closer in recent years. Our relationship is based on mutual understanding and a fundamental coincidence of interests. I know that problems do arise between us, but both sides approach areas of potential difficulty with good sense and are prepared to listen to each other's point of view. This was shown last year when we came to satisfactory conclusions over such issues as, for example, the defence costs agreement.
I am very much aware of the deep concern in Hong Kong over the Nationality Bill. We fully understand this. My noble friend the Foreign Secretary and other colleagues in the Government have given personal attention to the representations that the Government of Hong Kong and the unofficial members of the legislative and executive councils have made to us. These are being considered very carefully at a high level. I cannot at this point in time predict what the outcome will be, but there are two points which I would particularly wish to stress to your Lordships. It has been suggested—and clearly many people believe—that the proposals in the Bill are deliberately intended to distance the United Kingdom from Hong Kong and thereby to reduce its obligations to the territory. I can assure your Lordships that nothing is further from the truth. As my right honourable friend the Home Secretary made clear in another place on 28th January, we attach great importance to our links with the territory. The Bill is not aimed at Hong Kong. It is not intended in any way to weaken our ties.
Much of what has been said this evening has been about Hong Kong's internal affairs. Her Majesty's Government have of course a constitutional responsibility for the good governance of Hong Kong, and my noble friend the Secretary of State for Foreign and Commonwealth Affairs is answerable to Parliament for this. However, I should like to make it quite clear that its internal affairs are, first and foremost, a matter for the Hong Kong Government to manage. Moreover, Her Majesty's Government have every confidence in the Hong Kong Government's ability to do this fairly and successfully. Here, I should like to echo the tributes to the role and record of the governor, Sir Murray MacLehose, which have been paid this evening. His good sense and balanced judgment during ten years of office have been a major factor in providing a stable and fair society.
The problems, particularly those arising from population growth, which Hong Kong has had to face in recent years have been enormous. I need only mention here the influx of an estimated 180,000 illegal immigrants from China and more than 80,000 refugees from Vietnam between 1st February 1979 and 31st December 1980. The fact that it has coped so well is truly remarkable evidence that our confidence is well placed.
Almost 260,000 housing units were built between 1973 and 1980. Gross national product per capita rose by an average of 6·5 per cent. per annum in the 1970s. Hong Kong's achievements in providing housing, medical and health care, education, assistance for the needy, recreational facilities and generally the opportunity for its people to enjoy a full and satisfying life

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are outstanding by the highest standards, and a record of which the people and Government of Hong Kong can be justly proud.
On the question of employment, which the noble Lord, Lord Goronwy-Roberts, raised, it is perhaps worth noting that the legal minimum age of employment was raised from 14 to 15 in September last year, which has helped on the problem, of course; and the employment of children under 14 has always been prohibited in Hong Kong.
Hong Kong is sometimes criticised as being undemocratic; indeed, the noble Lord, Lord Brockway, made that point in his speech tonight. It has no elected legislature, unlike the other remaining dependent territories which support populations of any size. But then, Hong Kong occupies a unique geopolitical position and it is not surprising that it has developed its own unique and highly effective method of monitoring and responding to public opinion. The Government spend vast amounts of their resources on assessing public opinion and in involving the man in the street in practical administration. A very recent example of this can be seen in the proposals to set up district boards, with a significant elected element, throughout the territory. This is not mere window-dressing. It is a practical measure to improve the quality of local government in one of the world's most densely populated areas. In any event, window-dressing is not a skill which the Hong Kong Government have chosen to learn or use, nor indeed would their people allow them to do so.
All this adds up to a striking success story. The ever changing face of Hong Kong symbolises a spirit of adventure, of self-help and enterprise, based on political and economic confidence. Nowhere is this better seen than in the growth of the new towns in the New Territories, where communities of up to half a million people each are springing up to provide homes for a new generation of industrial and office workers where five years ago there was farm land and mountain territory. Nothing could better demonstrate Hong Kong's pride in its present and confidence in the future.
I must therefore say that I see no justification for the sort of Royal Commission on Hong Kong which the noble Lord, Lord Brockway, has suggested. Such an inquiry would not contribute new information about
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so open a society, nor would it help it to plan for the future. Indeed, it might in itself raise doubts and thus undermine stability. There is no evidence that new institutional arrangements would serve Hong Kong better than the existing ones. What the territory needs is the scope for its resourceful people to develop their society and consolidate the economic basis on which they have already built so much. I am confident that the present policies of Her Majesty's Government, for which I have been glad to note so much support here this evening, provide the best foundation for this.
My Lords, I should like to end on a simple and straightforward point. The ultimate responsibility for the good government of Hong Kong and the protection and wellbeing of its people rests with Her Majesty's Government here in London, and specifically with my noble friend the Foreign and Commonwealth Secretary. I reaffirm our commitment to that constitutional position tonight.

Felixstowe Dock and Railway (No. 2) Bill
Returned from the Commons with the amendments agreed to.