Lords Sitting of 3 March 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 Hereford.

Medical Schools (London): Future
Lord Segal: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the advisory group's recommendation in paragraph 16 of their report, they will now confirm that there will be no future reduction in the number of London's medical schools.
The Minister of State, Department of Education and Science (Baroness Young): My Lords, I can give no such confirmation. The organisation of London's medical schools is essentially a matter for the University of London.
Lord Segal: My Lords, while thanking the noble Baroness for that reply, may I ask whether she is aware that the university senate is completely divided about the future of London's medical schools and that members of the senate are angry and frustrated at the long, wasted hours of discussion on these matters? Is it not high time that the noble Baroness's right honourable friend intervened to avoid further discussions and to allow hospital consultants to get on with their proper work of healing the sick and reducing the long waiting lists of the National Health Service?
Baroness Young: My Lords, as I have already indicated, the organisation of the medical schools is essentially a matter for the university, but I understand that a working party under Professor Lequesne has been considering the costs of various options for reorganising the schools and that the senate and court of the university will be considering any recommendations arising from its report at the end of March. It is for the university to reach its own decisions in this matter.
Lord Segal: My Lords, does not the noble Baroness realise that it would be a monstrous act of vandalism on the part of the university to order the closure of any of these London medical schools? Would not the noble Baroness's right honourable friend think it wiser to intervene at this stage and to advise collaboration between the medical schools instead of keeping the constant threat of closure over any single one of them?
Baroness Young: My Lords, my right honourable friend the Secretary of State for Social Services has no status in this matter. This is a matter for the medical schools and for London University.
Lord Annan: My Lords, is the noble Baroness aware that this year the University of London, owing to the Government's policy on overseas students' fees, has had its resource allocation reduced by £6·3 million, of which £3·8 million has fallen on the post-graduate medical schools? Is she further aware that next year, according to the best estimates, these losses will rise to £15 million? And would she not agree that, in these circumstances, it would be most imprudent for me, as Vice-Chancellor, to give any assurances that any school, whether medical or non-medical, is likely to remain on its present site and in its present form? Is the noble Baroness also aware that we in the university are doing our very best to come to a speedy conclusion—which I hope will be arrived at at the end of March—on these highly difficult problems now that we are facing cuts of this magnitude?
Baroness Young: My Lords, I have every confidence that the noble Lord, Lord Annan, and his colleagues will come to the right conclusion on this difficult matter.

The Polish Community in the UK
2.38 p.m.
Baroness Vickers: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the magnificent service given by many Poles in the Royal Air Force during the 1939–45 war, they will have an official inquiry into their present financial circumstances.
Lord Cullen of Ashbourne: My Lords, the gallant Poles who settled here after the 1939–1945 war are entitled as individuals to all social security benefits in the same way as are other United Kingdom residents; and no separate records are kept of them as a group.
Baroness Vickers: My Lords, I thank my noble friend for that reply. In view of the fact that 1 in 12 Spitfire pilots were Poles, in view also of the magnificent service they carried out for this country, and of the fact that a recent appeal to help them I gather was unsuccessful, I wonder whether my noble friend could look into any difficulties or special cases sent to him.
Lord Cullen of Ashbourne: My Lords, if there are any special cases I should like to hear of them. The Poles are entitled to all the social security benefits, pensions, war pensions, and so on, just like our own nationals. I do not think there is very much more that the Government can do. We all appreciate the magnificent work and service given by the Poles during the war, and I think we do everything that we can to help them.
Lord Wallace of Coslany: My Lords, can the noble Lord say how many Polish ex-Servicemen are in mental hospitals in this country? I have in mind a

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particular hospital where Dr. George Brown has done wonderful work for them.
Lord Cullen of Ashbourne: My Lords, I am sorry but I do not have the answer to that question. I shall write to the noble Lord if I can find the answer.
Lord Elwyn-Jones: My Lords, is the noble Lord aware that the Battle of Britain is listed among the battle honours of Polish officers at the war memorial in Warsaw and therefore it is appropriate, for that and other reasons, that we should give them every assistance consistent with our means and in relation to what is done for our own ex-Servicemen?
Lord Cullen of Ashbourne: My Lords, I agree with the noble and learned Lord.
Lord Gisborough: My Lords, can the noble Lord say whether Polish ex-airmen are able to take advantage of SSAFA as is the case with our own ex-Servicemen?
Lord Cullen of Ashbourne: My Lords, I am sorry but I do not know the answer to that question.
Lord Gore-Booth: My Lords, while it is not precisely relevant, do the Government bear in mind all the time that day after day our friends from Poland are a very special case in (shall we say?) world history and that should at least inform us even if it cannot in any special form affect our policies?
Lord Cullen of Ashbourne: My Lords, I do not think I can add to what I have said. I am entirely in agreement with the tributes to the magnificent service of the Poles in the last war. We do everything we can to help them. There is a home at Newton Abbot in Devonshire, which is run by my department, where 174 Poles are looked after. They are not able to assimilate into this country because of language difficulties and so on. Some of their dependants are there and some children are there. Normally, the Poles have managed to get jobs here in this country. They are entitled to the supplementary benefits and pensions available to our own nationals.

Unemployed Young People: Military Training
2.43 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have reached a decision regarding the implementation of the proposal that military training should be arranged for the jobless young.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, my right honourable friends the Secretaries of State for Employment and Defence are considering what further help they might give to unemployed young people. No decision has yet been taken.
Lord Brockway: My Lords, while welcoming the training of the school-leavers and recognising the right to opt for military training, may I ask whether the Government will give us an assurance that, when discussions with them take place, civilian training will be given equal persuasion to military training? Will the Government be very careful in their procedure not to give any indication of economic conscription?
The Earl of Gowrie: My Lords, there are no suggestions whatsoever of conscription—taking that to mean statutorily enforced military service. The noble Lord will be aware that the Ministry of Defence has been a sponsor of the Youth Opportunities Programme since 1978 when the programme began under the previous Government. Therefore, to refine and improve this sponsorship would seem to be a sensible thing to do.
Lord Avebury: My Lords, if there is any spare capacity for training in the armed services, could this not be used to train civilians in skills which may well be needed by the armed forces but which also would fit young people for careers in civilian life? I am thinking particularly of the engineering trade and engineering technicians.
The Earl of Gowrie: My Lords, one of the great virtues of military training is that it does tend to equip one for civilian life.
Lord Brockway: My Lords, although I appreciate the reply, the Minister did not answer my question, as to whether, when these discussions take place there is persuasion for civilian training equally with military training.
The Earl of Gowrie: My Lords, the vast bulk of the Youth Opportunities Programme is of course in civilian training. That will not change. All I was seeking to do was to say that discussions were taking place as to how the armed forces might provide additional sponsorship within these schemes.
Baroness Vickers: My Lords, in view of the fact that it has recently been announced that the Royal Navy has not enough men to keep the decks of the ships clean, and so on, may I ask whether it will be possible to get a corps of young men to go round to these dockyards and do the polishing and cleaning which is really necessary?
The Earl of Gowrie: My Lords, we do not impose any system of maintenance on the Royal Navy. I am sure that they will feel quite free to come to us if we can help in any way through the Youth Opportunities Programme.

Kingsley School, Glebe Place, Chelsea
2.47 p.m.
The Earl of Kimberley: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the Kingsley School, Glebe Place, Chelsea is under special surveillance; and if so why.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, it is not the practice of Her Majesty's Government to confirm or deny whether any person or place is subject to surveillance.
The Earl of Kimberley: My Lords, while I thank my noble friend for that Answer—and I appreciate it—may I ask him whether he could go into a little more detail as to when the Kingsley School was last inspected—if inspected by anybody—and, if not, can it be inspected by the Department of Education to see what is being taught there?
Lord Belstead: My Lords, I am grateful to my noble friend for understanding the reason for the reply which I have given him. The school is not in operation yet. I understand that the premises are still empty and that alterations to the premises, for which planning permission from the local authority has been obtained, are being carried out. But the school, when it starts, will be required to be registered with the Department of Education and Science, and will be subject to inspection by Her Majesty's Inspectorate of Schools.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Elton will, with the leave of the House, repeat a Statement that is to be made in another place on the Northern Ireland prison protests.
It might also be for the convenience of your Lordships if I announce that in view of the number of Members who have indicated their wish to speak on tomorrow's Motion standing in the name of the noble Lord, Lord Peart, the Leader of the Opposition, the business which was to have been taken after the debate, namely, the Second Reading of the Interpretation of Legislation Bill, in the name of the noble and learned Lord, Lord Scarman, and the Unstarred Question, which was to have been asked by the noble Lord, Lord Allen of Abbeydale, have, by agreement, been removed from tomorrow's Order Paper.

Town and Country Planning (Minerals) Bill [H.L.]
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order, viz.:—

Clause 1

Clause 18

Clauses 2 and 3

Clause 19

Clause 4

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Clause 20

Clause 5

Clause 21

Clause 6

Clause 22

Clause 7

Clause 23

Clause 8

Clause 24

Clause 9

Clause 25

Clause 10

Clause 26

Clauses 11 and 12

Clause 27

Clauses 13 and 14

Clause 28

Clause 15

Clause 29

Clause 16

Clause 30

Clause 17

Clause 31

Schedule 1

Schedule 2

Clauses 32 and 33

—(Lord Bellwin.)
On Question, Motion agreed to.

Redundancy Fund Bill
Bill read 3a, and passed.

Maximum Number of Judges Order 1981
2.50 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone)The Lord Chancellor (Lord Hailsham of Saint Marylebone) rose to move, That the draft order laid before the House on 16th February be approved. The noble and learned Lord said: My Lords, I beg to move that the Motion standing in my name—that is, the Maximum Number of Judges Order 1981—be agreed to.
The effect of this order, which is made under the Administration of Justice Act 1968, is to increase the maximum number of puisne judges from 75 to 77. This number will in fact be 74 with a maximum of 76 if, as I hope will be the case, the Supreme Court Bill, which we discussed yesterday in Committee, receives the Royal Assent.
I am sorry to have to bring it forward but the matter is urgent, as will appear from the short argument I hope to present to the House. The ultimate object which I have in mind is to enable a larger number of High Court judges to try criminal cases in the High Court, but I think perhaps it would be wise for me to paint in a certain amount of background because the members of the judiciary are a totality and the pressures upon them come from more sources than one. For instance, one High Court judge, Mr. Justice Michael Kerr, is the permanent chairman of the Law Commission and when his time comes to an end he will be

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replaced by another High Court judge. This is a permanent liability of the modern High Court. Another High Court judge, Mr. Justice Browne-Wilkinson, is the permanent President of the Employment Appeal Tribunal, replacing Mr. Justice Slynn, who resigned to take up post as Advocate General at Luxembourg. That is another permanent obligation of the modern High Court Bench.
Mr. Justice Croom-Johnson has, as I see the noble and learned Lord, Lord Elwyn-Jones, is only too well aware, for some years been engaged in the Crown Agents inquiry. Whether or not it will ever come to an end, it is, I am told, unlikely to be completed for quite some time and certainly not before the end of this year. In my present term of office I have been singularly fortunate in having been able to stave off any further judicial inquiries involving the full-time use of a High Court judge, but for all I know one may turn up tomorrow morning and the effect would be to lose the full-time services of another judge. All this, of course, is by way of background.
In addition there is the inexorable flow of civil business in the High Court and that means, alas! that 12 months' delay must now be the normal period elapsing between the setting down of the trial of a civil case for hearing in the High Court and its ultimate appearance in the day's list for hearing; and that is not acceptable. In the third quarter of 1980, for instance, as compared with the third quarter of 1979, writs in the Queen's Bench Division alone went up by 39 per cent.—that is to say, nearly 40 per cent. Of course very few of those will come to trial but presumably the proportion will be stable.
There have been similar substantial increases in other types of work in the civil courts. Owing to the heroic work done by the Lord Chief Justice and the Lord Justice Donaldson, the divisional court has been reducing its intolerable delays and has now succeeded in reducing a backlog of 700 cases to 111. In the Queen's Bench Division and the Chancery Division the work has been kept flowing by the generous—some people would say excessive—use of deputies. That is not a satisfactory way of proceeding. It satisfies neither the public nor the profession.
The Court of Appeal in civil jurisdiction is now sitting in, I think, six divisions and is assisted by puisne judges, retired Lords Justices and Lords of Appeal. The Criminal Division of the Court of Appeal, whose background we were considering yesterday, is struggling with an ever-increasing number of appeals against sentence, conviction or both—standing at the end of 1979 (the latest figure that I have) at 2,723. There is no doubt that people are being kept in prison in anxiety, and perhaps in a few cases wrongly, waiting for their cases to come on.
However, it is the Crown Court about which I have the greatest cause for anxiety. When I was appointed not quite two years ago, I was told that if I appointed 90 full-time circuit judges to operate solely in the South-East and London it would still take 18 months to work off the arrears, while the remaining judiciary, full-time recorders and deputies would be working at full stretch to deal with the current flow. In 1980 the receptions were nearly 56,000 cases, and that was a very heavy increase over 1979. This has been particularly disappointing because during my previous term of office we had reduced the waiting time between
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committal and arraignment to a tolerable eight weeks in the provinces and a still excessive 17 weeks in the South-East and London. For the first weeks of my present term of office the condition continued to deteriorate. From about Easter last year, however, a few tentative swallows began to appear—heralding, I trust, the approach of spring. Although, as I say, we have had about a 20 per cent. increase in receptions by way of committal to the Crown Court—and in addition I would ask the House to remember that the Crown Court has to deal with appeals from the magistrates' courts and committals for sentence, which have been increasing on a parallel scale—we none the less reduced the backlog by the end of the year by 2,000 cases, which is a very heavy increase in productivity.
However, the real need I am concerned with today is the requirement, which I regard as urgent, for High Court judges to try Crown Court cases in the criminal jurisdiction. I think it is well known to your Lordships that there is a banding of types of case in the Crown Court. Rapes, murders, and a few of the more important types of crime are reserved for what is called the "red judge", and for a limited band of specially selected circuit judges, including of course the Recorder of London and the Common Serjeant of London. But the real need is for High Court judges in this field not to try the top band of cases. Far more difficult from the technical point of view than rapes and murders is the increasing number of lengthy fraud cases running into weeks and even months in length. Noble Lords will recall a brief exchange we had yesterday in a totally different context between the noble Lord, Lord Wigoder, and the noble and learned Lord, Lord Elwyn-Jones, and myself regarding trial by jury in such cases. The difficulty of summing up to juries and actually conducting the trial is, in my view, something which requires a judge of High Court calibre to be constantly available for cases of this kind.
Noble Lords will perhaps recall a recent case at the Old Bailey of an alleged case of international fraud which aborted at the first trial after weeks owing to an attempt to nobble one of the jurors, and which then failed at the second trial at the Court of Appeal on the ground of misdirection by the trial judge. I cannot afford to see—I do not think any of us can—many repetitions of that sort of thing, and so I come to Parliament for an increase in the number of High Court judges, primarily to try cases of this type which may last for weeks or months. If things go well, they will not be much in the public eye, but the need for them is urgent. I have statistics on my side and I shall quote only two before I sit down. Since 1972, the number of crime days—it is a horrible expression—sat by High Court judges in the Crown Court have declined from 10.3 per cent. to only 4.9 per cent. in 1979; or, put in another way, the number of High Court judge days which were sat on crime, excluding the Court of Appeal, has declined from 34.8 per cent. in 1972 to 25.6 per cent. in 1979.
I do not want to detain your Lordships at inordinate length, in view of the long list of work that we have to complete today, but I would endorse what was said yesterday by my noble and learned friend Lord Roskill. He told us that, in his view—and it was based on his vast experience—the level of the Bar at the top is as

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high as ever it has been and, despite the heavy financial and fiscal penalties, their willingness to accept judicial appointments in the public interest is still undiminished. But we need more High Court judges for the reasons I have given, and if this Motion is passed I have no doubt that the quality of our justice will correspondingly improve. It only remains for me to say that the order was considered in draft by the Joint Committee on Statutory Instruments, which stated in its Eleventh Report to the House that there was no particular point to which the attention of the House should be drawn. I beg to move.
Moved, That the draft order laid before the House on 16th February be approved.—(The Lord Chancellor.)
3.2 p.m.
Lord Elwyn-Jones: My Lords, the facts which have been disclosed by the noble and learned Lord the Lord Chancellor indicate a strong case for approval of this order. Until, I think, about 10 years ago, any increase in the number of judges had to be done by Act of Parliament and I am glad that I was involved as Attorney-General in changing the procedure and enabling it to be done by Order in Council. Otherwise, a good deal of parliamentary time would have been taken in the recurrent necessity which has arisen to increase the number of judges. The number can now be increased by order, subject to parliamentary approval, but I am happy to say that High Court judges cannot be removed by order, and yesterday, in the Supreme Court Bill, we reasserted that proposition and maintained the independence of the judiciary.
The problems that have been adumbrated by the noble and learned Lord certainly confronted me in my term of office. The twofold problems that had then to be faced—and the noble and learned Lord faces them now—were, first and above all, the increase in the number of criminal cases coming on; and, secondly, the unhappy phenomenon that cases were taking longer to try—statistically, 10 per cent. a year per case longer. I do not know whether the noble and learned Lord, by his pressures and endeavours, has been able to achieve any improvement in that record, but I have little doubt that if we had had more time today it would have been an interesting occasion to examine what further steps can be taken to reduce the pressure on the higher judiciary.
I remember that, two or three years ago, I was bold enough to introduce a Bill to take away the right to trial by jury for small thefts of property up to £20, and I was confronted with indignant refusals by, among others, the Lords of Appeal who are here. My old friend Lord Morris of Borth-y-Gest quoted Shakespeare at me—"Who steals my purse steals trash"; taking away the good name of a man deserved trial by jury. When I ventured to remind him that those words were mentioned by the wicked Iago and not by the virtuous Othello, it cut no ice at all. But there it is. It is something that needs looking at further and I am sure that the noble and learned Lord the Lord Chancellor and his department are engaged upon it, with measures such as the more frequent and proper use of summons for directions to shorten proceedings, and trying to deal with the pressure of work in various ways. However, this is not
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the best occasion to develop that aspect further.
The noble and learned Lord the Lord Chancellor has referred to the fact that, certainly, three of the High Court judges who now count in the number are not available for court work at all. I am happy to say that I myself resisted the setting up of the inquiry into the Crown Agents, but perhaps I must not stir up that controversy again. But I have a guilty conscience about having asked Mr. Justice Croom-Johnson to sit as chairman of the inquiry over the course of the last two or three years. The tendency is, of course—and, in a way, it is a compliment to the judiciary—when some great issue of public confidence arises about corruption in high places, to call first for a High Court judge.
I noted carefully the language of the noble and learned Lord the Lord Chancellor about resisting pressures which come upon him, as indeed it fell to me also to do. But we cannot have it both ways. We cannot restrict the numbers and yet call upon them to do a number of things outside the ordinary course of duties. The importance which the noble and learned Lord the Lord Chancellor has attached to the availability of High Court judges to deal, above all, with difficult fraud cases will, I think, be well received both in the House and elsewhere. In a curious way, from the judicial expertise point of view, it is very much easier to try a rape or a murder case than many of the fraud cases, and the tendency has been, perhaps overmuch, to count upon the excellent work that the Crown Court judges perform in different parts of the country—above all, in the Old Bailey—to engage upon what is the hardest task in the judicial scene. So I am very glad to gather from what has been said that that will be carefully watched hereafter, after some recent unhappy experiences.
The temptation to go on and on about this subject is happily resistible, but it gives rise to matters which we might consider on another occasion. There is a terrible log-jam in the courts in the administration of justice and I have felt at times, I must say, that we were reaching crisis points. The noble and learned Lord the Lord Chancellor was a little more relaxed about it—or apparently more relaxed about it—than I was. But it is something that we must find time generally to consider together here in this House, where there is so much experience and expertise and which might be able to throw up some ideas on this very difficult situation. Up till now, from my experience—and I have travelled to various conferences of Ministers of Justice in Europe, the Commonwealth and other parts of the world—we have maintained a good reputation for the speed with which our cases are tried, particularly in the criminal field. We are now falling behind and, therefore, this is something that Parliament must look at very carefully. In the meantime, obviously, the order deserves the support of the House.
Baroness Wootton of Abinger: My Lords, I am very much interested in the statistics which the noble and learned Lord the Lord Chancellor quoted, showing a reduction in the crime days spent by High Court judges. I take it that this cannot be due to any diminution of criminality, but does it mean that the rest of the community is becoming more litigious in civil cases?
The Lord Chancellor: My Lords, I am very grateful to the noble and learned Lord, Lord Elwyn-Jones, for his friendly welcome. If I may deal, first, with the question just posed to me by the noble Baroness, no, I think the fact of the matter was that when we instituted the Crown Courts in 1972—the Act was, of course, in 1971—we deliberately attempted to band cases so as to favour trial by circuit judges, recorders or deputies, rather than red judges. Of course, it also reflects an increase in civil work in the High Court, but I think it was done as a matter of policy. We have now reached the point at which we find that over a particular class of case we have gone too far. This is a rather impromptu answer but probably it is the right one.
If I may turn to what the noble and learned Lord, Lord Elwyn-Jones, had to say, I thank him very greatly for his friendly welcome. I was one of those who rather wished that the House had taken a different line than it did over the James Committee report but I had to tell the noble and learned Lord—and I think was right to do so—that I did not think it would get through either House of Parliament in the form in which it was originally proposed, dealing as it did with £20 thefts. Curiously enough, the other day hundreds of pounds of public money and the time of 12 jurors were wasted upon trying a case in which the charge was theft of a cabbage.
This rather indicates that the noble and learned Lord was wiser in his generation, as was the late Lord Justice James, than even his noble and learned friend whom we always remember with such affection, Lord Morris of Borth-y-Gest. I think I said at the time, and I certainly think now, that if I wanted to worry about my reputation, my reputation would be more severely damaged by swindling the railway company, like the late Professor Joad, which is a purely summary offence or by being cruel to a dog than by stealing a cabbage. But the old crime of theft is against the Ten Commandments, while nothing supposedly is said in them about railway companies or even cruelty to animals. So we take rather an old-fashioned view about what used to be called larceny and which I have now learned to call theft. At any rate, I sympathised at the time with the noble and learned Lord and I personally thought that he was right.
Yes, cases are taking longer to try and this is a very mysterious fact. In the South-East, it is now taking something like 10 hours on average—of course, averages mean very little in this connection—to try a jury case. That is two whole days. One of the more startling facts about life is that although the increase has been continuous over the whole country, it has remained continuously the case that it takes about two hours longer to try a case in London and the South-East than anywhere else in the country. There are some other very remarkable facts. For instance, 70 per cent. of the people who are charged on the North Eastern circuit for an indictable offence plead guilty. In London, the comparable number is just under 40 per cent. Of those who plead not guilty in the North-East, 70 per cent. are convicted by juries. In London, the figure is under 40 per cent. I do not know whether these figures are related but certainly they are startling and not purely fortuitous. But that is going a long way outside the realms of the present Motion.
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Yes, we do have a good reputation. One of the strangest things about the delays of which I have been speaking is that although we have this appalling problem of delay we still take much less time to dispose of cases than either our friends in America, who also have the jury system, or our friends on the Continent who adopt the dossier system, where it takes positively years to get rid of a case. There they try to find out the truth, not whether the prosecution have managed to prove their case—which is not always the same thing. I am digressing now. I just wanted to thank those who have supported me, and to commend the order to your Lordships.
On Question, Motion agreed to.

Water Bill
3.15 p.m.
Lord Bellwin: My Lords, I beg to move that this Bill be now read a second time. When my honourable friend introduced this Bill on Second Reading in another place he said that it was short and, in the Government's view, uncontroversial. It is now slightly longer, but it remains, in our view, uncontroversial. As a result of the wide-ranging debate in another place, a number of amendments were made. The Government believe these have improved the Bill. We have it in mind to make a further addition to the Bill—also, I hope noble Lords will feel, an improvement—during its passage through your Lordships' House. I shall say more about that in a moment.
Before I turn to the substance of the Bill, I should like to take a moment or two to put it in context. I want to stress that this Bill is limited in scope—and quite deliberately. Its primary object is to increase the borrowing powers of the British Waterways Board. In addition, we have taken the opportunity to rectify a number of unrelated anomalies in existing water legislation. This is not to say that the Government regard these provisions as unimportant. But it is necessary to understand that this Bill does not, and could not, in view of its nature, affect the structure, powers and duties of the water industry in any fundamental way.
As it stands, the Bill contains four main provisions. First and foremost, it provides for an increase in the borrowing powers of the British Waterways Board; and here I must stress the importance of enacting this provision as soon as possible, for the board's present powers are now all but exhausted. Second, it provides for the exemption from charge of private water supplies for fire-fighting. Third, it amends the powers of statutory water undertakers to insist on separate service pipes to individual dwellings. And, fourth, it raises the limit on the contribution that a local authority may require a house-owner to make towards the cost of installing a supply of water for public health reasons.
I deal first with the borrowing powers of the British Waterways Board. Noble Lords may find it useful if I briefly outline the background to this provision. The board was established under the Transport Act 1962. Its main function is to maintain some 2,000 miles of inland waterways, including some 350 miles of commercial routes, and over 1,100 miles of canals used for pleasure cruising. These figures illustrate

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well how the role of the canal system in this country has changed. It was, of course, constructed originally to provide the means of transporting freight from one part of the country to another, from the centres of production to our seaports, for export. As such it played no small part in our nation's industrial success during the 18th and 19th centuries. But with the advent of other forms of transport—in particular, the railways—its role declined and, as a result, large parts of the system were allowed to fall into disuse and disrepair.
Over the last 20 years, however, the canal system has been revived; not this time so much as a carrier of freight, but mainly as a source of great pleasure and relaxation to the thousands of people who every year take to our inland waterways for holidays and leisure. There can be little doubt that this use will increase as the years go by. It is the responsibility of the British Waterways Board to maintain the system largely, but not exclusively, for this new use. And the Government would be the first to acknowledge the work they have done over the years in financial circumstances which have often been less than favourable.
The maintenance work of the board is, of course, paid for out of revenue—that is, the board's income plus an annual deficit grant from the Department of the Environment, which currently amounts to some 60 per cent. of revenue expenditure. It is important to be clear that this Bill does not affect maintenance work. It relates only to capital expenditure by the board on items such as land, buildings, plant and equipment and the one major improvement scheme being undertaken, the Sheffield and South Yorkshire Navigation. The board pays for these works out of borrowing, and it is the power to borrow which Clause 1 affects.
When the board was set up the limit set on its borrowing was £30 million. This figure allowed, however, for a commencing capital debt of some £19.25 million and when, in 1968, the commencing debt was written down to just under £4 million the limit on the board's borrowing powers was also reduced—to £22 million. This limit was last raised by the previous Administration in 1977, when it was set at £20 million. Since then, of course, we have seen inflation take its toll; and, as I have said, the board have begun a major capital improvement scheme on the Sheffield and South Yorkshire Navigation which, in our view, will demonstrate the commercial viability of this canal.
All this has resulted in the board's present borrowing powers being all but exhausted and, if its current capital programme is not to be jeopardised, it is vital that its borrowing powers be extended as soon as possible. The Bill therefore provides for an increase in these powers, from the present £20 million, to £35 million. We propose that the first £5 million of the extra amount should be authorised on Royal Assent and the remainder by subsequent order or orders of my right honourable friend the Secretary of State, subject to Affirmative Resolution in another place.
With your Lordships' permission, I will now turn to the second main provision in the Bill—the exemption from charges of private water supplies for fire-fighting. The Government are dealing here with an anomaly in existing legislation, which was highlighted by the charging practice of the North West Water Authority.
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Under Schedule 3 to the Water Act 1945—which has now been applied throughout most of England and Wales—no charge may be made for water taken from public hydrants for fire-fighting purposes. The costs of this service are absorbed in the water undertakers' general charges. The same does not apply, however, when special water supplies for fire-fighting are laid to private premises—to serve say a sprinkler system—as is the case in many factories, shops and offices throughout the country. Here, water undertakers may—and, indeed, have—argued that under Section 30 of the Water Act 1973, they should charge the consumer for the cost of making this service available.
This is an unfortunate state of affairs for, in the Government's view, any specific charges for fire-fighting water supplies can be regarded as a deterrent to the installation of sprinkler systems, and other fire-fighting equipment. The General Secretary of the Trades Union Congress has described these specific charges, as a "tax on public safety". It is in the public interest that the most effective fire-fighting systems be installed in premises to which they, the public—whether as shoppers, employees or visitors—have regular access.
There are two points to add to what I have said. First, I would stress that this provision does no more than put private and public water supplies for fire-fighting on a par. Second, whatever the current law, the fact is that no water undertaker actually levies specific charges at present for water taken for fire-fighting. And only one—the North-West Water Authority—levies a standing charge of any significance for water made available for fire-fighting in private premises. What this means is that the effect of this provision will be to provide in law for the practice which most water undertakers have hitherto followed.
I want to turn now briefly to the third main provision—the change in the power of water undertakers under the Water Act 1945 to insist on separate service pipes to individual dwellings. A service pipe is the one which connects a dwelling to the water mains. Before the 1945 Act came into force many houses in this country were built with a common service pipe—that is, one pipe serving a number of dwellings. Problems can arise with this system when the common pipe needs renewal because the cost must be shared among the various owners. The Water Act 1945 empowered water undertakers to require the owners of houses built after it came into force to install separate service pipes except where a group of houses had a single owner who undertook to pay the water charges for all of them. It also empowered water undertakers to insist on separate service pipes in dwellings built before the Act came into force in cases of operational difficulty—where the existing common supply was defective or insufficient, or a water bill was in arrears, or where a house had been divided into a number of dwellings.
It is generally only local authorities who have continued to build houses on common supplies. This is because it is slightly cheaper to do so. But difficulties can arise where such houses are sold; the new owner can then be faced with a large bill for a new separate supply of water even though the existing common supply is perfectly adequate. The Government believe it is nonsense that any buyer of a house on a common

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supply—whether or not it is a council house—should be faced with such expense for no good reason. In one well known case the cost involved was over £2,000. The Bill therefore removes the power of undertakers to insist on a separate service pipe simply because a house on a common supply is sold. But it will allow them to stipulate that all new houses are built with separate supplies; and it will not affect their power to insist on separate service pipes for existing dwellings, where operational circumstances genuinely require this.
I will now move on quickly, to the final provision currently contained in the Bill: the increase in the contribution payable by a house-owner towards the cost of installing a supply of water. Noble Lords who have watched the Bill's progress will know that this provision was added to the Bill by the Government in another place. Under Section 138 of the Public Health Act 1936, local authorities, in their capacity as public health authorities, have a power to require that any house which does not have an adequate piped supply of wholesome water, should be supplied with one. It is the house-owner's responsibility to provide such a supply, but the amount he is required to find has always been limited to a fixed amount, with any residual being paid by the local authority. This limit was originally set, in 1936, at £20. It was raised to £60 under the Public Health Act 1961. The Bill now provides that it be raised again—to £300. This is in line with inflation over the period since 1961. Without such an increase, local authorities may well be discouraged from discharging an important health duty, because of the high costs they inevitably have to bear. We are also making provision for this limit to be varied in future, by order by my right honourable friend the Secretary of State, so avoiding the need for a further Bill when next the limit must be raised.
I am aware that I have spoken at some length on these provisions, but I hope the House will bear with me a little longer, while I say a few words about an important amendment to the Bill, which the Government have undertaken to table in your Lordships' House. It concerns the liability of water authorities for damage caused by escapes from water mains. At present, water authorities cannot be held liable for such escapes, unless it can be proved that they have been negligent. As many noble Lords will be aware, it is often very difficult to prove negligence. In such cases, the individual may be left to bear loss from damage caused by burst water mains, when the fault is in no way his own.
Lord Davies of Leek: My Lords, may I stop the Minister there? The noble Lord is dealing with the water mains. I have followed him closely, but I have had the experience of a canal itself bursting. There is doubt in my mind about the responsibility for the bursting of a canal and the flooding over a farmer's field or local cottages. Is there any alteration in the law with regard to that position?
Lord Bellwin: My Lords, I should not think that was so, but as the Bill proceeds we will take up the point which the noble Lord has made. I was saying that this situation cannot be right. Such loss should really be borne by the community as a whole through the
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general water charges it pays. The Government, therefore, intend to table an amendment, in time for Committee stage, to impose on water authorities liability in respect of damage from burst or leaking water mains, whether or not it has been caused by negligence. I commend this Bill to your Lordships and I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Bellwin.)
3.29 p.m.
Lord Underhill: My Lords, I should like, first, to thank the noble Lord, Lord Bellwin, for explaining the Bill so clearly and succinctly. He said that it is a non-controversial Bill, and I think in general it is, although there will be some pertinent remarks that I wish to make, and I hope I may make them as simply and as clearly as the noble Lord the Minister.
There are some items which we believe could have been included in a Water Bill, whereas the Government have taken the opportunity to include a couple or so items in what, primarily, is a British Waterways Board Bill. Naturally we welcome the decision to increase the borrowing powers of the board. We fully support the opportunity for further investment in our waterways. But it is little use to consider the borrowing limit unless the House also looks at the annual grant which is payable to the British Waterways Board and which has been essential since the 1968 Transport Act gave the board the responsibility to which the noble Lord, Lord Bellwin, referred, of the maintenance of the 2,000 miles of waterways, particularly the commercial and the cruiser waterways.
Over the years the board's own income, as the noble Lord said, has been only a small part of the total cost. I think he mentioned that 60 per cent. is now met by the annual Exchequer grant. I have taken the opportunity to look briefly at the history of the grant. I was looking at the report of the Select Committee on Nationalised Industries, which dealt with the British Waterways Board in its report published in February 1978. As far back as 1970 the board advised the DOE that a major programme of engineering work was required for maintenance of the waterways, for which there had been under-expenditure in past years. I think I must make this comment. This is an example of where sometimes a cut in public expenditure is short-sighted, because one has to make good the damage in later years.
Despite that warning, nothing was done for four years, when the DOE then appointed an independent consultant to study what were the maintenance needs of the British Waterways Board. The findings in the Fraenkel Report published at the end of 1977 confirmed the board's view that there was a backlog of maintenance to be carried out, and they valued it then at some £38 million. In the 1979 report of the board, which is the latest report to which I have access, the auditors of the board's accounts, in their report dated June 1980, referred to the Fraenkel Report and they stated that the maintenance backlog on the commercial and cruising waterways alone at 1979 prices would be no less than £77 million. The auditors also pointed out that there was substantial maintenance required in

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connection with the remainder waterways of some 600 miles.
So we find that in 1979 the then Government raised the annual grant to £21 million, and the last figure I had was that it was raised further to £27 million. There was an argument in the other place that this £27 million should really have been £32 million at current prices. The Minister there disagreed and said that at current prices it should have been £29.5 million. Even that is in fact a £2½ million reduction of the grant paid to the British Waterways Board. I would ask the Minister who is to reply: How is the Waterways Board expected to make up that £2½ million? When one looks at the problems facing the board, there is no dispute that many of the aqueducts and tunnels and other parts of the waterways system are in need of repair, some of the tunnels being 200 years old. The board has had to face, and still has to face, years of decay and past neglect of the waterways; I think everybody will agree about that. It now has the statutory responsibility of maintaining these important waterways.
I find that the board's report for 1979 showed a loss of £21 million on its operations, which followed a loss of £13.5 million the previous year. But this in no way should be considered another lame duck, because the board's responsibility for maintaining waterways is the greater part of its costs. The maintenance work as such is set against revenue and it is new development and improvement which comes out of the capital borrowing, which in the Bill we are now increasing. By its various activities the board's total net income, as I can work it out from the accounts, produced a sum of £6 million, whereas the board's report says that the cost of operating, dredging and maintaining the waterways was a little over £22 million. Hence the reason for the annual grant of nearly £21 million. On page 63 of the board's report I see there is a total indebtedness of some £14 million, on account of interest charges for the commencing capital, further debts to the Secretary of State, and a substantial bank loan. In 1979 no less than £1 million was paid out by the board in interest charges.
Therefore, while we support the principle of the first clause of the Bill, the more the board borrows the greater will be its accumulated debt and interest charges, and one must query whether this is wise financing in view of the very limited opportunity that exists for revenue. I should like to ask the Minister how much of the backlog of maintenance has been cleared. Is the board only just managing to cope with current needs? It would seem that the board's income on annual grant is too low to enable it to catch up with the arrears which the Fraenkel Report and the Select Committee on Nationalised Industries said must be tackled. That is why I stress that the cut of £2½ million in the annual grant is something which will be a very serious burden on the board.
I pass on to Clause 2, to which the noble Lord referred, dealing with the supply and use of water for fire fighting purposes. As I have mentioned on other occasions, I was in the National Fire Service for five years. Therefore, I recognise only too well the need for efficient fire fighting equipment and for fire protection. What this clause proposes is to exempt
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from charges making water available in connection with fire service equipment and the actual supply of water for fire protection. If you are going to cut out charges it means that that income has to be met from somewhere else. There was a long argument in the other place as to whether or not thus was going to penalise domestic consumers. The Minister in another place pointed out that under the terms of the previous Acts the charges would be spread over the same class of consumers, which means in this case over the metered consumers, which would be the commercial and industrial concerns.
There are two points I should like to put to the Minister. First, as he rightly says, only a number of water authorities made any substantial charges. The one which did make a considerable charge was the North-West Water Authority, some £600,000 a year. That sum has to be met from somewhere, if by this clause they are no longer permitted to charge. It is to be spread over all the metered customers. That will include large undertakings and small undertakings. I would ask the Government, is it fair and equitable that a small concern, which cannot afford, say, a sprinkler system, will have to pay more in charges because it is on the meter, in order that the large concern can have its adequate protection from a sprinkler system? This seems to be another instance where the small concerns are to be hit, yet we thought our general objective was to help small businesses. Also I understand that fire insurance companies will give a very generous reduction for a concern which has a sprinkler system. So once again we shall find, under this provision, that the large concern will be helped whereas the small concern which has not got a sprinkler system suffers.
Subsection (2) of this clause provides that the Secretary of State shall determine the method by which a water authority shall calculate the charges where a supply of water to a concern is a common supply, partly for the fire equipment and partly for general service. It would certainly be helpful to me, and I am sure to other noble Lords, to understand what is in the Secretary of State's mind for determining how this will be calculated. Is it to be a hit or miss system, or is he to set up a large bureaucratic apparatus in order to check on the equipment of the various concerns? It would be helpful to know the situation.
It would also be helpful if the Minister could say whether there have been any comments on the principles of the clause and on the proposal about calculating the charges where there is a common supply to a concern. It would be interesting to know whether any comments have been made either by the Water Council or by any of the water authorities. Incidentally, in the debates in the other place it was mentioned that although the Thames Water Authority has not made any substantial charges hitherto, it has budgeted for the current year to raise £1¼million from these charges. If the Bill is passed, of course, those charges will no longer be levied. But it will mean that that water authority will be £1¼ million out in its budget. As I understand that it is the Government's wish that this should come into force on 1st April this year, I should like to ask the Minister whether it would be possible for that particular authority to re-adjust all its charging to cope with that position.

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While on the subject of charges, I believe that there is one issue which is missing from the Bill. The Government decided not to make an order this year under the Water Charges (Equalisation) Act 1907. That will mean that the Welsh Authority, for one, will be some £3 million worse off. I should like to know whether the Government are just to let this slide or whether they have other proposals for the equalisation and, if they have, whether this is a matter which could well have been covered in this Water Bill.
The only other clause to which I wish to refer is the one dealing with insistence. Under the present law a local authority can insist that there should be a separate service pipe to an existing dwelling. I should like to know whether any views have been expressed on this change, which is quite an important change, by the local authority associations and by any of the town planning bodies, because there are very acceptable reasons why this provision has been in being for some years and yet it is now to be removed. I should like to know the real reasons for the Government's decision to remove this facility.
It has been said that to insist on this provision if a council house is to be sold, could be extremely unfair. I know that in another place it was mentioned that that was not of itself a reason for saying that we should dismantle the previously agreed system, although I see in the Notes on Clauses that particular reference was made to the need for this change because of the decision to sell council houses. It would be extremely regrettable if a provision which has been widely accepted for so many years as a desirable provision is now to be removed because of the Government's policy on the sale of council houses.
There is just one other matter to which I should like to refer and which I believe is, unfortunately, not dealt with in the Bill; that is the fact that the water authorities now have the responsibility for sewerage and sewage disposal. Previously those services were under the local authorities and covered by a rate rebate scheme. Now, of course, as a separate demand note is sent by the water authorities, it means that those who would have had a rate rebate if those items had been still with the local authorities, will no longer have the advantage of that rebate. It may be argued that those on supplementary benefit would still be able to be covered. However, quite a large number of people obtain a rate rebate but are not necessarily on supplementary benefit. Therefore, once again we have the situation of persons who are very near the limit being hit because they are not on supplementary benefit. As the water authorities are not allowed to discriminate against any class of consumer or to show undue preference, they, of course, are not able under the present law to give a rebate. That is something which I should like the Government to tackle.
The announcement by the Minister that the Government are to introduce an amendment at the Committee stage to deal with compensation for any collapse in the water pipe system is one that we welcome. However, I should like to ask whether there is to be provision—which I do not believe exists at present—should there be any collapse in the sewerage system, which can be as dangerous as any collapse in the water supply.
I hope that the points that I have raised are not
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considered too controversial. I believe that the noble Lord, Lord Skelmersdale, who is to reply will be doing so on his first occasion, and I wish him well.

Northern Ireland: Prison Protests
3.45 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Elton): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement reads as follows:
"I will, with permission, Mr. Speaker, make a statement on the latest developments in the protests by Republican prisoners in Northern Ireland prisons.
"On 1st March one of the prisoners at Maze refused food and declared himself to be on hunger strike. A statement attributed to the prisoners said that this action was being taken, once again, in support of their demand for political status.
"Yesterday, the Republican prisoners still taking part in the dirty protest at Maze and Armagh prisons—439 in all—let it be known that they intended to stop fouling their cells. Two hundred and forty men prisoners have, accordingly, already been moved into clean cells and provided with clean bedding. The rest will be moved as quickly as further cells become available. The 28 women prisoners will all be in clean cells by this evening.
"The Government welcome this decision by the prisoners to put an end to the degrading conditions which they have imposed upon themselves. But, in another statement, the prisoners have indicated that their action is being taken in support of demands for changes in the prison regime which would give effect to their demand for political status. In this they differ from those 80 prisoners who have stopped protesting altogether since the last hunger strike ended on 18th December. That group are now receiving the full range of privileges and facilities which I described in my Statement of 4th December, including that of association, and of wearing their own leisure clothing of an approved type, in the evening and at weekends. That régime remains available for all who choose to take advantage of it: nothing has been added to and nothing taken away from my Statement of 4th December.
"The claim for political status has been rejected in clear terms by the European Commission of Human Rights, by successive Governments and by all sides in this House. I wish to make it clear, once again, in case there is any doubt anywhere about the Government's position, that we shall not give way on the issue of political status under pressure of further protest action, whatever form this takes and whether it is inside or outside the prisons."
My Lords, that concludes the Statement.
Lord Blease: My Lords, I wish to thank the noble Lord for repeating the Statement. I feel sure that the House will join in welcoming the ending of this form of political protest. Whatever may be the declared reasons or the underlying objectives for calling off

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the dirty protest, many will agree that the decision may help to ease tensions in Northern Ireland. I am sure that we would all wish to welcome and support the responsible and thoughtful statement made on Sunday last by the Roman Catholic Bishop of Derry, Dr. Edward Daly. He urged people not to support the hunger strike and called upon young people in Northern Ireland to shun all those who perpetrate violence by deed and by tongue. Whatever may be the reasons for the decision of Mr. Bobby Sands—the Maze prisoner—to fast unto death, I would join with all those who have urged that he and others may earnestly heed the words of Bishop Daly and find a better way to seek to achieve happiness and prosperity for the people of Ulster and Ireland.
May I ask the Minister whether it is a fact that knowledgeable observers—persons of international repute—who visited the Maze, have declared that the Maze prison accommodation and the prison régime there are most humane prison conditions in the United Kingdom, if not in Europe? From this side of the House, I think that we must all realise—those in prison and those outside—that there can be no going back to political status. For those reasons we support the Government and the Secretary of State on the course that they have taken to deal with the current H block issues.
Lord Hampton: My Lords, I, too, should like to thank the noble Lord the Minister for repeating this Statement. It is, of course, good to hear that 439 people are giving up the dirty protest. At the same time it is serious that one man has declared himself to be on hunger strike. I think that it is part of the attitude in Northern Ireland of treating life cheaply, whether it is one's own or that of other people. I just hope that he can be deterred. I should like to ask the noble Lord the Minister just one question, to which I am sure he can give me a satisfactory answer. It has been said by some prisoners that the Government have gone back on terms that they have agreed in past cases. If the noble Lord can deny that, I shall be very happy to hear it. Apart from that, from these Benches I can only add that we wholeheartedly support the Government in resisting this demand for political status.
Lord Elton: My Lords, I am most grateful for the support that has been given to Her Majesty's Government at the present juncture both by the noble Lord, Lord Blease, and by the noble Lord, Lord Hampton, on behalf of both their parties. I can, indeed, endorse that the standard of accommodation at the Maze Prison is exceedingly high and many noble Lords will, in fact, have been able to see this for themselves from watching a television programme shown not so many months ago. Noble Lords will be aware that this protest is not in fact about prison conditions at all. It is about the status of prisoners, and a particular status is required for people who have gone in for crimes of violence and murder. It is not the business of Her Majesty's Government to lend respectability by any means to those who kill Her Majesty's subjects.
Therefore, I very much welcome the support of noble Lords opposite from both parties. I should also like to confirm what I stated when I repeated the
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Statement of my right honourable friend which has been made in another place, that nothing has been added to and nothing has been taken away from the Statement of 4th December. I repeated that Statement at great length in this House, and noble Lords who wish to know its content may find it on the record. I think that I have the sympathy of the House in saying that we are united in our determination not to give respectability by status to those who kill Her Majesty's subjects.

Water Bill
Second Reading debate resumed.
3.53 p.m.
Lord Winstanley: My Lords, perhaps we may now return to the rather more tranquil waters under the control of the British Waterways Board. On behalf of my noble friends on these Benches I, too, should like briefly to thank the noble Lord, Lord Bellwin, for giving us so clear an explanation of the purpose of this limited, although very necessary, measure. I should also like to indicate our general support for the measure.
As the noble Lord, Lord Bellwin, explained, the main purpose of this Bill is to increase the borrowing powers of the British Waterways Board. I have worked very closely with the British Waterways Board in a number of capacities for very many years and, thus, I am deeply conscious of the board's need for adequate resources with which to discharge its very important functions. As the noble Lord, Lord Bellwin, indicated, our inland waterways network, of some 2,000 miles, is a unique and very valuable part of our national heritage, and I think that noble Lords in all parts of the House would agree with me when I say that if we once lost it, it could never be recovered.
As the noble Lord, Lord Bellwin, indicated, the main purpose of our inland waterways network is, frankly, recreational. It is true that it has some importance to agriculture in relation to drainage; it possibly has a potential—not yet fully realised—with regard to freight transport, for which it should undoubtedly be preserved. But at the moment its main benefit to our community is for recreational purposes.
I believe that one of the main or principal challenges facing Britain today rests in the provision of opportunities for the fulfilling and constructive use of leisure, in ways which are not consumptive of resources or destructive of environment. I believe that the recreational activities of the inland waterways network fall precisely into those categories. They are unique in that they provide a wide range of opportunities for a wide range of people—people of all ages, of different types of physical ability and of different kinds of tastes. They provide opportunities for boating, fishing, canoeing, simply sitting about or walking along the towpaths of the waterways. These are invaluable areas and I believe that everything possible should be done to support the British Waterways Board in maintaining them. However, I would certainly agree with the noble Lord, Lord Underhill, that we must look not only at the capital provisions but at the revenue costs as well.

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With regard to the amendment, which has not yet been introduced, to which the noble Lord, Lord Bellwin, referred, I would merely say that I think this is a very necessary measure. I think that it has been one of the few issues on which, frankly, I found myself in total and complete agreement with the Country Landowners' Association and the National Farmers' Union. Indeed, I think that the provision to which the noble Lord, Lord Underhill, referred and which it would not be proper to go into in more detail here, is very necessary and will certainly receive our support. But in general terms I think that it is right to remind your Lordships that the effective provision of leisure opportunities at the moment is of paramount importance, and the inland waterways network can do a great deal towards that.
Noble Lords may like to know that at the moment the Countryside Commission is working very closely with the British Waterways Board in providing a new long-distance route for walkers, made out of linking the canal towpaths, towpaths which in many places intersect the existing long-distance routes, such as the Pennine Way. That these towpaths already exist means no acquisition of new land; they merely have to be linked together and maintained. Of course, the British Waterways Board has a statutory responsibility for maintaining navigation. It has no corresponding responsibility for maintaining the towpaths for walkers. However, I merely mention that as an example of a further way in which this part of our national heritage can be used for recreational purposes. Insofar as this limited measure goes some way towards giving the British Waterways Board some of the resources which it undoubtedly needs in order to discharge these, at the moment, very heavy responsibilities, it certainly will have our enthusiastic support.
3.58 p.m.
Lord Skelmersdale: My Lords, I have listened with great interest and care to the speeches of the two noble Lords this afternoon. I hope that the noble Lord, Lord Underhill, will not think it discourteous of me if, first, I comment on what the noble Lord, Lord Winstanley, said while it is fresh in my mind. I am very well aware of the point he made. Having, up to a month ago, made my entire living off the leisure industry, I am very well aware of the opportunities that can and should be created and which, in the particular case which the noble Lord mentioned, are being created.
My feeling is that the noble Lord, Lord Underhill, perhaps read rather more into the Bill than he need have done. Obviously, it is impossible for me to deal adequately with all the points that he raised, but I shall endeavour to explain what I mean when I say that perhaps he slightly misunderstood provisions of the Bill. If I omit anything, the noble Lord can be assured that, with the leave of the House, I shall write to him.
The noble Lord's main complaint was that this is a feeble, puny, little Bill which might well have dealt far better with matters which they see as more pressing in the water industry. But I must repeat what my noble friend said in his opening remarks. This Bill is deliberately short. Its primary function, as has been acknowledged, is to secure an increase in the
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borrowing powers of the British Waterways Board, an increase which I would remind the House is very urgently needed. It must have that increase by 1st April, the beginning of the new financial year. While it was appropriate in the Government's view also to use this vehicle to tidy up one or two anomalies on water law, this is water supply law. I really must underline this point. After the comments made at Committee and indeed at Second Reading in another place, my department sought legal advice on this. The scope of the Bill is as a water supply Bill, and there is no way that any other provisions outside this particular rather narrow field can be incorporated into it.
I should also emphasise that it is not necessarily the case that legislation is needed to deal with some of the questions that the noble Lord raised. In many cases improvements can be secured by administrative means, and the Government have taken a number of steps in this direction with the general intention of making the water industry more efficient and cost conscious. This policy is beginning to pay off. Not least, of course, is the old problem that legislative time is at a premium now as it always has been.
On the problem of collapsing sewers, this is one of those things that legislation cannot solve. It is a question of more money. I can assure the House that water authorities are fully aware of the problem and are taking every step they can to improve the situation. But, as in many other cases, it is a question of balancing costs against resources. If there was more money, there are many things we should like to do not only in the water industry per se but also for the British Waterways Board. The sooner we all manage to make more money, to create more money by working for it, the sooner we shall be able to achieve all these objectives.
The British Waterways Board's grant is something which has concerned the noble Lord. It is important to be absolutely clear that, as my noble friend said, this Bill deals only with borrowing powers for capital items. It does not affect the position on maintenance works which are paid for out of revenue, except in so far as it enables the board to acquire plant; for example, a dredger which is subsequently used for maintenance work. As has been made clear, the Government already support the board to the extent of 60 per cent. of its revenue costs. We would wish to do more but again economic realities apply.
As to the need to provide a clear indication over a period of years of the grant that the board can expect, I repeat what my honourable friend the Parliamentary Under-Secretary of State said in another place:
"It is clearly desirable and it will be done as soon as economic circumstances permit".
The noble Lord also mentioned the reduction in grant by the Government over the previous Administration's proposals. It is true that a reduction of £2 million was made in the basic grant. This was an essential part of our fight against inflation, but there is a danger of making far too much of this. After adding special allowances for protection measures and other adjustments during the year, the amount of grant paid to the board during the current financial year will be £25.4 million. Grant at this level will be maintained for 1981–82 when the total is expected to be £28.5 million

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at constant prices. Our calculations show that, allowing for inflation, the level of grant for 1981–82 proposed by the previous Administration would have been £29.4 million, a difference of about £1 million, which I am sure the noble Lord will admit is really very little in the circumstances.
The backlog of maintenance is something that anybody who knows about the canals is extremely worried about. I should like to give noble Lords some reassurance in this matter. The board takes every opportunity to publicise the interruptions to navigation and keeps in close touch with representatives of the firms operating hire craft so that the area of the difficulty is well known in advance. The two points of interruption on the Leeds and Liverpool Canal will be open to navigation by the end of April. Wast Hill Tunnel on the Worcester-Birmingham Canal is expected to be open by the end of June, as is Stoke Bardolph Lock in the River Trent. This leaves only the Netherton Tunnel on the Birmingham Canal navigation, and Blisworth Tunnel on the Grand Union which will remain closed throughout the year. Regarding the noble Lord's comments on the Fraenkel Report, it is my understanding that 10 per cent. of the problems that he outlined have already been cleared up. I think if the noble Lord is a little more patient than he seemed to be he will find that within the next few years they will all be cleared up.
That probably covers Clause 1, the British Waterways Board section. The noble Lord, Lord Underhill, also made various other points about the rest of the Bill. When particularly water undertakers are no longer able to charge for fire-fighting supplies they will have to recover the costs from somewhere. There was some discussion of this in another place and it may be helpful if I explain the situation as we understand it. We originally took the view, based on the practice which the North-West Water Authority told us on more than one occasion they would follow when this Bill is enacted, that the cost exemption will be recovered from metered industrial and commercial consumers. In this case domestic consumers would not have been affected, and my honourable friend the Parliamentary Under-Secretary of State pointed this out in another place. We now understand that the North-West Authority changed their plans at a meeting on the 23rd February. They now propose to spread the cost of exemption among all their consumers. In this case, of course, the domestic consumer would be very slightly affected. Our calculations reckon that this is about 1 per cent. of the total water bill.
This Government however (this is another point on the same subject that the noble Lord made) are not in the business of setting up bureaucratic organisations. I think he will agree that our record of doing away with unnecessary Quangos is second to none in the past 20 years. We do not feel that this general charging policy means that the Bill should be amended to protect the domestic consumer.
Lastly, it would be appropriate if I mentioned the clause dealing with the Water Authority's right to require that separate pipes should be installed for various reasons. It was, I hope half-heartedly, suggested by the noble Lord that the power of the undertakers to insist on separate service pipes to houses
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with common supplies is merely a device to further the sales to council houses. I can assure him that this is simply not true. It is true, however, that most houses built with common supplies in recent years have been council houses. It is also true that the problem we are tackling is highlighted by the sale of a council house. However, the Government do not accept that there is any sense in imposing the extra costs on the buyer of a house with a common supply, and there are private houses also with common supply simply because that house is being sold and irrespective of whether there is anything wrong with the supply, or the various conditions mentioned in the relevant clause in the Bill.
I hope that I have now dealt, albeit briefly, with the more important topics raised in the debate. There is one point about which I shall certainly write to the noble Lord. It is very complicated. That is the point he made about the Thames Water Authority and how they were going to budget for the income which is no longer available to them. If I can put it briefly, I would say at this stage that they have had plenty of warning for this. As far back as last October they knew that they were not going to be allowed to do it. My personal feeling is that if they have not done it by now, they never will. But I am sure they will do it and I will write to the noble Lord.
I am very encouraged that noble Lords have not expressed any fundamental opposition to what the Bill is proposing, and I ask the House to send it forward to Committee where we will be able to look at its provisions in much more detail.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Industry Bill
4.11 p.m.
Lord Skelmersdale: 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 Skelmersdale.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD ABERDARE in the Chair.]
Clauses 1 to 5 agreed to.
Clause 6 [Powers to promote careers in industry etc.]:
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 1:
Page 4, line 22, after ("Charter") insert the terms of which are in accordance with the provisions of Schedule [PROVISIONS OF ROYAL CHARTER FOR BODIES FALLING WITHIN SECTION 6(5)] to this Act."].
The noble Lord said: This is a paving amendment leading to Amendment No. 3; the amendment numbers seem to have gone somewhat awry, in that we have Nos. 1 and 2 followed by an unnumbered amendment, and then No. 3. However, I am sure we all know where we are and I propose, if the Committee agrees,

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to discuss Amendment No. 3 at the same time as Amendment No. 1. Indeed, as all the amendments appearing on the Marshalled List relate more or less to the same subject, it might be for the convenience of the Committee if we discussed them all in one general debate and then moved them as appropriate in order, should we wish to do so. Do I have the agreement of the Committee to proceed in that way?
Several noble Lords: Hear, hear!
Lord Howie of Troon: I should begin by declaring an interest in this matter, as a member of the Institution of Civil Engineers, which is one of the chartered engineering institutions involved in the discussions relating to Clause 6, and as a one-time member of the Finniston Committee, from whose recommendations the entire matter arises. The first point to which I shall address my remarks is whether Amendment No. 3 is relevant to the purposes of the Bill, and I believe it is, for two reasons. The first is that Clause 6 indicates the kind of body to which the Government will guarantee loans at some later stage and lists the objectives of that body, the main one in my view being the first one that is listed. The second reason why my amendment is relevant is that Clause 6 refers to a Royal Charter, and my amendment does so as well.
Indeed, the amendment puts flesh on the various objectives in Clause 6(2) and goes on to indicate various important matters which should be referred to in the Royal Charter mentioned in the clause. That is important because Clause 6 was criticised in another place, largely because it put forward a metaphorical blank cheque in that it said that guarantees for public loans should be made for a body set up under a Royal Charter without specifying in any way what that Royal Charter should be about. That was criticised in another place, in my view rightly. Amendment No. 3 is designed to fill in, as it were, the figures in that metaphorical blank cheque; but I hasten to say, bearing in mind the constitutional position of your Lordships' House, that I have no intention of filling in any real figures; they are metaphorical figures only.
I am encouraged in my belief that the various items I have listed in what I accept is a very long amendment—I apologise for its length—should be in the charter because the amendment is taken almost verbatim from the Royal Charter which is now being discussed between the Government, the engineering institutions and various other public bodies: the Royal Charter, an amendment to which can now be found in the Library and to which the Minister referred on Second Reading. I should add that although the charter is in the Library and although my amendment is taken almost verbatim from it, the engineering institutions have turned it down flatly and have said it is not good enough for their purposes. That is a pity.
The Finniston Committee reported just over a year ago suggesting certain changes in the engineering régime in this country, all of which were expected to lead to some kind of improvement in engineering and, with a bit of luck, to an improvement, in part at least, in the economy. One of Finniston's proposals was to set up an engineering authority. That proposal the Government
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have accepted and they are proposing an engineering council. There was, however, a difference between Finniston and later commentators on his report. Sir Monty and his colleagues, of whom I was one, believed that an engineering council—I will use the word "council" rather than, as he described it, "engineering authority"—to have teeth and clout, would best be set up under a statute of some kind. The engineering institutions, partly from their history, believed it preferable that an engineering authority, if there was to be one, with whom they could work, would best be set up under a Royal Charter.
Their reason for that suggestion was partly historical; their own institutions and council of engineering institutions are set up under Royal Charters and they have found that a comfortable way to proceed and an efficient way of carrying out their business. But they had another and deeper reason; namely, they felt that if the new council were set up under a statute, it would bring in politics, and the engineering institutions wanted to avoid like the death the bringing in of politics to engineering. They felt that setting up the new council under a Royal Charter would keep the politicians out. I am not sure whether that was a wholly good idea, one with which your Lordships will agree with entirely, but nevertheless it animates the whole discussion. The engineering institutions wish to be free and independent of politics and they feel, wrongly I believe, that a Royal Charter would protect them in a way that an engineering council set up under a statute would not. The Government agree with the institutions and have decided that a council should be set up under a charter rather than a statute.
I believe there is a strong argument in favour of the statute, one which was never made by the Finniston Committee, and perhaps that was a pity. It is that whether the new council is set up under a statute or a Royal Charter, the procedure under which it will be set up is one of consultation, discussion and attempts to reach agreement between the Government and the various interests involved, be they the engineering institutions, the industrial organisations—trade unions and so on—or the academics. In any event, there will have to be discussion and agreement.
There is I believe one quite strong argument in favour of the statutory approach as opposed to the Royal Charter approach, and it is as follows. If the Government had proceeded under statute, they would still have had to reach agreements, but at the end of the day they would have been in a fairly strong position to say, "Look, we have had consultation. We have had discussion. We have had disputation. We believe the answer is this". They would have reached what I can describe as the highest common factor in the search for agreement.
If, on the other hand, the Government proceed, as they have done, at the wish of the institutions, along the road of the Royal Charter, they give away their right to say, "This has gone on long enough. This is what the agreement ought to be". I am not saying that the Government ought to be dictatorial; nor do I believe that they would be in a matter of this kind. But they would be able to say, "This is the end of the road".
The Royal Charter route is open to reaching not

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the highest common factor, but the lowest common denominator. I am perfectly sure that Ministers and others who have been involved in the discussions throughout the winter and the late summer of last year have probably now come to agree with me and are realising that they could have done with the additional clout which the statutory route would have given them. So I think that the statute route would have been preferable, because the Government and Parliament could have brought the argument to an end, and it would have been right to have done so.
I believe that, despite what I have said, agreement on the Royal Charter is fairly near, or at any rate the difference between the two sides is fairly small. It so happens that in my private life I am involved in discussions with the National Union of Journalists over a wage claim, and the difference between me and the union is very small. I believe for that reason that agreement is near, though I do not think that the union believes that. What I am saying here is that, although the difference between the Government and the institutions and others is quite small, agreement ought to be near, but might not be. I should like to think that agreement is near, and if agreement is near, much of what I am doing today might turn out to be unnecessary.
I believe that whether agreement is near, or whether disagreement is merely small, there would be no harm done if Parliament, in the shape of your Lordships, were to give those involved in the discussions a fairly sharp push towards agreement; to give them a reminder that they are not involved in the discussion for their own purposes but rather that both sides are involved in the discussion in order to reach an agreement which goes along the lines—which they have all accepted—projected by the Finniston Committee, because it was thought that those lines were advantageous to the country as a whole.
Apart from its inherent virtue, that is my main reason for putting forward the amendment—to give a push to the current discussion. The amendment has another advantage. It provides the Royal Charter which the institutions want, and it also gives statutory backing, which I think is needed.
Let me very rapidly go through the provisions of the amendment. I shall not read them out; there are far too many of them. The amendment discusses the objects of the new council and it puts flesh on the objects already listed in Clause 6 of the Bill. I think that that is necessary. It goes on to discuss the powers of the new council. I think that that is quite important, because the powers which the council is given under the charter which is being discussed and which is included in part in my amendment allow the council to do certain things by itself. But the powers also allow the council to do certain things in collaboration with other bodies, the engineering institutions and others. I regard that as quite important, because, in so far as I am aware of the manner in which the discussions have gone on, it seems to me that the institutions have continually been suspicious of the Government's intentions. They have felt—wrongly, I believe—that they were being ignored. They have felt—again, wrongly, I think—that they were being pushed aside. They have been suspicious that the council might
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usurp the things which they have done for a long time; in the case of my own institution for the last 150 years or so. So they perhaps have history on their side in their suspicions.
I believe that those suspicions are unfounded, and the amendment will give the Minister the opportunity to explain that they are unfounded. Incidentally, I do not think that he will have any difficulty in persuading me, but he might have some difficulty in persuading the institutions outside. That is a very important point, because it has, I believe, been germane to the manner in which the institutions have tended to drag their feet.
The amendment goes on to list the titles which engineers should be given when they are registered. This is quite important because the charter is really asking the institutions to give up titles which are theirs and yield them to a new body, of which, as I say, they have been slightly suspicious. The only reason why the Finniston Committee did not adopt the titles proposed in the charter was that we knew at the time that the titles belonged to the institutions and we could not command them in any way. We should have liked to retain the title "chartered engineer" and other similar titles, but we proposed the title "registered engineer" only because the other title was not ours to give. We knew that it was their title and that if they could be persuaded to yield it that would be valuable, but we could not demand that they should.
I think that the Government request to the institutions to yield the title "chartered engineer" and the other titles which the Engineers' Registration Board uses is correct. Of course that gives the institutions certain leverage in the discussion—leverage which they quite properly use. However it should be made perfectly clear to the institutions that, while Parliament is willing that they should exercise the leverage which they quite properly have, that does not give them absolute leverage, and that the leverage should be tempered with common sense.
The amendment goes on to refer to the possibility of removing people from the register, and in this respect it goes rather farther than the institutions already go; and that I believe is to go farther in a desirable direction. The amendment refers, too, to assistance to Ministers. That is an area where the institutions are very suspicious, because it is in the clause in the charter which relates to giving assistance to Ministers that the institutions see the hidden hand of political domination.
That was not the intention of the Finniston Committee when we said that attention should be paid to what Ministers and Government wanted. We were not talking about domination of the engineering profession by Government, and, disastrous as the present Government may be, not for one minute do I believe that their intention is to dominate the engineering profession through the Royal Charter. I am certain that that is not the intention of the Government. I believe that the Minister should take this opportunity to reassure the institutions and to make it quite plain that he is not talking about political domination of a profession and that here again their fears are exaggerated and unfounded.
The amendment talks of the accounts and the report, and here I have added to the draft charter, in that I

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have said that the report ought to be presented to Parliament. I believe that it should be so. I shall not elaborate on that because I see that that is the subject of a later amendment, and no doubt we can discuss it then.
When we come to the membership of the council, I have elaborated on the charter quite a bit and have made three different additions to it. First, in that part of the charter which talks about engineering employers and managers I have added trade union representatives. I took that idea really from a letter which was sent to Sir Keith Joseph by John Lyons, the General Secretary of the Engineers' and Managers' Association, on 2nd February, in which he suggested that the trade unions ought to be put into the charter. I think this is quite important. Mr. Lyons' position is important, because he was in a sense one of the instigators of the Finniston Committee in that it was he who moved the successful resolution at the TUC some years ago which encouraged the then Government to set up the committee. I am encouraged to add trade unionists to this part of the charter by the comment made by a Government Minister at the Committee stage in another place, when he assured the Committee that trade unionists would be appointed to the committee. If they would be appointed to the committee, it seems to me more sensible not merely to rely on his word (not that I doubt it) but to put a provision into the charter and enshrine their appointment to the committee, just as others are enshrined.
My second addition to the charter, which I have set out in my amendment in Clause 8(2)(c), is to suggest that:
"four places shall be reserved for members selected by the Secretary of State for Industry from lists nominated by the engineering institutions …".
That particular proposal was taken from an anonymous footnote to the Finniston Committee which was written by a member of the committee who I normally find extremely reliable. The point about it here is that reserving four places for the institutions does two things. It ensures that the institutions are directly represented on the council, and that should reassure them in certain of their fears about the nature of outside domination. Of course, it would also prevent domination of the council by the institutions, because although we have reserved four places, four places would be a minority on the council and the council would not then be the handmaiden of the engineering institutions. They would be represented there, but they would not dominate the council.
In the same way, in paragraph (d) I have asked for two places to be reserved for representatives of the technician engineers and the engineering technicians. I have really said that because if the register goes ahead as proposed by the Government in the charter, roughly on the same lines as the engineers' register which already exists, a very large number of people on it, and possibly at some time a majority of the people on it, would be either technician engineers or technicians, and it would be quite wrong if they were not directly represented on the council which governed them. It would be wrong, too, if they were to rely for their representation on the good offices of other people. Since they would make up a sizeable number of members on the register—as I say, probably a majority
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—I think they should be directly represented upon it. They would not dominate it, of course; there are only two of them—one for each of these two large sections. They would not dominate it, but they would be directly represented there and their voice would be clearly and openly heard.
I want to say one thing very rapidly, because I know I am taking up a good deal of the Committee's time, but this is an important matter. On numerous occasions when we have discussed this council questions have been raised about self-regulation of the engineering profession. My noble friend Lord Hinton has mentioned this, and my noble friend Lord Mishcon has mentioned it as well. I believe that the council as defined in the charter, by which two-thirds of its members will be practising engineers, would represent self-regulation by engineers. It would not represent self-regulation by the engineering institutions because they would not be a majority. But if a majority of the council—two-thirds, in fact—were themselves practising engineers, that represents, to my mind at any rate, self-regulation by engineers, and is a complete answer, I believe, to the protestations of the institutions and others on that behalf.
The main purpose of this amendment is to permit debate on the arrangements which lie behind Clause 6 of the Bill. As I said earlier, Clause 6 is in a way a metaphorical blank cheque. We are being asked to give the Government power for something at which we can only guess, and I think that should be made clearer. But another purpose is to remind everybody engaged in discussion of the future of the engineering profession that the Finniston Committee did not reach its conclusions without careful consideration spread over rather longer than the recent discussions have taken. Monty Finniston tried to propose arrangements for engineering which would lead to improved engineering and accommodate the vested interests in engineering but not yield to them. It gave them a place, but did not permit them to dominate. The engineering institutions are very good (and I have been a member of the Civils for a very long time now) but, even so, the engineering institutions should not be taken at their own valuation. They should be taken really at the valuation which industry puts upon them, or which industry can be persuaded to put upon them. It would be wrong now if the changes which were made were not real changes.
I believe, as I have already said, that agreement is quite close, or at any rate that the area of disagreement is narrow, if that is the same thing; and I welcome that. But, in concluding, I should like to remind the Committee of the last paragraph of the letter which John Lyons sent to the Secretary of State for Industry on 2nd February, and which I have already quoted. Lyons said this:
"if however the Institutions refuse all reasonable compromise on this vital point, and threaten to oppose the creation of a Chartered Engineering Council on the basis of your revised draft Charter, we would urge you strongly to go for a Statutory Council without delay, when Parliament could determine the powers it should have".
I draw attention to that fact merely to remind the Committee that this is not just a discussion between the Government and the engineering institutions. Other organisations are just as interested in engineering as the institutions are, and the trade union movement

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is certainly one of them. It would be a great mistake to yield to the institutions, admirable as they may be, at the expense of these others. I beg to move Amendment No. 1 which stands in my name.
4.40 p.m.
Lord Rochester: I agree that it is convenient that we should take all these amendments at one go, so to speak. The noble Lord, Lord Howie of Troon, in moving his amendment has sketched in the background sufficiently clearly to ensure that there is no need for me to go over that again. I should therefore like to speak now to Amendment No. 2, in my name on the Marshalled List, and in doing so to refer to a limited extent to the amendment which has just been moved by the noble Lord, Lord Howie of Troon, and also, with the agreement of the noble Lord, Lord Hinton of Bankside, to say a few words on the amendment which he will shortly be moving to leave out Clause 6. I hope that this will mean that the Committee will not have to suffer listening to me more than once. I rather think that what I shall have to say on the amendment of Lord Hinton of Bankside will place emphasis on the matters that he may deal with.
In a situation where, as Lord Howie of Troon has reminded us, there are conflicting views on whether the proposed new engineering council should be a statutory body or a body set up by means of a Royal Charter under the auspices of the Privy Council, the purpose of my amendment simply is to mark out a ground on which I hope we can all stand; for I am convinced that if engineers and engineering are to be held in higher esteem in society, and particularly among students, the action to be taken to achieve that objective must have the widest possible agreement. The amendment standing in my name, therefore, seeks simply to provide for the progress of the new council to be discussed by Parliament annually for the first three years of its existence during which its members are to be appointed by the Secretary of State and the Government will be empowered to give it financial support.
The amendment moved by the noble Lord, Lord Howie of Troon, seeks to achieve, as I understand it, rather more than my amendment in that he is aiming to obtain statutory authority for the charter and on a number of points his amendment (as he himself made plain) goes further than the charter. Specifically on the matter covered by both his amendment and mine, the requirement that a report of the engineering council should be presented to Parliament, he is asking for provision to be made for this to be done on a continuing basis whereas my amendment has a more limited objective. I welcome his proposal that included among the members of the new council should be some trade union representatives of the engineers. I understand that the Government already have in mind that there should be at least one such member of the council, but that seems a pretty meagre representation.
So my amendment represents an attempt to reach the consensus that I feel sure we all desire on what is not a party political question; and I confess to having had some difficulty in drafting it. It is designed to deal with the new engineering authority, but I suppose that it is possible that if a report of every organisation
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persisting in promoting the practice of engineering and receiving financial aid has to be laid before Parliament annually, as the amendment provides, that might prove to be too many of them for the purpose I have in mind to be easily achieved.
Any advice that Members of the Committee have to offer on this point will be very welcome; but I suggest that we direct our attention primarily, so far as my amendment is concerned, to the principle underlying it as it affects the proposed engineering council. That principle is that since, according to the Explanatory and Financial Memorandum of the Bill, altogether about £1 million of public expenditure is being incurred annually, "for the purposes specified in Clause 6", the Government should be accountable to Parliament each year at least for that presumably substantial part of the total expenditure which will be used for promoting the practice of engineering by the new council. If that principle can now be agreed, I feel sure that any imperfections of drafting in my amendment can easily be cleared up at the Report stage with the help of the noble Earl, Lord Gowrie, now that he feels that he is, as he testified to us last week, in a state of grace and has been called to the "Ministry of Enlightenment".
So far as the amendment of the noble Lord, Lord Hinton of Bankside, is concerned, I wish to relate what I have to say about the clause as a whole more particularly to subsections (1)(b) and (1)(c) of that clause. As I said at Second Reading, it is welcome, that specific statutory authority is now to be provided for recurring Government expenditure to finance activities aimed at improving mutual understanding between industry and education, particularly at the schools level. But, as I also said then, time and again, arising from the evidence which has been given to your Lordships' Select Committee on Unemployment which is chaired by my noble friend Lady Seear—and I am glad to have her support at my side—our attention has been directed to the vital need to improve the links between industry and education in this country.
A number of us made a trip to Western Germany to see what went on there in this regard because, although in that country there is as everywhere else in the industrial world an increasing problem in relation to unemployment in general, the problem relating to young people, and more particularly school-leavers, is really negligible compared with the problem in this country. We found that that appeared to be attributable largely to their dual system of vocational training, as they call it, wherein young people spend a substantial part of time both in on-the-job training at work and also in further education in vocational schools, so that there is that combination of training and further education.
In Western Germany a large part of that overall training and education is financed if not by the state, at least by the provinces or Länder, as they are called. I do not doubt that there will be some reference to that point in the report of that Select Committee which will eventually be presented to the House. Speaking for myself, I feel we have a lot to gain from the German experience in that regard. So I am more than ever sorry that, as I understood what it was that the Secretary of State had to say at Second Reading of this Bill, the Government, so far from devoting more resources to these activities, are proposing to reduce

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the expenditure and indeed the staff engaged in them.
The noble Earl, Lord Gowrie, looks a little puzzled. If he wishes to intervene I hope he will do so. It may be that he will be able to give me some reassurance a little later.
The Earl of Gowrie: I intervene now while the point is fresh in the mind of the Committee. The Government have repeatedly said that they very much admire and have learned from the German experience in training. But the noble Lord, Lord Rochester, must also make it clear that Germany is now exactly twice as rich as this country per capita. That is a regrettable situation but it limits our freedom of manoeuvre.
Lord Rochester: I have no more to add on the point except that any saving in this direction seems to me, at least in our present circumstances, to be very shortsighted. That is all I have to say as to my amendment, my comments on Lord Howie's amendment and on the amendment which will be moved by the noble Lord, Lord Hinton of Bankside.
4.52 p.m.
Lord Hinton of Bankside: I willingly accepted the suggestion that these amendments should be aggregated for discussion. It was felt that the discussion of them might become slightly convoluted if they were dealt with in the order in which they appeared on the list. Indeed, I am not free at the moment from the impression that our debate is getting a little convoluted. I believe that it is proper for me to draw attention at this stage to the amendment which I set down which is to omit Clause 6.
Perhaps I have been negligent in that I did not see Lord Howie's amendment until I came into the Chamber this afternoon. Nor indeed did I bring with me the Hansard of the previous debate on Second Reading. However, I clearly remember saying in that debate—and I was not contradicted—that, as I understood it, we were not debating the Finniston Report. We were merely debating certain financial powers which the Secretary of State thought that he might need from any action which was taken arising from the Finniston Report. I suggest that this is still the case today and that we are discussing merely those financial measures and are not discussing the Finniston Report. I hope that that is the case.
I remember that when I was doing research at Cambridge under the late Sir Charles Inglis, he said to me: "You know, Hinton, I claim that I can make the best extemporary speech in Cambridge provided that I have a month in which to prepare it"! I have found that to be so in my own case. I shall without any doubt wake up at two o'clock tomorrow morning with a most fluent speech dealing with all those points which have been raised by the noble Lord, Lord Howie. However, for the moment, I should prefer to confine myself to what I conceive to be the purposes of this Bill; that is, to provide certain financial powers.
In the Second Reading debate, I drew attention to the fact that there was a suggestion that the Minister should appoint for the first three years the members of any body which he set up; but, thereafter, that body should be self-governing. I feel most strongly about this. The point was made both by the noble Lord,
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Lord Mishcon, and myself that the engineering profession, like all of the other learned professions, is entitled to be self-governing.
In speaking on that occasion, I drew attention to the fact that, by clever manipulation, it would, under the terms of Clause 6(5)(a) and (b), be possible for the Minister to appoint the members of whatever body is set up at anytime in the future. This, I am sure, would be resented by the whole of the engineering profession. It is a learned profession and it should, like all other learned professions, be self-governing. I drew attention, also, to other weaknesses which I saw in Clause 6. For instance, to the fact that the financial terms on which the Secretary of State could make grants to such bodies as were set out were less generous than the terms which are granted to other learned societies. I said that I felt that, although the first point that I had made might possibly be remedied by altering the word "and" at the end of Clause 6(5)(a) to "or", the whole clause was open to such objection that it had better be withdrawn.
My view on that is, if anything, strengthened by what has been said this afternoon. This is a matter which is, I suggest, too important to be dealt with in a miscellaneous clause tacked on to the end of a Bill which otherwise deals with very different matters. I should still be most happy if the Committee were to decide that, rather than come to any other conclusions this afternoon, the wisest course might be to arrange a debate in which the whole matter, and not merely the financial clauses, are debated.
Lord Ponsonby of Shulbrede: Other noble Lords have underlined their reservations about Clause 6, and the noble Lord, Lord Rochester, has made certain proposals for improving it. The noble Lord, Lord Hinton of Bankside, has said, as I was going to say, that Clause 6 is a miscellaneous clause at the end of a miscellaneous Bill and that engineers rightly feel that this is a very odd way to be treated: it demeans their profession. As the noble Lord, Lord Howie, has referred to the letter from the presidents of the engineering institutions, I would only add that the letter did underline to the Secretary of State their dissatisfaction with this clause and with these proposals as they stood. To be successful, an engineering council needs to be supported by the employers, the professions and the trade unions, but it seems unlikely to happen with the proposal in the Bill at the present time, as clearly it does not have the support of the profession.
As has been said, the proposal differs from that made in the Finniston Report, in that the proposed body will be a chartered body accountable to the Privy Council and not a statutory body accountable to Parliament. That point was underlined by the noble Lord, Lord Howie of Troon. The profession is fearful of losing its independence: that would come about if the Government appointed all the members of the proposed council, and, as the noble Lord, Lord Hinton, said on Second Reading, the Bill as it stands means that they could continue to appoint those members.
I think we accept that regulation of the profession is needed but the proposals as at present tabled do not seem to be adequately thought out. That point was underlined very clearly by the noble Lord, Lord Howie,

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when he sought to insert the whole terms of the charter into the Bill and, indeed, made a number of amendments to the charter as it has been laid in the Library by the Government.
There is concern that another chartered body existing alongside the present bodies would come to be regarded as a co-equal body and not as primus inter pares. I think all I would say in supporting what has been said by a number of speakers this afternoon is that clearly there is a considerable degree of dissatisfaction about the proposals in Clause 6 as they now stand. It seems to me that the wisest course would be for the Government to take on board that there are these reservations and to have a look at them again before Report stage.
5.4 p.m.
The Earl of Gowrie: We have had a very interesting and informed debate, and one would expect that any debate which had been contributed to by the noble Lord, Lord Hinton of Bankside, would be particularly informed in this field. It was started by the noble Lord, Lord Howie of Troon, who gave us a lucid explanation of the subject.
The Government decided against a statutory body after taking fully into account the very wide range of views and all the submissions which we received on the Finniston Report. There was considerable agreement on the need for a new body to act as a focal point for the engineering profession, but equally there was a widespread feeling that a statutory body, as wished for by the noble Lord, Lord Howie, would represent excessive Government interference in the regulation of what almost everybody wants to be a self-regulating and independent profession.
The report itself did not recommend any statutory powers for its proposed engineering authority: nor did the bulk of the evidence submitted to the Government by industrialists, institutions and educationalists. They indicated a strong preference for a royal chartered body; so I congratulate the noble Lord, Lord Howie, on his ingenious attempt to turn the engineering council into a statutory body. But I do not think his amendment would have that effect. Indeed, its effect could be to prevent the Secretary of State from guaranteeing the obligations of the proposed engineering council. This is because the Secretary of State would only be able to guarantee the obligations of a body of which the charter was as specified in the proposed schedule. However, the version included in the noble Lord's amendment—the version dated 23rd January—has been undergoing some revision to take account of the comments received by my right honourable friend. In consequence, the final version of the charter will not be identical in every respect to the version which the present amendment seeks to introduce in a schedule to the Bill. So I am sure the noble Lord would not intend to constrain us to a draft of the charter which had not been the subject of the necessary consultations which are needed if we are to reach the consensus which we are trying to achieve.
The noble Lord, Lord Howie, asked for reassurance about the Government's overall position. We have made clear at every stage during the passage of this
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Bill that nothing in our proposals is intended to diminish the importance of the engineering profession or its institutions; and I will come back, if I may, to that central point at the end of my remarks.
The noble Lord also asked about the use of the "Chartered Engineer" title. We want to proceed here by agreement and the extention of the "C. Engineering" title is a point we are discussing with everyone concerned: the profession, the employers and those concerned with education. Of course it is a difficult issue and the House will not expect me to say very much at this stage as these discussions take place, but I would emphasise that the Government's purpose has been made clear. It is to widen the recognition of all concerned with engineering, and most of all the generality of employers, and to make everyone recognise the importance in the national interest of educating, training and using effectively individuals holding the qualifications of the new council. To do so we will need to reach a conclusion which is as far as possible acceptable to everyone. We recognise that this will require give-and-take all round if the council is to be successful. In this situation I think it is unlikely that success could be achieved by unduly restricting access to the title.
The noble Lord, Lord Howie, said that my honourable friend the Parliamentary Under-Secretary of State for Industry said in another place that trade unionists would be appointed to the council. I understand the point the noble Lord was making. We recognise that there are many interests involved besides the engineering institutions, but we want to avoid members of the council acting not as delegates but in their own right.
The noble Lord, Lord Howie, has suggested particular representatives and the Government are well aware of the importance of the first appointments to the new body, because the success of that body will depend largely on their being recognised as a well-balanced team, and of course my right honourable friend will bear that very much in mind when he makes his initial choice. With this in mind, the draft charter already specifies that, so far as practicable, the chairman and other members shall together have a wide knowledge and experience of all matters relating to the practice of engineering. I do not think it would be useful to go beyond this and specify particular interests which must be included. No one will sit on the council as a direct representative of any organisation.
I come now to the points made by the noble Lord, Lord Rochester, from the Liberal Benches. The noble Lord explained that the purpose of his amendment is to require the proposed Chartered Engineering Council to submit an annual report to the Secretary of State and to require the Secretary of State to lay this before Parliament. As I shall try to explain, such a proposal would not be acceptable to the Government. But I think, first, it might be helpful if I explained that this proposed amendment, would not have the precise effect that the noble Lord, Lord Rochester, desires, as I think, in all fairness to him, the noble Lord may have acknowledged.
As the noble Lord said, the amendment would not only require a report from the engineering council, if and when we provide it with grants or loans, but it would also require a substantial number of other bodies, which currently receive support from the

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Government in connection with industry/education links, to submit an annual report which my right honourable friend would have then to lay before Parliament. This is because the phrase,
"the promotion of the practice of engineering"
in subsection (1) encompasses other bodies, in addition to the proposed Finniston engineering council.
As an illustration, I am able to tell your Lordships that, in the financial year 1979–80, we supported projects by 17 bodies at a total cost of some £32,000 which would have been caught by the proposed amendment; and to date, in the present financial year, we have supported a further 23 projects at a cost of £40,000. So I am sure your Lordships will accept that the effect of such a requirement would be seriously out of proportion, and would be likely to reduce the number of cases where we could support promising industry/education activities.
But I, in my work in a different Ministry, of course, care passionately about the improvement of training, and we are constantly, with the MSC and with the industrial training boards, trying to refine and improve our training and to get industry to do so as well. In an intervention, I have already paid tribute to the inspiration that we have had from looking at the German model, but I made it clear that, at the moment, the German model is a good deal further ahead than our means allow.
May I turn quickly now to the other purpose underlying the amendment of the noble Lord, Lord Rochester. We have given the matter serious consideration since it was raised in another place, but our view remains that it would be inappropriate to require the proposed engineering council to submit an annual report to the Secretary of State. As I have already emphasised, our intention is that Government involvement in the body should be limited to appointing its chairman and members just during the initial three-year period, and standing behind it financially to the extent that this proves necessary. Any requirement for the body to report to the Secretary of State would, in my view, be taken as an attempt by the Government to increase control of the council—the very point that the noble Lord, Lord Hinton, was anxious about.
At the same time, of course, we recognise that there will be a great deal of interest in the way that the council progresses, and my right honourable friend the Parliamentary Under-Secretary therefore undertook that we would consider whether copies of the council's annual report and accounts should be deposited in the Libraries of both Houses. We will certainly give consideration to that, and I have taken note of the interest expressed here this afternoon. But for the reasons that I have given, I would prefer that your Lordships do not at this time accept the amendment in the name of the noble Lord, Lord Rochester.
The noble Lord, Lord Hinton, argued that Clause 6 would enable a Secretary of State, if he chose, to continue to nominate the members of the council beyond the initial three years that we envisage. I can assure the Committee that the noble Lord's fear is without foundation. If your Lordships care to examine again the draft charter which we have placed in the Library of the House, you will see that it is made quite clear that the Secretary of State's power to make nominations shall extend for only three years. Nothing
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in Clause 6 would enable the Secretary of State to amend the charter in any way. It follows that the provisions could not, therefore, on any interpretation, be used to extend the Secretary of State's powers of nomination in the way that the noble Lord suggested they might. I can understand that the meaning of subsections (4) and (5)—
Lord Hinton of Bankside: If I may intervene, I spelled out in the Second Reading debate the way in which those subsections could be used in order to enable the Secretary of State to nominate the members of the body in perpetuity. He has only to foreclose on the loan, after which the body would have to go to the money market to raise such amount as was outstanding, and the body would not be able to do that without getting a Government guarantee. I suggest that if such a Government guarantee were given, the subsections to which I referred could entitle the Secretary of State to make nominations.
The Earl of Gowrie: My instinct is that if the Secretary of State wished to proceed in such a tortuous way to try to establish this control, which we have repeatedly disclaimed having any interest in, and which we do not feel the legislation allows, he would find it much more convenient—presumably, he would enjoy a parliamentary majority of some kind—to come back to Parliament and take control directly—
Lord Hinton of Bankside: If the noble Earl will forgive me once more, I said very clearly in the Second Reading debate that I did not for one moment suggest that the present Secretary of State would do this, but that once the Bill is on the statute book it could be done and the present Secretary of State cannot commit his successors.
The Earl of Gowrie: Of course I recognise that, but I am not making the point simply about the present Secretary of State. I was trying to say that it would seem to me that this route to control would be so tortuous as to argue that a subsequent Secretary of State, assuming he wished to take control, would simply take it by legislation. But we have tried to draft these provisions very carefully to identify the engineering council and also to define the borrowings which may be guaranteed as those incurred while the Secretary of State appoints the members, and that provision is the one which should set the noble Lord's mind at rest.
It grieves me that we should be apart on this, because I recognise from all that he has said—and, of course, from his career, to put it mildly—that we are after the same thing in this legislation. But all the advice I have is that, while the meaning of subsections (4) and (5) of this clause which relate to the guarantees to which the noble Lord has just drawn our attention, may not be immediately apparent, this is simply because we had to introduce the Bill before a name had been settled for the new body and that causes some drafting difficulties. But as I have just said, the provisions were carefully drafted to identify the engineering council and also, therefore, to define the borrowings which may be guaranteed as those incurred while the Secretary of State appoints the members.

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Therefore, I think that we can reassure the Committee that no amendment is required to clarify or to restrict this meaning of the clause.
Over and above that, we have made it clear at every stage during the passage of the Bill that nothing in these proposals is intended to diminish the importance of the engineering profession or its institutions. Nor do we see any continuing need for Government involvement in the chartered engineering council. While we are willing initially to appoint its chairman and members, we will do so in such a way as to reflect the broad range of interests involved. Then we shall leave the council to get on with its work. At the end of three years the council will, after consulting widely, recommend how further members of the council will be elected or nominated. But that is all in line with the way that my right honourable friend has made it so clear that the Government are not seeking to regulate the profession.
In the light of these repeated assurances, of my explanation of the difficulty we have had in that the name of the body has not yet been established, and of my repeated indications of the way we have drafted the Bill to define the borrowings which may be guaranteed as those incurred while the Secretary of State is in the process of appointing the members, I hope that noble Lords will feel themselves able to withdraw these amendments.
Lord Howie of Troon: I do not in fact intend to press my amendment. I am reluctant, however, to withdraw it immediately in case, by so doing, inadvertently I prevent others from speaking in reply to later amendments. I assure the Committee that I shall certainly do so in the fullness of time, but first may I make one or two comments.
One of the values of today's debate is that it has given to the Government an opportunity, which I believe they have taken, to allay the fears of the institutions, fears which were very clearly illuminated in the various interventions and comments of the noble Lord, Lord Hinton of Bankside. His place as an eminent engineer at the head of the profession is absolutely unrivalled. The fact that he is subject to these fears is a very real measure of how far they spread throughout the profession. I think that the Government have to my satisfaction, as a much more junior member of the profession than the noble Lord, managed to allay these fears, and I sincerely hope that both he and others of influence in the profession will feel the same.
However, I agree very strongly with the noble Lord about one point which he raised: partly because of these fears and partly because of the place which engineering has in the economy of the country as a whole, the entire matter is too important to be brought in at the tail end of a Bill which deals with entirely different matters. I quite understand that the Government were looking for an opportunity to do something and to take quite beneficial powers, and that they took advantage of a Bill which happened to be there and added a clause on to the end of it. But I do not really believe that this is the correct way to deal with an important matter.
My next point arises from the comments of my noble friend on the Front Bench. He quite rightly drew
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attention to the dissatisfaction of the institutions with certain aspects of the proposed legislation. However, I would remind him that although the fact that the institutions are dissatisfied is of interest and of importance in the disccussions, this by itself does not mean that the Government are wrong. I would ask him to think over that point very carefully during the remainder of the discussions on the Bill.
My last point relates entirely to the comments of the noble Earl the Minister on my Amendment No. 3 in which I introduce into the legislation part at least of the charter. The noble Earl was quite right to say that my amendment was the wrong one, in the sense that the charter which I used for the amendment has been overtaken by events and has been turned down. There have been discussions since then which no doubt will lead to an amended charter in the fullness of time.
I am inclined to think that the best way to proceed is this. Should there fail to be proper agreement between the Government and the various interested bodies during the next week or so, the right thing would be for the noble Earl to put down at Report stage an amendment similar to mine but based on the revised charter, so far as it had got by the time we reached Report. If it is inappropriate for the noble Earl to do that and he cares to give me a copy of the charter in the state which it has then reached, I shall be happy to put down the amendment for him. That would overcome the difficulty to which he quite rightly drew our attention.
I wish to withdraw Amendment No. 1, the amendment which we are debating in the formal sense, but may I ask whether I should do so now or later?
Lord Ponsonby of Shulbrede: The noble Lord should do so now.
Lord Howie of Troon: I beg leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn.
5.27 p.m.
Lord Rochester Lord Rochester moved Amendment No. 2:
Page 4, line 24, at end insert—
("( ) Every body which in the opinion of the Secretary of State is assisting in the promotion of the practice of engineering and to which he makes a grant or a loan under the provisions of this section shall, not less than once in each year commencing with 1982, make a report to the Secretary of State as to the discharge of its functions and the Secretary of State shall forthwith lay a copy of any such report before each House of Parliament.").
The noble Lord said: With the permission of the Committee, may I formally move my amendment. I am disappointed with the response of the noble Earl, Lord Gowrie, to my blandishments. I think I made it plain that I recognised it was possible that if a report from every organisation assisting in the promotion of the practice of engineering had to be laid before Parliament, there might prove to be too many of them for the idea to be practicable. I take the point which the noble Earl made in response to that. I acknowledge those practical difficulties.
At the same time I suggested that in considering my amendment the Committee should address itself to the principle underlying it in so far as it affected

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the engineering council. I said that that principle was that since so much public expenditure was involved, it was only right that during the period that this expenditure was so involved the Government should be accountable to Parliament each year, at least for that part of the expenditure which was concerned with the promotion of the practice of engineering through the engineering council. So I acknowledged that point and I am rather sorry about the response to it of the noble Earl.
I was not planning that this report should be made to Parliament indefinitely but only for a limited period. I note what the noble Earl has said about the possibility of reports being deposited in the Library and I understand that he is to give further consideration to that matter. But my overall feeling is one of disappointment.
In all the circumstances, 1 do not think that I should seek at this stage to press my amendment further but I should like to reserve my position so far as the Report stage is concerned. I still hope that on this general question, having in mind all the amendments, it might somehow be possible to reach a measure of agreement, not simply between the movers of the amendments this afternoon but with the Government. With those reservations, therefore, I beg leave at this stage to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Remaining clause agreed to.
[Amendment No. 3 not moved.]
House resumed: Bill reported without amendment.

Trees (Replanting and Replacement) Bill [H.L.]
5.31 p.m.
Lord Leonard: My Lords, the noble Lord, Lord Somers, has been unable to remain in the House owing to being unwell but he has asked me to convey his apologies to your Lordships, and on his behalf I beg to move that the report be now received.
Moved, That the report be now received.—(Lord Leonard.)
On Question, Motion agreed to: Report received.

Pet Animals Act 1951 (Amendment) Bill [H.L.]
5.32 p.m.
Lord Houghton of Sowerby: My Lords, I beg to move that this Bill be now read a third time. I need detain the House only for two minutes. I hope that your Lordships will send this Bill on its way to another place. I think that the most I can usefully say about this Bill in your Lordships' House has already been said. There are numerous other considerations regarding it which I think would be more appropriate to be dealt with in another place where constituency and other interests can be brought to bear upon any aspects of the Bill which might still be important in the minds of some people. For example, all the open air markets
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that I am aware of throughout the country will be in the constituencies of some Members of another place, and they will be able to judge the situation for themselves on the basis of local conditions and what they know of the treatment of animals in those markets.
Therefore, I thank all those who have taken part in the debates upon this Bill and I am grateful to the noble Lord, Lord Belstead, for the remarks that he made at the conclusion of the Committee stage of the Bill. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Houghton of Sowerby.)
On Question, Bill read 3a, and passed, and sent to the Commons.

Local Authority Services: Privatisation
5.34 p.m.
Lord Gisborough Lord Gisborough rose to ask Her Majesty's Government whether they will encourage the privatisation of certain local authority activities and services.
The noble Lord said: My Lords, local authorities this year will spend between them some £25,000 million, and the figure gets higher each year. Taken together with public utilities and industries, these giant spenders account for about a third of the national turnover and any inefficiency or lack of control or services adds up to huge sums wasted. Yet while private industry has had to increase its efficiency through competition and fear of bankruptcy the public authorities, in their monopoly and protected positions, have been able continuously to escalate their costs and simply pass them on to the ratepayer or taxpayer to fund from the profits of the profitable private sector. This burden in the form of huge rate increases has contributed significantly to driving many firms out of business and restricting others from expansion. It has significantly contributed thereby to unemployment.
Local government the world over tends to be wasteful, expensive and inefficient. Furthermore, the authorities are not forced to attract customers, they face no competition and in the long run, when cuts are forced upon them, they inevitably tend to operate in the interests of those who administer and of the union members who comprise the workforce and preserve their structure at the expense of the services which they are meant to provide for the public. Public services are indeed almost impervious to influence by the public, and even the elected councillor often has difficulty and has neither the time nor the expertise to grapple with the complexities of the Establishment. It is only the private sector that depends for its survival on satisfying the public, and therefore it takes good care to do so.
This is not an attitude which is confined to this country; it applies the world over and little wonder therefore that the Americans and Europeans—and even some of the Communist countries—have very successfully pioneered the privatisation of council services. Many of the more enlightened councils in this country have started to privatise their functions. This may sound anathema to some and in particular the word "privatisation" itself, but one must realise that while a local authority must ensure that a service is provided

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this does not mean that a local authority itself must provide that service. That is a fundamental truth.
Where privatisation of services has been tried—and I refer to services as opposed to supplies, which of course are often put out to tender—firms have had to compete to provide that service and to maintain a good standard to avoid dismissal or penalty. In addition to performing the service cheaper than the council direct labour, they have often been able to improve the service and make a healthy profit to boot. The experiments have largely been staggeringly successful. The costs go down and the quality of the service goes up.
There are many opportunities for privatisation in local government. For example, architectural services provided by a private firm can be far more economical than a large council staff, and can be employed only when and as required. A council can make an unbiased assessment of the performance of a private firm, which it is unlikely to be able to do of one of its own departments—and it cannot do much about it, even if the department is found wanting. The private firm has to remain efficient in order to complete against its rival trying for the same contract.
Results have been so good that, for example, the average savings in the United States of America on refuse disposal for cities of 50,000 and more inhabitants has been 40 per cent. of the cost of doing it by direct labour. In one case it cost 207 dollars a year per household for a twice weekly collection in one district, compared with 72 dollars—less than half—for a thrice weekly collection by a private firm. Nearer to home, Rochford Council reportedly lopped £150,000 from its budget of £500,000 by going to private contract in refuse disposal.
Window cleaning is another example, and Humberside slashed the cost of cleaning windows in 100 schools in Hull from £85,000 to £35,000 by contracting out. Even fire-fighting has been privatised. It has been tried with startling success in some American cities, along with ambulance cover that has provided a better service at less cost. Another aspect of privatisation has been the community service for old people scheme in Kent, whereby a combination of private contract and voluntary effort has met with great success, both in cutting costs and in the service and I understand that Gateshead, Anglesey and Hammersmith are all looking at that scheme. Park maintenance can be contracted out—and Dortmund saved £200,000 a year by doing it. Golf courses, crematoriums, airports, slaughter-houses, sports halls, you name it, they can all be contracted out.
Not only is the cost to the public reduced but the service is improved, and private management can even make a profit, which contributes to the wealth of the country and eventually provides the base for greater employment. There are many examples where businesses have been run at a loss by public authorities and have been run at a profit by private enterprise. Even where public enterprise has run at a profit there is every reason to believe that private enterprise would have done far better still. I see that, according to yesterday's paper, even Red China is encouraging private enterprise to help solve its financial problems.
Part of the savings brought by privatisation is that the service is geared to the demands of the consumer and the customer, who are the object of the whole operation of local government, rather than the ability of the authority to produce a service. Very often the provision of services by public authorities is a relic of the past, established for some reason that has long since ceased to apply, but tradition has instilled the belief that only the public authorities are capable of providing that service. There is, after all, no reason why any business should be run by a council. Over and over again it can be proved that private enterprise can do it cheaper and better. The job of the council should be to organise the service, to finance the contracts and to monitor the performance.
The impediment to the trend of going private is the fear of union resistance. One must ask: Should local government be run for the benefit of union members or of the staff, or any other vested interest? A much better answer is that in practice it has been found that municipal employees tend to get taken on by the private firms that take over the work, and have often been found to earn higher wages, with better working conditions, and to have a higher morale and less absenteeism.
Training colleges for staff must come under review, and it has been discovered that it is about one-third more economical as well as more efficient for authorities to send their staff to private colleges. Could not the courses provided by Government departments at their own conference mansions—I believe Wiston Park is one—be provided at far less cost by private conference organisations. Just as local authorities, unable to be bankrupted and unable to avoid the high wage demands and corresponding ever-increasing rate demands, so, to digress, does every other public authority and business find the same. While every private industry is responding to the chill wind of competition and prices are being squeezed, the nationalised industries swallow up the wealth of the country to fund their pay rises and continue in their inefficiency. The publicly-run London Transport heads the list for inflation and continues to increase charges unchecked. The Post Office, electricity, all the public utilities, without competition, just raise prices.
Exactly the same applies to nationalised industries, and one would think back to the debate last week on the airports and airways. One can compare state-owned airways with the private airways. They just cannot afford to make the giant and expensive mistakes that the state-owned airways get away with. Nobody questioned in that debate the cost of the British Airways flying school per student as opposed to the use of private flying instruction. Turning to the Coal Board, even mines discarded by the NCB are reported to have been re-opened privately and are now being profitably worked. The story is the same in all publicly-run businesses the world over. The costs of direct labour are often concealed by the overheads being charged to general administration, so the position is even worse than it seems.
The Question, therefore, is to ask the Government whether they agree with the concept of privatisation of services, not only for local authorities but also publicly-owned businesses, and if so, what steps they will take to help councillors and directors to assess the true cost

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of council services against those available by contract, in order thereby to achieve a better and less expensive service to the public.
5.46 p.m.
Lord Bruce of Donington: My Lords, the House will be grateful to the noble Lord, Lord Gisborough, for having raised this most important Question at this time. On looking at the Question itself, it is posed in the terms,
"To ask Her Majesty's Government whether they will encourage the privatisation of certain local authority activities and services".
On listening to the noble Lord I wondered whether he was really speaking to the Question, which I for my part am quite content to leave the noble Lord, Lord Bellwin, to answer, because the noble Lord, Lord Bellwin, is well-known and is on the record as being very firm in his advocacy of the independence of local government, in local authorities being given the maximum amount of choice in whatever they seek to do.
In fact, in the course of the Local Government Bill, which was under consideration by your Lordships' House quite recently, the noble Lord, Lord Bellwin, put himself forward as being the champion of the local authorities. He was accused at the time—indeed, I myself added to the chorus—of desiring to restrict the activities of local authorities. He was accused of trying to put local authorities under the leadership and dictation of his right honourable friend the Minister for the Environment. And we on this side of the House were not entirely satisfied with the arrangements ultimately put forward in the Bill. But certainly the noble Lord put himself forward—and we know he is a very genial and honourable man—as being the champion of local authorities.
I can therefore imagine the chagrin of the noble Lord on being told by his noble friend Lord Gisborough that local authorities are inefficient in every conceivable activity they undertake, an assertion which the noble Lord, Lord Bellwin, was at pains to deny when he was tactfully steering his Bill through the House. The noble Lord had the utmost admiration for the activities in which the local authorities were engaged. He did not remotely suggest to your Lordships that it was ever the intention of Her Majesty's Government to encourage the hiving off of the fire services, the hiving off of the refuse collection services by private enterprise. The reasons are quite clear. The noble Lord, like us on this side of the House, has every confidence that the task of the local authorities, in conforming to the age-long tradition that has attended their foundation and their continuance, is to produce the best possible service for the people of the communities in the area they cover at the most economical price. The noble Lord was at pains to deny that local authorities in general were anything other than efficient and dedicated in the discharge of their tasks.
Now we have this picture presented to us this evening by the noble Lord, Lord Gisborough, who evidently has spent some time recently in the United States and obviously comes back well-fired with the passion for private enterprise that is known to pervade those vast territories, and at this time is even personified in the person of the new President. If the noble Lord, Lord Gisborough, had his way there would be very little
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function for any local authority to perform any more other than possibly the election of its mayor—which would vary from party to party as time passed—for the performance of purely perfunctory functions and, indeed, the sub-contracting out to private enterprise, whatever that may mean, of all the functions that are performed by local authorities.
Your Lordships will have to consider the feasibility of the proposition, although I very much doubt whether the noble Lord, Lord Bellwin, will be really prepared to take seriously some of the suggestions that have emanated from his noble friend. If for one moment he conceded any of the points that have so far been made he would be in very great contradiction as regards most of the observations which he has been able to address to your Lordships' House on this point.
I shall not deal with all the various suggestions that the noble Lord, Lord Gisborough, has made, because on the basis of the experience of those who have been engaged in local government—including the noble Lord, Lord Bellwin, and the noble Lord, Lord Pitt of Hampstead, who I am very pleased to see will be speaking later in the debate—local authorities are able fully to carry out the great majority of the functions which have been assumed by them and indeed which have been thrust upon them by Parliament over the course of the years.
For the moment I shall only deal with the question of refuse collection because the noble Lord made much of that. Let us consider what would happen at this point in time if the refuse collection function were to be subcontracted out on a permanent basis to private enterprise. The first thing that would happen is that its supervision would essentially be in the hands of persons not experienced in the very complex process of refuse collection, stacking and disposal. Moreover, there would be no guarantee of continuity of service.
We are talking in a current situation where unemployment is running at roughly one million more than it was a year ago, where for reasons that are not germane to this debate but which will be expounded upon no doubt on a later occasion, bankruptcies are occurring at the rate of 170 per week. So how could there be any guarantee of continuity in respect of any firm to whom a contract was given for the disposal of refuse?—bearing in mind that private enterprise firms generally are groaning under the weight of extortionate interest rates. And, peradventure, in the event of an ultimate recovery when eventually the depression—to use the Chancellor of the Exchequer's term—"bottoms out" is there any guarantee that they will continue to want to dispose of refuse any more and might even decide to go into another kind of business altogether?
Is it the suggestion of the noble Lord—and perhaps the noble Lord, Lord Bellwin, will help him—that any contractor contracting to collect and dispose of refuse should enter into a bond with the council for due performance? Would there be any guarantee at all that the private entrepreneur would be able to acquire the highly-specialised equipment which is now used by local authorities to dispose of the refuse properly, to collect it properly and to meet all the appropriate health standards? The noble Lord, Lord Bellwin, doubtless will be able to give us his views on that.
Lord Gisborough: My Lords, will the noble Lord give way for a moment? He talks about this as if it were a hypothetical possibility. I hope he will accept that it is happening, and happening extremely successfully.
Lord Bruce of Donington: Yes, my Lords, I am also aware that the structure of local government finance in the United States is vastly different from the structure of local government in the United Kingdom, and that the basis of its financing is very different from the basis of financing here. The noble Lord has talked about the encouragement of local authorities by Her Majesty's Government. If the noble Lord can find one local authority in the whole of the United Kingdom that has derived any particular encouragement from the measures recently announced by Her Majesty's Government, I—and I am quite sure the House—would be very pleased to learn of their documented enthusiasm for the measures that have been adopted here. No, my Lords, the situation in the United States is entirely different.
As regards the collection and disposal of refuse, all local authorities are in possession of established routines, established techniques, established methods and established organisation. They have excellent and specialised equipment which, of course, has to conform to both health and safety requirements. Moreover, they employ very experienced personnel. It might well be that one could get a cowboy here and there to undertake the task; but who would ensure that it would be as satisfactorily done as indeed it is done at present?
Of course it might be possible—the noble Lord did not mention this, but I am quite sure that he had it in mind—to put the library service under private enterprise. If the noble Lord is content to have the intellectual equivalent of the Sun substituted for that of The Times, he is, of course, very welcome to it. The fact of the matter is that the library service provided by the local authorities, and indeed available to the public, is of a very superior quality, which, under no circumstances, could be matched by any private incursion into that field, without a very extortionate cost to the ultimate consumer.
No, my Lords, the idea which the noble Lord, Lord Gisborough, has brought before the House must, of course, have a certain party aspect to it. At a time when there is massive unemployment in both the private and the public sectors of the economy, it must occur to the noble Lord that unemployment in the private sector could, to some extent, be relieved if employment in the public sector were reduced. But the total result on net employment in the community would not be very different. The local authorities of the United Kingdom—as indeed the noble Lord, Lord Bellwin, will be pleased to testify—have a long, honourable and constructive history in the roles which have been assigned to them by Parliament. They seek to carry out the statutory requirements that are laid on them by Parliament, by the Government and, by and large, they do them very well. We should, therefore, hesitate before we allow the pirates to get into the scheme, not for the sole purpose of promoting the general wellbeing of the community, but for the purpose
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of providing private pelf to the organisers who would then step in.
6 p.m.
Lord Evans of Claughton: My Lords, first, I should like to say how grateful we should all be to the noble Lord, Lord Gisborough, for raising this subject this evening. I am only sorry that the word "privatisation", which he is obliged to use, is such a ghastly word, and I suspect that he may have imported it from the United States.
From these Benches we have no doctrinal objection to the involvement of the private sector in the provision of public services. In fact, local government has always had the right to carry out services, either through its own officers or through the employment of the private sector, as it thinks most appropriate in the individual circumstances of the local authority. Private consultants are very often used. Private contractors carry out many local authority functions where contracting-out is economically viable and where, in the short-term, to turn to private firms for advice would be better than employing an expert in the local authority. Volunteers are involved in the social and welfare services. Recently, the Department of Health and Social Security has provided a consultation paper, Care in Action, which deals at length with privatisation in the social services sector.
Privatisation of local authority services can have many facets. I should like to concentrate my remarks principally on the facet of the actual provision of services by local contractors. My party has always opposed the concept of monopolies and favoured competition and initiative. Therefore, from these Benches there cannot be any objection in principle to the provision by private contractors of services such as road gritting, maintenance and supervision of parks, private catering for canteens and even possibly, as an experiment, the handing over of the entire cleansing department to private contractors, as Southend Borough Council has done recently; though I think that we should be careful in reaching any downright conclusions about that, because it is very early days for its provision. It is important that all of us who are interested in local government should watch the Southend experiment very carefully.
I think that a cautionary note about privatisation must be struck. First, are the services that the private sector would provide necessarily cheaper or even better than those which the local authority would provide? This year in Merseyside County Council, of which I am a member, we are disposing of the services of a private security firm—which has done a first-class job in guarding Croxteth Hall, formerly the seat of the late Lord Sefton, but which now belongs to the county council—because of the cost of that service, and we are returning the supervision of the park and the parks generally in Merseyside to the care of the Merseyside police force.
The Transport Act 1980 embodies the principle of privatisaton, but it is of interest that in this particular area no private firm of omnibus transport owners has sought to complete with the local authority services, no doubt because over a wide front public transport is making a grotesque loss. Again, another cautionary note is the question: what is to prevent a private contractor,

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who has successfully undercut the public works department—which we discussed at length and, indeed, the noble Lord, Lord Bruce of Donington, discussed it at length during the passage of the Local Government, Planning and Land Act—with the result that the public works department is run down, from increasing his rates considerably when the contract is up for renewal? What private contractor would be willing to provide the expensive and anti-social working hours of some of the emergency 24-hour standby services that local authorities run?
I know that the Government are at pains to pin their hopes on there being enough competition between private contractors to keep down prices in this kind of area, but in my opinion this is a very doubtful proposition in some parts of the country, though not necessarily in all, and in some skills. We must not forget that many of the services which local government now provide were taken over by them only because the private sector had failed to provide them originally. They were not taken over because they were offering a better or cheaper service; they were taken over just because the private sector could not provide them.
Therefore, privatisation, though perfectly good in principle, cannot provide services on as wide a front as the noble Lord, Lord Gisborough, might hope in the remarks that he made initiating this discussion. The same problem might well recur when a local authority found that a service provided by a local contractor was inefficient and inadequate. This would be more difficult to put right if the local authority had no control over the workforce or over the contractors.
Therefore, to summarise my remarks, I think that some privatisation already exists where it has been found economically useful or where historic or local circumstances have made it the provider of services, as, for instance, in the provision of personal social services. But there are areas such as public transport, which I mentioned earlier, where private operators clearly are either unable or unwilling to provide a competitive service at a competitive price. I expressed frequently during the passage of the Local Government, Planning and Land Act, my belief in local autonomy. I said at the time that I thought that local autonomy would be undermined by that Act; but to be consistent, I think that privatisation of local authority services should be a matter for local decision depending on local circumstances.
6.8 p.m.
Baroness Elles: My Lords, I should like to join with other noble Lords in thanking my noble friend Lord Gisborough for introducing this subject tonight. I know that we shall listen with great interest to the reply of my noble friend the Minister to these various comments. From listening to the noble Lord, Lord Bruce of Donington, who with his usual exuberance defends his cause nobly, I began to wonder whether everybody who was not employed by a local authority might be termed a "cowboy". It seemed rather that way by the time he had finished his speech. Nevertheless, I think that there is something to be said for things being done by local authorities as well as for some measure of privatisation.
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We must ask ourselves what we want a local authority to do for us and for the community, because this is what must guide us in our decision as to how local authorities should operate. I would certainly join the noble Lord, Lord Bruce of Donington, in saying that, by and large, local authorities provide a most valuable service to the community. One cannot say that everything should be removed from their powers because they have been inefficient or cost-ineffective, for clearly that simply is not true.
But what do we want them to provide? First, I think that we want them to fulfil their statutory duty: to provide the services and benefits that have been laid down by Parliament; secondly—and this is sometimes omitted—we want them to measure the cost-effectiveness of the management administration of the services that they provide; thirdly, to decide on the priorities in their allocation of expenditure. I am quite certain that many local authorities do not do that to the benefit of their ratepayers. How many ratepayers would rather see their roads being maintained and repaired, indeed, improved and built, than having some of the services which are provided at great expense and which are not wanted? Fourthly, we want them to be guided by the principle of thrift, which can be a measure of the responsibility of an authority to the ratepayers. There is no doubt that the graphic and dramatic rise in the rates is a burden not only to individuals but to commerce and industry. Every time the rates go up it of course reduces the combativity of industry and commerce, and particularly industry in relation to its competitors abroad.
I should like to make a few comments about some European Community aspects. As noble Lords will be aware, there is now an obligation on member states of the Community as regards public authority contracts to publish notices of these contracts in the Official Journal of the European Community, particularly for such things as highway construction, and indeed where-ever the contract exceeds 1 million units of account, which is about £650,000. It may be of interest to noble Lords to know that the United Kingdom has in fact published more contract notices than any other member state. In 1978 the United Kingdom published 799, Germany 528, and France 330.
I am not here to say that one state is more honest than another. It may be the way administration is organised, or the regional and local authorities are designed, or the type of contracts which are handled by public authorities as opposed to Government, but nevertheless these figures are of interest, showing that the United Kingdom does fulfil its duties and its obligations under Community legislation.
We should not be misled necessarily by the publication of these contract notices, because in fact the contract can still go to direct labour. Some noble Lords are not always aware that when a contract notice is published a local authority, certainly one known to me, said, "In fact we are not going to take any notice of the tenders that are presented to us. We are going to use our own direct labour". So the figures do not always bear out what they say. Secondly—and for the benefit of the noble Lord, Lord Bruce of Donington, I should like to tell him that this happened in a Conservative local authority—although a contract was put out to tender and several

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firms replied, this council decided that they could get better conditions through their direct labour force.
One of the effects of putting a contract out to tender is to put pressure on the direct labour force to provide a better service to the community at cheaper rates, longer hours, in general conditions and terms of working. So that although the theory of competition and putting something out to tender is definitely a good thing as a general way of behaviour, it does not mean that at the end of the day the contract will go to the private sector rather than to direct labour.
Thirdly, with regard to Community matters, I would request the Minister most urgently to see that where Community funds are used by a public authority in, for instance, an infrastructure undertaking, a public notice is put over that particular work to the effect that there has been a European Community contribution. This country has just received about £80 million from the European Regional Development Fund, of which sum two-thirds will probably go on infrastructure throughout the country. This is something of which the people of this country ought to be aware. I would again request the Minister to look into this to see what can be done.
Fourthly, I understand that the Consultative Committee for Public Works Contracts of the Community have asked for an analysis of the situation in the European construction market in the public sector. This could be very much of interest in coming to some conclusions on the kind of matter we are now discussing. Again I should be grateful if the Minister, if he is not able to give us some information on it now, would in any case let me know what is the result of this analysis, because it certainly has some bearing on how local authorities handle their finance.
If there is to be some form of privatisation—and I believe it is a method that should be looked at—it is essential that the maintenance of public services should be ensured and that their standards should not be reduced. There is also a considerable chance of financial saving just by the fact of tendering, as I have already indicated. It does not mean that the job is going to end up in the private sector, but the element of combativity must be there. With regard to continuity, to which the noble Lord, Lord Bruce of Donington, referred, who in this country can say that anything has continuity? So I think that is perhaps not a strong argument in favour of not using the private sector today.
There are of course some difficulties which face us with regard to privatisation, so called. There is the introduction of closed shop clauses into contracts with private firms. Here again, do not let us have any illusion on these Benches that by just going into the private sector is going to solve all our problems, because we have seen that firms are being used who do operate these clauses. Damages will of course fall on the council under these contracts, but that does not restore the job to the person who perhaps has lost it through not belonging to a union. Other councils may of course operate clauses which will employ only firms which have a closed shop. Again, another difficulty, particularly for this country, is that the threshold of £100,000, which under the present Local Government, Planning and Land Act obliges a council
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to publish its tenders for contract, is a very high sum for the large majority of contracts undertaken by local authorities.
These are just some of the points that I wanted to mention in conjunction with this Unstarred Question. There is no doubt that if we want to cut our public expenditure—and, as my noble friend pointed out, the expenditure by local authorities represents something like one-third of total public expenditure—the Government have a duty to see how cuts can be made in any way possible. If privatisation is one way of doing it in certain sectors and certain areas, very well. Nevertheless, I believe that if they are to have privatisation the Government must provide a framework within which this can work efficiently, to the benefit not only of the local authority but particularly of the ratepayer, and of course of the people who are employed by the local authority.
There is no doubt that the continued increase in rates is an intolerable burden on the people of this country; it is making us less and less competitive. It is depriving the individual of the right to choose how to spend his own money, and very little benefit is coming to people as individuals and as businesses. So, my Lords, I join with others in asking my noble friend the Minister to help us in solving what is probably an intractable problem, but he will undoubtedly take into account all the remarks that have been made by noble Lords tonight.
6.18 p.m.
Lord Pitt of Hampstead: My Lords, I must begin by apologising to the noble Lord, Lord Gisborough, for missing most of his speech. I am sorry about that, because from what I have heard from other speakers I have obviously missed a great deal. I shall study Hansard with interest tomorrow morning. I am sure that I shall learn a great deal from that. I feel that the question of privatisation of local authority services should be viewed in the context of efficiency. It is in that context that I want to look at it.
Local authorities have a duty to be efficient not only in their administration but also in the provision of services. They owe it to everyone—their customers, staff, rent payers, ratepayers, and taxpayers—because we all benefit from an efficient public service. As the noble Lord, Lord Evans of Claughton, has already said, privatisation is not new. Local authorities always had, and used, discretion to carry out their responsibilities in the manner most appropriate to the circumstances. This is particularly true in the professional specialist field where local authorities frequently use private firms, usually where the scale of the operation makes contracting out economically viable.
Moreover, as has already been pointed out, under Part III of the Local Government Planning and Land Act, which passed through your Lordships' House last October, local authorities may not enter into a direct works contract over a specific value unless they do so as the result of acceptance of a tender open to private contractors. So there is that competition. Moreover, as the noble Lord, Lord Evans of Claughton, pointed out, in the Transport Act, which also passed through your Lordships' House last year, the principle of privatisation has been embodied. But the private operators have not so far taken advantage of that freedom.

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Refuse collection is an example of the sort of choice local government must make. I gather that the noble Lord, Lord Gisborough, referred to this issue, which is another reason why I regret missing his speech. It is a labour-intensive service leaving little room for manoeuvre in terms of cost cutting. In the short-term, local authorities may be tempted to turn to private firms for financial savings, but there is as yet no evidence to suggest that the refuse collection services can be more or less efficient whichever sector of the economy runs them.
In the long-term it could be a false economy because the private firm needs to make a constant profit if it is to remain in business. Moreover, there are thousands of workers engaged in these services and while they could be attracted to a package by redundancy payments in the short term, not all of those made redundant would be re-employed. And those who are re-employed may find that some of their conditions of service are inferior to those offered by the council.
Local authorities could be attracted by the opportunity to raise money through the sale of equipment and by the offer of a low-cost contract in the short term. Again as the noble Lord, Lord Evans, pointed out, prices may rise dramatically in the future and a local authority that has already sold its equipment and is finding it difficult to make ends meet, may discover it is no longer in a position to offer its own services as an alternative, and that must be borne in mind when authorities are jumping to pass over their services to private enterprise.
As has been mentioned, Southend-on-Sea is probably the only local authority so far publicly to privatise refuse collection and, as the noble Lord, Lord Evans, said, we can do little more than await the results of that experiment. The results will be interesting because they may answer the question whether it is more efficient to do it that way.
I seem to be referring a lot to the noble Lord, Lord Evans. I must do so again because he pointed to a document we had from the Department of Health and Social Security entitled Care in Action. That devoted several paragraphs to the question of privatisation. It recognised that some local authorities already made arrangements with private concerns to deal with fostering, for example, and local authorities sometimes used private children's homes. The document implied, however, that there might be considerable scope for the privatisation of support services for those in their own homes who could afford to pay, and in the area of sheltered housing. It also suggested that while privatisation was not involved at present in areas such as domiciliary care, the possibility of private sector interest in such spheres was strong.
Many of the personal social services are already on an agency basis at a cost which is at least that of the local authority services. I therefore believe we should resist any extension of privatisation in the personal social services. As the noble Lord, Lord Evans, said, privatisation must be a local decision; it cannot be anything else because local authorities must make up their minds as to the more efficient way they can provide their services. But privatisation has problems. I remember several occasions during my 16 years in County Hall when contractors went bankrupt and the projects had to be rescued by issuing
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new contracts to other contractors or by using the council's direct labour organisation. In other words, it is not all the plain sailing that it is sometimes made out to be. In my view, by and large we are better served by a local authority-controlled organisation, except for certain large projects or in specialist fields.
What I should like to see is an extension of the competition which already exists between local authority direct labour organisations and the private sector. I should like to see not merely contracts going out to tender but the local council direct labour organisations taking on the private sector. In other words, I should like to see them given more scope to compete for other work in their localities, ensuring at the same time that they are efficiently run and publicly accountable for their performance. I should also like to see them allowed to engage in industrial and commercial duties in their areas, within the framework of the national and regional economic strategies. In other words, I would take the competition a little further, not just allowing the private sector to compete with the public sector; I want the public sector to go out and compete with the private sector, and then let us see who can provide the most efficient service. I conclude as I began, by saying that local authorities must be efficient and that the question whether a service shall be performed by the public or private sector should depend on which provides the more efficient service.
6.28 p.m.
Viscount Massereene and Ferrard: My Lords, I wish at the outset to comment on what the noble Lord, Lord Pitt of Hampstead, said towards the conclusion of his speech. I understood him to say that he would like to see a great extension of the public sector competing with the private sector. Is he aware that that would be most unfair because the public sector need only increase the rates to be able to undercut the private sector? The private sector must at least pay its own expenses, and it hopes to make a profit so that it can be taxed in order that the public sector can exist.
Lord Pitt of Hampstead: My Lords, what I said must be taken in the context of my opening and closing remarks. I said that the question of privatisation or otherwise must be judged in the context of efficiency. What the noble Viscount is saying is not really relevant to the point I was making.
Viscount Massereene and Ferrard: I agree that everything must be judged in the context of efficiency, my Lords, but in my experience that will not be an easy judgment to make with local authorities. I also wish at the outset to apologise to my noble friend Lord Gisborough because my train was late, which meant that I did not have the advantage of hearing his speech. I have no interest to declare except in so far as I am a substantial ratepayer in Kent and Argyll. The present great expense of local government worries me; I understand that it costs well over £20,000 million a year. That is a very big sum.
In my home in Scotland I was unfortunate enough to come under Strathclyde when local government was reorganised. Though my home is over 100 miles from Glasgow, the moment I came under Strathclyde

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my rates were trebled, even though I received no extra service. I think that to be rather high-handed action. Rates are an arbitrary tax. True enough, one can appeal against a rating assessment, but the trouble is that one can appeal only to the rating authority. Due to the way in which rating appeals work the situation is rather like that of someone who is convicted by a magistrate being able to appeal only to that magistrate. That is not justice.
The most worrying point in my mind in regard to the great expenditure of many local authorities is that today so many of the councillors have no experience of business. Some of them before becoming councillors have had very little responsibility. A great number of them have never paid wages out of their own pockets. If one has not had to pay wages out of one's own pocket on a Friday, it is very difficult to know how many beans make five. That is what worries me. I quite agree that a great number of councillors, including county councillors, do their job extremely well; but that does not apply to all councillors. I felt that the noble Lord, Lord Bruce of Donington, tended to give councillors a heavenly halo, but I am sure that he would not apply his remarks to the Clay Cross councillors.
I have here today's paper containing an article about Camden Council. We are told that according to a report, which took three months to prepare, Camden Council has wasted about £30 million a year. The report has been conducted by an expert in local authority finance, Mr. Alex Henney, a former chief housing officer. The report in the paper says that the people running the council are not in the slightest bit interested in other people's money. That is a very serious matter. Perhaps it is human nature, but it should not be so with councillors.
I do not like the word "privatisation"; it is an American word. However, I should like to see far more co-operation between local government and private contractors. Many things which local authorities have to do could not be done by private enterprise or rather private business, because they would not be suitable. On the other hand, the situation can be vice versa: there are many things that private contractors can do—this has been proved—more cheaply and efficiently than local authorities. After all, if one watches some council men at work, one sees that they are not exactly like lightning.
As I see it, the public have very little control over local authority services. Of course the public can turn out the council at election time, but they cannot turn out the permanent officials. The permanent officials of the council have vast power. Many of the councillors are not always so "clued up" on the work done by the council, and therefore the local officials have great power. I am not quite sure how it would be organised, but I should certainly like to see ratepayers having greater power, in particular when it comes to appeal against a rating assessment.
I think it was the noble Lord, Lord Bruce of Donington, who said that one cannot compare local government in America with local government in this country. Of course, one cannot compare it 100 per cent., I agree; but it has some bearing on the question, and in many instances privatisation in America has been successful.
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We have had a certain amount of success here. I understand that Maldon District Council went in for private refuse disposal and saved £50,000. Rochford Council saved, I understand, £150,000, where previously the cost had been £500,000. If those two councils can effect savings of that kind, surely other councils can follow suit.
Before concluding, I should like to mention something that Kent County Council has done. In my opinion, Kent County Council is a very good council; I have a home in Kent. The council runs its affairs quite efficiently and it has been extremely successful with a combination of private contract and voluntary effort. A community care scheme to look after old people in their own homes has been extremely successful. That arrangement has been far nicer for the old people, which of course is the most important point. It has also saved a great deal of money, and I hope that other councils might follow the example.
A few weeks ago I read that Lambeth Council employs even a poet laureate. I do not know whether that was a joke. But there ought to be some rationale in what councils do. I think that some of the services or facilities provided by councils must have come about by accident. Why should some councils have tennis courts and some have riding schools? I understand that some councils have swimming baths. There are many other examples, including the provision of bowling alleys. I think there ought to be some rationale. For instance, why should ratepayers have to pay for riding schools? I am all for riding schools, but I understand that one or two councils have riding schools. I think that is a bit hard on ratepayers who do not ride. You could say the same, I suppose, about tennis, but I think that is a bit different because far more people play tennis.
I will not speak any longer, but I should like to say—I see one or two trade unionists opposite me—that it is said by councils as an excuse sometimes that they dare not do away with a certain service because they would get trade union opposition, but I do not think that is strictly true. There may be intimidation in some cases, but, on the whole, I think that is an excuse for councils not taking a firmer hand.
I shall be very pleased to hear what my noble friend on the Front Bench says. I hope he will give some hope that expenditure by local authorities can be scaled down somehow, and presumably the only way it can be scaled down is to have more private enterprise doing jobs that councils do. Take capital equipment. If a council requires some extremely expensive capital equipment, it must surely be far cheaper for them to hire it. As anyone who has had a factory, as I have had, knows, if you have expensive machines you have got to keep them running all the time; you have got to keep them running 24 hours a day if you can. There again, I think that is an area where councils ought to be able to work with private enterprise to their advantage and to the ratepayers' advantage.
Baroness Phillips: My Lords, before the noble Viscount sits down, he said there should be more control over these activities. As one who has suffered constantly from the total inefficiency of the private builder and has had no control over trying to get him

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to finish a job, I wonder how the noble Viscount would suggest that you could have control over the activities of private enterprise as opposed to the activities of public enterprise.
Viscount Massereene and Ferrard: My Lords, I am not a builder and I really do not know very much about it; but, regarding private builders, presumably you have a time-clause in the contract so that if they do not complete the building by a certain time they have to pay fines.
6.43 p.m.
Lord Bellwin: My Lords, I am most grateful to my noble friend Lord Gisborough for raising this important subject today, and I, too, very much welcome debate in this area and, of course, I have listened with interest to the views expressed this evening. I must compliment my noble friend on the powerful case he made. The savings figures in certain circumstances to which he referred were certainly impressive. I must say that most of what he said is not new to me, but I suspect it is to many people—perhaps not in your Lordships' House, but to many others who might read of it—and I think it is good to give the topic the maximum possible airing.
The subject of privatisation (and I, too, do not like the word at all, but I have not yet come across one which seems to sum up the situation better) is especially relevant today, at a time when the rest of the economy can no longer afford to continue the steady expansion in public sector resources which has taken place over most of this century. Now more than ever it is in the interests of all local authorities and of the electors and ratepayers that they serve to review all the services they provide with a view to securing the greatest possible value for money.
The private sector has much to offer here. Industry and commerce have long experience in exercising the discipline necessary to survive in difficult times. The force of competition and the profit motive give them strong incentives to achieve efficiency—incentives which apply to a far greater extent than (I have to say) in the field of local government. Let me assure the noble Lord, Lord Bruce, with whom, if I may say so, it is a great pleasure to be crossing swords once again, that despite my unqualified support for the role of local authorities I nevertheless firmly support the need to urge local authorities to look to private firms as possible suppliers of the services they at present provide directly; and in no way do I consider this to be a contradiction because local authorities should be, and hope that they are, as concerned as anyone to get the best value for the money they spend. The noble Lord, Lord Pitt, said that local authorities have a duty to be efficient. I entirely agree, and "duty" is the operative word.
I would go even further and say that, at a time when the search for greater efficiency is paramount, it is essential that local authorities should consider all the options, and contracting out is one (not of course the only one, by any means, but one) which I hope all authorities will now be looking at closely in the areas where it may be practicable and beneficial. Apart from cost savings, the use of contractors can have a number of other advantages for local authorities. It can offer
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them flexibility to cope with varying demands, thus avoiding the need to make over-provision so as to be able to cater for peak period situations. Local authorities can keep their own labour force to the minimum needed to deal with a normal workload. Contracting out can provide local authorities with the opportunity to mobilise private capital investment and so lighten the burden on public funds without any detriment to the service. Nor should the considerable reduction which can take place in the load of day-to-day administration and management activity be overlooked.
One major attraction of considering privatisation is that the authority will often gain a valuable touchstone against which to judge the efficiency of their own operations. Even if they ultimately decide not to contract out a particular activity, evaluating the true costs of direct provision against those of outside contractors may enable them to identify ways of streamlining their own services. In this way it can provide a most valuable contribution to the search for greater efficiency and economy. It is not without significance that where there is a serious known council interest in contracting out, it has been shown to have the effect of concentrating the minds of both the management side and trades unions, particularly in those cases where restrictive practices are contributing greatly to low productivity and unnecessarily high costs of service provision.
The scope for contracting out includes but of course goes well beyond the field of construction and maintenance, which is very much the side served by the direct labour organisations, and I do not intend to say a great deal about that tonight. We have had such lengthy debates on this over so long and so recently in your Lordships' House that t think to go over that aspect of it again would perhaps be counter-productive. But in addition to that, there are local authorities who have already made arrangements for contracting out other services. For instance, a number of them already contract out such across-the-board activities as cleaning, vehicle maintenance and catering; and, as my noble friend Lord Gisborough has said, some use is made of the private sector for the provision of architectural and other professional services.
The Government are doing what they can to help local authorities who are interested in pursuing these possibilities. One of the main obstacles facing them at the moment is the paucity of information which is generally available about the areas where contracting out has been adopted successfully, about the factors which need to be considered and about the practicalities involved in organising the contracting arrangements. This seems to be a prime example of an area where all concerned would benefit from a greater pooling of information and experience about existing practice. The Department of the Environment has therefore commissioned a research project to investigate recent service delivery and pricing decisions in a range of local authority services, including the much talked about refuse collection, recreation and environmental health. The report will be published during the summer, and will be followed by more detailed studies of particularly interesting cases. I hope it will go some way towards promoting more informed debate about contracting out, and provide local authorities with practical advice on the possibilities. In the same

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vein, we are looking at what can be done to disseminate central Government experience of contracting out where this is relevant to local authority work.
We are considering ways in which we can keep local authorities informed of appropriate areas. LAMSAC, which does advisory and consultancy work for local authorities in the management services and computer fields, might prove to be a particularly useful channel here. As my noble friend Lord Gisborough so rightly said, there is a wealth of interesting examples of contracting out to be found in other countries, and this is another area where we are making information available to local authorities. There is, as was said, a great deal of experience abroad, in the use of contractors for refuse collection.
This is common practice in France, Germany, the Netherlands, Japan and the United States. As my noble friend said, other services provided by the private sector, surprisingly, include fire protection in Denmark and the United States, park maintenance in West Germany, and even revenue collection in the United States. That is one to make the mind boggle, especially for the noble Lord, Lord Bruce. In the United States, 25 authorities have adopted the approach pioneered in Lakewood, California, where municipal services are almost all provided either by the private sector or by larger public authorities. Examples are many and they range far and wide. Having said that, I am the first to say that overseas experience must be treated cautiously, because of differing circumstances. Nevertheless, it does give some idea of how very wide is the range of possibilities for contracting out. And the number of successful instances overseas can but help to confirm that there may be real benefits to be derived by local authorities in this country.
Another aspect to be considered, is the willingness and ability of private firms to deliver local government services. I know that there are those in local government, as well as some who spoke tonight, who are somewhat sceptical about this. Clearly, greater readiness on the part of local authorities will be the best stimulus to the private sector, but the Government would also like to see firms themselves do more to make local authorities aware of the services they can provide. We are considering ways in which we might help or encourage the trade associations, and other interested organisations, to provide authorities with more information about what they have to offer. But, ultimately, this is up to private firms and their associations themselves. They must publicise their activities more, they must demonstrate why they can and are able to give better value for money, and they must if they can make their case loud and clear for all to see.
The Government's position is that we will publicise and discuss potential openings for the private sector, and the results of our current research project will themselves, I hope, provoke interest and provide useful information for firms. But I am the first to acknowledge that local circumstances differ, and only the firms themselves can adequately explore, in detail, the opportunities available; and they can do this only by aggressive marketing. The Southend experience which has been mentioned is, as the noble Lord, Lord Pitt, said, an experiment; but it is only an experiment
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in its size and in the extent of it, because there is now such a lot of evidence in other places that we can look beyond Southend and see what that might produce. The most interesting aspect of that was the number of firms who tendered. It gave an indication of the number of people who were interested in carrying out this work. Even since then we are getting more information on this. What is encouraging is that it suggests that the tendering process itself generates interest by firms who have the necessary expertise. Some of the companies—to allay the anxieties of noble Lords who were concerned about firms going out of business—were very substantial; although I know that it happens to the most substantial. Nevertheless, in practical terms it should not be more of a problem than has always existed in local government. I can think of the experience of contracting out window cleaning, painting et cetera; but, from time to time, there is always a situation where a firm gets into difficulties and the local authorities must sort out the situation. But there are always other firms and always other ways of doing it. This is part of the general process which those involved know so well.
The benefits of contracting out will vary, according to local circumstances. Ultimately, it must be for each authority to consider the factors involved and draw its own conclusions. In some cases, the benefits of competition may best be injected by developing a mix of public and private sector provision. And there are other ways of harnessing private sector expertise and resources, such as co-operative arrangements with private firms and capital, and rebates or vouchers to consumers wishing to use competing services. Whatever the conclusions reached, the important thing is that decisions must be taken at the local level, after the costs and benefits of all the alternatives have been thoroughly and objectively evaluated.
Contracting out is not a panacea for all that ails local government. It will not work miracles. In no way will it absolve local authorities from the duty to set and maintain proper levels of services. But used in appropriate places and circumstances, and with the most careful pre-examination of the benefits to be gained, it can, and, I forecast, it surely will, become as much a part of the alternatives available to local government in the search for efficiency, as any of the conventional ways of carrying out duties and providing services that exist today.
This mode of provision is growing and expanding all over the world, and no Canute-like attitude is going to turn it back. It is one of the serious new options. There are too many people now engaged in the business, there is too much evidence accruing daily of the benefits; the prize in terms of better service for less cost is too great for it to do other than develop. I say to those who are anxious and who would tend to speak against contracting out, on whatever principles: It will not go away; it is coming. It will be an important factor, not the only one by any means but a significant factor in the future provision of local government services.
I understand Lord Bruce's concern—I do not share it—about possible lack of continuity in the event of a situation arising of the kind he mentioned. I have no reason to believe that it would not be dealt with in the way which experience has shown me local authorities

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already deal with situations where this happens in contracts that they place out. He said the Americans have excellent specialised equipment. I understand that they have; but we also have excellent equipment. Local authorities have it. Any private organisation taking on work using less than excellent equipment would be putting themselves so very far behind the start line as to be at great disadvantage, and clearly they would have to have the same standard of equipment. With respect, I think "cowboys" and "pirates" are unfair terms and certainly the calibre of some of the people tendering for this work around the country really would not come within that description.
I welcomed Lord Evans's moderate and reasoned approach and I agree with much of what he said. Like all noble Lords who spoke, his opinion was: "Yes; if there is a better way then we must look at it, not with any dogma. The whole country is in business to get the most for what we spend. That is what it is all about". As for my noble friend Lady Elles, what a pleasure it was to hear her speak. It is the first time I have had that pleasure in this House. Her references to the European experience were most interesting. I can assure her that I have taken careful note of what she said about possibly putting up notices where the European contribution was being made to projects. We will look at that and I will write to her in due course on the other point that she made. I was very interested in what the noble Lord, Lord Pitt, said. I know of his great service in local government. I thought that he, too, in the main did not disagree with the principle, provided that he was satisfied that it was genuinely as good as, or better. Well, better, if you like. I am sure he would not expect me to agree with the last point that he made about the public sector going into competition. However, not for a moment because I would be afraid of what it might produce; only because of what it might cost to those who have to pick up the tab at the end of the day. My goodness! the track record all along the line is such that we would have to be very nervous indeed about that.
So I conclude by saying that the Government's interest in encouraging a closer look into this whole field is solely and simply in recognition of the need—indeed, of the urgency now—for local government to do things better, to give better value for money. When resources are scarce, it does concentrate the mind. When faced with either cutting back services or getting more for what is spent, any local authority worth its salt will go for the latter. My Lords, I repeat my thanks to my noble friend Lord Gisborough for initiating what I think has been a most constructive debate today, and I am grateful to him for that.

Peterborough Development Corporation Bill [H.L.]
Examiners certificate that the further Standing Orders have been complied with: Ordered to lie on the Table; Bill committed to an Unopposed Bill Committee.
Greater London Council (General Powers) (No. 2) Bill
Brought from the Commons; read 1a, and referred to the Examiners.